Ex ante contracting with endogenously determined communication plans

Summary. In this paper we introduce a new model of ex ante contracting for economies with asymmetric information to examine endogenously determined communication plans for information sharing in the interim stage. In contrast to the models used in previous research, in the present model agents negotiate not only on a contract of state contingent allocations but also on a communication plan, a set of rules describing how agents will reveal part of their private information at the interim stage to execute the trade contracts. We prove a result about the nested structure of the set of allocations implementable by various communication plans and establish the existence of core strategies for this cooperative game under various regularity conditions. Received: 4 March 1998; revised version: 17 September 1999     

Relative price and inflation variability in a simple consumer search model

There is a large empirical literature on the effect of aggregate inflation on both price-level dispersion (relative price variability, RPV) and inflation rate dispersion (relative inflation variability, RIV) across goods or locations. Early empirical work of RIV has an explicit theoretical foundation in signal-extraction models. However, recent empirical work on RPV has produced results inconsistent with signal-extraction models. In particular, while RIV is increasing in the absolute value of inflation shocks, RPV is a negative monotonic function of inflation shocks. We show that consumer search theory offers a potential explanation for these apparently contradictory observations.     

Beyond choice: investigating the sensitivity and validity of measures of strength of preference

Many experiments investigating different decision theories have relied heavily on pairwise choices between lotteries. These are easy to incentivise, but often yield only limited dichotomous information. This paper considers whether respondents’ judgments about their strength of preference (SoP) for one alternative over another can usefully supplement standard choice data. We report extensive evidence that such judgments show sensitivity to variations in question format and parameter values in the directions we should expect, not only within-subject but also between-sample. We illustrate how such judgments can usefully supplement standard pairwise choice data and enrich our understanding of observed behaviour.     

OPTIMISM AND PESSIMISM IN GAMES

This article considers the impact of ambiguity in strategic situations. It extends the existing literature on games with ambiguity‐averse players by allowing for optimistic responses to ambiguity. We use the CEU model of ambiguity with a class of capacities introduced by Jaffrray and Philippe (Mathematics of Operations Research 22 (1997), 165–85), which allows us to distinguish ambiguity from ambiguity‐attitude, and propose a new solution concept, equilibrium under ambiguity (EUA), for players who may be characterized by ambiguity‐preference. Applying EUA, we study comparative statics of changes in ambiguity‐attitude in games with strategic complements. This extends work in Eichberger and Kelsey (Journal of Economic Theory 106 (2002), 436–66) on the effects of increasing ambiguity if players are ambiguity averse.     

Undergraduate Coursework in Economics: A Survey Perspective

Survey results from a large sample of economics departments describe offerings for principles courses, coursework requirements for economics majors, and program augmentations such as capstone courses, senior seminars, and honors programs. Findings are reported for all institutions, and institutions are subdivided into six different categories based on public or private control and the highest economics degree offered. The coursework required for the economics major typically consists of ten courses, five in a required core and five electives. The most conspicuous curriculum change over the past 30 years is the rise of econometrics as a required course, now mandatory at about half of major programs. The authors estimate that about 40 percent of students who matriculate as first-year undergraduates take at least one economics course before they leave.     

Women,Muslim Immigrants,and Economic Integration in France

Muslim immigrants to Europe display distinctive attitudes toward women in a wide range of survey data. This study investigates whether this translates into distinctive behavior. Relying on a dictator game in France and an identification strategy that isolates the effect of religion from typical confounds such as race, we compare the donations of matched Christian and Muslim immigrants and rooted French to in‐group and out‐group men vs. women. Our results indicate that Muslim immigrant participants deviate from Christian immigrant and rooted French participants in their behavior toward women: while the latter favor women over men, Muslim immigrants favor men over women.     

Introduction to special section on “Risk and Technology”

Technology has grown rapidly, a characteristic of our advancing civilization. Technology provides many valuable tools, but also introduces new risks. This special section of Technological Forecasting and Social Change provides the state of the art studies of risk and technology management.     

Dismantling terrorist networks: Evaluating strategic options using agent-based modeling

Dismantling dark networks remains a critical goal for the peace and security of our society. Terrorist networks are the most prominent instantiation of dark networks, and they are alive and well. Attempts to preemptively disrupt these networks and their activities have met with both success and failure. In this paper, we examine the impacts of four common strategies for dismantling terrorist networks. The four strategies are: leader-focused, grassroots, geographic, and random. Each of these strategies has associated pros and cons, and each has different impacts on the structure and capabilities of a terrorist network. Employing a computational experimentation methodology, we simulate a terrorist network and test the effects of each strategy on the resiliency of that network. In addition, we test scenarios in which the terrorist network has (or does not have) information about an impending attack. Our work takes a structural perspective to the challenge of addressing terrorist networks. Specifically, we show how various strategies impact the structure of the network in terms of its resiliency and capacity to carry out future attacks. This paper also provides a valuable overview of how to use agent-based modeling for the study of complex problems in the terrorism, conflict studies, and security study domains.     

Tests of Hypotheses Arising In the Correlated Random Coefficient Model

This paper examines the correlated random coefficient model. It extends the analysis of Swamy (1971), who pioneered the uncorrelated random coefficient model in economics. We develop the properties of the correlated random coefficient model and derive a new representation of the variance of the instrumental variable estimator for that model. We develop tests of the validity of the correlated random coefficient model against the null hypothesis of the uncorrelated random coefficient model.