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The global economy is in recession due to the pandemic of the coronavirus infection COVID-19. According to available estimates, Russia's GDP in 2020 will fall by 2–8%, so that in its consequences the current crisis may be tougher than the crises of 1998 and 2008. In the coming years, the Russian economy will have to recover and enter a new long-term growth path. At what expense and in which industries will this happen?
The report based on the experience of previous crises using industry accounts of economic growth and Russia KLEMS data, examined possible sources of recovery of the Russian economy after the crisis of 2020. By analogy with the recovery after 2008, it is likely to be associated with increased demand for raw materials on world markets and the reaction of the Russian oil and gas complex. Stagnation after 2008 is due to a decrease in production efficiency, especially in the expanded mining complex, as well as the cessation of technological make-up. Growth stimulation measures should include finding ways to increase the efficiency of the expanded mining complex, stimulating the adaptation of advanced technologies, and preserving existing adaptation channels in times of crisis - for example, successful export-oriented industries integrated into global value chains.
This paper builds a theory of deregulation and roll-out of on-road competition in the public transport sector. Focusing on the dimensions of competition, ownership and authorisation, we identify five distinct regulatory regimes: public monopoly, regulated monopoly, unregulated monopoly, outsourcing to private monopoly and competition in the market. Our generalised theoretical framework allows for the direct comparison in the social welfare terms of the monopolies' outcomes and the fragmented market structure after deregulation. We formulate a set of parameter restrictions that make competition in the market preferable to public monopoly and competition for the market in the form of outsourcing. We also show the theoretical possibility of a ‘revised’ regulatory cycle forming a sequential transition between these identified regulatory regimes. Our model predicts possible policy reversals and the bypassing of certain phases of the cycle, that can occur due to technological advances, changes in fiscal constraints and institutional capacity improvements
The personal role of sub-national rulers is crucial for regional development in countries with weak institutions. This paper studies the impact of regional governors’ tenure in ofﬁce and their local ties on procurement performance in Russia. To identify the causal effect, we construct instruments for governor’s tenure by exploiting the regional vote share of ruling party in past parliament elections. We ﬁnd the evidence that governors who do not have pre-governing local ties in the region (outsiders) demonstrate predatory behaviour, compared to governors with local ties (insiders). Namely, governors-outsiders restrict the competition at awarding stage signiﬁcantly more than governors-insiders. Moreover, for governors-outsiders this restriction becomes stronger with tenure in ofﬁce, while governors-insiders do not demonstrate such negative tenure effect. We argue that this restriction of competition by governors-outsiders cannot be explained by the intention of better contracts execution: the delays in execution and the probability of contract termination either increase or keep stable with tenure for governors-outsiders and these outcomes decrease with tenure for governors-insiders.
I study a career concerns model in which the principal receives information about the agent’s performance from an intermediary (evaluator). I show that, in general, a biased evaluator is ex-ante optimal for the principal. The ex-ante optimal bias solves the tradeoff between ex-post optimality of the principal’s decisions about the agent and incentive provision. It is “anti-agent” (“pro-agent”) when the agent has an a priori high value (low value) for the principal. It increases with the strength of the agent’s career concerns and decreases with the degree of uncertainty about his ability. Delegating decisions to the evaluator dominates communication with her when ex-ante optimality calls for a sufficiently large bias.
Any teacher, beginner or experienced, wants to teach an effective and successful lesson. The notion of effective teaching is rather difficult: two teachers can teach the same lesson, but differently, and both lessons can be effective. This article deals with some principles which can make a lesson effective, such as lesson management, lesson structure, students’ motivation to study, and class size. This research into students’ attitude to class size covers four groups from academic year 2016-2017 (faculty of linguistics at the National Research University Higher School of Economics – NRU HSE), six groups from academic year 2017-2018 (faculty of linguistics), and four groups from academic year 2017-2018 (International College of Economics and Finance – ICEF). Students’ replies to the question of whether they like to study in large or small groups show that most students prefer to study in small groups; the standard number of students in a first-year class is 15, but in reality can exceed 20.
The low temperature transport of electron, or vibrational or electronic exciton towards polymer chains turns out to be dramatically sensitive to its interaction with transverse acoustic vibrations. We show that this interaction leads to substantial polaron eﬀect and decoherence, which are generally stronger than those associated with longitudinal vibrations. For site-dependent interactions transverse phonons form subohmic bath leading to the quantum phase transition accompanied by full suppression of the transport at zero temperature and fast decoherence characterized by temperature dependent rate k2 ∝ T3/4 at low temperature while k2 ∝ T2 for site-independent interactions. The latter dependence was used to interpret recent measurements of temperature dependent vibrational energy transport in polyethylene glycol oligomers.
This paper presents a model of strategic competition between universities that accounts for the existence of positive spillover effect from -education (peer effect). It was demonstrated that in the presence of peer effect strategic competition results in inefficient student allocation between the two universities (biased to the high-quality university) and excessive quality differentiation. The model is used to analyze the implications of government funding policies as well as admission and quality regulation. It was demonstrated that traditional schemes of institutional funding and students’ financial aid programs like tuition fee subsidy, quality investment subsidy, or total cost subsidy reduce social welfare. At the same time, an introduction of provision of tuition-free education for the best students combined with a per-student grant provided to the university improves both students’ and social welfare. It was also demonstrated that tight admission regulation is not socially desirable while the introduction of minimum quality standards makes society better off.
The history of research in ﬁnance and economics has been widely impacted by the ﬁeld of Agent-based Computational Economics (ACE). While at the same time being popular among natural science researchers for its proximity to the successful methods of physics and chemistry for example, the ﬁeld of ACE has also received critics by a part of the social science community for its lack of empiricism. Yet recent trends have shifted the weights of these general arguments and poten- tially given ACE a whole new range of realism. At the base of these trends are found two present-day major scientiﬁc breakthroughs: the steady shift of psychology towards a hard science due to the advances of neuropsychology, and the progress of reinforcement learning due to increasing computational power and big data. We outline here the main lines of a computational research study where each agent would trade by reinforcement learning.
Strong-Δ-Rationalizability introduces first-order belief restrictions in the analysis of forward induction reasoning. Without actual restrictions, it coincides with Strong Rationalizability (Battigalli, 2003; Battigalli and Siniscalchi, 2003). These solution concepts are based on the notion of strong belief (Battigalli and Siniscalchi, 2002). The non-monotonicity of strong belief implies that the predictions of Strong-Δ-Rationalizability can be inconsistent with Strong Rationalizability. I show that Strong-Δ-Rationalizability refines Strong Rationalizability in terms of outcomes when the restrictions correspond to belief in a distribution over terminal nodes. Moreover, under such restrictions, the epistemic priority between rationality and belief restrictions is irrelevant for the predicted outcomes.
Multiple units of property, each owned by a seller with a private value, are perfect complements in a private redevelopment project. The paper develops a mechanism for assembly of property which (i) allows compulsory sales, (ii) does not require any transactions unless the property assembly takes place, (iii) is ex-post budget-balanced, (iv) guarantees a minimum compensation to each seller, and (v) seeks to maximize the joint welfare of sellers. The mechanism is shown to converge asymptotically, as the number of sellers grows, to the seller first-best at a high rate. The mechanism requires very little knowledge about the distributions of seller valuations, and is robust to incorrect specification of distributions of both seller or buyer valuations by the market maker.
This paper presents a public procurement transaction cost evaluation using a large-scale survey of procurers and suppliers. The study was conducted in Russia in 2017. The results of the survey confirmed that the lower the contract value, the more expensive the procurement procedure. An empirical analysis of factors impacting public procurement cost evaluation also revealed considerable differences between respondents with and without experience in complex procurement procedures. The paper makes an important contribution to the academic literature by elaborating a new approach to public procurement cost evaluation, as well as providing an empirical evaluation of direct transaction costs of public procurement.
The survey-based approach to the evaluation of public procurement costs described in this paper can be used by other countries and regions. Although the average overall transaction costs for public procurements in the case study country amounted to about 1% of the total value of concluded contracts, this figure was 6.6% to 8.1% for small purchases. This figure exceeds the budget saving from competitive procurement and calls for a need to simplify regulations around smaller procurements. This analysis of the procurement costs on Russian data will allow other developing countries to avoid the mistakes made in Russia, as well providing a way to realistically and affordably measure their procurement transaction costs.
This paper provides a status-based explanation for convertible securities. An entrepreneur with status concerns inducing risk-taking decides how to finance the firm and how to dynamically manage it. Solving analytically for the optimal security, we find that it is substantially similar to a convertible security. Our model can explain why convertible securities are mainly issued by start-ups and small firms, as we show that their salient characteristics, higher volatility and dynamic flexibility, accentuate incentives to issue convertible securities. We also provide analytical results relevant to quantifying how status concerns affect credit risk, an established factor behind security choice.
In dynamic games, players may observe a deviation from a pre-play, possibly incomplete, non-binding agreement before the game is over. The attempt to rationalize the deviation may lead players to revise their beliefs about the deviator’s behavior in the continuation of the game. This instance of forward induction reasoning is based on interactive beliefs about not just rationality, but also the compliance with the agreement itself. I study the effects of such rationalization on the self-enforceability of the agreement. Accordingly, outcomes of the game are deemed implementable by some agreement or not. Conclusions depart substantially from what the traditional equilibrium refinements suggest. A non subgame perfect equilibrium outcome may be induced by a self-enforcing agreement, while a subgame perfect equilibrium outcome may not. The incompleteness of the agreement can be crucial to implement an outcome.
Economic predictions often hinge on two intuitive premises: agents rule out the possibility of others choosing unreasonable strategies (‘strategic reasoning’), and prefer strategies that hedge against unexpected behavior (‘cautiousness’). These two premises conflict and this undermines the compatibility of usual economic predictions with reasoning-based foundations. This paper proposes a new take on this classical tension by interpreting cautiousness as robustness to ambiguity. We formalize this via a model of incomplete preferences, where (i) each player's strategic uncertainty is represented by a possibly non-singleton set of beliefs and a (ii) rational player chooses a strategy that is a best-reply to every belief in this set. We show that the interplay between these two features precludes the conflict between strategic reasoning and cautiousness and therefore solves the inclusion-exclusion problem raised by Samuelson (1992). Notably, our approach provides a simple foundation for the iterated elimination of weakly dominated strategies.
We study the consequences of misreporting in settings where ambiguity-averse investors face uncertainty about two aspects of the firm: productivity and reliability of the information system. We show that the joint presence of these two sources of uncertainty distort the firm’s investment choices in opposing ways, leading to over-investment by large firms (to signal productivity) and under-investment by small firms (to signal reliability). Our analysis suggests that uncertainty regarding the reliability of financial statements affects both the level of the market-to-book ratio and its association with firm size. In addition, we show that, under plausible circumstances, reductions in uncertainty can be detrimental to social welfare: lower information asymmetry about reliability always encourages more aggressive misreporting and boosts investment, thereby exacerbating the possible over-investment problem facing some firms.
The paper investigates under what conditions it is optimal to exclude some motorists searching for parking from occupying a vacant parking bay. Privileged parking is found to be optimal if motorists are heterogenous and can steer their search towards or away from such parking. The socially optimal allocation of privileges and search strategies are characterized. The second-best pricing policies in the presence of cruising-for-parking externality are described; short-term parkers should always be allowed to take the first vacant bay they find. A model extension studies technologically modified “special needs” parking. Unlike existing policies that make such parking exclusive for special-needs motorists, the optimal policy makes it available for an extra fee to anyone, while increasing the number of special-needs bays so that even the initial users are better off.
In the future world of self-driving vehicles, intersections will be managed by computers that send individual commands to each passing vehicle. This paper proposes to make traffic priority contingent on self-reported value of time of vehicle occupants. A model of two merging roads with stochastic traffic is developed. Algorithms for calculation of optimal exit sequences, accounting for time value heterogeneity, are characterized. Welfare costs of limited planning horizon are assessed. Incentive compatible scheme of payment for priority is calculated. The winners and losers of the proposed mechanism are described. Optimality of traffic volume and composition under optimal exit regulation is established.