Uncertainty and its perception: experimental study of the numeric expression of uncertainty in two decisional contexts

According to a consolidated tradition of research about the psychology of decisions (Newell et al. 2007) and the psychometric psychology (Sartori 2008), the present study aims at analysing the preferences of individuals between the main numeric expressions of uncertainty: the probabilistic form (expressed by percentages) and the fractional form (expressed by fractions). The purpose is to verify a different management of credit on the basis of a different expression of the representation of risk. The scientific outline refers to the most relevant studies in the field of decision making, which show the demonstrations and the experiments carried out by different authors starting from the investigations by Kahneman and Tversky. These results joined in their most accredited two theories: the Framing Effect and the Cumulative Prospect Theory, an evolution of the Prospect Theory. The following survey is designed to experimentally demonstrate the change in preferences on the basis of a different numeric representation of uncertainty. The study considers a generic sample of 100 individuals who were submitted two questionnaires especially designed. The obtained data were drawn up with statistic means in order to find out common norms in decision-making processes. The results showed the tendency of individuals to assign a different preference on the basis of the numeric representation, probabilistic or fractional. Referring to this feedback, one hypothesis is proposed as well as a new theory linked to the informative context of the options is presented.     

Management accounting texts in New Zealand: the need for a paradigm shift

This paper questions the dominance in textbooks of a management accounting grounded largely in neo-classical economics and scientific management. In New Zealand the most popular textbook used in introductory management accounting courses is Horngren and Foster's Cost Accounting - a Managerial Emphasis.The current seventh edition of the text, although extensively used, is not regarded as adequate for the purpose by many New Zealand educators. The text is seen as being rootd firmly in the traditional understandings of the role of management accounting which are subject to increasing challenge. Other popular texts which are influencing the content of management accounting courses also are reviewed. We conclude that, despite much criticism over many years, modern textbooks have failed to evolve; change is overdue.     

Inefficiency in Japanese water utility firms: a stochastic frontier approach

I examine inefficiencies in Japanese water utility companies. Efficiency in this context is defined as a firm’s capacity to maximize output given a fixed level of inputs. The findings suggest that the average operation rate, customer density and size variables are associated with lower levels of inefficiency (or higher levels of efficiency), while water purification (a conditioning variable capturing low initial water quality), subsidies and outsourcing are associated with higher levels of inefficiency. Since inefficiency exists, there is an opportunity to improve Japanese water utilities by working on emulating “best practice” firms whenever possible and by providing a regulatory framework that can set appropriate incentive schemes to do so.     

Bayesian VARs: Specification Choices and Forecast Accuracy

In this paper we discuss how the point and density forecasting performance of Bayesian vector autoregressions (BVARs) is affected by a number of specification choices. We adopt as a benchmark a common specification in the literature, a BVAR with variables entering in levels and a prior modeled along the lines of Sims and Zha (International Economic Review 1998; 39 : 949–968). We then consider optimal choice of the tightness, of the lag length and of both; evaluate the relative merits of modeling in levels or growth rates; compare alternative approaches to h‐step‐ahead forecasting (direct, iterated and pseudo‐iterated); discuss the treatment of the error variance and of cross‐variable shrinkage; and assess rolling versus recursive estimation. Finally, we analyze the robustness of the results to the VAR size and composition (using also data for France, Canada and the UK, while the main analysis is for the USA). We obtain a large set of empirical results, but the overall message is that we find very small losses (and sometimes even gains) from the adoption of specification choices that make BVAR modeling quick and easy, in particular for point forecasting. This finding could therefore further enhance the diffusion of the BVAR as an econometric tool for a vast range of applications. Copyright © 2013 John Wiley & Sons, Ltd.     

Consumer spending self-control effectiveness and outcome elaboration prompts

Decision making related to finances is of significant importance. A major factor underlying financial decision making involves differences in consumers?? spending self-control (CSSC). We conceptualize CSSC as an individual difference, distinct from general self-control, develop a parsimonious measure to assess it, and demonstrate important related consequences and behaviors. Further, we examine how underlying differences in CSSC impact the effectiveness of a self-control strategy that has recently received attention in public policy legislation??enhancing consumers?? awareness of the future consequences of present behavior through the provision of outcome elaboration prompts. Results from our studies suggest that outcome elaboration prompts (that is, external stimuli used to encourage consumers to consider the future outcomes of their present decisions) differentially impact consumers?? self-control effectiveness depending on their inherent CSSC. Specifically, the presence of outcome elaboration prompts enhances self-control for low CSSC consumers, but does not affect the choices of high CSSC consumers. Furthermore, we provide direct evidence that it is a differential focus on future outcomes that drives the distinct responses of high- versus low-CSSC consumers to the provision of outcome elaboration prompts.     

AGRICULTURAL TRANSITION AND EUROPEAN INTEGRATION

MOCT-MOST: Economic Policy in Transitional Economies -     

A Base Model for Multifactor Specifications of the Term Structure

In this article, we aim to show that most of the recent multifactor specifications of the term structure can be traced back to a common general equilibrium model, based on an economy of the Cox, Ingersoll and Ross type. This base model of the term structure has a very general form and includes both square root and Gaussian dynamics of the underlying state variables. We establish a direct link among the state variables used in the different specifications of many multifactor models and analyse the structure of the resultant implied relationships. This technique has relevant implications from a practical point of view, as it can allow one to recover from the estimated coefficients of one model the implied value of the coefficients of other models. Moreover, it provides a way of recovering from the term structure the values of such unobservable variables as the real short rate and the expected inflation rate.
(J.E.L.: E43, G12).     

Global Rebalancing and the Future of the Sino-US Codependency

The crisis of 2008 has shown the unsustainability of the global imbalances centered on the US-China symbiotic relationship that characterized the previous decade. This has revived the so-called growth-rebalancing debate. In particular, the new emerging consensus calls for a re-orientation of the US economy away from consumption and toward exports, and for policy shifts that can help China to reduce its dependence on external demandand inefficiently high rates of capital accumulation. We discuss the economic and political feasibility of the proposed patterns of re-adjustment by focusing on the short-term and long-term trade-offs faced by the policy-makers. We argue that the rebalancing will be gradual and partial because of the costs associated with a radical shift in the growth models adopted by both countries. We believe that this scenario will be consistent with a world economy expanding at lower rates than over the past decade.     

Concentration in Indonesia Manufacturing, 1975–93

This paper analyses trends and levels of industrial concentration in 102 Indonesian industries between 1975 and 1993. There was a long-term decline in industrial concentration across the manufacturing sector over this period. The simple average four-firm concentration ratio declined from 64% in 1975 to 54% in 1993, while the percentage of industries classified as highly concentrated fell from 39% in 1975 to 28% in 1993. Allowing for foreign trade substantially reduces average concentration measures: in 1993 the average concentration of a sample of 67 industries was 53% without adjustment for foreign trade, but 41% if foreign trade was allowed for. Thus, competition is stronger in Indonesian markets than domestic concentration ratios would suggest.