Efficiency of consumer intertemporal choice under life cycle cost conditions

Many decisions made by consumers are intertemporal. Life cycle cost (LCC) conditions represent a specific type of intertemporal decisions, typically referring to items involving two cost components: present purchase price and future maintenance costs. This paper presents a conceptual framework for analyzing consumer LCC decision making. Within this framework the notion of choice efficiency is highlighted. The main contribution of the study is the direct estimation of consumers’ choice efficiency, as compared to previous studies that estimate only consumers’ implicit discount rates. Effects of situational and personal variables on efficiency of choice are estimated by means of a series of manipulated choice settings. The main empirical findings show situational effects of monetary size, type of object and time horizon. Additional findings show the effect of personal variables such as gender, marital status and education.     

Mother‐Child Coregulation During Delay of Gratification at 30 Months

Fifty‐eight 30‐month‐old children and their mothers were observed during a task in which the child was asked to refrain from touching an attractive toy. Child and maternal regulatory strategies were independently coded in 5‐sec intervals. Consistent with past research, the ability to refrain from touching the toy was associated with less time orienting to the forbidden object and more time focusing on other stimuli. Mothers of children who refrained from touching the toy were more likely to use distraction as a technique to assist in their children's regulation than were mothers of touchers, whereas mothers of children who transgressed used more nondistracting strategies than did mothers of nontouchers. Analysis of contingent behaviors suggested that mothers and children effectively coregulated behavior during this challenging situation, as children and mothers followed one another's lead in the allocation of attention away from the toy. These findings indicate the benefits of proactive, rather than reactive, parental strategies for assisting child delay of gratification.     

Self-control and loss aversion in intertemporal choice

The life-cycle theory of saving behavior (Modigliani, 1988) suggests that humans strive towards an equal intertemporal distribution of wealth. However, behavioral life-cycle theory (Shefrin & Thaler, 1988) proposes that people use self-control heuristics to postpone wealth until later in life. According to this theory, people use a system of cognitive budgeting known as mental accounting. In the present study it was found that mental accounts were used differently depending on if the income change was positive or negative. This was shown both in a representative nationwide sample of households and in a student sample. Respondents were more willing to cut down on their propensity to consume when faced with an income decrease than to raise it when the income increased. Furthermore, contrary to the predictions of behavioral life-cycle theory, it was found that the respondents adjusted their propensity to consume the most when the income increases or decreases took place immediately. Hence, it is suggested that theories of intertemporal choice (e.g., Loewenstein, 1988; Loewenstein & Prelec, 1992) provide a better account of the data than does the behavioral lifecycle theory.     

Impulsivity and Sustained Attention in Pathological Gamblers: Influence of Childhood ADHD History

Pathological gambling (PG) has been associated to both impulsiveness and attention deficit/hyperactivity disorder (ADHD) in different studies. Our objective was to compare different impulsivity and sustained attention variables, using both behavioural tasks and self-administered questionnaires, in a group of pathological gamblers with a history of childhood ADHD (PG-ADHD; n = 16), a group of pathological gamblers without this history (PG-non-ADHD; n = 39), and a control group (n = 40). As instruments of measure, we used the stop signal task (to evaluate inhibitory control/impulsivity), the differential reinforcement of Low Rate Responding Task (delay of gratification/impulsivity) and the Continuous Performance Test (sustained attention). The Barratt Impulsivity Scale (BIS-11) was used as a self-administered questionnaire to measure impulsiveness.Our results show that patients in the PG-ADHD group exhibit a significantly lower capacity to delay gratification than those in the PG-non-ADHD and control groups, and less inhibitory control than patients in the PG-non-ADHD group. On self-administered questionnaires such as the BIS-11 the PG-ADHD group obtained higher scores than the PG-non-ADHD and control groups. However, no differences were found with respect to sustained attention using the CPT.Our results suggest a possible selective implication of the prefrontal cortex in PG, which would be especially evident in those with a childhood history of ADHD.     

ON THE SOCIAL DIMENSION OF TIME AND RISK PREFERENCES: AN EXPERIMENTAL STUDY

When explaining risk taking, intertemporal allocation, and distributing behavior, economists rely on risk, time, and other-regarding preferences but offer no guidance on how these three crucial aspects are interrelated. We report on an experiment exploring such interrelation. For this sake, we compare evaluations of several prospects, each of which allocates certain or risky and immediate or delayed payoffs to the actor and to another participant. We find that individuals are self-oriented as to social allocation of risk and delay and other-regarding with respect to expected payoffs . ( JEL C91, D63, D81)     

Commitment and weakness of will in game theory and neoclassical economics

This paper draws on theoretical and experimental studies in game theory and on the neoclassical concept of intertemporal inconsistency in choice to argue that the motivational theory shared by neoclassical economics and noncooperative game theory is mistaken in assuming that commitment never takes place in human decisions. The paper first gives two parallel examples, one of intertemporal inconsistency in a financial decision, and the other of noncooperative (subgame perfect) equilibrium in a game in extensive form. So far as one decision-maker is concerned, the two decisions are isomorphic, and both can be associated with weakness of will. By contrast, the cooperative analysis of the game (along the lines originally suggested by von Neumann and Morgenstern) predicts a different decision associated with commitment to a particular conditional sequence of “behavior strategies”, i.e. a particular pure strategy. In effect the cooperative analysis assumes perfect strength of will. The paper then argues that strength of will and rationality of decisions are independent dimensions of a decision process and reviews some experimental evidence that suggests that both traditions are mistaken in their extreme assumptions about commitment or strength of will: neoclassical economics and noncooperative game theory in assuming that commitment never takes place, and cooperative game theory in assuming that it always does. The evidence indicates moreover that commitment is more likely in at least one context of value judgments than in its absence. The value context is reciprocity. It is suggested that a focus of research on the circumstances that favor commitment – rather than on modifications of an assumed utility function to accommodate non-self-regarding motivations – might lead to a more fruitful behavioral economics and behavioral game theory.     

Time Preference and Life Cycle Consumption with Endogenous Survival

We provide a structural theory of time preference and derive a functional form of intertemporal preferences by postulating that individuals make their life-cycle consumption choices as if to maximize expected lifetime. This yields a nontime-separable expected utility representation where the inverse of the coefficient of intertemporal substitution exceeds the coefficient of relative risk aversion. The rate of time preference depends on the inverse of expected remaining lifetime and the effect of age on the productivity of consumption in affecting health. The preference formulation is applied in a standard intertemporal consumption model to illustrate the implied life-cycle consumption choices ( JEL D91, B41).     

Undoing Sexual Objectification in the Japanese Socio-Juridical Context: The Human-Rights-Oriented Transmutation of the Conception of "Obscene" Material

Abstract: This article argues that in the socio-psychic phenomenon of the sexual objectification of girls and women manufactured by certain media and the majority of conventionally so-called pornography, woman is represented, perceived, and treated as a sexually materialized object ready to be exploited exclusively as a means to produce sexual gratification, but not at all as an end in herself, i.e. a human subject with her own sexual will and human dignity. The article exposes the social role of sexually objectifying merchandise in rendering the viewer's sexuality compulsive and addictive, and in producing the viewer's psychic desire for sexual violence especially against those who are most vulnerable (such as children, women who were sexually abused as children, women with intellectual disabilities, etc.) by referring to a number of sociological data and actual evidences collected in Japan and North America. As an alternative modality of sexuality, the article proposes sexual intersubjectivity. In light of sexual objectification, this article qualitatively analyzes and criticizes the conventional definition of "obscene" material, which revolve around discipline and order, and that of "pornography", and proposes the human-rights/equality-oriented transmutation of the conception of obscene material. The article argues that merchandise which produces the desire for sexual violence is disqualified as a concretion of the freedom of expression. This article then attempts to examine the constitutionality (referring specifically to the freedom of expression) of Japanese Obscenity Law by delineating the precise criteria of judgment for obscenity itself and the very method of its enforcement.     

A CONTRIBUTION TO THE THEORY OF DEPLETABLE RESOURCE SCARCITY AND ITS MEASURES

Economists commonly use rent and unit costs as measures of non-renewable resource scarcity and identify the types of scarcity as Malthusian or Ricardian. Malthus and Ricardo, however, concerned themselves mainly with renewable agricultural land; Mill and Jevons provided major insights into non-renewable resource scarcity. A simple model of mining brings out the contributions of major classical and other writers and shows that unit costs and rent are not necessarily useful indicators of scarcity. Exhaustibility of the deposit and choice of capital stock appear more pertinent to firms' intertemporal decisions than exhaustibility of world reserves.     

A Neo-Durkheimian analysis of a new religious movement: The case of Soka Gakkai in Italy

Soka Gakkai is one of the world’s fastest-growing religious movements and Italy figures among the western nations where this religious group has been most successful. This article aims at explaining this success-story: why has Soka Gakkai, and particularly its Italian affiliation, grown so rapidly in recent years? This research question gives the opportunity to assess the applicability of the economic theory of religion to the growth of new religious movements. Hence, in order to explain the expansion of Soka Gakkai, this work begins with an examination of the adaptive strategies developed by a Japanese organization in the Italian religious market. It is claimed, however, that a rational choice explanation cannot stand on its own and that we must take into account the dynamics of pre-contractual solidarity that promote trust, especially when the expected benefits promised by this organization to its adherents do not materialize. Moreover, these solidarity dynamics generate intense emotional gratification that works as a highly motivating incentive to sustain members’ commitment and to prevent them from dropping out. This pre-contractual solidarity is actively produced and continuously reproduced by means of ritual interaction along the lines suggested by Collins’s theory.     

The fragility of cooperation: A false feedback study of a sequential iterated prisoner's dilemma

We examined the mutability of naturally occurring mutual cooperation and mutual defection. Forty-five pairs of subjects participated in an extended iterated prisoner's dilemma (median duration 1807 trials) using a monetary payoff matrix. When stable cooperation or defection emerged, false feedback was provided indicating to each subject that his partner was choosing contrary to previously stable play. This was followed by recovery trials in which false feedback indicated to each subject that his partner had resumed making the previously stable choice.While stable cooperation occurred more frequently than stable defection, it was considerably more vulnerable to the false feedback manipulation. This was true both in terms of the extent to which choice changed in response to false feedback (p=0.006) and in terms of the extent to which the disruption persisted (p<0.001). While the effect of four false feedback cooperations was undone by a single recovery false feedback defection, the effect of even a single false feedback defection was still apparent after seven false feedback recovery cooperations. These results are discussed in relation to the analogy between interpersonal bargaining and intertemporal bargaining within individuals.     

A Theory of Time Preference

This article proposes that people generally prefer present consumption to future consumption because their expected utility from consumption (eventually) falls as their mental and physical abilities (eventually) decline with age. Moreover, contrary to the ubiquitous intertemporal formulation with a constant rate of time preference and contrary to three recent theories of time preference that predict decreasing discounting as people age, this article asserts that discounting increases over the life cycle. This hypothesis is supported by data from the Panel Study of Income Dynamics as well as evidence from numerous previous studies.     

INTERTEMPORAL SUBSTITUTION AND CONSTRAINTS ON LABOR SUPPLY: EVIDENCE FROM PANEL DATA

This paper tests an intertemporal labor supply model for workers who say they face quantity constraints on their hours and for workers who say they do not. The data reject the model for the first group but not for the second. I conclude from this evidence that employment fluctuations result mainly from changes in the severity of constraints—that is, changes in involuntary unemployment—rather than intertemporal substitution. It also appears that liquidity constraints influence labor supply. Finally, the paper proposes a new approach to identifying intertemporal labor supply equations.     

Challenging the Rhetoric of Choice in Maternal Labour‐Force Participation: Preferred Versus Contracted Work Hours

The notion of choice in maternal labour‐force participation (LFP) is a contentious one, with assertions that LFP is a direct result of either personal inclinations, such as employment commitment or external factors, such as historically available opportunities. This article suggests an alternative framework for understanding and testing choice in LFP using preferred versus contracted work hours. It explores these constructs quantitatively in a group of working mothers (N = 275) with dependent children and investigates qualitatively the underlying reasons for discrepant preferred versus contracted work hours in a sub‐sample of these women with under‐school‐aged children (N = 20). The results show that nearly two‐thirds of women working full time would prefer to work part time and the major reasons for not acting on their preferences is because of the nature of the job and the lack of career opportunities available for part‐time employees.     

Poverty and time

We examine the measurement of individual poverty in an intertemporal context. Our aim is to capture the importance of persistence in a state of poverty and we characterize a corresponding individual intertemporal poverty measure. Our first axiom requires that intertemporal poverty is identical to static poverty in the degenerate single-period case. The remaining two properties express decomposability requirements within poverty spells and across spells in order to reflect the persistence issue. In addition, we axiomatize an aggregation procedure to obtain an intertemporal poverty measure for societies and we illustrate our new index with an application to EU countries.     

Impulsivity traits and gambling cognitions associated with gambling preferences and clinical status

Impulsivity (and related traits reward/punishment sensitivity and tolerance to delayed rewards) and gambling cognitions have been linked to gambling. However, their independent associations with gambling preferences and clinical status have never been dissociated. The current study applied a data-driven strategy to identify gambling preferences, based on gambling frequency in several modalities. The two resulting factors were used to classify gambling disorder patients (GDPs) and non-problem recreational gamblers (RGs) into Type I (preferring cards, casino games and skill-based bets) and Type II (preferring slot machines, lotteries/pools and bingo). Participants were assessed in impulsivity, delay discounting, reward/punishment sensitivity, gambling-related cognitions, gambling severity, gambling frequency and average amount gambled per episode. GDPs scored higher than RGs in positive and negative urgency, delay discounting, reward sensitivity and intensity of gambling-related cognitions, but less in lack of perseverance. Additionally, Type II gamblers had greater difficulties delaying gratification, whereas Type I gamblers showed higher cognitive distortion and reward sensitivity levels. In practical terms, the finding that some characteristics are equally pervasive in disordered gamblers independently of their preferences (affect-driven impulsivity), whereas others (distorted cognitions, reward sensitivity, delay discounting) are more prominent in one type or the other, provides a basis to establish targets’ priority in therapy.     

School choice from a household resource perspective: Preliminary findings from a north of England case study

This paper seeks to widen the conceptual lens of school choice debate and analysis to account for multiple, intersecting economies, cultures, and infrastructures of daily life. Preliminary findings are presented in the case of primary school enrolment in the north of England city of Newcastle upon Tyne. The national context is one in which public service delivery has been influenced by the language of ‘choice’, notably a parent's ‘right to choose’ a school other than that nearest to their child's home, and ‘responsibility’ to exercise choice as self-determined consumer-citizens. At the metropolitan level this translates as market-led competitive enrolment and a tendency for more children to travel longer distances to school and for there to be greater variation in journey length, as some parents are able to use superior transport and personnel as leverage in their quest for a better choice of state school. Findings are presented from a multi-method pilot study combining daily diary, resource audit, and biographic analysis for a sample of 18 families drawn from two case study schools. One school (Town) attracts pupils from an area of low-income population, to which most children journey on foot; the other school (Woodland) attracts pupils from further away, situated within a largely middle-class area, to which most children are driven in their parent's car. The findings show how the market model assumes and rewards a particular mode of choice-making which fails to recognise that some parents seek less instrumentally for their child to be happy. Discussion combines theory, empirical findings, and critical analysis to expose the subtle inequities of school choice in relation to neo-liberal thinking.     

Soziale Ungleichheiten beim Schulstart

Although there is a regular age of school entry in Germany, some children start school later than usual and some children start ahead of schedule. While there has been some decrease in delayed school entries in the last years, the rate of premature school entry has increased substantially. Paradoxically, while the delayed entry is primarily because professionals rate a child as not ready for school, the premature entry is mainly based on parents’ choice. The first aim of the paper is to discover whether kindergarten attendance can reduce the risk of a delayed entry. The arguments and hypotheses are mainly based on the theory on the ecology of human development of Bronfenbrenner. The empirical analyses demonstrate that low educated families profit most by kindergarten attendance, but only if the child begins attending the care institution before reaching age four. The second aim concerns considerations in regard to the decision of prematurely entering school. Socio-economic conditions are not as important at this point as compared with a delay in school entry. However, there are some effects indicating that higher educated parents foster a premature entry to elementary schools. The analyses are based on over 1.400 children in the relevant age group and their parents taking part in the large nationwide German Socio-Economic Panel Study (SOEP).     

PARENTS KNOW THEM BETTER: THE EFFECT OF OPTIONAL EARLY ENTRY ON PUPILS' SCHOOLING ATTAINMENT

The effect of optional early school entry on pupils' educational outcomes is investigated using data covering the entire population of Italian primary school students and exploiting exogenous thresholds imposed by norms regulating first enrollment. Results highlight the fact that pupils whose parents can choose when their children start school perform better than those who are bounded by terms imposed by law. These findings suggest that parental choice leads to a better match between pupils' characteristics and the beginning of formal learning. Results show that giving parents the option to anticipate or delay school entry could be a beneficial measure. (JEL I20, H52)