The Mendacity of Reconciliation in an Age of Resentment

The political ideal of reconciliation has gained increased prominence in recent decades, in part due to political experiments such as the South African Truth and Reconciliation Commission and other formal or informal truth or reconciliation processes. Here, I argue that there is a fundamental mendacity to reconciliation, given stubborn asymmetries of social power and disrespect. Reconciliation as an ideal carries an impetus towards resolution that covers over the necessary role that conflict plays in political struggles—including the role that conflict plays within struggles for reconciliation. Nevertheless, despite the mendacity of reconciliation, its meaning still holds political value. Reconciliation implies an orientation towards social repair, which even the strongest critics of reconciliation cannot bring themselves to reject. Some lies are worse than others, and some lies might be noble or necessary. Reconciliation is the latter—a fiction that is less pernicious than its absence. In this light, the task is to locate means of political reconciliation that do not obscure the conflicts and asymmetries of social life but enable social actors to face up to these conflicts and to discover novel ways to repair the damage that they can do.     

Optimal Retirement with Increasing Longevity

We develop an optimizing life‐cycle model of retirement with perfect capital markets. We show that longer healthy life expectancy usually leads to later retirement, but with an elasticity less than unity. We calibrate our model using data from the US and find that, over the last century, the effect of rising incomes, which promote early retirement, has dominated the effect of rising lifespans. Our model predicts continuing declines in the optimal retirement age, despite rising life expectancy, provided the rate of real wage growth remains as high as in the last century.     

A Fresh Look at U.S. Water and Wastewater Infrastructure: The Commercial and Environmentally Sustainable Path Forward

The growing scarcity of water has a silver lining: water is being transformed into an economic resource whose price will better reflect its true value and thus encourage conservation and stimulate new supplies. This in turn can be expected to put more pressure on water and wastewater organizations to become both commercially and environmentally sustainable. And by making its decision‐making more consistent with economic criteria, the U.S. water industry will be in a better position to address its four major challenges: insufficient capital; industry fragmentation; paucity of innovations; and lack of environmental sustainability. The EPA estimates that maintenance and upgrades of public water systems will require over $344 billion in investment over the next 20 years. The good news, however, is that institutional investors have found major long‐term investment opportunities in water and wastewater infrastructure in the U.K., and have also established a small toehold in the U.S. Focused on increasing the value of the assets they purchase, such active investors can be expected to bring investment discipline as well as capital to water utilities. A more rational approach to the industry's economics will facilitate consolidation of what is a highly fragmented industry, thereby reducing service costs and increasing access to capital, which is badly needed by small U.S. community systems. Contributing further to cost reductions and increased access to capital, a vibrant and commercially oriented industry should also spawn valuable innovation. Finally, more accountable and well‐governed water organizations can become natural leaders in achieving environmental sustainability by ensuring that water is priced to reflect its true costs and that water resources are conserved for the future.     

Happily Ever After: How Ending Valence Influences Narrative Persuasion in Cautionary Stories

Narratives are a persuasive platform that evokes processing distinct from other message formats. Story-ending valence is a component common to all stories and can influence how individuals respond to and are persuaded by the story. The current work examines how ending valence of a cautionary story, a popular type of narrative that delivers a warning to the audience, influences story-consistent beliefs through a process of global reflection or understanding of the overall story message. Across three studies, we find a positive story ending enhances reflection on the message meaning and, subsequently, enhances story-consistent beliefs.     

GAMBLING IN CONTESTS WITH REGRET

This paper discusses the gambling contest introduced in Seel and Strack (2013, Gambling in Contests, Journal of Economic Theory, 148(5), 2033–2048) and considers the impact of adding a penalty associated with failure to follow a winning strategy. The Seel and Strack model consists of n‐agents each of whom privately observes a transient diffusion process and chooses when to stop it. The player with the highest stopped value wins the contest, and each player's objective is to maximize her probability of winning the contest. We give a new derivation of the results of Seel and Strack based on a Lagrangian approach. Moreover, we consider an extension of the problem to a behavioral finance context in the sense of regret theory. In particular, an agent is penalized when her chosen strategy does not win the contest, but there existed an alternative strategy that would have resulted in victory.