Risk and risk aversion effects in contests with contingent payments

Contests by their very nature involve risk, winning and losing are both possible, and the gain from winning can itself be uncertain. The participants in a contest use resources to increase their chance of winning. The main focus of this analysis is on the effects of risk aversion and risk in contests where only winners pay for resources used to compete. When payment is contingent on winning, the effect of risk aversion is in the opposite direction of what occurs when costs are paid by both winners and losers. A number of contests observed in the marketplace that exhibit this contingent payment property are discussed.     

The Rise of the West—or Not? A Revision to Socio-economic History

The debate over the "Rise of the West" has generally been over which factor or factors—cultural, geoographic, or material—in European history led Europe to diverge from the World's pre-industrial civilizations. This article aims to shift the terms of the debate by arguing that there were no causal factors that made Europe's industrialization inevitable or even likely. Rather, most of Europe would not and could not move toward industrialization any more than China or India or Japan. Rather, a very accidental combination of events in the late seventeenth century placed England on a peculiar path, leading to industrialization and constitutional democracy. These accidents included the compromise between the Anglican Church and Dissenters, and between Crown and Parliament, in the settlements of 1689; the adoption of Newtonian science as part of the cosmology of the Anglican Church and its spread to craftsmen and entrepreneurs throughout Britain; and the opportunity to apply the idea of the vacuum and mechanics to solve a particular technical problem: pumping water out of deep mine shafts in or near coal mines. Without these particular accidents of history, there is no reason to believe that Europe would have ever been more advanced than the leading Asian civilizations of the eighteenth and nineteenth centuries.     

Individualized Transition Planning for Students With Learning Disabilities

Many transition plans for students with learning disabilities suffer because (a) they often focus on the employment needs of students with more severe cognitive and physical disabilities and (b) they are not required until as late as 14 years old, sometimes too late for many students with learning disabilities. Lack of effective transition planning may result in inadequate postsecondary adjustment problems (e.g., under‐ or unemployment, restricted participation in community and leisure activities). The authors describe specific problems in transition planning for students with learning disabilities and offer suggestions for designing K‐12 transition plans that are uniquely suited for these students.     

Conceptualising informal institutions: Drawing on the case of guanxi

Institutions regulate social life through formal rules and sanctions. These are distinguished from another source of social regulation, the informal incentives and constraints inherent in cultural currents and customary practices. Informal practices may be based not simply on cultural forces, though, but expectations regularised by informal rules and sanctions, which may operate as informal institutions. One approach holds that informal institutions arise out of formal institutional voids. Another holds that informal institutions operate in response to situations in which formal institutions frustrate the interests of individuals and groups who engage informal institutions to augment, compromise, or subvert formal institutions. After developing the concept of informal institution, the article goes on to indicate how an informal relationship pervasive in modern China, guanxi, may be understood as an informal institution. It is shown that by drawing on the case of guanxi the scope of the concept informal institution can be extended and also that our understanding of guanxi is enriched when the concept of informal institution is applied to its analysis.     

‘Once a miner,always a miner’: Poverty and livelihood diversification in Akwatia,Ghana

This paper offers an alternative viewpoint on why people choose to engage in artisanal mining – the low tech mineral extraction and processing of mainly precious metals and stones – for extended periods in sub-Saharan Africa. Drawing upon experiences from Akwatia, Ghana's epicentre of diamond production since the mid-1920s, the analysis challenges the commonly-held view that the region's people are drawn to artisanal mining solely because of a desire ‘to get rich quick’. A combination of events, including the recent closure of Ghana Consolidated Diamonds Ltd's industrial-scale operation and decreased foreign investment in the country's diamond industry over concerns of it potentially harbouring ‘conflict’ stones from neighbouring Côte D'Ivoire, has had a debilitating economic impact on Akwatia. In an attempt to alleviate their hardships, many of the town's so-called ‘lifetime’ diamond miners have managed to secure employment in neighbouring artisanal gold mining camps. But their decision has been condemned by many of the country's policymakers and traditional leaders, who see it solely as a move to secure ‘fast money’. It is argued here, however, that these people pursue work in surrounding artisanal gold mining communities mainly because of poverty, and that their decision has more to do with a desire to immerse in activities with which they are familiar, that offer stable employment and consistent salaries, and provide immediate debt relief. Misdiagnosis of cases such as Akwatia underscores how unfamiliar policymakers and donors are with the dynamics of ASM in sub-Saharan Africa.     

Asymptotic Efficiency in Parametric Structural Models with Parameter‐Dependent Support

In certain auction, search, and related models, the boundary of the support of the observed data depends on some of the parameters of interest. For such nonregular models, standard asymptotic distribution theory does not apply. Previous work has focused on characterizing the nonstandard limiting distributions of particular estimators in these models. In contrast, we study the problem of constructing efficient point estimators. We show that the maximum likelihood estimator is generally inefficient, but that the Bayes estimator is efficient according to the local asymptotic minmax criterion for conventional loss functions. We provide intuition for this result using Le Cam's limits of experiments framework.     

Environmental migration as short- or long-term differences from a trend: A case study of Hurricanes Katrina and Rita effects on out-migration in the Gulf of Mexico

An environmental event that damages housing and the built environment may result in either a short- or long-term out-migration response, depending on residents' recovery decisions and hazard tolerance. If residents move only in the immediate disaster aftermath, then out-migration will be elevated only in the short-term. However, if disasters increase residents' concerns about future risk, heighten vulnerability, or harm the local economy, then out-migration may be elevated for years after an event. The substantive aim of this research brief is to evaluate hypotheses about short- and long-term out-migration responses to the highly destructive 2005 hurricane season in the Gulf of Mexico. The methodological aim is to demonstrate a difference-in-differences (DID) approach analysing time series data from Gulf Coast counties to compare short- and long-differences in out-migration probabilities in the treatment and control counties. We find a large short-term out-migration response and a smaller sustained increase for the disaster-affected coastal counties.