Bayesian decision theory with action-dependent probabilities and risk attitudes

This paper extends the work of Karni (Econ Theory 48:125–146, 2011) to allow for the possibility that decision makers’ effect-dependent risk attitudes are also affected by their actions. This extension is essential for modeling decision situations in which actions have a monetary dimension that creates interaction between actions and wealth.     

Technological progress and income inequality

Summary This paper examines the effects of Hicks-neutral, Harrod-neutral, and Solow-neutral technological improvements on the distribution of income in an overlapping generations economy with endogenous labor supply and a bequest motive. Income inequality in this model is generated by a stochastic process representing random variations in intergenerational transfers and pure luck. The comparative dynamics analysis trace the effects of the aforementioned technological changes in each and every period after they occur. These effects depend on the nature of the technological change and on the elasticity of substitution.We thank Carl Davidson, James Foster, and two anonymous referees for their useful comments.     

Individual sense of fairness: an experimental study

Many prior studies have identified that subjects in experiments demonstrate preferences for fair allocations. We present an experimental study designed to test whether a similar concern for fairness manifests itself when the decision maker is choosing among differing probabilistic allocation mechanisms that will all generate an ex post unfair allocation by assigning an indivisible prize to one individual. This investigation is inspired by Karni and Safra (Econometrica, 70, 263–284, 2002 ) in which a structure for preferences for fairness in such an environment was developed. Here we use this model to design experiments that allow us to test for the presence of concern for fairness in individual choice behavior and examine some factors that may affect the intensity of the concern for fairness.

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Electronic Supplementary Material  The online version of this article () contains supplementary material, which is available to authorized users.      

On the equivalence of preferences

Preference relations that agree on the ranking of elements of the space on which they are defined necessarily agree on all the conditional rankings of pairs of components of these elements. In this note we show the converse statement is also true.     

Subjective Expected Utility Theory with State-Dependent Preferences

This paper extends Savage′s subjective expected utility theory to include state-dependent preferences. The dependence of the decision maker′s preferences over consequences on the states of nature is represented by state-specific mappings of the set of consequences onto itself. Within this framework Savage′s postulates are reformulated and it is shown that there exist subjective expected utility representations of the preference relation over acts with unique, nonatomic, probability measure on the algebra of all events, and a state-dependent utility function over the set of consequences. Journal of Economic Literature Classification Number: D81.     

Subjective expected utility theory without states of the world

This paper develops an axiomatic theory of decision-making under uncertainty that dispenses with the state-space. The results are subjective expected utility models with unique, action-dependent, subjective probabilities, and a utility function defined over wealth-effect pairs that is unique up to a positive linear transformation.     

Similarities and Differences in the Academic Education of Software Engineering and Architectural Design Professionals

This article focuses on the similarities and differences in the academic education of software engineers and architects. The rationale for this work stems from our observation, each from the perspective of her or his own discipline, that these two professional design and development processes share some similarities. A pilot study was performed, in which 24 practitioners (12 software engineers and 12 architects) were interviewed concerning the main characteristics of the two professions. The characteristics were classified according to four categories: discipline-related characteristics, professional skills, characteristics of typical problems and processes, and characteristics of a typical product. Data analysis indicates that according to the practitioners, while the professional skills required of professionals in the two disciplines are mostly common, the difference between the two disciplines is reflected most significantly in the features of the product created in the two professional processes. Based on this observation, some conclusions are outlined with respect to the academic education in the two fields.     

A simple test of the theory of the short-run Phillips curve

The theory of the Phillips curve is reexamined taking into account the relationship between workers and firms. Emphasis is given to the firm's role in determining employment and hours over the business cycle. Empirical relations between real wages, employment and unemployment using distributed lag estimation are examined.