Axiomatic reference-dependence in behavior toward others and toward risk

Summary. This paper considers the applicability of the standard separability axiom for both risk and other-regarding preferences, and advances arguments why separability might fail. An alternative axiom, which is immune to these arguments, leads to a preference representation that is additively separable in a reference variable and the differences between the other variables and the reference variable. For other-regarding preferences the reference variable is the decision-maker’s own payoff, and the resulting representation coincides with the Fehr-Schmidt model. For risk preferences the reference variable is initial wealth, and the resulting representation is a generalization of prospect theory.Received: 28 April 2004, Revised: 27 April 2005, JEL Classification Numbers: D81, D64.An earlier version of this paper was titled “An Axiomatic Characterization of the Fehr-Schmidt Model of Inequity Aversion.” I am grateful to Rachel Croson, Jill Stowe, and Karl Vind for helpful comments. Financial support was provided by the Private Enterprise Research Center, the Program in the Economics of Public Policy, and the Program to Enhance Scholarly and Creative Activities.     

The damage costs of climate change toward more comprehensive calculations

It is argued that estimating the damage costs of a certain benchmark climate change is not sufficient. What is needed are cost functions and confidence intervals. Although these are contained in the integrated models and their technical manuals, this paper brings them into the open in order to stimulate discussion. After briefly reviewing the benchmark climate change damage costs, region-specific cost functions are presented which distinguish tangible from intangible losses and the losses due to a changing climate from those due to a changed climate. Furthermore, cost functions are assumed to be quadratic, as an approximation of the unknown but presumably convex functions. Results from the damage module of the integrated climate economy modelFUND are presented. Next, uncertainties are incorporated and expected damages are calculated. It is shown that because of convex loss functions and right-skewed uncertainties, the risk premium is substantial, calling for more action than analysis based on best-guess estimates. The final section explores some needs for further scientific research.     

Plant domestication more rapid under optimizing behavior

We assume that early Neolithic cultivators had an optimizing behavior aiming yield maximization and labor efficiency. Then we conduct a hypothetical optimization exercise by examining which consequences such behavior would have if applied to the cultivation of Near-Eastern wild cereals, especially on their rate of domestication measured by the frequency of non-shattering seeds. Two stages of the cultivation process are analyzed, the harvest and the processing. The harvest stage requires two strategies, one about the state of ripeness at the harvest and the other about the harvesting method. We demonstrate that under an optimizing behavior most mature seeds are harvested—by combining two technologies, ground collection and sickling—and thus this stage leads to no selective pressure. On the contrary, the processing stage, from threshing to storage, leads to positive selection when the products of the two harvests are processed separately, a strategy resulting from labor efficiency and risk minimization. Therefore, and from a theoretical point of view, an optimizing behavior tends to support a rapid pathway toward plant domestication, even though the latter is an unconscious outcome of human behavior.     

Payoff Assessments without Probabilities: A Simple Dynamic Model of Choice

We develop a model which reflects the tendency of people to simplify the decision problems they face. The decision maker chooses among alternate strategies only on the basis of the payoff she assesses she would obtain from them, and these assessments do not explicitly take into account her subjective judgements regarding the likelihood of alternate states of the world. At each stage, the decision maker chooses the strategy that she assesses to give the highest payoff. She updates her assessments adaptively. We show that such behavior leads to maxmin choices. We also consider the decision maker who experiences shocks. Journal of Economic Literature Classification Numbers: C7, D8.     

It's not your peers,and it's not your friends: Some progress toward understanding the educational peer effect mechanism

Using a new administrative panel data set from the University of Maryland, this paper explores conventional peer effects and the effects of socially proximate peers at a large public university where some students are randomly assigned to housing. Results show that there is little evidence of robust residential peer effects on undergraduate performance. The impact of socially proximate peers' characteristics on student achievement is then examined using an instrumental variables technique. Results indicate that social “friends” do not impact performance more than randomized peers. The paper casts doubt on the notion that social tie formation is the route to peer effects, and urges caution in the continued pursuit of peer effects in education without substantial empirical or theoretical innovation.     

Improving Assessments of Gender Bargaining Power: A Case Study from Bangladesh

Gender bargaining power has entered into mainstream economic theory and public policy. However, common empirical measures are only loosely related to the theoretical concept, and research has not produced consistent results regarding the causal chains underlying women’s empowerment. This study critically examines accepted measures of bargaining power, arguing that participation in specific household decisions is not directly associated with the theoretical concept of bargaining power. The study analyzes the relationship between measures of participation in household decisions and individual and household characteristics thought to contribute to bargaining power. Using Demographic and Health Surveys (DHS) data on Bangladesh over the period 1999–2011, the study finds that despite the loose relationship of the survey questions to the theoretical construct bargaining power, the decision-making questions provide relatively consistent and theoretically supported measures of this unobservable characteristic. Simple changes in using the measures would contribute to more robust and consistent findings.     

新兴技术风险评估中的风险性和不确定性

在技术的风险评估中,人们首先往往要确定环境条件是有风险的,还是不确定有风险的.尤其是在新兴高技术不断涌现的环境下,人们通常没有足够的信息对决策环境做出明确的分类.本文以碳纳米管的风险评估作为案例指出,对高技术的风险评估,关键的要素是技术发展判断和结果预见.因此,在对新兴技术风险进行定量评估的同时,应持有适当的风险怀疑态度,最好能够考虑到不确定性条件下风险评估的决策策略,由此可以划分为风险性条件下的决策和不确定性条件下的决策.两点值得考虑的建议是:第一,加强决策的现实化和逼真度,在某种意义上,可以将决策选择作为现实世界的实验来看待;第二,加强对决策环境定量信息的审议,建立多方叁与的风险评定和决策选择机制.     

Local Perception of Public Goods: Recent Assessments of Willingness-to-pay for Endangered Species

A contingent valuation mail survey was administered in late 2001 to better understand current public opinion about controversial endangered species preservation in Orange County, California. Questionnaire design focused on additional taxes residents would be willing to pay to support recovery plans. Habitat and recovery of a single species, the Riverside fairy shrimp, is valued at around $25 per household, and the valuation is significantly changed by the higher scope of the public good provided, with an annual willingness-to-pay of around $50–60 per household for all local endangered species. Across the whole county, the public valuation of biodiversity is substantial yet probably could not fund necessary land acquisition for critical habitat, so continued national support for species preservation remains logical. (JEL Q51 , Q57 , Q58 )     

纳米技术对社会安全影响的风险评估——基于军事国家和恐怖分子的使用

军事国家和恐怖集团对纳米科学的热衷使纳米技术的发展可能会对社会的安全产生一定的影响。为了综合和深入地分析其风险,提出了定性评估的方法和路径。通过5个方面的探讨,分析了风险产生的动机和实现因素,以及直接和间接的影响,并提出一些建设性设想和对策。     

通向经济一体化：日本政策的演化

2000年10月22日,日本首相森喜朗与新加坡总理吴作栋同意就达成新时代伙伴关系的日新经济协定（JSEPA）于2001年1月展开正式谈判,其依据为日本－－新加坡自由贸易协定（JSFTA）联合研究组2000年9月发表的报告。这是日本首次为一个区域性经济一体化协定进行谈判。在格外强调需要应对全球化和技术进步所引起的挑战时,联合研究组探讨了两国间提出“新时代自由贸易协定”（New Age FTA）建议的各种可能因素,吴总理1999年12月曾提出这一建议。因此,JSEPA标志着日本在加强区域性经济一体化和探索这方面新因素的重大转折点。     

全球经济危机对哈萨克斯坦经济的影响

全球经济危机对哈萨克斯坦的影响广泛且剧烈,在短时期内,作为哈萨克斯坦贸易收入和国际收入主要来源与财政收入重要来源的资源产业的收入大幅度缩减,这势必对哈萨克斯坦的经济发展产生强烈的震荡。对此,哈萨克斯坦采取石油减产保价、通过财政注资刺激实体经济增长、稳定金融系统等途径抗御此次经济危机,将经济危机冲击造成的损失降到最低水平。     

Attitudes of college males toward parenthood timing

A study of 76 male college students, residing in 4 states in the US, assessed male attitudes toward the timing of parenthood; results of the study indicated that these men tended to favor delayed parenthood. The data was collected in conjunction with a larger survey of 980 female college students. Only the results of the analysis of the male respondents were presented. 99% of the respondents were Anglo-American and most had no children, were never married, and were between 18-23 years of age. A scale instrument called the Attitude toward Timing of Parenthood Scale was used to collect the information. Respondents were presented with 10 statements and asked whether they agreed or disagreed with the statement. Overall, the responses favored delayed parenthood. 84.1% disagreed with a statement indicating that it was best to begin having children during the initial 2 years of a marriage, 76.0% agreed with a statement that it was important to enjoy a social life prior to having children, and 68.5% disagreed with a statement indicating that the birth of a child during the early marriage years strengthened a marriage. Only 2.6% thought that young couples who do not have children are unable to do so, and only 9.2% agreed that married couples who display mature love want to have children early in their marriages. Many males were undecided about whether an early birth strenghtened marriage ties and whether females were happier and felt mor fulfilled if they gave birth early in the marriage. These undecided responses probably reflect recent changes in attitudes toward family life in the US.     

Climate Insecurity in (Post)Conflict Areas: The Biopolitics of United Nations Vulnerability Assessments

Within the United Nations, the United Nations Development Programme, United Nations Environment Programme and Office for the Coordination of Humanitarian Affairs have all highlighted climate risks as relevant to their work in areas affected by conflict, endorsing human security approaches as valid for mapping the relationships between climate stresses and conflict-related harm. While this policy interest has limited operational presence, I discuss salient assessments of climate vulnerability in (post)conflict areas, arguing that these agencies have applied a natural disaster rather than conflict regulation inflection of humanitarian reason. The former entails a biopolitical paradigm of disaster risk reduction, prescribing technical-managerial measures to build the resilience of vulnerable populations. This framing supports a depoliticised stance reflecting UN norms of neutrality and impartiality. I claim that this position nevertheless disregards its own geopolitical conditions and effects, which dilute the scope for international humanitarian law to assign responsibility for conflict-related harm.     

A more powerful modification of Johansen's cointegration tests

We apply the idea of using reversed time series to improve the power of Johansen tests. We suggest computationally simple variants of the trace and maximum eigenvalue statistics and establish their limit distributions. Both are shown, via simulation, to yield nontrivial power gains.     

Welfare effects of changing commodity tax rates toward uniformity

This paper presents a theory of tax reform that is applicable to a many-good economy where (i) the initial tax structure is arbitrarily given, (ii) no lump-sum tax exists, and (iii) the initial tax revenue must be maintained after the reform. Sufficient conditions are established under which tax changes definitely result in increases in welfare. They indicate that in a wide class of situations the uniform tax structure can be a useful intermediate target on the way to optimum.