22 publications classées par:
type de publication
: Revue avec comité de lecture
Articles Santos-Pinto L. & Dell'Era M. (in press). Entrepreneurial Optimism and the Market for New Issues. International Economic Review.
Astebro T., Mata J. & Santos-Pinto L. (2015). Skewness seeking: risk loving, optimism or overweighting of small probabilities?. Theory and Decision, 78(2), 189-208. [doi] [abstract]
In a controlled laboratory experiment we use one sample of college students and one of mature executives to investigate how positive skew influences risky choices. In reduced-form regressions we find that both students and executives make riskier choices when lotteries display positive skew. We estimate decision models to explore three explanations for skew seeking choices: risk-loving (convex utility), optimism (concave probability weighting) and likelihood insensitivity (inverse s-shape probability weighting). We find no role for love for risk as neither students nor executives have convex utility. Both optimism and likelihood insensitivity play a part in skew seeking choices. Likelihood insensitivity is larger for students than for executives. Executives have more concave utility and are more optimistic than students, but this is found to be largely due to them being older.
Santos-Pinto L., Bruhin A., Mata J. & Astebro T. (2015). Detecting Heterogeneous Risk Attitudes with Mixed Gambles. Theory and Decision, 79(4), 573-600. [doi] [url] [web of science] [abstract]
We propose a task for eliciting attitudes toward risk that is close to real-world risky decisions which typically involve gains and losses. The task consists of accepting or rejecting gambles that provide a gain with probability p and a loss with probability 1−p . We employ finite mixture models to uncover heterogeneity in risk preferences and find that (i) behavior is heterogeneous, with one half of the subjects behaving as expected utility maximizers, (ii) for the others, reference-dependent models perform better than those where subjects derive utility from final outcomes, (iii) models with sign-dependent decision weights perform better than those without, and (iv) there is no evidence for loss aversion. The procedure is sufficiently simple so that it can be easily used in field or lab experiments where risk elicitation is not the main experiment.
Carvalho D. & Santos-Pinto L. (2014). A cognitive hierarchy model of behavior in the action commitment game. International Journal of Game Theory, 43(3), 551-577. [doi] [url] [web of science] [abstract]
We apply the cognitive hierarchy model of Camerer et al. (Q J Econ 119(3):861-898, 2004)-where players have different levels of reasoning-to Huck et al. (Games Econ Behav 38:240-264, 2002) discrete version of Hamilton and Slutsky (Games Econ Behav 2:29-46, 1990) action commitment game-a duopoly with endogenous timing of entry. We show that, for an empirically reasonable average number of thinking steps, the model rules out Stackelberg equilibria, generates Cournot outcomes including delay, and outcomes where the first mover commits to a quantity higher than Cournot but lower than Stackelberg leader. We show that a cognitive hierarchy model with quantal responses can explain the most important features of the experimental data on the action commitment game in (2002). In order to gauge the success of the model in fitting the data, we compare it to a noisy Nash model. We find that the cognitive hierarchy model with quantal responses fits the data better than the noisy Nash model.
Iris D. & Santos-Pinto L. (2014). Experimental Cournot oligopoly and inequity aversion. Theory and Decision, 76(1), 31-45. [doi] [url] [web of science] [abstract]
This paper explores the role of inequity aversion as an explanation for observed behavior in experimental Cournot oligopolies. We show that inequity aversion can change the nature of the strategic interaction: quantities are strategic substitutes for sufficiently asymmetric output levels but strategic complements otherwise. We find that inequity aversion can explain why: (i) some experiments result in higher than Cournot-Nash production levels while others result in lower, (ii) collusion often occurs with only two players whereas with three or more players market outcomes are very close to Cournot-Nash, and (iii) players often achieve equal profits in asymmetric Cournot oligopoly.
Iris D. & Santos-Pinto L. (2013). Tacit Collusion under Fairness and Reciprocity. Games, 4(1), 50-65. [doi] [url] [abstract]
This paper departs from the standard profit-maximizing model of firm behavior by assuming that firms are motivated in part by personal animosity-or respect-towards their competitors. A reciprocal firm responds to unkind behavior of rivals with unkind actions (negative reciprocity), while at the same time, it responds to kind behavior of rivals with kind actions (positive reciprocity). We find that collusion is easier to sustain when firms have a concern for reciprocity towards competing firms provided that they consider collusive prices to be kind and punishment prices to be unkind. Thus, reciprocity concerns among firms can have adverse welfare consequences for consumers.
Santos Pinto L. (2012). Labor Market Signaling and Self-Confidence: Wage Compression and the Gender Pay Gap. Journal of Labor Economics, 30(4), 873-914. [doi] [url] [web of science] [abstract]
I extend Spence's signaling model by assuming that some workers are overconfident-they underestimate their marginal cost of acquiring education-and some are underconfident. Firms cannot observe workers' productive abilities and beliefs but know the fractions of high-ability, overconfident, and underconfident workers. I find that biased beliefs lower the wage spread and compress the wages of unbiased workers. I show that gender differences in self-confidence can contribute to the gender pay gap. If education raises productivity, men are overconfident, and women underconfident, then women will, on average, earn less than men. Finally, I show that biased beliefs can improve welfare.
Park Y. J. & Santos Pinto L. (2010). Overconfidence in Tournaments: Evidence from the Field. Theory and Decision, 69(1), 143-166.
Santos Pinto L. (2010). The Impact of Firm Cost and Market Size Asymmetries on National Mergers in a Three-Country Model. International Journal of Industrial Organization, 28(6), 682-694. [url] [abstract]
This paper studies the impact of firm cost and market size asymmetries on merger decisions. I consider a model where a small and a large country compete in a third (world) market. Each of the two countries has two firms (with potentially different costs) that supply the domestic market and export to the third market. Merger decisions in the two countries are modeled as a simultaneously move game. The paper finds that firms in the large country have more incentives to merge than firms in the small country. In contrast, the government of the large country has more incentives to block a merger than the government of the small country. Thus, the model predicts that conflicts of interest between governments and firms concerning national mergers are more likely in large countries than in small ones.
Santos Pinto L. (2010). Positive Self-Image in Tournaments. International Economic Review, 51(2), 475-496. [doi] [web of science] [abstract]
This article analyzes the implications of worker overestimation of productivity for firms in which incentives take the form of tournaments. Each worker overestimates his productivity but is aware of the bias in his opponent's self-assessment. The manager of the firm, on the other hand, correctly assesses workers' productivities and self-beliefs when setting tournament prizes. The article shows that, under a variety of circumstances, firms can benefit from worker positive self-image. The article also shows that worker positive self-image can improve welfare in tournaments. In contrast, workers' utility declines due to their own misguided choices.
Santos Pinto L. (2009). Asymmetries in Information Processing in a Decision Theory Framework. Theory and Decision, 66, 317-343. [pdf]
Santos Pinto L. (2008). Positive Self-Image and Incentives in Organizations. The Economic Journal, 118(531), 1315-1332. [doi] [pdf] [abstract]
This paper investigates the implications of workers' mistaken beliefs about their abilities on incentives in organisations. It shows that if effort is observable, then an agent's mistaken beliefs about his own ability are favourable to the principal. However, when effort is unobservable an agent's mistaken beliefs about his own ability can be either favourable or unfavourable to the principal. The article provides conditions under which an agent's overestimation about his own ability is favourable to the principal when effort is unobservable. The article shows that workers' mistaken beliefs about their co-workers' abilities make interdependent incentive schemes more attractive to firms than individualistic ones.
Santos Pinto L. (2008). Making Sense of the Experimental Evidence on Endogenous Timing in Duopoly Markets. Journal of Economic Behavior and Organization, 68(3/4), 657-666. [pdf] [abstract]
The prediction of asymmetric equilibria with Stackelberg outcomes is clearly the most frequent result in the endogenous timing literature. Several experiments have tried to validate this prediction empirically, but failed to find support for it. In contrast, these experiments find that simultaneous-move outcomes are modal and that behavior in endogenous timing games is quite heterogeneous. This paper generalizes Hamilton and Slutsky's (Hamilton, J., Slutsky, S., 1990. Endogenous timing in duopoly games: Stackelberg or Cournot equilibria. Games and Economic Behavior 2, 29-46) endogenous timing games by assuming that players are averse to inequality in payoffs. I explore the theoretical implications of inequity aversion and compare them to the empirical evidence. I find that this explanation is able to organize most of the experimental evidence on endogenous timing games. However, inequity aversion is not able to explain delay in Hamilton and Slutsky's endogenous timing games.
Santos Pinto L. & Sobel J. (2005). A Model of Positive Self-Image in Subjective Assessments. American Economic Review, 95(5), 1386-1402. [pdf]
Cahiers de recherche Dell'Era M. & Santos-Pinto L. (2011). Entrepreneurial Overconfidence, Self-Financing and Capital Market Efficiency (11.06). Université de Lausanne - HEC - DEEP. [pdf] [url] [abstract]
We propose a new strategy to identify the existence of interjurisdictional tax competition and to estimate its spatial reach. Our strategy rests on differences between desired tax levels, determined by culture-specific preferences, and equilibrium tax levels, determined by interjurisdictional fiscal externalities as well as by preferences. While fiscal preferences differ systematically and demonstrably between French-speaking and German-speaking Swiss regions, we find that local income tax burdens do not change discretely at the language border but exhibit smooth spatial gradients. The slope of these gradients implies that tax competition constrains tax choices of jurisdictions with a preference for higher taxes at a distance of up to 20 kilometres. Hence, tax competition does constrain income taxation by local governments. When, as in the Swiss system, local jurisdictions are constrained to decide on a single shifter of an exogenously given tax schedule, the effect of tax competition are confined to a small spatial scale.
Santos Pinto L. (2011). Labor Market Signaling and Self-Confidence: Wage Compression and the Gender Pay Gap (This paper replaces Nr 10.07 "Labor Market Signaling with Overconfident Workers", June 2010) (11.07). Université de Lausanne - HEC - DEEP. [pdf] [url] [abstract]
I extend Spence's (1973) signaling model by assuming some workers are overconfident - they underestimate their marginal cost of acquiring education - and some are underconfident. Firms cannot observe workers' productive abilities and beliefs but know the fractions of high-ability, overconfident, and underconfident workers. I find that biased beliefs lower the wage spread and compress the wages of unbiased workers. I show that gender differences in self-confidence can contribute to the gender pay gap. If education raises productivity, men are overconfident, and women underconfident, then women will, on average, earn less than men. Finally, I show that biased beliefs can improve welfare.
Santos Pinto L. & Carvalho D. (2010). A Cognitive Hierarchy Model of Behavior in Endogenous Timing Games (10.06). Université de Lausanne - HEC - DEEP. [pdf] [url] [abstract]
This paper applies the cognitive hierarchy model of Camerer, Ho and Chong (2004) to the action commitment game of Hamilton and Slutsky (1990). The model generates the heterogeneity of behavior reported in Huck, Müeller and Normann (2002). The model predicts the spike in the leadership quantity in the first period as well as the spike in the Cournot quantity in the second period. The model predicts delay, a feature that cannot be explained by social preferences. The also model predicts very well the percentage of Stackelberg outcomes, double leadership outcomes, and Stackelberg leaders punished by followers. Notwithstanding, the model produces low first period movement and is unable to generate sufficient percentages of sequential play of Cournot quantities and collusive market outcomes.
Santos Pinto L., Astebro T. & Mata J. (2009). Preference for Skew in Lotteries: Evidence from the Laboratory (09.09). Université de Lausanne - HEC - DEEP. [pdf] [url] [abstract]
We use a laboratory experiment to investigate how positive skew influences risky choices. We use a non-parametric method to classify subjects according to risk and skew preferences and to test whether their choices are compatible with expected utility or not. We find that subjects make riskier choices when lotteries display positive skew. Half of the subjects make skew seeking choices and these come roughly in equal proportions from those who violate expected utility axioms and from those who do not. Structural estimation of decision models for the sub-samples defined by our classification shows that probability distortion can explain heterogeneity in behavior.
Santos Pinto L. & Iris D. (2008). Tacit Collusion, Fairness and Reciprocity (09.03). Université de Lausanne - HEC - DEEP. [pdf] [url] [abstract]
This paper explores the implications of fairness and reciprocity in dynamic market games. A reciprocal player responds to kind behavior of rivals with unkind actions (destructive reciprocity), while at the same time, it responds to kind behavior of rivals with kind actions (constructive reciprocity). The paper shows that for general perceptions of fairness, reciprocity facilitates collusion in dynamic market games. The paper also shows that this is a robust result. It holds when players' choices are strategic complements and strategic substitutes. It also holds under grim trigger punishments and optimal punishments.
Santos Pinto L. & Pires T. (2008). Self-Confidence and the Timing of Entry (09.05). Université de Lausanne - HEC - DEEP. [pdf] [url] [abstract]
This paper analyzes the impact of overconfidence on the timing of entry in markets, profits, and welfare. To do that the paper uses an endogenous timing model where (i) players have private information about costs and (ii) one player is overconfident and the other is rational. The paper shows that for moderate levels of self-confidence there is a unique cost-dependent equilibrium where the overconfident player has a higher ex-ante probability of entering the market before the rational player. In this equilibrium self-confidence reduces the profits of the rational player but can increase the profits of the overconfident player provided that cost asymmetries are small. Finally, we show that overconfidence reduces welfare, except when cost asymmetries are very small.
Santos Pinto L. (2006). Positive Self-Image over Time (09.02). Université de Lausanne -HEC - DEEP. [pdf] [url] [abstract]
This paper incorporates egocentric comparisons into a human capital accumulation model and studies the evolution of positive self image over time. The paper shows that the process of human capital accumulation together with egocentric comparisons imply that positive self image of a cohort is first increasing and then decreasing over time. Additionally, the paper finds that positive self image: (1) peaks earlier in activities where skill depreciation is higher, (2) is smaller in activities where the distribution of income is more dispersed, (3) is not a stable characteristic of an individual, and (4) is higher for more patient individuals.
Thèses Dell'Era M., Pinto L. S. (Dir.) (2014). Two essays on the impact of optimism on market outcomes and one essay on lobbying and reference dependence. Université de Lausanne, Faculté de biologie et médecine.