Economics LettersPub Date : 2025-03-25DOI: 10.1016/j.econlet.2025.112308
Zhen He , Fergal O'Connor , Jacco Thijssen
{"title":"Can risk-free and zero-beta portfolios be constructed? UK and US Evidence","authors":"Zhen He , Fergal O'Connor , Jacco Thijssen","doi":"10.1016/j.econlet.2025.112308","DOIUrl":"10.1016/j.econlet.2025.112308","url":null,"abstract":"<div><div>This paper determines whether a risk-free portfolio can be formed using gold, T-bills, silver, platinum, and palladium. We construct zero-variance portfolios composed of two assets showing that it is possible to construct risk-free portfolios based on zero variance. We apply Wald tests to Black's zero-beta CAPM to examine whether these constructed risk-free portfolios qualify as zero-beta portfolios. We find that a risk-free portfolio is not always a zero-beta portfolio. Results show that a risk-free portfolio and a zero-beta portfolio in one market is not necessarily so in another.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112308"},"PeriodicalIF":2.1,"publicationDate":"2025-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-25DOI: 10.1016/j.econlet.2025.112289
Matthew J. Robertson
{"title":"Procurement with competing insiders","authors":"Matthew J. Robertson","doi":"10.1016/j.econlet.2025.112289","DOIUrl":"10.1016/j.econlet.2025.112289","url":null,"abstract":"<div><div>The tournament auction is a novel approach to studying procurement in which a group of entrants compete for the chance to face a strong incumbent, or insider. I introduce competing insiders and risk aversion to this form of procurement auction and analyse how these factors affect optimal bidding behaviour. Increasing the number of strong insiders significantly decreases the degree of above-value bidding that is present with a single insider. In contrast, risk aversion increases above-value bidding relative to risk neutrality, but has a weaker effect than the number of insiders on bidding behaviour. Therefore, even with risk-averse bidders, bids eventually approach bidders’ values when the number of insiders grows large.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112289"},"PeriodicalIF":2.1,"publicationDate":"2025-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143726161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-25DOI: 10.1016/j.econlet.2025.112274
Takuto Kaneko , Satoshi Nakada
{"title":"Nullified-game consistency and axiomatizations of the Core of TU-games with a fixed player set","authors":"Takuto Kaneko , Satoshi Nakada","doi":"10.1016/j.econlet.2025.112274","DOIUrl":"10.1016/j.econlet.2025.112274","url":null,"abstract":"<div><div>We provide new axiomatic foundations for the Core of TU-games with a fixed player set. Our main axiom is referred to as <em>nullified reduced game consistency</em>, which is a natural counterpart of reduced game consistency in the setting with a universal player set. We consider three types of nullified reduced game consistency axioms, each of which corresponds to the max-, complement-, and projection-reduced game consistency in the literature. We show that each property, together with other standard axioms, characterizes the Core. As a result, our characterization results uncover implicit restrictions on solutions imposed by consistency in the universal player set.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112274"},"PeriodicalIF":2.1,"publicationDate":"2025-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143705304","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-25DOI: 10.1016/j.econlet.2025.112296
Youngsoo Heo
{"title":"Rank-Dependent Pessimism and its divergence from Maxmin Expected Utility","authors":"Youngsoo Heo","doi":"10.1016/j.econlet.2025.112296","DOIUrl":"10.1016/j.econlet.2025.112296","url":null,"abstract":"<div><div>The distinction between pessimism and uncertainty aversion has not been fully clarified in the economics literature, largely due to their intuitive similarities. However, understanding their unique economic implications requires a precise definition of each concept. This paper introduces a decision-theoretic formalization of pessimism, termed <em>Rank-Dependent Pessimism</em>. While it is equivalent to the conventional notion of uncertainty aversion within Choquet Expected Utility models, the two concepts diverge in a more general setting. This raises fundamental questions, such as whether all Maxmin Expected Utility preferences can actually be classified as pessimistic.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112296"},"PeriodicalIF":2.1,"publicationDate":"2025-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143705307","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-24DOI: 10.1016/j.econlet.2025.112304
Nico Oefele
{"title":"One year of bitcoin spot ETPs: A brief market and fund flow analysis","authors":"Nico Oefele","doi":"10.1016/j.econlet.2025.112304","DOIUrl":"10.1016/j.econlet.2025.112304","url":null,"abstract":"<div><div>Since January 2024, the market for Bitcoin spot exchange-traded products has expanded rapidly. The market became increasingly concentrated, with more than half of the assets under management allocated to a single product. The average weekly net fund flow of 1.4 % indicates strong investor demand. Daily changes in Bitcoin's price are the primary driver of daily net fund flows. On average, a 3.4 % change in Bitcoin's price corresponds to a 0.2 % net fund flow, all else equal. This suggests that investors in Bitcoin spot ETPs primarily base their investment decisions on Bitcoin's price movements.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112304"},"PeriodicalIF":2.1,"publicationDate":"2025-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725787","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-24DOI: 10.1016/j.econlet.2025.112306
Manling Zhang , Jing Chen
{"title":"Spatial spillovers of media sentiment divergence in the stock market: A dynamic spatial Durbin approach","authors":"Manling Zhang , Jing Chen","doi":"10.1016/j.econlet.2025.112306","DOIUrl":"10.1016/j.econlet.2025.112306","url":null,"abstract":"<div><div>This study investigates the spatial spillover effect of media sentiment divergence on the stock market. Using firms in China from 2005 to 2022 and a dynamic spatial Durbin model, we document significant negative spatial spillover effects of media sentiment divergence on stock prices. Media sentiment divergence not only impacts a company's stock price but also affects firms in neighboring regions. The temporal dynamics of these spillovers are noteworthy: the indirect effects dominate in the short term but disappear over longer horizons. The findings shed new light on the geographical diffusion of media sentiment and information across regions in financial markets.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112306"},"PeriodicalIF":2.1,"publicationDate":"2025-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143735129","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-22DOI: 10.1016/j.econlet.2025.112286
João V. Ferreira, Foivos Savva
{"title":"Having enough and not having too much: A characterization of sufficientarianism–limitarianism","authors":"João V. Ferreira, Foivos Savva","doi":"10.1016/j.econlet.2025.112286","DOIUrl":"10.1016/j.econlet.2025.112286","url":null,"abstract":"<div><div>Sufficientarianism, a prominent framework in distributive justice, asserts that everyone should have enough resources to meet a minimum threshold. Limitarianism, by contrast, holds that no individual should possess more than a specified upper limit of income or wealth. While the latter has gained attention in political philosophy and policy debates, it remains largely unexplored in formal normative economics. This paper bridges this gap by offering an axiomatic characterization of a social welfare criterion that integrates sufficientarian and limitarian principles. We formalize these dual commitments and investigate their implications for resource allocation. The analysis sheds light on the theoretical underpinnings of this hybrid approach and its potential relevance for normative analysis.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112286"},"PeriodicalIF":2.1,"publicationDate":"2025-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725788","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-22DOI: 10.1016/j.econlet.2025.112287
Nicolás Figueroa , Carla Guadalupi
{"title":"Procuring drugs while regulating the private market","authors":"Nicolás Figueroa , Carla Guadalupi","doi":"10.1016/j.econlet.2025.112287","DOIUrl":"10.1016/j.econlet.2025.112287","url":null,"abstract":"<div><div>Public procurement mechanisms play a critical role in reducing drug costs and improving access to medicines. However, their competitive effects often fail to fully translate into private markets, where patient loyalty and physician preferences create quasi-monopolistic conditions for branded drugs. This paper proposes a novel mechanism that integrates public procurement and private market regulation. A branded-drug producer with market power competes with generic firms in a procurement auction, but it may opt out to retain unregulated monopoly profits. The optimal mechanism adjusts the allocation rule based on the firm’s cost reports: For low-cost reports, it resembles a standard optimal auction. For high-cost reports, it favors the branded-drug producer in procurement while tightening price caps in the private market. This mechanism results in higher profits for all cost realizations, reflecting the role of higher informational rents driven by type-dependent outside option. Compared to standard practices, this mechanism yields significant welfare gains.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112287"},"PeriodicalIF":2.1,"publicationDate":"2025-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143678936","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-21DOI: 10.1016/j.econlet.2025.112283
Yifei Cai
{"title":"US-China tensions, global supply chains pressure, and global economy","authors":"Yifei Cai","doi":"10.1016/j.econlet.2025.112283","DOIUrl":"10.1016/j.econlet.2025.112283","url":null,"abstract":"<div><div>Using a SVAR model, I examine the causal relationship between Sino-US political tensions, global supply chains pressure and global economic conditions. The impacts of structural US-China political tensions and global supply chains pressure shocks vary across different proxies of global economic conditions. It is recommended to use multiple variables to measure global economic activity for robustness checks.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112283"},"PeriodicalIF":2.1,"publicationDate":"2025-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143696094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economics LettersPub Date : 2025-03-21DOI: 10.1016/j.econlet.2025.112293
Jingyu Zhang, Zhongyu Wang, Xiao Tang
{"title":"How can governments mitigate statistical data manipulation? Evidence from China's enterprises’ direct report reform","authors":"Jingyu Zhang, Zhongyu Wang, Xiao Tang","doi":"10.1016/j.econlet.2025.112293","DOIUrl":"10.1016/j.econlet.2025.112293","url":null,"abstract":"<div><div>The reliability of China's GDP data has been a significant topic in economic research. However, few studies have estimated the strategies taken to improve data quality. This study examines the impact of the Enterprises’ Direct Report Reform on economic data quality in China. Using a novel statistical method based on Benford's Law to detect firm-level data manipulation, we employ a staggered difference-in-differences specification and find that the reform has reduced the degree of manipulation by approximately 15 % of a standard deviation, with this reduction primarily attributable to improvements in the data quality of private enterprises. Our analysis indicates that the reform is effective by engaging enterprises in data reporting, rather than simply imposing stricter monitoring within governments.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"250 ","pages":"Article 112293"},"PeriodicalIF":2.1,"publicationDate":"2025-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143696095","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}