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Publication Open Access A characterization of the extended serial correspondence(Elsevier, 2015) Heo, Eun Jeong; Department of Economics; Yılmaz, Özgür; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 108638We study the problem of assigning objects to a group of agents. We focus on probabilistic methods that take agents' ordinal preferences over the objects. Importantly, we allow for indifferences among objects. Katta and Sethuraman (2006) propose the extended serial correspondence to solve this problem. Our main result is a characterization of the extended serial correspondence in welfare terms by means of stochastic dominance efficiency, stochastic dominance no-envy and "limited invariance," a requirement we adapt from Heo (2014a). We also prove that an assignment matrix is selected by the extended serial correspondence if and only if it satisfies "non-wastefulness" and "ordinal fairness," which we adapt from Kesten et al.Publication Open Access A comparison of game-theoretic models for parallel trade(World Scientific Publishing, 2018) Gnecco, Giorgio; Pammolli, Fabio; Department of Economics; Alpanda, Berna Tuncay; Faculty Member; Department of Economics; College of Administrative Sciences and EconomicsWithin the EU Single Market for medicines, differences in drug prices, regulations, and transaction costs may create, under suitable conditions, arbitrage opportunities well before patent expiration, giving an incentive to the occurrence of parallel trade. When this is permitted, parallel traders may obtain a profit from buying drugs in a country where prices are lower, then re-selling them in a country where prices are higher. This phenomenon may came inefficiencies from a global welfare perspective, and reduce the manufacturers' incentive to invest in Research and Development (R & D). Given this framework, in this paper, we investigate the efficiency (expressed in terms of the price of anarchy) of the subgame-perfect Nash equilibria associated with five dynamic noncooperative game-theoretic models for the parallel trade of pharmaceuticals. We also compare such models with regard to the manufacturer's incentive to invest in R & D. More specifically, first we find in closed form the optimal value of the global welfare of two countries, which is obtained by solving a suitable quadratic optimization problem modeling the decision-making process of a global planner. Then, we use such a result. to evaluate and compare the prices of anarchy of five games modeling the interaction between a manufacturer in the first country and a potential parallel trader in the second country. The first three games refer, respectively, to the cases of no parallel trade threat, parallel trade threat, and parallel trade occurrence at equilibrium. Then, we investigate two modifications of the third game, in which its transfer payment from the potential parallel trader to the manufacturer is, respectively, removed/determined by Nash bargaining. For completeness, we also consider a decision-theoretic model of no parallel trade threat. For what concerns the incentive for the manufacturer to invest in R & D, the results of our numerical comparison show that the decision-theoretic model of no parallel trade threat is always the one with the highest incentive, whereas the two game-theoretic models of parallel trade threat/occurrence that do not include the transfer payment provide typically the lowest incentives. Moreover, the latter two models have the highest prices of anarchy (i.e., their equilibria have the lowest efficiencies). From a policy-making perspective, improvements are obtained if suitable countermeasures are taken to help the manufacturer recover from the costs of R & D, such as the inclusion of a transfer payment in the model.Publication Open Access A kidney exchange clearinghouse in New England(American Economic Association (AEA), 2005) Roth, Alvin E.; Ünver, M. Utku; Department of Economics; Sönmez, Tayfun; Faculty Member; Department of Economics; College of Administrative Sciences and EconomicsPublication Open Access A practitioner’s guide to handling irregularities resulting from the 2014 revisions of the Turkish Household Labor Force Survey(Boğaziçi Üniversitesi İktisadi ve İdari Bilimler Fakültesi, 2021) Poyraz, Meltem; Department of Economics; Demirci, Murat; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 272082We document the implications of the 2014 revisions to the Turkish Household Labor Force Survey and offer guidance on how to handle the irregularities in population and unemployment statistics that resulted from two particular revisions. First, new population projections were adopted to assign survey weights. Second, a narrower definition of unemployment was adopted. We propose methods to adjust the survey weights for the pre-2014 period in order to discern changes in population statistics by age groups and regions without interruption over time and to calculate the unemployment rates according to both broader and narrower definitions since 2004. / Bu çalışmada TÜİK Hanehalkı İşgücü Anketi’ninde 2014 yılında yapılan düzenlemelerden kaynaklanan bazı sonuçları bulguluyor, nüfus ve işsizlik istatistiklerinde yapılan revizyonların özellikle ikisinden kaynaklanan sorunların nasıl ele alınması gerektiği hakkında yol gösteriyoruz. İlk revizyon, anket ağırlıklarının dayandırıldığı yeni nüfus projeksiyonlarının kabul edilmesidir. İkincisi ise, dar tanımlı bir işsizlik tanımına geçilmesidir. Bu çalışmada 2014 öncesindeki anket ağırlıklarını nüfus istatistiklerinde yaş bazında ve bölgesel olarak kopma olmayacak şekilde yeniden ayarlamak ve işsizlik oranlarını geniş ve dar tanımlı olarak 2004 yılından itibaren hesaplamak için yöntemler öneriyoruz.Publication Open Access A Twitter-based economic policy uncertainty index: expert opinion and financial market dynamics in an emerging market economy(Frontiers, 2022) Altuğ, Sumru; Department of Economics; Yeşiltaş, Sevcan; Şen, Anıl; Arslan, Beyza; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; Graduate School of Social Sciences and Humanities; 258768; N/A; N/AIn this paper, we construct a Twitter-based high-frequency Economic Policy Uncertainty (TEPU) index built on a select set of Twitter user accounts whose tweets are considered to reflect expert opinion on the topic. We study the relationship between the TEPU index and a set of key financial indicators for tracking financial developments in Turkey over the sample period 2013–2021. Based on the results from a vector autoregressive analysis, we find evidence that changes in expert opinion described by fluctuations in the TEPU index interact with fluctuations in financial indicators such as the exchange rate and the stock market index to capture information about high frequency events during our sample period. Second, fluctuations in the TEPU index emerge as a key indicator that helps to predict the country risk premium measured by the CDS spread. We also find evidence that the conditional volatility of the different series reflects salient events that occurred over our sample period.Publication Open Access Algeria’s manufacturing sector: few avenues to diversification(The Lebanese Center for Policy Studies, 2017) Bustos, Sebastian; Department of Economics; Yıldırım, Muhammed Ali; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 219280This policy report on Algeria’s industrial sector is the eighth in a series of reports aimed at identifying strategic options Arab countries have in undertaking structural transformation. Using the product space methodology, this report analyzes existing capabilities of selected economies by identifying products they currently export and determining which path they should follow to produce more sophisticated and strategic products. Algeria’s position in the product space suggests that the country’s future path for development should focus on new opportunities in the chemical and food clusters. Redeploying productive knowledge that already exists within the country into other more complex products would prove difficult but the current position implies that, unaided, the economy is unlikely to diversify. This suggests the need to adopt proactive industrial policies entailing a number of new industries or products at which to target public inputs.Publication Open Access Ambiguous business cycles: a quantitative assessment(Elsevier, 2020) Altuğ, Sumru; Collard, Fabrice; Mukerji, Sujoy; Department of Economics; Çakmaklı, Cem; Özsöylev, Han Nazmi; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 107818; N/AIn this paper, we examine the cyclical dynamics of a Real Business Cycle model with ambiguity averse consumers and investment irreversibility using the smooth ambiguity model of Klibanoff et al. (2005, 2009). Ambiguity of belief about the productivity process arises as agents do not know the process driving variation in aggregate TFP, and they must make inferences regarding the true process at the same time as they infer the behavior of the unobserved temporary component using a Kalman filtering algorithm. Our findings may be summarized as follows. First, the standard business cycle facts hold in our framework, which are not altered significantly by changes in the degree of ambiguity aversion. Second, we demonstrate a role for information and learning effects, and show that lower initial ambiguity or greater confidence coupled with learning dynamics lowers the volatility and increases the persistence in all of the key macroeconomic variables. Third, comparing the performance of our model to the New Keynesian business cycle model of Ilut and Schneider (2014) with maxmin expected utility, we find that the version of their model without nominal and real frictions turns out to have limited success at matching the moments for the quantity variables. In the maxmin expected utility framework, the worst case scenario instills too much caution on the part of agents who, in the absence of a key set of nominal and real frictions, end up excessively reducing their responses to TFP shocks.Publication Open Access Arab country product space report introduction and methodology(The Lebanese Center for Policy Studies, 2017) Bustos, Sebastian; Department of Economics; Yıldırım, Muhammed Ali; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 219280During the decades prior to the Arab spring, Arab countries on average had one of the lowest per capita growth rates compared to other parts of the world. Although countries in the region registered higher growth rates at the beginning of the century, this economic growth did not bring about a structural transformation required to diversify Arab economies. The challenge remains not only in how to ensure these economies grow but also to ensure that growth is inclusive and sustainable. The general objective of the report is to lay out the strategic options Arab countries have in undertaking structural transformation. Using the product space methodology, the existing capabilities of selected economies are analyzed by locating products they currently export, which assists in determining which path they should follow to produce more sophisticated and strategic products.Publication Open Access Bank volatility connectedness in South East Asia(2018) Department of Economics; Yılmaz, Kamil; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 6111This paper presents an analysis of the volatility connectedness of major bank stocks in the South East Asia (SEACEN) region between 2004 and 2016. Applying the Diebold-Yilmaz Connectedness Index (DYCI) framework to daily stock return volatilities of major banks in the region, we obtain results that help us uncover valuable information on the region's static and dynamic bank volatility network. The volatility connectedness increased substantially during the US financial crisis (from 2007 to 2009) and during the European sovereign debt and banking crisis in 2011. The recent increase in the total connectedness has resulted from temporary financial shocks on a global scale. Once included in the analysis, the global systemically important banks (GSIBs) from the U.S. and Europe generate substantial volatility connectedness to SEACEN banks. We also identify country clusters in the banking volatility network. Major Indian, Taiwanese and Chinese banks generate volatility connectedness to their counterparts in other countries of the region. Finally, we show that the region's bank volatility network becomes tighter during systemic events; banks from different countries in the region generate volatility connectedness to the others.Publication Open Access Building social cohesion in ethnically mixed schools: an intervention on perspective taking(Oxford University Press (OUP), 2021) Alan, Şule; Baysan, Ceren; Kubilay, Elif; Department of Economics; Gümren, Mert; Researcher; Department of Economics; Graduate School of Social Sciences and HumanitiesWe evaluate the effect of an educational program that aims to build social cohesion in ethnically mixed schools by developing perspective-taking ability in children. The program is implemented in Turkish elementary schools affected by a large influx of Syrian refugee children. We measure a comprehensive set of outcomes that characterize a cohesive school environment, including peer violence incidents, the prevalence of interethnic social ties, and prosocial behavior. Using randomized variation in program implementation, we find that the program significantly lowers peer violence and victimization on school grounds. The program also reduces the likelihood of social exclusion and increases interethnic social ties in the classroom. We find that the program significantly improves prosocial behavior, measured by incentivized tasks: treated students exhibit significantly higher trust, reciprocity, and altruism toward each other as well as toward anonymous out-school peers. We show that this enhanced prosociality is welfare improving from the ex post payoff perspective. We investigate multiple channels that could explain the results, including ethnic bias, impulsivity, empathetic concern, emotional intelligence, behavioral norms, and perspective taking. Children's increased effort to take others' perspectives emerges as the most robust mechanism to explain our results.