Probability of survival in a random exchange economy with dependent agents

Summary. In this paper I analyze the general equilibrium in a random Walrasian economy. Dependence among agents is introduced in the form of dependency neighborhoods. Under the uncertainty, an agent may fail to survive due to a meager endowment in a particular state (direct effect), as well as due to unfavorable equilibrium price system at which the value of the endowment falls short of the minimum needed for survival (indirect terms-of-trade effect). To illustrate the main result I compute the stochastic limit of equilibrium price and probability of survival of an agent in a large Cobb-Douglas economy. Received June 7, 2001; revised version: January 7, 2002 RID="*" ID="*" I would like to thank Mukul Majumdar and Thomas DiCiccio for helpful discussion and an anonymous referee for valuable comments and suggestions.     

Researching Preferences,Valuation and Hypothetical Bias

A number of recent papers in environmental economics have focused on the process of researching preferences – agents are uncertain about preferences but with effort may narrow their uncertainty. This issue has arisen in formulating bids in contingent valuation (CV) as well as the debate over the divergence between WTP and WTA. In the context of CV, it has been suggested that the hypothetical nature of the preference elicitation process biases responses. This paper provides both a theoretical model and experimental evidence to contribute to this debate. The model is a model of competitive bidding for a private good with two components that are particularly relevant to the debate. The first component is that bidders are unsure of their own value for the private good but may purchase information about their own value (researching preferences). The second component is that there is a probability that the auction is hypothetical – that the winning bidder will not get the private good and will not pay the winning bid. The experiment tests this theoretical model of bidding equilibrium and analyzes the effects of variations in the parameters (hypotheticalness, information costs and number of agents) on the endogenous variables (such as the proportion of bidders who become informed and the winning bid). Experimental results suggest that an increase in the hypotheticalness of an auction tends to decrease the likelihood that bidders pay for information on their valuation with an ambiguous effect on the winning bid.      

Take a risk: Preferring prevention over control of biological invaders

Scientists have argued that invasive species can be managed most cost effectively with greater investments in prevention. Further, under ideas like the precautionary principle it is reasonable to expect that a cautious manager would use more prevention relative to control because it keeps more invaders out. Yet, this is not typically done. In many cases, private and public resources are invested primarily to control existing invaders rather than to prevent new invasions. Managers frequently wait until after invaders have arrived and then scramble to limit the damages. We believe these paradoxical decisions can be understood by recognizing the link between typical human preferences for risk bearing and the technology of risk reduction. We demonstrate quantitatively how managers perceived to be cautious or averse to risk tend to shy away from prevention relative to control. This counterintuitive result arises because control is a safer choice than prevention because its productivity is relatively less risky: it works to remove existing invaders from the system. In contrast, the productivity of prevention is more uncertain because prevention only reduces the chance of invasion, it does not eliminate it, and invasion may not occur even in the absence of prevention. Managers' averse to risk will inherently avoid as much uncertainty as possible, whether the source of uncertainty regards ecological outcomes or economic productivity. Implications for environmental decision making are clear. In invasive species management, if managers act as though they are risk averse, their caution can backfire when it leads to more control rather than prevention. The social consequences of this choice are a greater probability of future invasions and lower social welfare. Our results suggest that social welfare is highest when managers were willing to “take a risk” with prevention.     

需求多样化下非会计专业本科会计学教学改革探索

本文从对学生和社会本科会计学教学需求的调查中发现,社会与学生对本科会计学教学的需求具有多样性。这种多样性导致了严格的教学学时限制与教学内容丰富性要求的矛盾,难以简单地以增加授课内容的方式来满足。教学实践表明,在主要传授会计学基础内容的前提下,适当引导学生进行形式多样、内容丰富的自主学习,是解决这一矛盾的有效方式。     

Competitive equilibrium when preferences change over time

Summary. We show the existence of a competitive equilibrium in an economy with many consumers whose preferences may change over time. The demand correspondence of an individual consumer is determined by the set of subgame-perfect equilibrium outcomes in his intrapersonal game. For additively separable preferences with concave period utility functions that are unbounded above, this demand correspondence will satisfy the usual boundary conditions. Whenever consumers can recall their own mixed actions, this correspondence is convex-valued. This ensures the existence of a symmetric competitive equilibrium.Received: 29 July 2004, Revised: 17 November 2004, JEL Classification Numbers: D51, D91, C73. Correspondence to: Thomas MariottiWe thank Michele Piccione for useful comments and suggestions. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.     

The Monetary Policy of the European Central Bank

The first six years of ECB monetary policy are examined using a general framework that allows central bankers to weight differently positive and negative deviations of inflation, output and the interest rate from their reference values. The empirical analysis on synthetic euro‐area data suggests that the objective of price stability is symmetric, whereas the objectives of real activity and interest‐rate stabilizations are not. Output contractions imply larger policy responses than output expansions of the same size, while movements in the interest rate are larger when the level of the interest rate is relatively high. The hypothesis of M3 growth‐rate targeting is rejected.     

Stone–Geary preferences in overlapping generations economies under pure exchange: A note

We incorporate Stone–Geary preferences into an overlapping generations economy under pure exchange, and explore stability, indeterminacy, and cycles with positive levels of saving and nonnegative public debt. A stable nontrivial steady state exists for parameter values, for which there does not exist equilibrium in the model with purely logarithmic utility function. We also show the possibility of a period-doubling bifurcation (a two-cycle).     

Can intertemporal choice experiments elicit time preferences for consumption?

The paper considers what can be inferred about experimental subjects’ time preferences for consumption from responses to laboratory tasks involving tradeoffs between sums of money at different dates, if subjects can reschedule consumption spending relative to income in external capital markets. It distinguishes three approaches identifiable in the literature: the straightforward view; the separation view; and the censored data view. It shows that none of these is fully satisfactory and discusses the resulting implications for intertemporal decision-making experiments. JEL Classification C90, C91, D90, D91, D11, D12     

Diversification, convex preferences and non-empty core in the Choquet expected utility model

Summary. We show, in the Choquet expected utility model, that preference for diversification, that is, convex preferences, is equivalent to a concave utility index and a convex capacity. We then introduce a weaker notion of diversification, namely “sure diversification.” We show that this implies that the core of the capacity is non-empty. The converse holds under concavity of the utility index, which is itself equivalent to the notion of comonotone diversification, that we introduce. In an Anscombe-Aumann setting, preference for diversification is equivalent to convexity of the capacity and preference for sure diversification is equivalent to non-empty core. In the expected utility model, all these notions of diversification are equivalent and are represented by the concavity of the utility index. Received: July 27, 1999; revised version: November 7, 2000     

The Brand Choice Model of Wine Consumers: A Multinomial Logit Model

The objective of this study is to determine factors influencing brand preferences of wine consumers in the Marmara region where viniculture and wine production is so important in Turkey. First, the consumers’ preferences survey has been conducted with 1022 persons in the region randomly selected and evaluated. Then, the informative factors influencing brand preferences collected in these surveys have been determined by the multinomial logit model. A lot of independent variables have been used in the multinomial logit model, but, because some independent variables were not found as significant according to Likelihood Ratio test, these variables are not included in the multinomial logit analysis. Six important factors influencing wine brand preferences have been determined. These factors are brand change causes of consumers, occupation of consumers, marital status of consumers, birthplace of consumers, income of consumers and gender of consumers. In addition, whether the wine brand preferences are independent, has been tested with Testing Independence of Irrelevant Alternatives of Hausman. According to this test, it has been found that the wine brand preferences are independent.