An Improved Reverse Auction for Addressing Water Quality in Agricultural Watersheds Using Coupled Simulation-Optimization Models

As nutrients and sediment in agricultural watersheds continue to degrade water quality, attention is increasingly given to reverse auctions to cost-effectively address these pollutants. Typically, reverse auctions include a selection process which depends on both the monetary bid and a ranking of the environmental benefit, where the latter is often approximated using simple models, such as the Universal Soil Loss Equation （USLE）. When the environmental objective is to improve water quality, the cost-effectiveness of such ranking methods cannot always be assured since simple models may poorly approximate the effects on downstream water quality. In this paper, we introduce an alternative reverse auction approach that takes advantage of richer watershed process models and optimization tools that are now much more commonly available. This ＂improved＂ reverse auction allows decision-makers to better consider the cost-effective assignment of conservation practices and to address water quality or other environmental objectives. In a spatially detailed simulation, we demonstrate how this approach can improve the design of a reverse auction for the Raccoon River Watershed in Iowa, and estimate the potential gains from using the simulation-optimization approach relative to simpler ranking methods for selecting bids. We also point out that simple bid ranking schemes may not yield sufficient nutrient reductions to achieve water quality goals but bids areeasily selected to achieve any feasible water quality improvement in the ＂improved＂ auction process.     

Myopic rationality in a Mania

The rationality of investors during asset price bubbles has been the subject of considerable debate. An analysis of the British Railway Mania, which occurred in the 1840s, suggests that investors may have been myopic, as their expectations were only accurate in the short-term, but they remained rational, as they acted in a utility maximising manner given their expectations. Investors successfully incorporated forecasts of short-term dividend changes into their valuations, but were unable to predict longer-term changes. When short-term growth is controlled for, it appears that the railways were priced consistently with the non-railways throughout the entire episode.     

Parental Ethnic Identity and Child Test Scores*

We examine the relationship between parental ethnic identity and the test scores of ethnic minority children. We use standard survey measures of the strength of parental identity alongside validated cognitive test scores in a rich British cohort study. We show that children whose mothers report either an adoption or an active rejection of the majority identity tend to score lower in cognitive tests at age 7, compared with those children whose mothers report neutral feelings about the majority identity. We find no consistent differences in test scores according to mothers’ minority identity. Our findings provide no support for education or citizenship policies that promote the adoption of the majority identity or discourage the maintenance of separate identities in ethnic minority communities.     

Bouncing out of the banking system: An empirical analysis of involuntary bank account closures

Using a new database, we document the determinants of involuntary consumer bank account closures. During 2001–2005, approximately 30 million debit accounts were involuntarily closed for excessive overdrafting. We focus on multiple factors to explain this phenomenon: household economics and financial decision-making ability, social capital, bank policies, and the alternative financial services sector. Involuntary closures are more frequent in US counties with a larger fraction of single mothers, lower education levels, lower wealth, and higher unemployment. Closures are higher in communities with high property crime rates and low electoral participation. Bank policies have an independent relation to closures, with counties having more competitive banking markets and more multi-market banks experiencing higher closure rates; bank structure also seems to affect the speed at which banks adjust their policies to changes in household income. Finally, using both national data and a state-level shift in regulation, we find evidence that access to payday lending leads to higher rates of involuntary account closure.     

Managing buzz

We model the incentives of individuals to engage in word of mouth (or buzz) about a product, and how a firm may strategically influence this process through its information release and advertising strategies. Individuals receive utility by improving how others perceive them. A firm restricts access to information, advertising may crowd out word of mouth, and a credible commitment not to engage in advertising is valuable for a firm.     

Skin in the game: personal stock holdings and investors’ response to stock analysis on social media

Review of Accounting Studies - Motivated by concerns that financial positions impair analyst objectivity, we examine investor perceptions of the financial positions of nonprofessional analysts...     

Do financial analysts compel firms to make accounting decisions? Evidence from goodwill impairments

Review of Accounting Studies - This paper examines whether financial analysts’ presence compels recognition of goodwill impairments. Analysts could impact managers’ impairment decisions...     

Science and proven experience: a Swedish variety of evidence-based medicine and a way to better risk analysis?

A key question for evidence-based medicine (EBM) is how best to model the way in which EBM should ‘[integrate] individual clinical expertise and the best external evidence’. We argue that the formulations and models available in the literature today are modest variations on a common theme and face very similar problems when it comes to risk analysis, which is here understood as a decision procedure comprising a factual assessment of risk, the risk assessment, and the decision what to do based on this assessment, the risk management. Both the early and updated models of evidence-based clinical decisions presented in the writings of Haynes, Devereaux and Guyatt assume that EBM consists of, among other things, evidence from clinical research together with information about patients’ values and clinical expertise. On this A-view, EBM describes all that goes on in a specific justifiable medical decision. There is, however, an alternative interpretation of EBM, the B-view, in which EBM describes just one component of the decision situation (a component usually based on evidence from clinical research) and in which, together with other types of evidence, EBM leads to a justifiable clincial decision but does not describe the decision itself. This B-view is inspired by a 100-years older version of EBM, a Swedish standard requiring medical decision-making, professional risk-taking and practice to be in accordance with ‘science and proven experience’ (VBE). In the paper, we outline how the Swedish concept leads to an improved understanding of the way in which scientific evidence and clinical experience can and cannot be integrated in light of EBM. How scientific evidence and clinical experience is integrated influences both the way we do risk assessment and risk management. In addition, the paper sketches the as yet unexplored historical background to VBE and EBM.     

Gender Gaps in Unpaid Domestic and Care Work: Putting The Pandemic in (a Life Course) Perspective

Our paper examines  trends in gender inequalities in unpaid domestic and care work over the short- and long-term in Australia, including assessing the impact of the COVID-19 lockdowns. We use the concept of time—historical, biographical and transitional—as a framework for our analyses. Drawing on data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we find wide and continuing gender gaps in unpaid work over the past two decades. We demonstrate that parenthood is a far greater producer and exacerbator of gender inequalities in unpaid domestic and care work than COVID-19 lockdowns.