econ
econ
11-25 00:00
arXiv:2511.17866v1 Announce Type: new Abstract: This study evaluates large language models as estimable classifiers and clarifies how modeling choices shape downstream measurement error. Revisiting the Economic Policy Uncertainty index, we show that contemporary classifiers substantially outperform dictionary rules, better track human audit assessments, and extend naturally to noisy historical and multilingual news. We use these tools to construct a new nineteenth-century U.S. index from more than 360 million newspaper articles and exploratory cross-country indices with a single multilingual model. Taken together, our results show that LLMs can systematically improve text-derived measures and should be integrated as explicit measurement tools in empirical economics.
q-fin.ececon.gn
econ
econ
11-25 00:00
arXiv:2511.17928v1 Announce Type: new Abstract: This paper develops limit theorems for random variables with network dependence, without requiring that individuals in the network to be located in a Euclidean or metric space. This distinguishes our approach from most existing limit theorems in network econometrics, which are based on weak dependence concepts such as strong mixing, near-epoch dependence, and $\psi$-dependence. By relaxing the assumption of an underlying metric space, our theorems can be applied to a broader range of network data, including financial and social networks. To derive the limit theorems, we generalize the concept of functional dependence (also known as physical dependence) from time series to random variables with network dependence. Using this framework, we establish several inequalities, a law of large numbers, and central limit theorems. Furthermore, we verify the conditions for these limit theorems based on primitive assumptions for spatial autoregressive models, which are widely used in network data analysis.
stat.thmath.stecon.em
econ
econ
11-25 00:00
arXiv:2511.18550v1 Announce Type: new Abstract: This paper presents robust inference methods for general linear hypotheses in linear panel data models with latent group structure in the coefficients. We employ a selective conditional inference approach, deriving the conditional distribution of coefficient estimates given the group structure estimated from the data. Our procedure provides valid inference under possible violations of group separation, where distributional properties of group-specific coefficients remain unestablished. Furthermore, even when group separation does hold, our method demonstrates superior finite-sample properties compared to traditional asymptotic approaches. This improvement stems from our procedure's ability to account for statistical uncertainty in the estimation of group structure. We demonstrate the effectiveness of our approach through Monte Carlo simulations and apply the methods to two datasets on: (i) the relationship between income and democracy, and (ii) the cyclicality of firm-level R&D investment.
stat.mlstat.meecon.em
econ
econ
11-25 00:00
arXiv:2511.18576v1 Announce Type: new Abstract: Access to finance is vital for improving food security, particularly in developing nations where agricultural production is crucial. Despite several financial interventions targeted at increasing agricultural production, smallholder farmers continue to lack access to reasonable, timely, and sufficient financing, limiting their ability to invest in improved technology and inputs, lowering productivity and food supply. This study examines the relationship between access to finance and food security among smallholder farmers in Ogun State, employing institutional theory as a theoretical framework. The study takes a quantitative method, with a survey for the research design and a population of 37,200 agricultural smallholder farmers. A sample size of 380 was chosen using probability sampling and simple random techniques. The data were analysed via Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings demonstrate a favourable relationship between access to finance and food security, with an R2-value of 0.615 indicating a robust link. These findings underline the need of improving financial institutions and implementing enabling policies to enable farmers have access to the financial resources they need to achieve food security outcomes.
q-fin.ececon.gn
econ
econ
11-25 00:00
arXiv:2511.18582v1 Announce Type: new Abstract: Concerns about how workers are perceived can deter effective collaboration with artificial intelligence (AI). In a field experiment on a large online labor market, I hired 450 U.S.-based remote workers to complete an image-categorization job assisted by AI recommendations. Workers were incentivized by the prospect of a contract extension based on an HR evaluator's feedback. I find that workers adopt AI recommendations at lower rates when their reliance on AI is visible to the evaluator, resulting in a measurable decline in task performance. The effects are present despite a conservative design in which workers know that the evaluator is explicitly instructed to assess expected accuracy on the same AI-assisted task. This reduction in AI reliance persists even when the evaluator is reassured about workers' strong performance history on the platform, underscoring how difficult these concerns are to alleviate. Leveraging the platform's public feedback feature, I introduce a novel incentive-compatible elicitation method showing that workers fear heavy reliance on AI signals a lack of confidence in their own judgment, a trait they view as essential when collaborating with AI.
cs.hcq-fin.ececon.gncs.ai
econ
econ
11-25 00:00
arXiv:2511.18647v1 Announce Type: new Abstract: This paper introduces a prior-free framework for information design based on partial identification and applies it to robust causal inference. The decision maker observes the distribution of signals generated by an information structure and ranks alternatives by their worst-case payoff over the state distributions consistent with those signals. We characterize the set of robustly implementable actions and show that each can be implemented by an information structure that withholds at most one dimension of information from the decision maker. In the potential outcomes model, every treatment is implementable via an experiment that is almost fully informative.
econ.thecon.em
econ
econ
11-25 00:00
arXiv:2511.18738v1 Announce Type: new Abstract: Mutual trust is a key determinant of decision-making in economic interactions, yet actual behavior often diverges from equilibrium predictions. This study investigates how emotional arousal, indexed by skin conductance responses,SCR, relates to trust behavior in a modified centipede game. To examine the impact of uncertainty, the game incorporated both fixed and random termination conditions. SCRs were recorded alongside self-reported measures of mutual and general trust and individual risk-taking propensity. Phasic SCRs were significantly higher under random termination, particularly following the opponent take actions, indicating increased emotional arousal under uncertainty. Mutual trust scores correlated positively with risk propensity but not with general trust. Behaviorally, higher mutual trust was associated with extended cooperative play, but only in the fixed-turn condition. These findings suggest that physiological arousal reflects emotional engagement in trust-related decisions and that uncertainty amplifies both arousal and strategic caution. Mutual trust appears context-dependent, shaped by emotional and physiological states that influence deviations from equilibrium behavior.
q-fin.ececon.gn
econ
econ
11-25 00:00
arXiv:2511.18944v1 Announce Type: new Abstract: We revisit Esteban and Ray's (1994) seminal model of polarization. Their main result (unnecessarily) relies on the assumption that individuals are infinitely divisible, which imposes strong restrictions on admissible polarization indices. We show that relaxing this assumption yields a broader family of indices consistent with the original axioms. The resulting indices avoid counter-intuitive rankings that arise when using results on the original paper and provide greater flexibility for empirical applications.
q-fin.ececon.gn
econ
econ
11-25 00:00
arXiv:2511.19121v1 Announce Type: new Abstract: We propose a new formulation of the maximum score estimator that uses compositions of rectified linear unit (ReLU) functions, instead of indicator functions as in Manski (1975,1985), to encode the sign alignment restrictions. Since the ReLU function is Lipschitz, our new ReLU-based maximum score criterion function is substantially easier to optimize using standard gradient-based optimization pacakges. We also show that our ReLU-based maximum score (RMS) estimator can be generalized to an umbrella framework defined by multi-index single-crossing (MISC) conditions, while the original maximum score estimator cannot be applied. We establish the $n^{-s/(2s+1)}$ convergence rate and asymptotic normality for the RMS estimator under order-$s$ Holder smoothness. In addition, we propose an alternative estimator using a further reformulation of RMS as a special layer in a deep neural network (DNN) architecture, which allows the estimation procedure to be implemented via state-of-the-art software and hardware for DNN.
stat.mlecon.em
econ
econ
11-25 00:00
arXiv:2511.17646v1 Announce Type: cross Abstract: This study explores Bitcoin's value formation through the Granular Interaction Thinking Theory-Value Theory (GITT-VT). Rather than stemming from material utility or cash flows, Bitcoin's value arises from informational attributes and interactions of multiple factors, including cryptographic order, decentralization-enabled autonomy, trust embedded in the consensus mechanism, and socio-narrative coherence that reduce entropy within decentralized value-exchange processes. To empirically assess this perspective, a Bayesian linear model was estimated using daily data from 2022 to 2025, operationalizing four informational value dimensions: Store-of-Value (SOV), Autonomy (AUT), Social-Signal Value (SSV), and Hedonic-Sentiment Value (HSV). Results indicate that only SSV exerts a highly credible positive effect on next-day returns, highlighting the dominant role of high-entropy social information in short-term pricing dynamics. In contrast, SOV and AUT show moderately reliable positive associations, reflecting their roles as low-entropy structural anchors of long-term value. HSV displays no credible predictive effect. The study advances interdisciplinary value theory and demonstrates Bitcoin as a dual-layer entropy-regulating socio-technological ecosystem. The findings offer implications for digital asset valuation, investment education, and future research on entropy dynamics across non-cash-flow digital assets.
q-fin.eccs.cyecon.gn
econ
econ
11-25 00:00
arXiv:2511.18614v1 Announce Type: cross Abstract: Debt recycling is a leveraged equity management strategy in which homeowners use accumulated home equity to finance investments, applying the resulting returns to accelerate mortgage repayment. We propose a novel framework to model equity and mortgage dynamics in presence of mortgage interest rates, borrowing costs on equity-backed credit lines, and tax shields arising from interest deductibility. The model is calibrated on three jurisdictions -- Australia, Germany, and Switzerland -- representing diverse interest rate environments and fiscal regimes. Results demonstrate that introducing positive interest rates without tax shields contracts success regions and lengthens repayment times, while tax shields partially reverse these effects by reducing effective borrowing costs and adding equity boosts from mortgage interest deductibility. Country-specific outcomes vary systematically, and rental properties consistently outperform owner-occupied housing due to mortgage interest deductibility provisions.
cond-mat.stat-mechq-fin.ececon.gnq-fin.rm
econ
econ
11-25 00:00
arXiv:2511.18641v1 Announce Type: cross Abstract: High-dimensional vector autoregressive (VAR) models have numerous applications in fields such as econometrics, biology, climatology, among others. While prior research has mainly focused on linear VAR models, these approaches can be restrictive in practice. To address this, we introduce a high-dimensional non-parametric sparse additive model, providing a more flexible framework. Our method employs basis expansions to construct high-dimensional nonlinear VAR models. We derive convergence rates and model selection consistency for least squared estimators, considering dependence measures of the processes, error moment conditions, sparsity, and basis expansions. Our theory significantly extends prior linear VAR models by incorporating both non-Gaussianity and non-linearity. As a key contribution, we derive sharp Bernstein-type inequalities for tail probabilities in both non-sub-Gaussian linear and nonlinear VAR processes, which match the classical Bernstein inequality for independent random variables. Additionally, we present numerical experiments that support our theoretical findings and demonstrate the advantages of the nonlinear VAR model for a gene expression time series dataset.
stat.thmath.ststat.meecon.em
econ
econ
11-25 00:00
arXiv:2511.18733v1 Announce Type: cross Abstract: Information transmitted across modern communication platforms is degraded not only by intentional manipulation (disinformation) but also by intrinsic cognitive decay and topology-dependent social averaging (misinformation). We develop a continuous-fidelity field theory on multiplex networks with distinct layers representing private chats, group interactions, and broadcast channels. Our analytic solutions reveal three universal mechanisms controlling information quality: (i) groupthink blending, where dense group coupling drives fidelity to the initial group mean; (ii) bridge-node bottlenecks, where cross-community flow produces irreversible dilution; and (iii) a network-wide fidelity landscape set by a competition between broadcast truth-injection and structural degradation pathways. These results demonstrate that connectivity can reduce information integrity and establish quantitative control strategies to enhance fidelity in large-scale communication systems.
cs.itecon.thhep-thphysics.soc-phmath.it
econ
econ
11-25 00:00
arXiv:2511.19225v1 Announce Type: cross Abstract: We consider a bipartite network of buyers and sellers, where the sellers run locally independent Progressive Second-Price (PSP) auctions, and buyers may participate in multiple auctions, forming a multi-auction market with perfect substitute. The paper develops a projection-based influence framework for decentralized PSP auctions. We formalize primary and expanded influence sets using projections on the active bid index set and show how partial orders on bid prices govern allocation, market shifts, and the emergence of saturated one-hop shells. Our results highlight the robustness of PSP auctions in decentralized environments by introducing saturated components and a structured framework for phase transitions in multi-auction dynamics. This structure ensures deterministic coverage of the strategy space, enabling stable and truthful embedding in the larger game. We further model intra-round dynamics using an index to capture coordinated asynchronous seller updates coupled through buyers' joint constraints. Together, these constructions explain how local interactions propagate across auctions and gives premise for coherent equilibria--without requiring global information or centralized control.
econ.thcs.gtcs.ds
econ
econ
11-25 00:00
arXiv:2003.08421v5 Announce Type: replace Abstract: This paper studies how to design two-wave experiments in the presence of spillovers for precise inference on treatment effects. We consider units connected through a single network, local dependence among individuals, and a general class of estimands encompassing average treatment and average spillover effects. We introduce a statistical framework for designing two-wave experiments with networks, where the researcher optimizes over participants and treatment assignments to minimize the variance of the estimators of interest, using a first-wave (pilot) experiment to estimate the variance. We derive guarantees for inference on treatment effects and regret guarantees on the variance obtained from the proposed design mechanism. Our results illustrate the existence of a trade-off in the choice of the pilot study and formally characterize the pilot's size relative to the main experiment. Simulations using simulated and real-world networks illustrate the advantages of the method.
stat.meecon.em
econ
econ
11-25 00:00
arXiv:2309.13766v3 Announce Type: replace Abstract: We develop a general framework for reserve systems that allocate scarce resources such as vaccines to unit-demand agents under prioritization and eligibility constraints, along with a computationally efficient mechanism. Reserve systems allocate scarce resources --such as vaccines, medical units, school seats, or government positions-- to essential groups by creating categories with prioritized beneficiaries. Prior work typically assumed a common baseline priority ordering and featured either hard or soft reserves. The threshold reserve model we introduce supports independent priority orderings, mixtures of hard and soft reserves, and overlapping categories, thereby capturing both beneficiary designations and eligibility constraints while offering policymakers greater flexibility. Our Iterative Max-in-Max Assignment Mechanism (IMMAM) satisfies all desirable properties in this domain: it respects priorities within categories, maximizes resource utilization, and then lexicographically maximizes beneficiary assignments. IMMAM is path independent and therefore well-behaved in settings with multiple institutions making simultaneous allocation decisions. We leverage path independence to obtain comparative statics and to significantly improve the mechanism's computational efficiency. We outline applications of our framework in the context of vaccine allocation.
econ.thcs.ds
econ
econ
11-25 00:00
arXiv:2309.17216v4 Announce Type: replace Abstract: Despite the widespread implementation of conditional cash transfers in low- and middle-income countries, evidence on their long-term effects remains limited. This paper evaluates the impact of Ecuador's Human Development Grant on the formal labour market outcomes of children from eligible households. The programme, one of the first of its kind, was characterised by weak enforcement of its eligibility criteria. Using a regression discontinuity design, we find that the grant increased the probability of working in the formal sector by almost 13\% around 15 years after exposure, thereby helping to curb the intergenerational transmission of poverty. This positive effect is most likely to operate through human capital accumulation.
q-fin.ececon.gn
econ
econ
11-26 00:00
arXiv:2511.18664v2 Announce Type: replace Abstract: By clarifying the bases for the Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 2004 opinion, we hope to reduce two distinct errors. The false positive error is citing Trinko as precedent when it is not. This error is so prevalent it has earned the nickname of Trinko Creep. The false negative error is not citing Trinko when it should be. We argue that this error will be growing in the future as Trinko should be precedent in cases involving regulated access rights to sensitive consumer data in electronic health records and Agentic AI Long Term Memory.
q-fin.ececon.gn
econ
econ
11-25 00:00
arXiv:2511.17981v1 Announce Type: new Abstract: We identify a distinct motive for search, termed catalytic exploration, where agents rationally explore alternatives they expect to reject to resolve uncertainty about the status quo. By decomposing option value into switching and catalytic components, we show that high exploration rates can coexist with bounded switching probabilities. This mechanism generates three insights. First, strong catalytic motives cause separating equilibria to collapse in signaling games as receivers explore indiscriminately. Second, agents optimally acquire more precise information about the status quo than about alternatives, reversing rational inattention intuitions. Third, catalytic exploration creates negative externalities: information technology improvements can paradoxically reduce welfare by encouraging excessive benchmarking.
econ.th
econ
econ
11-25 00:00
arXiv:2511.18476v1 Announce Type: new Abstract: This paper studies choice situations in which a decision maker can choose multiple alternatives. Given a menu of available options, the decision maker selects a subset of the menu with certain probabilities. We employ an axiomatic approach to characterize various parametric models in the literature. Our results elucidate the implications of the functional form assumptions and shed light on the distinctions between models. The behavioral postulates offer simple tools for testing and falsifying the choice procedures used by the decision maker and reveal a close connection between models that are seemingly unrelated.
econ.th
econ
econ
11-25 00:00
arXiv:2511.18662v1 Announce Type: new Abstract: We introduce a model of persuasion in which a sender without any commitment power privately gathers information about an unknown state of the world and then chooses what to verifiably disclose to a receiver. The receiver does not know how many experiments the sender is able to run, and may therefore be uncertain as to whether the sender disclosed all of her information. Despite this challenge, we show that, under general conditions, the sender is able to achieve the same payoff as in the full-commitment Bayesian persuasion case.
econ.th
econ
econ
11-25 00:00
arXiv:2511.19017v1 Announce Type: new Abstract: We set out to solve a dual puzzle regarding reproductive strategies: The "Ancient vs. Modern" Puzzle (why pre-modern elites adopted a "Survival" strategy while modern elites adopt an "Anxiety" strategy) and the "Class Divide" Puzzle (why modern involution manifests as a U-shaped fertility pattern). We develop a unified computational framework (DP + Monte Carlo) that introduces Cognitive Heterogeneity across classes. Our Hybrid Model (M-H) posits that the poor act as "Rational Survivors" (M1 utility, Reality parameters), while the middle/rich act as "Biased Strivers" (M4b utility, Belief parameters). Our simulations yield three core findings. First, we confirm that the "Survival" strategy is objectively rational whenever risk exceeds a low threshold ($\sigma > 0.45$). Given that real-world risk is massive ($\sigma_{Real} \approx 4.9$), the modern "Quality" strategy is objectively fragile. Second, the trap for the Middle/Rich ($B \ge 200$) is driven by a "Two-Stage Belief Error": they are first "baited" by a Causal Error (underestimating risk) to enter the status game, and then "trapped" by a Marginal Error (underestimating returns) which triggers a stop in fertility. Third, the U-shape is driven by the cognitive divide. The Poor escape the trap by retaining a "Rational Survival" strategy in the face of real high risk. Conversely, the Aspirational Middle Class ($HC \approx 12, B \ge 200$) is uniquely trapped by their Biased Beliefs. Their high competence raises their dynastic reference point ($R$) to a level where, under perceived low returns, restricting fertility to $N=1$ becomes the only rational choice within their biased belief system.
econ.th
econ
econ
11-25 00:00
arXiv:2511.19372v1 Announce Type: new Abstract: This paper proposes an identification inspired from the SVAR-IV literature that uses external instruments to identify PVARs, and discusses associated issues of identification, estimation, and inference. I introduce a form of local average treatment effect - the $\mu$-LATE - which arises when a continuous instrument targets a binary treatment. Under standard assumptions of independence, exclusion, and monotonicity, I show that externally instrumented PVARs estimate the $\mu$-LATE. Monte Carlo simulations illustrate that confidence sets based on the Anderson-Rubin statistics deliver reliable convergence for impulse responses. As an application, I instrument state-level military spending with the state's share of national spending to estimate the dynamic fiscal multiplier. I find multipliers above unity, with effects concentrated in the contemporaneous year and persisting into the following year.
econ.em
econ
econ
11-25 00:00
arXiv:2306.04494v3 Announce Type: replace Abstract: Quantifying the impact of regulatory policies on social welfare generally requires the identification of counterfactual distributions. Many of these policies (e.g. minimum wages or minimum working time) generate mass points and/or discontinuities in the outcome distribution. Existing approaches in the difference-in-difference literature cannot accommodate these discontinuities while accounting for selection on unobservables and non-stationary outcome distributions. We provide a unifying partial identification result that can account for these features. Our main identifying assumption is the stability of the dependence (copula) between the distribution of the untreated potential outcome and group membership (treatment assignment) across time. Exploiting this copula stability assumption allows us to provide an identification result that is invariant to monotonic transformations. We provide sharp bounds on the counterfactual distribution of the treatment group suitable for any outcome, whether discrete, continuous, or mixed. Our bounds collapse to the point-identification result in Athey and Imbens (2006) for continuous outcomes with strictly increasing distribution functions. We illustrate our approach and the informativeness of our bounds by analyzing the impact of an increase in the legal minimum wage using data from a recent minimum wage study (Cengiz et al 2019).
econ.em