Browsing by study line "Taloustieteellisen tutkimuksen opintosuunta"

Regret is the value lost by playing an action on the current round of a iterative game. The idea of regret matching is to generate strategies that minimize regret, since it is guaranteed by folk theorem to converge to Nash Equilibrium in a two-player zero-sum game. Storing cumulative regrets after each iteration enables to use of regret matching. It is an algorithm that chooses next iteration strategy based on the cumulative regrets of the actions. This procedure itself would converge to Nash Equilibrium in a normal form game zero-sum game. For extensive form game the data storing will become too resource demanding, when the game size is even moderate. However, it's possible to minimize regret on each information set separately using counterfactual regret. Counterfactual regret is calculated by using counterfactual values. Counterfactual value calculates expected value given that player tries to get to an information set and play a certain action in it. The difference between the action and expected value of the information set is counterfactual regret. Similarly minimizing regrets converges toward Nash Equilibrium. Using counterfactual regret minimization framework I create an iterative self-play algorithm to solve two-player zero-sum imperfect information games. In this thesis I work with last betting round of limit Hold'Em. CFR+ uses improved strategy averaging, does not store negative regrets and alternates between strategy updating player. I did eventually manage to construct CFR+ algorithm, and it seems extremely effective compared to earlier versions of the algorithm.

The phrase 'central limit theorem' has commonly come to stand for a result where partial sums of random variables converge to a gaussian random variable in the sense of distribution. Theorems of this nature readily yield applications to statistics and econometrics since they form the theoretical basis of approximating the sampling distribution of a given test statistic when the exact distribution may be intractable or otherwise infeasible to be retrieved. Faced with such a situation, a researcher can instead ask whether the test statistic, or a certain transformation of it, converges in distribution as the sample size grows without bound. If the answer is in the affirmative, then one may in a principled manner approximate the distribution of the finite-sample statistics with that of the limit distribution such that the approximation can be made in some sense arbitrarily good by sufficient increases in the sample size. Naturally, similar procedures apply in the case of estimators. These asymptotic normality results for econometric estimators, as they are called, require differing conditions to be satisfied depending on the nature of the data-generating process where the observations are thought to originate from. This thesis examines a selection of foundational central limit theorems in the cases of I.I.D., independent, D.I.D., and dependent data-generating processes and presents examples of their econometric applications, primarily to deduce asymptotic normality for a selection of key econometric estimators.

This thesis evaluates the effects of entry on incumbent firms' prices and procedures volume in dental care markets using difference-in-differences regression and administrative data on private dental care visits reimbursed by the Social Insurance Institution of Finland. The entry is considered as a competition increasing shock. The entrant's prices were remarkably low at the time of the entry and the firm was able to acquire a large share of volume in common procedures performed at the market. Thus, the entrant offered a real low-cost alternative to the residents of the Capital Region. I focus on examinations and fillings, which are two of the most common procedures. Patients face switching costs when changing their dental care provider. This means that incumbent firms with locked-in customers might be able to accommodate the entry easier, than without the switching costs. The results show that incumbent firms do not lower their prices in response to the entry by economically significant amount. However, the results suggest that incumbent firms perform less fillings after the entry. The effect is driven by summer months. The pattern where the incumbent firms do not change their prices and lose a share of their turnover to the entrant is consistent with the theoretical switching costs literature.

Despite continuous improvements in treatments, childhood cancers are among the most common causes of death for children in Finland. The cancer treatments are often arduous and have long-lasting effects even beyond the person diagnosed. Estimating these effects is important, since they can affect the cost-effectiveness of many policies. This thesis focuses on estimating the effects of childhood cancer on parental labour market outcomes, especially on the earnings gap between genders. Estimating the causal connection between health and socioeconomic variables is difficult for many reasons. In this thesis, a quasi-experimental method called "staggered differences-in-differences" is employed to solve this problem. In this method, families where cancer is diagnosed are compared to those that are diagnosed at a different time, and this way the true causal effect can be estimated. The thesis used administrative data from all childhood cancer diagnoses in Finland during years 1999-2017. The results show that childhood cancer reduces parents' income significantly. In short run, the effect is around 30% of the income before the diagnosis for mothers and around 7% for fathers. For mothers, the decline in employment is also significant. The welfare state provides support to these families to the extent that the decline in the income after transfers is not as large. The gender earnings difference increases around 20% in the short run, and increases also in families where mother is the main provider in the years before the diagnosis. My results are robust to different checks, including alternative estimators to correct for possible cohort-heterogeneous effects. The previous research is scarce and has provided differing estimates, but the results of this thesis are in line with the most relevant literature. The decline in earnings can be caused by the need to take care of the child, mental health effects or declined accumulation of human capital. While it is hard to suggest policy changes based on these results alone, the current benefits around ill children are short in duration and focused on one person and the results indicate that perhaps a longer benefit scheme distributed more evenly between genders might provide different outcomes.

We consider a so-called principal-agent problem, where our aim is to construct an optimal contract that maximises utilities for the contractor, the principal, and for the effort-exerting party, the agent. In our setting, the time-horizon of the contract is infinite, and the agent receives a continuously paid compensation for exerting effort. Our main goal is to establish a problem introduced in Sannikov (2008) and characterise an optimal contract by restricting the menu of feasible contracts, an approach inspired by Cvitanic et. al. (2018) We begin with an extensive literature review, where we review the continuous-time principal-agent problems and further motivate the scope of this thesis. We start from the notable article Holmström et. al. (1987), and we progress towards the works Williams (2008), Sannikov (2008) and Cvitanic et. al. (2018) Following the review, we construct the problem and lay the mathematical foundations for it. We focus on a new benchmark setting, adapted from Sannikov (2008) and Cvitanic et. al. (2018). We first define the so-called controlled state equation, and construct the canonical probability space. Then, we introduce then impose few assumptions regarding the core concepts, and identify the problems of the agent and the principal and characterise their objective functions. After characterising the problem, we characterise the optimal contract and show that the optimal contract maximises the principal's profit. We characterise the difference function of Sannikov (2008) to the agent's optimisation problem, and then follow Cvitanic et. al. (2018) on the reduction of the problem. The reduction is done by restricting the possible menu of contracts and thus reduce the non-standard problem to a dynamic programming problem. We introduce the corresponding Hamiltonian functionals, together with the value functions to the both principal and the agent. Furthermore, we introduce a family restricted processes, which we show to characterise the optimal contract. We finish with showing that the optimal contract exists even with the notion of retirement. Having completed the main technical contribution, that is, having solved for the optimal contract, we briefly discuss the results and their implications against previous literature. Additionally, we discuss the possible extensions to our research.

This thesis studies what kind of strategic incentives a mechanism applied in Finnish college admissions in the fields of Business Administration and Economics (BAE) during 2015–2017 offers as well as how applicants respond to these incentives. A special type of a strategy that a student can only be hurt by and therefore strategically sophisticated students should try to avoid under the mechanism – referred to as the Priority Point Mechanism (PPM) – is characterised. Given this strategy, the thesis investigates whether the applicants’ behaviour is in line with some students responding to the incentives of the mechanism, and whether some students fail in responding to them. Using data on BAE applicants’ full Rank Order Lists (ROLs) and applying a First Differences approach, hypotheses associated with studying strategic behaviour are tested. The results are in line with some students strategizing under PPM: the removal of the priority points increases the probability of ranking the most prestigious programme first by 5.2 percentage points (p<0.001), and for the most prestigious programmes pairs, it increases the probability of ranking programmes with small expected cut-off differences by 5.5–12.7 percentage points (p<0.01). However, out of three programme pairs studied, for one pair the estimated effect is 2.1 and insignificant (p≈0.11). There is no evidence in favour of these behavioural changes translating into longer ROLs: the estimate is 0.069 more study programmes ranked when priority points are removed, and it is insignificant (p≈0.34). Students who fail in responding to the strategic incentives offered by PPM exist. During 2016 and 2017, 7–9 % of students submitted an ROL by which they could only be hurt, and in 2017, 2.8 % of students submitted an ROL which clearly demonstrates lack of strategic sophistication. Motivated by the result that students who make such mistakes exist, students who made a mistake are compared to those who didn’t. The results suggest that having more experience and lack of informational disadvantages don’t protect students from playing a strategy by which they can only be hurt, while these aspects seem to be negatively correlated with making a mistake that demonstrates lack of strategic sophistication. For both mistake types, making a mistake is associated with lower academic aptitudes. The finding that students’ behaviour is in line with some applicants strategically behaving under PPM has implications on whether true preferences should be inferred from stated preferences if stated under a manipulable mechanism. Furthermore, some students strategically behaving and some students failing in responding to the incentives can result in unfair allocations where some students justifiably envy others. In addition, factors such as luck, risk taking attitudes, confidence, and difficulties in predicting entry-thresholds may contribute to who ends up being selected. Therefore, given the importance of college admissions on young students’ future prospects, how applicants respond to the incentives of the mechanism applied and how that in turn impacts the fairness of the resulting allocation of students to colleges remain questions which deserve more research.

Apteekit muodostavat oleellisen osan suomalaista lääkehuoltoa. Apteekkien tehtävänä on huolehtia lääkehuollon tehokkaasta ja turvallisesta järjestämisestä. Apteekkimarkki-nan raskaan sääntelyn johdosta apteekeille muodostuu paikallisia monopoleja. Apteek-kien ja apteekkareiden verotuksen avulla pyritään kattamaan lääkehuollon kustannuksia sekä saavuttamaan tulonjaollisia tavoitteita. Tämä tutkielma pyrkii selvittämään harjoitta-vatko apteekit vero-optimointia ja millaisia taloudellisia vaikutuksia sillä on. Veroreaktioiden tutkimiseen käytetään usein verotuksen muutoksen luomaa luonnollista koeasetelmaa. Apteekkiverotuksessa ei ole tapahtunut merkittäviä muutoksia aineiston aikavälillä. Aineistona tutkielmassa käytetään FIMEAN apteekkien talousaineistoa vuosil-ta 2010-2018, yhdistettynä avoimesti saatavilla olevaan aineistoon apteekkien tiloissa toimivista erillisyhtiöistä. Apteekkien vero-optimointia lähestytään tarkastelemalla koko-naisverotuksen luomia verokannusteita. Tyyliteltyjä verokäyttäytymismalleja verrataan apteekkien ja apteekkareiden toteutuneeseen käyttäytymiseen. Veroja optimoivan käy-töksen sattumanvaraisuuden poissulkemiseksi käytetään logistista regressioanalyysiä. Tulosten perusteella apteekkareiden keskuudessa yleistyy systemaattinen vero-optimointia erillisyhtiöiden kautta tapahtuvalla tulonmuunnolla. Ylimpään tulodesiiliin kuuluvat apteekkarit saavuttavat näin lähes 15 prosenttiyksikön veroedun. Vero-optimoinnin todennäköisyyttä nostaa siirrettävissä olevat tulot sekä apteekkariin kohdis-tuva henkilöveroprosentti. Siirrettävien tulojen ylittäessä 200 tuhatta euroa ylittää erillis-yhtiön todennäköisyys 50 prosenttia. Verotulojen menetys on noussut, kun maksettujen yhteisöverojen kasvu huomioidaan, noin 15 miljoonaan euroa vuodessa. Tulokset ovat linjassa pienyritysten vero-optimoinnin empiirisen tutkimuskirjallisuuden kanssa. Aiheen jatkotutkimuksen kannalta olisi hyödyllistä yhdistää aineistoon veroaineisto henkilön tarkkuudella. Tarkastelu olisi mielenkiintoista laajentaa koskemaan kaikkia listaamatto-mia osakeyhtiöitä.

Hintavakauden saavuttamisesta on tullut keskuspankkien tärkeimpiä tehtäviä kaikkialla maailmassa, ja useat keskuspankit pyrkivät tiettyyn, hyvin määriteltyyn inflaatiotavoitteeseen. Samoin Euroopan keskuspankki pyrkii rahapolitiikallaan pitämään inflaation kahden prosentin tuntumassa. Inflaatiotavoite kuitenkin vaatii sen, että inflaatiota voidaan ennustaa mahdollisimman tarkasti. Koneoppimismetodeihin kuuluvat neuroverkkomallit ovat osoittautuneet olemaan monilla aloilla hyviä ennustemalleja. Inflaation ennustamisessa neuroverkkomallien tulokset ovat kuitenkin olleet ristiriitaisia. Aiempi tutkimus inflaation ennustamisesta on myös keskittynyt lähinnä Yhdysvaltojen ja muiden yksittäisten maiden inflaatioon. Tutkimusta ei ole myöskään tehty inflaation ennustamisesta eri suhdannetilanteissa neuroverkkomallien avulla. Tässä tutkielmassa tutkittiinkin neuroverkkomallin kykyä ennustaa inflaatiota koko euroalueella vuosien 2008-2009 taantuman aikana. Tutkielman aineistona käytettiin euroalueen harmonisoidusta kuluttajahintaindeksistä muodostettua inflaatioaikasarjaa vuosilta 1997-2010. Tutkielmassa epälineaarinen neuroverkko rakennettiin aiemmasta kirjallisuudesta vakiintuneella metodilla, jossa mallin valinta suoritettiin käyttämällä erillistä aineistoa. Valitulla mallilla simuloitiin aitoa ennustetilannetta käyttämällä euroalueen taantuman aikaista testiaineistoa. Ennusteet tehtiin myös taantuman jälkeiselle noususuhdanteelle, jotta eri suhdannetilanteita voitiin vertailla. Lisäksi samat ennusteet tehtiin ekonometriassa vakiintuneella lineaarisella mallilla, johon neuroverkkomallia verrattiin käyttämällä aiemmasta kirjallisuudesta tuttuja arviointikriteerejä ja tilastollisia testejä. Tutkielmassa selvisi, että neuroverkkomalli tuottaa hyvin tarkkoja ennusteita inflaatiolle kaikilla tutkielmassa käytetyillä ennusteväleillä. Neuroverkkomallin ennusteet ovat myös parempia, jos käytettävä aineisto on kausitasoitettu. Neuroverkkomalli tekee pienempiä ennustevirheitä noususuhdanteen aikana kuin taantumassa, mutta erot eri suhdannetilanteissa eivät ole kovin suuria. Neuroverkkomallin ennusteet eivät kuitenkaan poikkea yksinkertaisen lineaarisen mallin tekemistä ennusteista tilastollisesti merkitsevästi kummassakaan suhdannetilanteessa. Näin ollen neuroverkkomallin ei voida päätellä toimivan eri tavalla taloudellisessa taantumassa kuin muissa suhdannetilanteissa. Tutkielman tulosten perusteella neuroverkkomallia ei voida suositella keskuspankkien inflaatioennustemalliksi, koska mallin valinta ja testaaminen vievät yksinkertaista lineaarista mallia enemmän aikaa, mutta ennustetulokset eivät ole lineaarista mallia parempia. Tulokset antavatkin todisteita siitä, että inflaatio on euroalueella lineaarinen prosessi, jolloin epälineaariset mallit eivät tuota ennusteisiin lisähyötyä. Neuroverkkomallit voivat kuitenkin antaa hyvän työkalun keskuspankkien toiminnan arvioimiseen, koska niiden tuottamat ennusteet ovat tarkkoja pitemmillekin aikaväleille.

This thesis studies the effects of delayed discharge fees in Finland. Excessive lengths of hospital stays are a significant source of inefficacy in the health care system. Delayed discharge occurs when a patient who is medically fit to leave the hospital cannot do so for non-medical reasons. In Finland, several hospital districts have implemented financial fees to curb delayed discharges. As the fees were not adopted simultaneously everywhere, it provides a desirable research setting. I use a staggered difference-in-difference design to study how the delayed discharge fees reduce the length of hospital stays and the probability of urgent hospital readmission using patient-level data. I presume that the fees work as an incentive to increase the supply of post-acute care beds. Hence, the implementation of delayed discharge fees would lead to fewer delays and consequently shorter hospital days and early access to post-acute care. Previous literature suggests that there exists an inverse correlation between delayed discharges and the availability of post-acute care beds. In addition, there is evidence that health care providers react to financial incentives. However, the existing literature documents contradicting results on the effects of the delayed discharge fees. The chosen identification strategy does not yield valid results when using the length of stay as a dependent variable. My results suggest that the parallel trends assumption does not hold. The pre-treatment trends persist even after controlling for group-specific variables. I find that the delayed discharge fees reduce the probability of readmission for elderly hip-fracture patients. The effect is modest in size but increases over time. After six years from the implementation, the effect of the fees is -0.059 per cent. The classical two-period difference-in-difference model concludes that the decrease in probability associated with the delayed discharge fees is - 0.018 per cent. Although significant, the reduction in probability is small. Hence strong conclusions should be avoided. My results suggest that delayed discharge fees could have positive implications on patients’ health but that their effects be further studied.

During the recent decades corporate income tax rates have declined. This development may be due to several issues, such as changes in the political environment or increased knowledge of behavioral effects of corporate taxation. One prominent explanation is tax competition. Tax competition is defined as noncooperative tax regime setting by independent governments such that the tax policy decisions affect the allocation of mobile tax base(s) among different countries. Tax regimes include the statutory tax rates as well as the tax bases and other parts of corporate tax systems. Tax competition is an important phenomenon for multiple reasons. Lower tax rates may imply issues in financing the public sector. On the other hand, it makes some of the issues of the international corporate tax system visible. This thesis reviews theories of tax competition. The aim is to provide an analysis of the different aspects of tax competition and review how different institutional structures are modelled in tax competition framework. Studying the main implications of tax competition is an important part of the thesis. The first formal models of tax competition consider a world economy which consists of many identical countries. Firms maximize profits and governments maximize utility of the representative agent. It is shown that tax competition drives tax rates to an inefficiently low level. Later tax competition research develops both the institutional set -up of tax competition and modelling frameworks applied to study it. The results of this thesis imply that the result of the first tax competition models is strong. Tax competition drives corporate tax rates to an inefficiently low level even if the key assumptions are relaxed. On the other hand, some important extensions imply that corporate income tax rates are in an optimal level even in presence of tax competition. However, in most cases tax competition is harmful since it drives corporate income tax rates to inefficiently low levels. On the other hand, tax competition literature also provides other results. Considering sequential tax competition instead of simultaneous shows that tax rates may in equilibrium be higher if one country acts as a leader. This may be one explanation why tax rates have not declined to zero as the famous race to the bottom hypothesis suggests. Tax competition literature also provides analysis on the effect of tax havens. These results are, however, more confusing. Tax competition can decrease welfare or be welfare improving. This thesis reviews important aspects of tax competition literature and focuses on the institutional set-up of theories of tax competition. There remain some gaps in the literature. Some institutional set-ups are not analysed in the tax competition context. On the other hand, literature focusing on the empirics of tax competition is scarce. One of the important aspects of tax competition is how to limit it. This issue has a great amount of current attention in the work of OECD, for example.