Why Any Seatbelt Mandate is an Infinitely Iterated Prisoner’s Dilemma: A Health Economics Perspective

Abstract

Among the most controversial of public health measures are those that restrict people’s freedom of choice presumably for the purpose of protecting their own health and safety. Mandatory use of automobile seatbelts can inspire allusions to the “tyranny of health” and the ‘health police.” This study revisits state seatbelt legislation, which is in force in all but one state of the USA. In modeling seatbelt mandates as indefinitely repeated Prisoner’s Dilemma (PD) games, the study qualifies and overcomes the limitations of conventional interest group and expressive voting theories. It indicates why and how utility-maximizing players, particularly carmakers, insurance companies, consumer advocates and regulators, may choose to cooperate, even in instances where mutual defection would bring each of them higher payoffs. The study suggests why state seatbelt mandates endure, despite ongoing concerns that they undermine individual autonomy or that their social costs outweigh the benefits of law-enforcement. The evolution and mediating effects of reputation and reciprocity in otherwise highly contestable healthcare decisions are consequently explored. Finally, the study identifies the implications of indefinitely repeated games on the continuing nature of strategic relationships and for mitigating conflict over traffic safety regulation, regardless of time and place.     

An Equity-based Redefinition of Underemployment and Unemployment and Some Measurements

An attempt is made in this article to redefine underemployment and unemployment without making reference to an excess supply of labor or any causal mechanism of unemployment. Instead, underemployment and unemployment are defined in terms of equity which draws upon the individual's preferences. A specific proposal is that underemployment be defined by the presence of contribution inequity relative to at least half the persons employed in a field that the underemployed person might prefer to move into. Empirically, most recent survey data on preferences for contingent and other nontraditional employment are used to illustrate the application of the concept. The major finding is that nearly 10 million Americans in the nontraditional workforce are underemployed.     

A generalization of modern production theory

This paper analyses the relationship between inflation and equity returns in Australia over the period January 1974 to March 1996. Analysis is based on monthly and quarterly data, using value weighted equity indices at both the aggregate market and industry level. Three price indices, the consumer price index (CPI) (quarterly) and the manufactured materials used index (MMU) and the manufacturing articles produced index (MAP) (both monthly and quarterly) are used to measure inflation. Results provide little evidence of the statistically significant negative relationship observed in the US for the full study period. Analysis is also conducted on three subperiods, ‘monetary targeting’ (July 1976–January 1985), ‘checklist approach’ (February 1985–December 1989) and anti-inflation (January 1990–March 1996). At the market level the anti-inflation subperiod does provide some evidence of a negative relationship between inflation and equity returns though statistical significance is not apparent with quarterly time series. The impact of expected inflation on industry returns varies considerably. Consistent with the overall market analysis, the incidence of negative expected inflation betas increases in the latter anti-inflation subperiod. Finally, changes in Government inflation policy appear to have greatest impact on industrial company expected inflation betas.     

A parametric control function approach to estimating the returns to schooling in the absence of exclusion restrictions: an application to the NLSY

An innovation which bypasses the need for instruments when estimating endogenous treatment effects is identification via conditional second moments. The most general of these approaches is Klein and Vella (J Econom 154:154–164, 2010), which models the conditional variances semiparametrically. While this is attractive, as identification is not reliant on parametric assumptions for variances, the nonparametric aspect of the estimation may discourage practitioners from its use. This paper outlines how the estimator can be implemented parametrically. The use of parametric assumptions is accompanied by a large reduction in computational and programming demands. We illustrate the approach by estimating the return to education using a sample drawn from the National Longitudinal Survey of Youth 1979. Accounting for endogeneity increases the estimate of the return to education from 6.8 to 11.2%.     

Why politics needs marketing

This paper examines the survey evidence for the low standing of politics, politicians and political institutions in the mind of the British public, and discusses its consequences. Present public opinion about political parties in Britain, and about politicians in general, is predominantly negative. Politicians are distrusted, to a considerably greater extent than can be explained solely by their bad press. Nor is the public very familiar with politicians or political institutions. Yet it can be shown that in general (and not only in the political field) ‘familiarity breeds favourability, not contempt’. This may be feeding through into hostility towards the entire sector—not only the strictly ‘political’, but other institutions such as public services which the public associates with politics or government. Copyright © 2003 Henry Stewart Publications     

International Monetary Policy: A Global Taylor Rule

John Taylors rule for setting interest rates provides a framework for studying the global monetary policy generated by individual countries pursing their own policy goals. The study reflects the global nature of monetary policy by modeling an aggregate short-term interest rate as a function of measures of worldwide inflation and the GDP gap. Multiple specifications are estimated to correspond to past studies of the U.S. relationships between these variables. The authors find that Taylor rule is a useful tool for characterizing the global monetary environment as his equation provides a good fit to the data in every specification explored by the authors. However, the international response to inflation is slightly less robust despite claims of inflation targeting by the bulk of the larger economies in the sample.     

An experimental study of blind proficiency tests in forensic science

We conducted a series of sender?Creceiver experiments to study the consequences of implementing a regime of blind proficiency tests in forensic science to reduce error rates and improve the criminal justice system. Senders are our surrogate for forensic laboratories and receivers, for the judge or jury. Our experimental surrogate (random audits with a penalty) for blind proficiency tests reduced sender error rates by as much as 46% depending on the level of experimentally induced bias. When penalties improve information quality, receiver error rates fell by as much as 26% depending on the level of the sender bias. We also find that the penalty must be large relative to the payoff to induce the reduction in errors. Our results suggest that a regime of blind proficiency testing has the potential to reduce forensic science errors.     

An international comparison of the determinants of retail gross margins

In this paper we compare the results of applying a new economic framework for the analysis of retail gross margins to 1982 interindustry retail data for France, Germany, and the U.S. Use of the same theoretical framework and econometric methodology separately for each of the three bodies of data yields robust empirical regularities with respect to functional form and the role of distribution services in explaining retail gross margins. An interesting feature of these results is that they arise despite substantial differences in classification and in the retail environment of the three countries.We thank E. Hoffnar and P. MacNeill for excellent research assistance. We acknowledge the financial support of INSEAD's R&D department for project R2135. We also thank the CSC at Maryland for support. Earlier versions of this paper were presented at the MIT Northeast Marketing Colloquium, the Simon Graduate School of Management at the University of Rochester, the Graduate School of Business at the University of Chicago, the Yale School of Organization and Management, the School of Business Administration at the University of Washington, and the Bureau of Economics of the Federal Trade Commission. We thank the participants in these seminars for their constructive criticisms. We are especially indebted to Peter Rossi of the University of Chicago, who provided us with helpful written comments, and to Herr Krockow of the Statistisches Bundesamt Wiesbaden, who provided us with unpublished data.