Elicitation using multiple price list formats

We examine the properties of a popular method for eliciting choices and values from experimental subjects, the multiple price list format. The main advantage of this format is that it is relatively transparent to subjects and provides simple incentives for truthful revelation. The main disadvantages are that it only elicits interval responses, and could be susceptible to framing effects. We consider extensions to address and evaluate these concerns. We conclude that although there are framing effects, they can be controlled for with a design that allows for them. We also find that the elicitation of risk attitudes is sensitive to procedures, subject pools, and the format of the multiple price list table, but that the qualitative findings that participants are generally risk averse is robust. The elicitation of discount rates appear less sensitive to details of the experimental design. Electronic Supplementary Material Supplementary material is available in the online version of this article at . JEL Classification C9, D81, D91 An erratum to this article is available at .     

The greening of Swedish energy policy: A critique

This article discusses Swedish energy policy over the period 1973–1992 with a focus on its current energy objectives. Bans on energy sources are assessed as one of the challenges faced by Sweden in the 1990s. We raise questions about the future consequences of such draconian approaches to energy policy that inhibit societal learning. Bans on any fuel source only serve to handicap the economy and lead to a less flexible and more inefficient energy supply at a greater than necessary cost. With the Swedish economy on the verge of becoming more integrated with the rest of Europe, it is imperative to view its comparative advantage in electricity as the basis for its energy policy rather than the individual fuels that generate that electricity. Our goal has been to synthesize components among existing energy objectives to suggest logical implications for the future.     

Beyond Stakeholder Utility Function: Stakeholder Capability in the Value Creation Process

In spite of the thousands of articles on stakeholder theory, research on value creation has had a shorter history and narrower breadth. Only a few studies have researched value creation from stakeholder perspective looking at how stakeholders appropiate value or the processes or activities by which stakeholders create value. Consequently to date, certain questions still remain unanswered regarding how a firm should treat stakeholders in order to create value. Several questions arise specifically from the stakeholder's side: What does "value" mean for a particular group of stakeholders and how do firms create these different types of value? How do we measure the value created by stakeholders? The purpose of this paper is to answer these questions from Amartya Sen's Capability Approach, identifying and measuring stakeholders' capabilities in the value creation process. Stakeholder Capability is the adequate concept for understanding stakeholder welfare rather than the utility function concept. The empirical evidence comes from an in-depth case study of the company The Grobo Group and its stakeholders. According to the results, the following stakeholder capabilities are relevant to value creation: being employable, being autonomus, being innovative, being entreprenurial, being responsive, being socially integrated, being emphatic, being "green" and being healthy.     

Decision Making Costs and Problem Solving Performance

We report the results from an experimental study of how problem solving behavior is affected by financial rewards. We formulate three alternative hypotheses: costly rationality, extrinsic/intrinsic trade-off, and distraction effects. Subjects play a computerized version of the Tower-of-Hanoi game and report their beliefs about the optimal solution through a quadratic scoring rule. Subjects participate in one of two treatments: a high penalty and a low penalty. We find that eliciting beliefs, in addition to observing playing behavior, reveals useful information about subjects' cognitive behavior. We reject our hypothesis that the increase in the extrinsic penalty affects the intrinsic valuation in such a way as to decrease the amount of effort applied.     

The development of the Personality Audit: a psychodynamic multiple feedback assessment instrument

The Personality Audit (PA) was developed to meet a need for a relatively simple multiple feedback instrument that could clarify the various motivational needs of executives. Using a psychodynamic approach to leadership, the PA allows the test-taker to assess him- or herself in seven personality dimensions important in human behaviour and to identify personal ‘blind spots’. The resulting insights can be used to formulate appropriate leadership development goals.

The objective of this paper is to describe the design and psychometric properties of the PA. This instrument, in contrast with other tools that can be used to clarify the inner theatre of individuals, is designed not only to report information given by the test-taker but also to reflect the perceptions of observers representing both the test-taker's public and private spheres. This paper describes in detail the conceptual foundations of the questionnaire, the psychometric methods used to confirm its validity and reliability, and possible directions for future research.     

Kinship and business: how entrepreneurial households facilitate business growth

Building on studies that have stressed the importance of context and the role of the family in business growth, this study explores the role of the entrepreneurial household in the process of business development and growth. We seek to understand how household strategy influences the development of new businesses, the ways in which household characteristics and dynamics influence business growth strategy decisions and how business portfolios are managed and developed by the household. To examine these questions, comparative case studies were undertaken drawing data from four entrepreneurial households located in remote rural regions of Norway and Scotland. The data reveal the role of the entrepreneurial household in the evolution of business creation and growth, examining the processual aspects of entrepreneurial growth, the interactions between business activities and entrepreneurial households and how business portfolios are developed in practice. Three analytical themes emerged from the analyses: the tightly interwoven connections between the business and the household, the use of family and kinship relations as a business resource base and how households mitigate risk and uncertainty through self-imposed growth controls. Although previous studies have viewed entrepreneurial growth largely as an outcome of personal ambition and business strategy, these results reveal the importance of the entrepreneurial household and the household strategy in determining business growth activities.     

Policy making and rent-dissipation: An experimental test

We present a transfer-seeking model of political economy that links the theory of Becker (1983) with Tullock-type models of politically contestable rents. In our model the size of the transfer is determined endogenously, and over-dissipation of rents is predicted even under conditions of risk-neutrality and perfect rationality. We implement an empirical test of this model by collecting behavioral data in a laboratory experiment. We confirm the existence of behavior that leads to over-dissipation of rents in games with both symmetric and asymmetric political power. To the extent that the transfer-seeking costs are social costs, our findings imply that the total costs of running government might be greatly underestimated if the value of the rent is used as a proxy for the rent-seeking cost. We also confirm the hypotheses that lowering the political power of one player can lead to smaller rent-seeking expenditures and to larger transfers Electronic Supplementary Material Supplementary material is available in the online version of this article at . JEL Classification C91, D72     

Market potential and city growth: Spain 1860–1960

In this paper, we employ parametric and nonparametric techniques to analyse the effect of market potential on the structure and growth of Spanish cities during the period 1860–1960. Even though a few attempts have been made to analyse whether market potential might influence urban structures, this period is especially interesting because it is characterised by advances in the economic integration of the national market together with an intense process of industrialisation. By using an elaborated measure of market potential at the city level, our results show a positive influence of this market potential on city growth, although this influence is heterogeneous over time. Only changes in the market potential from 1900 have a significant effect on population growth.     

The Renaissance of the Big Cities—and the Opportunities for Berlin

Original Papers

The Renaissance of the Big Cities—and the Opportunities for Berlin     

Eliciting Subjective Beliefs about Mortality Risk Orderings

We develop an experimental method to elicit subjective beliefs about the ordering of mortality risk over different causes of death. The experimental procedure emphasizes incentive-compatibility, so that the individual has a positive financial incentive to respond truthfully. We also consider the extent to which individuals have subjective beliefs for sub-segments of the population that are more accurate than their beliefs about the risks for the population as a whole. We propose several hypotheses concerning the degree of familiarity of the risks, and find that the evidence supports those hypotheses. The evidence also suggests that there is no discernible difference between beliefs elicited using hypothetical or real financial rewards in the elicitation format we use. Our findings restore some confidence in the ability to elicit beliefs about mortality risks, and therefore to get reliable estimates of the monetary value of a statistical life. We dedicate this paper to the memory of J. Clay Lesley, who assisted us in the design and execution of the experiments and was a valued student, colleague and friend.