Least convex capacities

Summary. Debreu proposed the notion of `least concave utility' as a way to disentangle risk attitudes from the certainty preferences embedded in a von-Neumann Morgenstern index. This paper studies preferences under uncertainty, as opposed to risk, and examines a corresponding decomposition of preference. The analysis is carried out within the Choquet expected utility model of preference and is centered on the notion of a least convex capacity. Received: May 7, 1997; revised version: November 5, 1997     

Dynamics of inductive inference in a unified framework

We present a model of inductive inference that includes, as special cases, Bayesian reasoning, case-based reasoning, and rule-based reasoning. This unified framework allows us to examine how the various modes of inductive inference can be combined and how their relative weights change endogenously. For example, we establish conditions under which an agent who does not know the structure of the data generating process will decrease, over the course of her reasoning, the weight of credence put on Bayesian vs. non-Bayesian reasoning. We illustrate circumstances under which probabilistic models are used until an unexpected outcome occurs, whereupon the agent resorts to more basic reasoning techniques, such as case-based and rule-based reasoning, until enough data are gathered to formulate a new probabilistic model.     

Managers,specific human capital,and firm productivity in major league baseball

Recent research on the role of managers in firms concentrates on the relationship between compensation and individual performance, which links managerial skills and firm production only indirectly. In this paper, two related analyses test this link directly by examining how the experience of major league baseball managers affects both team and individual player performance. Grouped-data probit estimates indicate that, with team skills held constant, the probability of winning depends on the baseball-specific human capital of the manager. Further estimates, using the first-stage managerial attributes, also indicate that individual player performance improves when traded to "better-trained" managers.     

Tariff reduction via inflation : U. S. specific tariffs 1972–1979

Zusammenfassung Zollabbau mittels Inflation: Die spezifischen Z?lle der Vereinigten Staaten 1972–1979. -Die spezifischen Z?lle der Vereinigten Staaten — und zwar sowohl die reinen spezifischen Z?lle als auch deren Anteil in zusammengesetzten Z?llen -wurden zwischen 1972 und 1979 nominal festgesetzt. Das bedeutet, da\ die amerikanische Inflation die reale Protektion, die in diesen spezifischen Z?llen zum Ausdruck kommt, in dieser Zeit reduzierte und dadurch die überm?\ige Belastung, die mit diesen Tarifen verbunden ist, herabsetzte. Dieser Aufsatz liefert Sch?tzwerte (1) für die Verringerung der überm?\igen Belastung durch diese Tarife und (2) für die von der Inflation verursachte Verminderung der generellen USZollprotektion. Nach den Sch?tzungen der Autoren verringerte die Inflation zwischen 1972 und 1979 die durchschnittlichen Zolls?tze für Meistbegünstigungsimporte um 11,9 vH. In den Verhandlungen der Kennedy-Runde wurden die Z?lle sch?tzungsweise um 35 vH herabgesetzt, w?hrend der Zollabbau der Tokio-Runde bei 33 vH lag. Die inflationsinduzierte Zollsenkung ist im Vergleich zu diesen formalen Zollsenkungen betr?chtlich. Trotz des günstigen Vergleichs scheinen die Wohlfahrtsgewinne, die sich aus dem inflationsbedingten Abbau ergeben, verh?ltnism?\ig klein zu sein.

---

Résumé La réduction de tarif via l’inflation: Les tarifs spécifiques des E.U. 1972–1979. -Des tarifs spécifiques des E.U., purement spécifiques aussi bien que le rapport spécifique des droits composés, ont été fixés en terme nominal entre {dy1972} et 1979. L’inflation des E.U. entre 1972 et 1979 avait réduit le niveau de la protection, qui est implicite dans ces tarifs spécifiques, et diminué ainsi le charge d’excès associé avec ces tarifs. L’article contient des estimations (1) de la réduction du charge d’excès associé avec ces tarifs et (2) de la réduction induite par l’inflation en protection générale des E.U. Les auteurs estiment que l’inflation entre 1972 et 1979 a causé une réduction de 11.9 pourcent du taux tarifaire moyen imposé sur les importations NPF. Les négociations de la ?Kennedy Round? ont réduit, d’après cette estimation, les tarifs de 35 pourcent, pendant que la réduction à la fin de la ?Tokyo Round? se chiffrait à 33 pourcent. La réduction induite par l’inflation se tient favorablement avec les résultats de ces réductions officielles. Malgré cette comparaison favorable les gains de bien-être qui résultaient de ces réductions induites par l’inflation semblent relativement petits.

---

Resumen Reducción de axanceles por medio de inflación: Aranceles específicos en los EEUU entre {dy1972} y 1979. -Los aranceles específicos de los EEUU, tanto aquellos puramente específicos como también la porción específica de los aranceles combinados, han permanecido fijos en términos nominales entre 1972 y 1979. Por ello, la inflación que hubo en los EEUU entre 1972 y 1979 redujo el nivel real de protección implicite en los aranceles específicos. En este trabajo se presentan estimaciones (1) de la reducción de la protección asociada con estos aranceles y (2) de la reducción de la protección total del sistema general de aranceles de los EEUU inducida por la inflación. Segün los resultados de los autores la inflación logró disminuir el arancel medio sobre importaciones MFN en un 11,9 por ciento entre {dy1972} y 1979. Las negociaciones en la Kennedy Round habrían reducido la protección en un 35 por ciento, mientras que las de la Tokio Round habrian logrado una reducción del 33 por ciento. La reducción de la protección inducida por la inflación puede compararse ventajosamente con la que ocurrió en estas negociaciones. Sin embargo, los beneficios relativos derivados de la reductión inducida por la inflación resultan marginales.

     

A note on the recoverability and uniqueness of changing tastes

This paper demonstrates that it will be impossible, by observing an agent's demand behavior, to either refute or confirm the general taste change hypothesis without substantially restricting the class of eligible preferences.     

IID: independently and indistinguishably distributed

The inability of the Bayesian model to accommodate Ellsberg-type behavior is well-known. This paper focuses on another limitation of the Bayesian model, specific to a dynamic setting, namely the inability to permit a distinction between experiments that are identical and those that are only indistinguishable. It is shown that such a distinction is afforded by recursive multiple-priors utility. Two related technical contributions are the proof of a strong LLN for recursive multiple-priors utility and the extension to sets of priors of the notion of regularity of a probability measure.     

The development of economic self‐sufficiency among former welfare recipients: lessons learned from Wisconsin’s welfare to work program

In 1996, the US Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, changing the culture of welfare from a system of dependency to one of personal responsibility and economic self‐sufficiency through workplace participation. Through the expert views of case managers and area employers of Wisconsin, this research sought to identify the problems and barriers to self‐sufficiency among former welfare recipients and other low‐income workers and the effectiveness of services and programs available to address these barriers. The study found situational barriers, education and learning experience barriers, personal issues and disabilities to impede the development of low‐income workers. The services found to promote the development of economic self‐sufficiency among former welfare recipients were support services, educational and learning programs, employer intervention services and counseling services. The findings suggest that these services could be expanded and made more effective through the collaborative efforts of welfare reform agencies, employers, educational institutions and community‐based organizations.