Asymmetric distribution of information, while omnipresent in real markets, is rarely considered in experimental financial markets. We present results from experiments where subjects endogenously choose between five information levels (four of them costly). We find that (i) uninformed traders earn the highest net returns, while average informed traders always perform worst even when information costs are not considered; (ii) over time traders learn to pick the most advantageous information levels (full information or no information); and (iii) market efficiency decreases with higher information costs. These results are mostly in line with the theoretical predictions of Grossman and Stiglitz (Am. Econ. Rev. 70:393-408, 1980) and provide additional insights that studies with only two information levels cannot deliver.

There is a heated debate on whether markets erode social responsibility and moral behavior. However, it is a challenging task to identify and measure moral behavior in markets. Based on a theoretical model, we examine in an experiment the relation between trading volume, prices and moral behavior by setting up markets that either impose a negative externality on third parties or not. We find that moral behavior reveals itself in lower trading volume in markets with a negative externality, while prices mostly depend on the market structure. We further investigate individual characteristics that explain trading behavior in markets with negative externalities.

In this methodological study we analyze price adjustment processes in multi-period laboratory asset markets with five distinct fundamental value (FV) regimes in a unified framework. Minimizing the effect of between-treatment variations we run markets with deterministically decreasing, constant, randomly fluctuating and—as main innovation—markets with deterministically increasing FVs. We find (i) efficient pricing in markets with constant FVs, (ii) overvaluation in markets with decreasing FVs, and (iii) undervaluation in markets with increasing FVs. (iv) Markets with randomly fluctuating fundamentals show overvaluation when FVs predominantly decline and undervaluation when FVs are mostly upward-sloping. Finally, we document that (v) bid-ask spreads and volatility of price changes are positively correlated with mispricing across regimes. The main contribution of the paper is to provide clean comparisons between distinct FV regimes, in particular between markets with increasing FVs and other regimes.

We review bubble measures which are commonly used in the experimental asset market literature. It seems sensible to require that measures of mispricing should (i) relate the fundamental value and price, (ii) be monotone in the difference between fundamental value and price, and (iii) be independent of the total number of periods and the absolute level of fundamental value. We show that none of the measures currently used fulfills all these criteria. To facilitate comparability across different experimental settings with different parameterizations we propose two alternative measures which fulfill all evaluation criteria. The measure for mispricing, RAD (relative absolute deviation), is calculated by averaging absolute differences between the (volume-weighted) mean price and the fundamental value across all periods and normalizing it with the absolute value of the average FV of the market. The measure for overvaluation, RD (relative deviation), is calculated analogously, but uses raw difference between (volume-weighted) mean prices and fundamental values. Hence, it provides information on whether the mispricing stems from over- or undervaluation of the asset.

In 1988 Smith, Suchanek, and Williams (henceforth SSW) introduced a very influential model to test the efficiency of experimental asset markets. They and many subsequent studies observe that bubbles are robust to many treatment changes. Instead, bubbles are avoided only when subjects are experienced in the same setting, when the dividend-process is experienced by subjects beforehand, or when the fundamental value-process (FV) is presented in a well understandable context to reduce subjects’ confusion. We extend this line of research and show that even marginal changes in the experimental instructions/procedure can eliminate bubbles in the SSW-model. In particular, we show that mispricing is significantly reduced and overvaluation is eliminated completely (i) when the fundamental value process is displayed in a graph instead of a table or (ii) when subjects are asked about the current fundamental value at the beginning of each period. From a questionnaire conducted at the end of the experiment we infer that these treatment changes help to improve subjects’ understanding of the FV-process. We conclude that all bubble reducing factors have one common feature: they allow subjects to understand the non-intuitive declining FV-process of the SSW-model better and thus reduce subjects’ confusion about the FV-process.

We run laboratory experiments to analyze the impact of prior investment experience on price efficiency in asset markets. Before subjects enter the asset market they gain either no, positive, or negative investment experience in an investment game. To get a comprehensive picture about the role of experience we implement two asset market designs. One is prone to inefficient pricing, exhibiting bubble and crash patterns, while the other exhibits efficient pricing. We find that (i) both, positive and negative, experience gained in the investment game lead to efficient pricing in both market settings. Further, we show that (ii) the experience effect dominates potential effects triggered by positive and negative sentiment generated by the investment game. We conjecture that experiencing changing price paths in the investment game can create a higher sensibility on changing fundamentals (through higher salience) among subjects in the subsequently run asset market.

While the quasilinear isothermal Euler equations are an excellent model for gas pipeline flow, the operation of the pipeline flow with high pressure and small Mach numbers allows us to obtain approximate solutions by a simpler semilinear model. We provide a derivation of the semilinear model that shows that the semilinear model is valid for sufficiently low Mach numbers and sufficiently high pressures. We prove an existence result for continuous solutions of the semilinear model that takes into account lower and upper bounds for the pressure and an upper bound for the magnitude of the Mach number of the gas flow. These state constraints are important both in the operation of gas pipelines and to guarantee that the solution remains in the set where the model is physically valid. We show the constrained exact boundary controllability of the system with the same pressure and Mach number constraints.

Despite the ongoing success of populist parties in many parts of the world, we lack comprehensive information about parties’ level of populism over time. A recent contribution to Political Analysis by Di Cocco and Monechi (DCM) suggests that this research gap can be closed by predicting parties’ populism scores from their election manifestos using supervised machine learning. In this paper, we provide a detailed discussion of the suggested approach. Building on recent debates about the validation of machine-learning models, we argue that the validity checks provided in DCM’s paper are insufficient. We conduct a series of additional validity checks and empirically demonstrate that the approach is not suitable for deriving populism scores from texts. We conclude that measuring populism over time and between countries remains an immense challenge for empirical research. More generally, our paper illustrates the importance of more comprehensive validations of supervised machine-learning models.

Public support is usually a precondition for the adoption and successful implementation of costly policies. We argue that such support is easier to achieve with policy-packages that incorporate primary and ancillary measures. We specifically distinguish command-and-control and market-based measures as primary measures and argue that the former will usually garner more public support than the latter given the low-visibility tendency of costs associated with command-and-control measures. Nevertheless, if included in a policy-package, ancillary measures are likely to increase public support by reducing negative effects of primary measures. Based on a choice experiment with a representative sample of 2,034 Swiss citizens, we assessed these arguments with respect to political efforts to reduce vehicle emissions. The empirical analysis supported the argument that policy-packaging affects public support positively, particularly generating more support when ancillary measures are added. Lastly, we ultimately observe that command-and-control measures obtain more public support than market-based instruments.

The objective of this study was to evaluate growth and seed production of giant foxtail under different N sources (NO3 and NH4) and N fertilizer application rates. Nitrate and NH4 fertilizers plus nitrification inhibitor were applied at 56, 112, and 225 kg N ha−1 under field conditions, and in the greenhouse four N rates (1, 5, 10, and 25 mM N) were applied in three NO3: NH4 ratios (100 : 0, 50 : 50, 0 : 100). Growth of giant foxtail was affected by N rates under both greenhouse and field conditions. In 1993, abundant rainfall in May and June allowed a rapid and earlier uptake of N by giant foxtail, resulting in larger plants with greater N accumulation and higher numbers of heads and seeds than in 1994. Total dry weight increased with increasing N rates; however, seed production reached a maximum at approximately 150 kg N ha−1. Nitrogen translocation efficiency decreased with increasing N rates. Giant foxtail did not show any preference to N form; however, seed production was reduced when the high N rate was applied as NH4 compared to NO3. These results suggest that NH4 fertilizer applications with a long-term nitrification inhibitor could reduce the seed production of giant foxtail and its contribution to the soil seedbank for subsequent growing seasons.

The NASA/DLR Stratospheric Observatory for Infrared Astronomy (SOFIA), a 2.5-meter infrared telescope on board a Boeing 747-SP, will conduct 0.3 - 1,600 μm photometric, spectroscopic, and imaging observations from altitudes as high as 45,000 ft., where the average atmospheric transmission is greater than 80 percent. SOFIA's first light cameras and spectrometers, as well as future generations of instruments, will make important contributions to the characterization of the physical properties of exoplanets. Our analysis shows that optical and near-infrared photometric and spectrophotometric follow-up observations during planetary transits and eclipses will be feasible with SOFIA's instrumentation, in particular the HIPO-FLITECAM optical/NIR instruments. The airborne-based platform has unique advantages in comparison to ground- and space-based observatories in this field of research which we will outline here. Furthermore we will present two exemplary science cases, that will be conducted in SOFIA's cycle 1.

The freedom of movement of persons is one of the core tenets of the European Union. Immigration however is often seen as a cause for concern amongst native workers, as rising labour supply may threaten jobs and create downward pressure on wages. National politicians are increasingly under pressure to guard against it — in times of recession particularly. Despite this, there is evidence that highly-skilled migrant labour has the potential to raise competitiveness significantly and in theory this may feed into productivity. In this paper, we explore first the composition of inward migration to the EU and within the EU, concentrating specifically on the role of the highly-skilled and the extent to which migrants are overqualified within their jobs. We then analyse whether migrant workers affect productivity at the sectoral level. We find under-utilisation of skilled foreign labour and there is little evidence in general to suggest that migrants have raised productivity which may in part be attributable to over-qualification. However, we find robust evidence that migrants — particularly highly-skilled migrants — play a positive role in productivity developments in industries which are classified as ‘skill intensive’.