Windfall Gain Research Articles

Research on the Game Mechanism of Cultivated Land Ecological Compensation Standards Determination: Based on the Empirical Analysis of the Yangtze River Economic Belt, China

The ecological compensation of cultivated land could also be called paying for the ecological service of cultivated land. It means that based on comprehensive consideration of the cost of the protection of the cultivated land and the value of the ecological service, the benefited area would implement the ecological compensation to the damaged area to motivate the actors of the protection behavior to protect the cultivated land better. A fair and reasonable cultivated land ecological compensation mechanism is critical in motivating cultivated land protection subjects’ active participation in cultivated land protection. However, most of the currently measured cultivated land ecological compensation standards are only determined from the perspective of a single interest, ignoring the participation and negotiation of cultivated land protection stakeholders, resulting in insufficient pertinence, low compensation standards, and low compensation efficiency. Therefore, by introducing a market mechanism, this study constructs a non-cooperative bargaining model and solves three stages of the game equilibrium solution under the condition of comprehensive consideration of interests of farmland ecosystem service providers and consumers. In this study, the Yangtze River Economic Belt is taken as the research area to provide empirical analysis of a cultivated land ecological game compensation standard between the subject and object of cultivated land ecological compensation in the area. The study found that, under the ecological compensation standard for cultivated land determined by the bargaining game, the cultivated land ecological compensation subject and object in the area meets the “KaldorHicks” resource allocation criterion, and the standard can take into account the interests of both parties. Meanwhile, the river basin horizontal ecological compensation quota determined by the game standard will neither cause a financial dilemma in the payment area due to the excessive compensation quota, nor financial “windfall gain” in the compensated area due to ecological finance transfer of cultivated land. The cultivated land ecological compensation standard based on the game between the two parties is reasonable and accurate for the cultivated land ecological compensation object, which not only functions as an economic incentive, but maintains long-term effectiveness of policy. Therefore, it is necessary to actively promote the determination of ecological compensation standards based on negotiation means, and to establish a sustainable ecological protection compensation mechanism involving government predomination, social engagement, and market-oriented operations, to drive marketization of cultivated land ecological compensation.

Government-Backed Venture Capital Investments and Performance of Companies: The Role of Networks

In this paper we analyze how different types of venture capital investments – private, public and indirect public – affect performance of portfolio companies. We use data on more than 20,000 VC deals in Europe between 2000 and 2018 and we hand collected a unique dataset on the institutional setting (public/indirect/private) of almost 3,500 investors. We find that public VC investors perform consistently worse than purely private ones, while indirect public investments (such as the “Juncker Plan” investments) perform consistently better. We link these findings to the fact that public funds do not enter the best performing cliques of investments. On the other hand, indirect funds invest in the VC funds with the best network characteristics, which raises a question of whether indirect VC investments are associated with a high level of windfall gain, and not necessarily improve the value added by the VC funds.

Spending Windfall (“Found”) Time on Hedonic versus Utilitarian Activities

AbstractConsumers often gain extra free time unexpectedly. Given the increasing time pressure that consumers experience in their daily lives, it is important to understand how they spend windfall (or unexpected) free time, which we term found time. In a series of five laboratory experiments and naturalistic field studies, we found that consumers spend more of their free time on hedonic activities than on utilitarian activities when they gain the time unexpectedly (i.e., found time), but not when they know about the free time in advance. This pattern occurs consistently regardless of whether consumers gain the time from canceled work-related or leisure activities. In addition, our studies uncovered perceived busyness as a ubiquitous yet unexplored moderator for the windfall gain literature: the inclination to allocate found time to hedonic consumption decreases when consumers perceive themselves to be busy at the moment. We discuss several potential accounts for the effect of unexpectedness on time expenditure, including a perceived fit between the nature of found time (a fun windfall gain) and hedonic consumption, need for justification, and planning.

An Exploratory Study of the Relationship Between Financial Well-Being and Changes in Reported Gambling Behaviour During the COVID-19 Shutdown in Australia

A change in someone’s financial situation, such as a windfall gain or increased financial stress, can affect the way that they gamble. The aim of this paper was to explore the relationship between financial well-being and changes in gambling behaviour during the coronavirus 2019 (COVID-19) shutdown. Australian past-year gamblers (N = 764; 85% male) completed an online cross-sectional survey in May 2020. Participants retrospectively reported monthly gambling participation before and after the COVID-19 shutdown, as well as their financial well-being, experience of COVID-related financial hardship, problem gambling severity, and psychological distress. Financial well-being showed strong negative associations with problem gambling and psychological distress. Neither financial well-being nor the interaction between financial well-being and problem gambling severity showed consistent evidence for predicting changes in gambling participation during the shutdown in this sample. This study provides preliminary evidence that self-reported financial well-being has a strong negative association with gambling problems but is not related to gambling participation. Future studies should link objective measures of financial well-being from bank transaction data with survey measures of problem gambling severity and experience of gambling-related harm.

Suspension 2.0: Segregated Development, Financial Speculation, and Waiting among Resettled Peasants in Urban China

Since the late 2000s, many rural-to-urban migrants in China have lost their rural land to development plans, resettled in designated areas, and acquired formal urban residency. They stopped migrating, and have apparently ended their life of "suspension," namely protracted mobility. While most existing research literature on this population foregrounds the issue of land dispossession, this article argues that, following resettlement, these former migrants' lives can be more accurately characterized as a state of suspension instead of dispossession. Many resettled young adults, while having secured livelihood thanks to state compensation, are excluded from the technology- and capital-intensive developments to which they have lost their land. Some of these young people instead became petty speculators and rentier capitalists by liquidating their compensated assets through mortgages, private lending, rent, and other financial means. They are constantly waiting for the next investment opportunity and windfall gain. Although physically settled down and economically secure, they remain anxious and unsettled. They continue to orient their lives towards an elusive future rather than striving to transform the here and now, thus living in a state that I call "suspension 2.0."

The windfall gain effect: Using a surprise discount to stimulate add-on purchases

• This research evaluated factors that motivate consumers’ unplanned purchases. • A surprise discount and a hedonic product induce additional spending intentions. • A hedonic product is preferred when a low discount is provided. • Impulse buying traits enhance the surprise discount effect on add-on purchases. • With a medium discount, impulse buying increases hedonic product purchases. How can the business maximize revenue while providing discounts? This research suggests that hospitality operators may stimulate add-on purchases with the adoption of surprise discounts. Two experiments investigated factors that influence hospitality consumers’ ancillary spending. Study 1 tested the discount and product type effects on additional spending intentions for a cruise booking. Study 2 identified how the depth of surprise discount and add-on product type influence consumers' add-on purchase decisions for an online hotel booking. The findings indicate that a surprise discount and hedonic items induce consumers' unplanned purchases. A hedonic add-on item is preferred over a utilitarian item when a low discount is offered. Impulse buying mediates the effect of surprise discount and product type on unplanned purchase intentions. This research extends the traditional discount role, by demonstrating that a discount promotion can induce consumers' additional purchases. The findings provide guidance for effective pricing strategies and add-on marketing mix.

COVID-19 and Its Impact on the Indian Economy

Pessimism looms large all over. COVID-19 has been projected as worse than the Great Depression of 1930. Everyday analyst and agency reports are diving into new bottoms of a fall-down in economic activities. Indian economy, however, has a slightly different story to tell at this hour of crisis. The silver lining for the Indian economy comes from a steep fall in the crude oil prices from around $70 per barrel to a record 18 years low of $22 per barrel. This windfall gain can, to some extent, offset the direct losses due to COVID-19. At the same time, dreams like a $5 trillion economy no longer look even a remote possibility. This article takes stock of the likely impact of COVID-19 on the Indian economy in the short term and the long term. A decision-tree approach has been adopted for doing the projections.

Pure Windfall Gain and Stock Market Participation: Evidence from Administrative Data

Pure Windfall Gain and Stock Market Participation: Evidence from Administrative Data

Windfall gains and stock market participation

We exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation. A $150,000 windfall gain increases the stock market participation probability by 12 percentage points among prelottery nonparticipants but has no discernible effect on prelottery stock owners. A structural life cycle model significantly overpredicts entry rates even for very high entry costs (up to $31,000). Additional analyses implicate pessimistic beliefs regarding equity returns as a major source of this overprediction and suggest that both recent and early-life return realizations affect beliefs.

Measuring total factor productivity on Irish dairy farms: a Fisher index approach using farm-level data

This paper presents a Fisher index measure of the total factor productivity (TFP) performance of Irish dairy farms over the period 2006–2016 using the Teagasc National Farm Survey (NFS) data. The removal of milk quotas in 2015 has led to an increase of over 30% in dairy cow numbers since 2010, and although suckler cow numbers have dropped slightly, the total number of cows in Ireland reached an all-time high of 2.5 million head in 2016. This large increase adds to the environmental pressures attributed to agricultural output and puts the focus firmly on how efficiently the additional agricultural output associated with higher cow numbers is produced. The primary purpose of this paper is to identify a standardised measure of the TFP performance of Irish dairy farms that can be routinely updated using Teagasc NFS data. We found that relative to 2010 the TFP of Irish dairy farms has increased by almost 18%; however, in one production year 2015, when milk quota was removed, the TFP measure increased by 7% and TFP continued to grow by 2.5% in the production year 2016. It would seem therefore that the removal of the European dairy quota system has resulted in a windfall gain for Irish dairy farmers but that productivity gains are continuing. Future data will be required to investigate the longer-term TFP performance of Irish dairy farms in the post-milk quota era.

Salient Volunteering Behavior Increases Monetary Risk‐taking

Research finds that engaging in prosocial behavior has many positive psychological outcomes (e.g., enhanced well‐being, optimism, perceived control, and a boost in self‐concept), and research on monetary risk‐taking reveals these psychological outcomes are associated with increased risk‐taking. Merging these findings, we propose that when people's volunteering behavior is made salient in their minds, they take more monetary risks. Making research participants’ volunteering behavior salient by having them recall an act of prior volunteering (studies 1 and 3), choosing whether to volunteer (study 2), or choosing one of two volunteering activities (study 4), four experiments (and a fifth reported in the Appendix S2) reveal increased risk‐taking across several monetary‐risk outcomes (incentive‐compatible gambles, allocation of a windfall gain, and a behavioral risk‐taking measure involving escalating risk). Lastly, when the decision maker attributes a decision to volunteer to an external source, the effect of salient volunteering on monetary risk‐taking attenuates.

Joint Ownership Housing in Urban China: A Property Inalienability Perspective

This paper analyzes joint ownership housing (JOH), a new type of low-income housing in China, from a property inalienability perspective. JOH policy that was recently promulgated by the Beijing City shows that local government is really a passive owner in JOH, contradicting a common argument that JOH can realize asset growth for government equity investment. In this sense, JOH is a policy tool that can continuously adjust property inalienability. In JOH, the government maximizes two externalities from property inalienability, namely externality on the homeowner’s production and externality of his/her windfall gain on the society, while the homeowner maximizes his/her financial gains. Nash equilibrium determines optimal equity position of the government and optimal exit timing by the homeowner. Numerical simulation shows that homeowner’s behavior is very sensitive to how housing price changes over time. Small government equity position can easily yield corner solutions in which the homeowner immediately sells the property after the first year. This finding helps to explain why local governments in China often impose a five-year window of inalienability on JOH.

Mining and petroleum boom and public spending policies in Niger: a dynamic computable general equilibrium analysis

AbstractThis study analyzes a public-spending option from mining and oil resources and its impact on Niger's economy. The windfall gain from mining and oil revenues provides an opportunity for the country to reinvest natural resource rents, enhance economic development, and address infrastructure gaps. Drawing on the country's recent and expected mining and oil exploitation, we evaluate the effects of a reinvestment policy in road infrastructure using a dynamic computable general equilibrium (CGE) model. We find that investment in road infrastructure brings positive spillover effects to other sectors of the economy and benefits to the economy in the long run. Our analysis additionally shows that reinvestment in road infrastructure, given the initial state of infrastructure in Niger, could help mitigate the resource curse.

Worker Morale and Effort: Is the Relationship Causal?

We investigate a unique setting which enables us to distinguish between two theories of work performance. A standard labor supply framework implies a negative effect of the nonpecuniary cost of work on the employee's effort. In contrast, a model of worker morale that is consistent with a widely used theory of Akerlof and Yellen (QJE, 1990) predicts this negative effect is stronger (weaker) for low‐morale (high‐morale) workers. We exploit a natural experiment design of a firm relocation from Milwaukee's Central Business District to the area's suburban ring in 1992. There is an exogenous source of variation on the adjusted commuting distance among those who stay at the firm. Some workers received a windfall gain, whereas other workers experienced an unforeseen cost in longer commuting time. The estimates suggest that low‐morale workers are responsive to the shock in commuting time for some of the dimensions of morale. We conclude that the results give some indication of the model of worker morale.

WARM‐GLOW GIVING: EARNED MONEY AND THE OPTION TO TAKE

Giving in dictator games has been shown to vary with the nature of the endowment (earned vs. house money) and the action space (give only vs. the option to give or take). This article is the first to test if these factors similarly affect warm‐glow giving alone. There is no reason that one would expect the same outcomes given that the motivations for warm‐glow giving are different from the motivations for total (warm‐glow plus purely altruistic) giving. We find that warm‐glow giving to charity or philanthropic institutions in a real‐donation experiment increases when the endowment is earned. The option to take does reduce warm‐glow giving to charity, but significant giving remains. Our results suggest that donating earned income creates greater utility than donating an equal amount from a windfall gain, and that warm glow comes not merely from the act of giving, but also from the characteristics of the recipient. (JEL C90, D64, H41)

Structural Transformation and Economic Diversification in West African Countries

<p>In the history of modern trade theory, the capitalized countries set up ridiculous pretensions as specialization for being an industrialized country. Thus, well-know words according to their idea is “Africa has a strong comparative advantage in natural resources, so, they should specialize on them.” But today, new theories on over-specialization are to keep away commodity dependent countries from specialization. As mentioned above, there are many new concepts which are not available for Africa continent. In this article, new concepts such as Natural Curse Arguments (paradox of plenty), Dutch Disease, Immiserising Growth, windfall gain argument and over-specialization were discussed.</p>

Natural resource revenue, spending strategies and economic growth in Niger

In this paper, we use a recursive dynamic computable general equilibrium (CGE) model to examine spending strategies in Niger, a resource-rich, low-income country that has a windfall gain from mineral export revenue. The recent literature on Dutch disease describes alternative policy rules to manage the income flow from the expected natural resource revenue, which can either be spent to raise immediate consumption or on public infrastructure to increase future productivity. We simulate four strategies. As a conservative strategy, Niger can spend only the interest earned on revenue in a sovereign wealth fund (bird-in-hand strategy); alternatively, it can borrow to spend now and repay with expected natural resource revenue. The key to the benefits of significant mineral revenue lies with the productivity and supply responses of spending. If significant output gain is assured, the different spending strategies have very similar effects on real consumption. Dutch disease, the overshooting of relative prices of non-tradable sector or the shrinking share of traded sectors in the economy, is also ameliorated with greater supply flexibility. Growth paths of alternative spending strategies differ markedly in timing and pattern, however, when spending does not raise productivity. The more aggressive spending plan may result in a boom–bust cycle if fiscal adjustments and debt repayments are necessary for any significant borrowing against future revenue and productivity gains are not realized.

Assessing the Impact of Financial Incentives in Extension Programmes: Evidence From Ireland

AbstractWe evaluate whether the effectiveness of a participatory extension programme changes when an incentive is introduced that financially rewards farmers for participation. Using data from a dairy farm extension programme operated in Ireland, the evaluation assesses whether farmers who joined before the financial incentive was introduced receive larger benefits from the extension programme than farmers who joined after the financial incentive. The results from a propensity score matching analysis reveal that farmers who joined before the incentive significantly improved their farm performance, as measured in gross margins and yields, while farmers who joined after the incentive did not significantly benefit from the extension programme. This implies that the incentive to participate is a windfall gain to these later participants.

Does Fairness Constrain Profit Maximization? New Evidence from a Dictator Monopoly Experiment

In seminal contributions, Kahneman, Knetsch and Thaler (1986a, 1986b) introduce dictator games and questionnaires to investigate whether fairness constrains profit maximization. They find that fairness does matter in dividing monetary gains. This is important because standard microeconomic models do not take fairness into account and therefore are deficient and, as Kahneman et al. (1986, p. S286) put it, embarrassingly so. The question that this paper takes up is whether the standard dictator exchange game is too simple to adequately address the question Kahneman et al. pose. We show that the standard ultimatum/dictator exchange games implicitly assume perfectly inelastic demand, an assumption, we argue, that is far too restrictive to support broad conclusions about profit maximization in general and about the restraint of fairness on profit maximization in particular. We argue that the question at least must be investigated in the context of the simple models of profit maximization that are criticized. This paper introduces a new experimental design based on a more general demand specification defining a dictator monopoly. Results from initial rounds are similar to those of standard dictator games with significant sharing in evidence. As rounds progress, however, dictator monopolists take more, until finally they take it all. This strongly suggests that agents making decisions within a more complex microeconomic setting, even as simple as the one in this paper, respond quite differently than they do when deciding on the simple division of a windfall gain.

Windfall gains and labour supply: evidence from the European household panel

Abstract JEL classification D12, J22. We investigate whether workers adjust hours worked in response to windfall gains using data from the European Household Panel. The results suggest that a rise in unearned income has a negative (although small) effect on working hours. In particular, after receiving a windfall gain, individuals are more likely to drop out of the labour force and the effects become larger as the size of windfall increases. Furthermore, the empirical findings show that the impact of windfall gains on labour supply: (i) is more important for young and old individuals, (ii) is most negative for married individuals with young children, (iii) but can be positive for single individuals without children at the age of around 40 years. The latter effect can be explained by individuals using the windfall gain to set up their own business and become self-employed.