Salt or Sludge? Exploring Preferences for Potable Water Sources

Decision makers often use information about public preferences to guide public policy. Several disciplines gather information on preferences through surveys by asking respondents to make hypothetical choices over potential policies. However the context of the choice question differs between approaches, with some failing to make the full consequences of the respondent’s choice explicit in the question. In this study we investigate whether question context matters, by exploring whether economic and psychology approaches yield a similar understanding of community preferences towards a large-scale recycled wastewater scheme. We find that stated preferences differ depending on whether the preference question is contextualised using economic incentives. The findings provide insight into the implications of inappropriately contextualised preference questions, methodological considerations in attitude identification and estimation, and the diversity of values and public attitudes towards recycled wastewater.     

Learning Objectives and Testing: An Analysis of Six Principles of Economics Textbooks,Using Bloom's Taxonomy

This study applies Bloom's Taxonomy of Educational Objectives to six principles of economics textboks and the accompanying instructor's manuals to determine whether the test banks provided are likely to measure the textbooks' stated objectives. The study finds significant discrepancies between the stated objectives of most textbooks and the instruments included in the instructor's manuals to measure student achievement.     

The effects of a modest incentive on information overload in an investment analysis task

This paper investigates the effects of performance based monetary incentives on cue usage within the information overload paradigm. Participants suggested appropriate stock prices for hypothetical companies based on either six or nine non-correlated information cues. The presence of monetary incentives motivated increased response times compared to participants who did not receive incentives. This in turn resulted in higher levels of information usage than has been observed in previous studies. The results support the view that information processing capacity imposes a limit on the amount of information processed per unit of time rather than on the amount of information that can be processed in total.     

Risk, uncertainty, and learning in adoption of a crop innovation

Risk and uncertainty have often been suggested as causes of poor adoption of rural innovations, but empirical evidence has been scarce. This study focuses on a new crop‐type, chickpeas, in Western Australia to gather such evidence. The empirical models developed are based on a theoretical framework that conceptualizes adoption as a dynamic decision process involving information acquisition and learning‐by‐doing by growers who vary in their managerial abilities, risk preferences, and their perceptions of the profitability and riskiness of the innovation. Learning encompasses improvements in skill as well as reductions in uncertainty. An annual face‐to‐face survey of over 100 farmers was conducted over 3 years, eliciting the farmers' risk attitudes and their subjective distributions of yields and prices. Two limited dependent variable models, Tobit and Probit, are used to estimate the empirical model. There is a high degree of goodness‐of‐fit for both models. The study provides strong empirical support for the primarily economic character of the adoption decision, and highlight the importance of economic risk in the process. The two risk‐related factors with greatest impact on the adoption decision were risk aversion and relative riskiness of the innovation. Risk aversion tended to reduce adoption, and to do so to a greater extent as relative riskiness and scale increased. Results also reveal the key role that trialing of the innovation plays in adoption.     

The impact of audit penalty distributions on the detection and frequency of fraudulent reporting

We investigate how the distribution of the penalties incurred by auditors for failing to detect fraud influences their effort to detect fraud and auditees’ commission of fraud. We compare a probabilistic, skewed audit penalty to a penalty that automatically imposes the expected penalty of the probabilistic distribution (hereafter, a deterministic penalty). Our experiments show that a deterministic penalty with the same expected value of a probabilistic, skewed penalty increases audit effort to detect fraud and decreases fraudulent reporting by auditees and that these benefits hold in a game involving both auditee and auditor players.     

Property Rights Protection of Biotechnology Innovations

Protection of intellectual property embedded in self-replicating biological innovations, such as genetically modified seed, presents two problems for the innovator: the need for copy protection of intellectual property and price competition between new seed and reproduced seed. We consider three regimes in two periods with asymmetric information: short-term contracts, biotechnological protection, and long-term contracts. We find that piracy imposes more intense competition for seed sales than does durability alone. Technology protection systems yield highest firm profit and long-term contracts outperform short-term contracts. Farmers prefer, in order, long-term, short-term, and biotechnical protection. Depending on monitoring cost, long-term contracts may be socially preferred to short-term contracts, with both preferred to biotechnical protection.     

Workfare: Ethics and Efficiency

John Burton of Leeds Polytechnic argues that workfare offers a solution to some of the problems of unemployment. He specifically rejects the notion that workfare involves a reduction in freedom, yet suggests that there may be a case for state involvement in unemployment relief.     

Consumer perceptions of tensile price claims in advertisements: An assessment of claim types across different discount levels

Findings are reported for two studies that examined the effects of three forms of tensile price claims (i.e., stating a minimum, maximum, or range of savings) on consumers’ price perceptions, search and shopping intentions, and estimates of price reduction across four different discount range levels. Hypotheses are offered based on a rationale drawn from an anchoring and adjustment framework. Results of both studies indicate that for broader discount ranges, tensile claims stating the maximum level of savings have more positive effects than those stating the minimum level or the entire savings range. For more narrow discount ranges, tensile claims stating the maximum level of savings appear to be no more effective than claims stating the minimum level or the entire savings range. He received his Ph.D. in Marketing from the University of Houston in 1988. Dr. Biswas’s work has been published or is scheduled to appear in the Journal of Marketing, Journal of Macromarketing, Journal of Business Research, Journal of Advertising, Journal of Consumer Affairs, Psychology and Marketing, and Journalism Quarterly, as well as other refereed journals and proceedings. He received his Ph.D. in Marketing from the University of Houston and a B.B.A. and M.B.A. from the University of Texas. His research has been published in the Journal of Marketing Research, Journal of Consumer Research, Journal of Marketing, Journal of the Academy of Marketing Science, Public Opinion Quarterly, and others.