Research Roundup: The Economics of World of Warcraft

- Krista-Lee M. Malone, a doctoral student at the University of Wisconsin-Milwaukee, uses personal experience to break down Dragon Kill Points, a make-shift economic system created by elite WoW players to split up loot. (SSRN)

- Staying on the magical tip, Niccolo Caldararo, an anthropologist at San Francisco State University, compares the invention of modern finance to mysticism. Here is a snippet: "The stock market serves as a religion, reflecting a belief system no more rational that that of the Lele." (SSRN)

- "This paper examines the effect on effort provided by U.S. commercial airline pilots following large, permanent reductions in pay. After controlling for other factors known to affect airline on-time performance, we find evidence that large pay cuts lead to a statistically significant decline in pilot effort, proxied by an increase in the rate of flight delays and cancellations. This reduction in pilot effort, however, is typically short-lived." (Journal of Labor Economics | Free version)

- The limits of democracy in the developing world: "There is no evidence of a systematic relationship between democracy and FDI inflows. This result suggests that being a democracy does not help attract higher levels of FDI." (International Economic Journal)

- More on FDI: "We find that about one-third of the excess return earned by U.S. corporations abroad can be explained by firms reporting "extra" income in low tax jurisdictions of their affiliates." (NBER | Free version)

- The effects of radiation on fetuses: "This paper exploits the natural experiment generated by the Chernobyl nuclear accident in April 1986, which caused a spike in radiation levels in Sweden. In a comprehensive data set of 562,637 Swedes born 1983-1988, we find the cohort in utero during the Chernobyl accident had worse school outcomes than adjacent birth cohorts, and this deterioration was largest for those exposed approximately 8-25 weeks post conception. Moreover, we find larger damage among students born in regions that received more fallout: students from the eight most affected municipalities were 3.6 percentage points less likely to qualify to high school as a result of the fallout. Our findings suggest that fetal exposure to ionizing radiation damages cognitive ability at radiation levels previously considered safe." (NBER | Free version)

- In support of franchises: "While descriptive statistics suggest that franchise operations use low road practices, once industry, size, and other control variables are included in the analysis, franchise operations appear on important dimensions to offer better jobs with more sophisticated systems of employee management than similar non-franchise operations." (NBER | Free version)