IMT-Lucca and UA-FAE
Friday, October 18 from 11:30 to 13:00
Place: Aula Vicens Vives
11:30 Welcome Remarks by Lola Collado
11:40 Presentation of the Agreement between IMT and UA of co-tutorship and double PhD degree by Massimo Riccaboni
12:00 Ennio Bilancini (IMT), “Does Focality Depend on the Mode of Cognition? Experimental Evidence on Pure Coordination Games” (with E. Bilancini, L. Boncinelli, L, Luini)
We study whether the reliance on the focality embedded in past experience requires or not a substantial cognitive effort. To do so we provide experimental evidence on how the mode of reasoning can affect behavior in pure coordination problems on familiar alternatives (colors, numbers, shapes, letters) with and without an exogenous anchor that can serve as a focal point. The mode of reasoning is manipulated in the lab by requiring subjects to decide quickly (time pressure treatment) and, alternatively, by requiring subjects to motivate their decisions in a few lines of text (motivation treatment). Experimental data suggest that: (i) subjects bring pre-existing focalities to the lab; (ii) the anchor introduces another focality that can go against pre-existing focalities; (iii) in the time pressure treatment the anchor is least effective while pre-existing focalities are best effective. As a result, the introduction of an exogenous anchor has an ambiguous effect on the overall ability of subjects to coordinate, making its desirability heavily dependent on the pre-existing focalities and the likelihood that subjects follow are more reflective.
12:30 Massimo Riccaboni (IMT), “Stock Market Reactions to Product Innovation: Evidence from the Pharmaceutical Industry” (with J. Niederreiter, M. Riccaboni)
We assess the relationship between product innovation announcements of bio-pharmaceutical companies and their stock market reactions using an event study approach. We hypothesize that abnormal returns around product-specific news are shaped by two effects: a ‘probability effect’, that depends on how investor s perceive the product’s likelihood of success, and a ‘portfolio effect’ that depends on the relative importance of the product within a company’s portfolio. To test for the probability effect, we elicit product-specific success probability estimates via supervised learning methods. The portfolio effect is measured by the product’s net present value before the announcement relative to the one of the company. We find that market reactions increase in product portfolio importance and decrease in the expected product success probability. Our results provide empirical insights on the drivers of market reactions that follow news on product innovation.