Some Cracks in the Empire of Chance (Flaws in the Foundations of Reliability)

Making quantified statements about the uncertainty associated with the lifelength of an item is one of the most fundamental tasks of reliability assessment. Most practitioners routinely do this using one of the several available statistical techniques. The purpose of this paper is two-fold. The first is to give the user an overview of the key tenets of two of the most commonly used parametric approaches. The second is to point out that these commonly used approaches involve strategies that are either ad hoc, or are in violation of some of the underlying tenets. A method that is devoid of logical flaws can be proposed, but this method is difficult to implement. The user must therefore resign to using that technique against which the fewest objections can be hurled.     

Subjective recursive expected utility

We axiomatize a subjective version of the recursive expected utility model. This development extends the seminal results of Kreps and Porteus (Econometrica 46:185–200 (1978)) to a subjective framework and provides foundations that are easy to relate to axioms familiar from timeless models of decision making under uncertainty. Our analysis also clarifies what is needed in going from a represention that applies within a single filtration to an across filtration representation.Part of this research was conducted when Ozdenoren visited MEDS in Fall 2003. We thank Tapas Kundu, Costis Skiadas, Jean-Marc Tallon and Tan Wang for helpful discussions and also thank audiences at Koc University, Northwestern University, the CERMSEM conference “ Mathematical Models in Decision Theory” at Universite Paris I, and the FUR XI conference on foundations and applications of utility, risk and decision theory     

Non-commitment in performance evaluation and the problem of information distortions

Auditing is modeled in a sequential game without commitment. The manager must decide whether and where to audit a worker's output, taking into account all interim information he has obtained. The worker will work just hard enough (and show it) to divert the manager from making an audit or cover up, withholding information about his work to make an audit more difficult. This usually raises the costs of setting work incentives, so incentives are softened, sometimes drastically. Moreover, when a worker's on-the-job information is valuable for entrepreneurial decisions, work incentives must be softened to improve the internal flow of information.     

Revisiting Savage in a conditional world

Summary. I present an axiomatization of subjective expected utility and Bayesian updating in a conditional decision problem. This result improves our understanding of the Bayesian standard from two perspectives: 1) it uses a set of axioms which are weak and intuitive; 2) it provides a formal proof to results on the relation between dynamic consistency, expected utility and Bayesian updating which have never been explicitly proved in a fully subjective framework. Received: December 1, 2000; revised version: February 26, 2001     

Cultural vs. operational market orientation and objective vs. subjective performance: Perspective of production and operations

The relationship between market orientation and organizational performance has been the focus of many studies for the last few years. The conclusions reported are very diverse and even contradictory. This ambiguity is reinforced to some extent by the high degree of methodological heterogeneity in the definition and measure of market orientation and organizational performance and the empirical formalization of the relationship between both concepts. This study tackles this question by comparing different methodological approaches. Three key aspects are considered: (1) cultural and operational approaches for measuring market orientation; (2) objective and subjective measures of performance; and (3) the source of information in the organization, specifically the perspective of production and operations. The results obtained from a sample of Spanish industrial firms show a stronger positive relationship for operational market orientation and subjective performance. Moreover, the adoption of ‘operational recipes’ of market orientation by the production and operations function seems to improve organizational performance regardless of the existence of any cultural support for market orientation.     

“With a young spirit,we will be young forever”: Exploring the links between tourism and ageing well in contemporary China

This research explores the entangled relationships between tourism, ageing and well-being in later life. We challenge the universal connotations of old age and “ageing well” and see their relationships with tourism as dynamic processes, in which older people are continuously producing different meanings and fulfilling personal quests over life courses. Using the contextualist and temporal lens, four scenarios of the evolving relationships between tourism and ageing well were identified from the lived experiences and travel histories of 48 Chinese senior travelers. The results demonstrate that how tourism affects ageing well are shaped by senior travellers' early life and travel experiences, the personalised conceptions attached to tourism and well-being, which are indeed complex responses to their personal, social and cultural contexts. This research unveils vivid pictures of Chinese older adults’ leisure lives, and highlights the urgency to develop relevant tourism policies and marketing strategies to cater for their changing needs.     

Electricity supply preferences in Europe: Evidence from subjective well-being data

We use survey data for 139,517 individuals in 25 European countries, 2002–2011, to estimate the relationship between subjective well-being (SWB) and production shares of various electricity generation technologies. The estimated relationships are taken to represent preference relationships over attributes of electricity supply systems (costs, safety, environmental friendliness, etc.). Controlling for a variety of individual and macro-level factors, we find that individuals’ SWB varies systematically and significantly with differences in the electricity mix across countries and across time. Among other results, we find that a greater share of solar & wind power relative to nuclear power and electricity from coal and oil is associated with greater SWB at all levels of income and that the implied preference for solar & wind power over nuclear power has risen drastically after the Fukushima nuclear accident.     

How reliable and consistent are subjective measures of welfare in Europe and Central Asia?

This paper analyses the reliability and consistency of subjective well‐being measures, using the Life in Transition Survey. Drawing on two life satisfaction questions with alternative scales, our results do not reveal substantial biases in accounts of life satisfaction due to framing. Subjective individual assessments of household relative income position, on the other hand, do not appear to be reliable predictors of objective poverty or wealth. We find that subjective relative income position is only weakly correlated with objective welfare measures. There are differences in evaluations of the household's relative standing across different household members, and these differences are correlated with respondent characteristics.     

How psychological and contextual factors contribute to travelers’ propensity to choose green hotels?

Despite the growing popularity of green hotels, there remains a dearth of research examining travelers’ intentions to choose green hotels. The study addresses this research gap by developing and testing an integrated model of green hotel behavior in an emerging market of India. We use a sequential approach of SEM and fuzzy set qualitative comparative analysis on 347 responses collected from Indian travelers to gain a more in-depth understanding of the role of biospheric value, green trust, willingness to pay premium, attitude, subjective norms, and perceived behavioral control in determining green hotel intentions. The findings show that presence of green trust is a significant and necessary condition for green hotel choice. Additionally, absence of willingness to pay premium, biospheric value, attitude, and subjective norm were found to deter travelers from choosing green hotels. These findings offer unique insights for managers in developing marketing strategies to enhance travelers’ green hotel adoption.     

Which formula for national happiness?

The World Happiness Report is published by the United Nations Sustainable Development Solutions Network and contains an international ranking of national average happiness, as measured by surveys of personal life evaluations. It also contains an analysis which tries to explain the happiness figures from more than 150 countries using data on six key variables. That analysis assumes the factors combine in an additive manner and therefore operate independently of each other. By contrast, we explore a multiplicative model, which allows for interactivity or synergy between factors, as well as the possibility of diminishing marginal benefit at higher levels of achievement. We find that this model provides a better fit to the data and is therefore superior in its explanatory power. The implication for policy-makers is that they should focus on improving those factors which are the lowest for their nation as this will provide greater relative benefits to subjective well-being. At an individual level this means focusing on improving conditions for those who are experiencing the lowest levels of well-being.