National culture and the configuration of public pensions

This paper explores the determinants of public pension plan configurations. It is argued that the level of intragenerational redistribution in public pension plans is related to a country's cultural background. The level of intragenerational redistribution is measured by Krieger and Traub's Bismarckian factor. The countries’ cultural background is operationalized using cultural dimensions developed by Hofstede. The empirical results are in line with our hypotheses. Uncertainty avoidance appears to have a significant, positive association with the Bismarckian factor (low intragenerational redistribution in public pensions), whereas the relation with individualism is negative (high intragenerational redistribution). Moreover, a positive association is found between the Bismarckian factor and inflation shocks in the first half of the 20th century. While the sample size is limited, the results are robust to the inclusion of different economic, institutional, and demographic control variables as well as to using alternative model specifications. These findings have important public policy implications. We argue that pension reform proposals suggesting a transformation of public to private pension provision should consider the cultural background of countries.     

Automatic,Multimodal Evaluation of Human Interaction

This article outlines an approach for automatically extracting behavioral indicators from video, audio, and text and explores the possibility of using those indicators to predict human-interpretable judgments of involvement, dominance, tension, and arousal. We utilized two-dimensional spatial inputs extracted from video, acoustic properties extracted from audio and verbal content transcribed from face-to-face interactions to construct a set of multimodal features. Multiple predictive models were created using the extracted features as predictors and human-coded perceptions of involvement, tenseness, and arousal as the criterion. These predicted perceptions were then used as independent variables in classifying truth and deception. Though the predicted values for perceptions performed comparably to human-coded perceptions in detecting deception, the results were not satisfying. Thus, the extracted multimodal features were used to predict deception directly. Classification accuracy was substantially higher than typical human deception detection performance. Through this research, we consider the feasibility and validity of the approach and identify how such an approach could contribute to the broader community.     

Location decision of heterogeneous multinational firms

We examine how multinational firms with heterogeneous total factor productivity (TFP) self-select into different host countries. Both aggregate- and firm-level estimates suggest that more productive French firms are more likely than their less efficient competitors to invest in relatively tough host countries. Countries with a smaller market potential, higher fixed costs of investment or lower import tariffs tend to have higher cutoff productivities and attract a greater proportion of productive multinationals. This self-selection mechanism remains largely robust when we control for unobserved firm and country heterogeneity and address potential TFP endogeneity.     

The influence of perceived uncertainty on entrepreneurial action in the transition to a low-emission energy infrastructure: The case of biomass combustion in The Netherlands

The transition towards renewable energy production will not occur without the involvement of entrepreneurs who dare to take action amidst uncertainty. In an earlier article, a conceptual model was introduced for analyzing how perceived uncertainties influence the decisions and actions of entrepreneurs involved in innovation projects that aimed at developing and implementing renewable energy technologies. In this article, the conceptual model is applied to stand-alone biomass combustion projects in the Netherlands. Although none of the biomass combustion projects has been abandoned, some entrepreneurs clearly have more difficulty to turn their project into a success than others. To create insight into the underlying dynamics of these projects, the article analyzes what types of positive or negative interaction patterns occur over time between (internal or external) factors in the project environment, perceived uncertainties, motivation and entrepreneurial action and how these patterns can be stimulated or prevented. The results provide several lessons to take into account when designing policies for stimulating the development and implementation of biomass combustion.     

More hedging instruments may destabilize markets

This paper formalizes the idea that more hedging instruments may destabilize markets when traders have heterogeneous expectations and adapt their behavior according to performance-based reinforcement learning. In a simple asset pricing model with heterogeneous beliefs the introduction of additional Arrow securities may destabilize markets, and thus increase price volatility, and at the same time decrease average welfare. We also investigate whether a fully rational agent can employ additional hedging instruments to stabilize markets. It turns out that the answer depends on the composition of the population of non-rational traders and the information gathering costs for rationality.     

Inflation Targeting: Some Extensions

Previous analyses of the implementation of inflation targeting are extended to monetary policy responses to different shocks, consequences of model uncertainty, and effects of interest rate smoothing and stabilization. Model uncertainty, output stabilization, and interest rate stabilization or smoothing all call for a more gradual adjustment of the conditional inflation forecast toward the inflation target. The conditional inflation forecast is the natural intermediate target during inflation targeting. The optimal way of reacting to shocks is hence to check how they affect the inflation forecast and then take the appropriate action.
JEL classification : E 42; E 52; E 58     

Asymmetric information in a competitive market game: Reexamining the implications of rational expectations

Summary. We examine price formation in a simple static model with asymmetric information, an infinite number of risk neutral traders and no noise traders. Here we re-examine four results associated with rational expectations models relating to the existence of fully revealing equilibrium prices, the advantage of becoming informed, the costly acquisition of information, and the impossibility of having equilibrium prices with higher volatility than the underlying fundamentals. Received: August 27, 1997; revised version: February 11, 1998     

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Satisfaction/Dissatisfaction with Food Shopping Among Elderly Consumers

The food shopping behavior of 110 elderly households in a standard metropolitan statistical area was examined. Data were collected by personal interview concerning the shopping behavior problems of elderly consumers and the frequency and types of dissatisfaction with food products purchased. Implications and directions for further research are suggested for those concerned with the role of the elderly in the marketplace.