Product evaluation bias under minimal group situations

The present study was designed to identify the source of product evaluation bias. Three experiments were conducted to see if the evaluation bias occur in the minimal group situation defined by [Tajifel, H., Billig, M., Bundy, R., & Flament, C. (1971). Social categorization and intergroup behavior. European Journal of Social Psychology, 1, 149–178], and to determine the factors responsible for making evaluation bias. Relative measure of product evaluation played a major role in producing an evaluation bias in minimal group situation. Similarly, relative measure of distribution was a critical factor affecting distribution bias. The possible boundary condition of [Tajifel, H., Billig, M., Bundy, R., & Flament, C. (1971). Social categorization and intergroup behavior. European Journal of Social Psychology, 1, 149–178] minimal group situation in evaluation bias were also discussed.     

Electricity consumption and economic growth in Nigeria: Evidence from cointegration and co-feature analysis

The paper investigates the causality relationship between energy consumption and economic growth for Nigeria during the period 1980–2006. The results of our estimation show that real gross domestic product (rGDP) and electricity consumption (ele) are cointegrated and there is only unidirectional Granger causality running from electricity consumption (ele) to (rGDP). Then we applied Hodrick–Prescott (HP) filter to decompose the trend and the fluctuation components of the rGDP and electricity consumption (ele) series. The estimation results show that there is cointegration between the trend and the cyclical components of the two series, which seems to suggest that the Granger causality is possibly related with the business cycle. The paper suggests that investing more and reducing inefficiency in the supply and use of electricity can further stimulate economic growth in Nigeria. The results should, however, be interpreted with caution because of the possibility of loss in power associated with the small sample size and the danger of omitted variable bias that could result from the use of bi-variate analysis.     

How Do Information Ambiguity and Timing of Contextual Information Affect Managers’ Goal Congruence in Making Investment Decisions in Good Times vs. Bad Times?

Information ambiguity is prevalent in organizations and may influence management decisions. This study draws upon research on information bias and ambiguity research to empirically test how information ambiguity and non-financial factors (e.g., interpersonal information) affect managers’ capital budgeting decisions when in good vs. bad times. Ninety-two managers completed two experiments. In Experiment One, the information was presented sequentially. Our results show that without the presence of non-financial factors, managers tend to maximize the firm value. After receiving non-financial factors, a significant number of managers switched to the self-serving option in good times (the gain condition) but stayed with firm-value maximization in bad times (the loss condition). In Experiment Two, the information was presented simultaneously in the presence and absence of ambiguity. We found that in the presence of ambiguity, the information presentation has no impact on managers’ self-serving bias in good times or their firm-value maximization tendency in bad times. Interestingly, we also observed managers’ use of interpersonal information even in the absence of ambiguity.JEL Classification: D8     

Known, Unknown, and Unknowable Uncertainties

In normative decision theory, the weight of an uncertain event in a decision is governed solely by the probability of the event. A large body of empirical research suggests that a single notion of probability does not accurately capture peoples' reactions to uncertainty. As early as the 1920s, Knight made the distinction between cases where probabilities are known and where probabilities are unknown. We distinguish another case –- the unknowable uncertainty –- where the missing information is unavailable to all. We propose that missing information influences the attractiveness of a bet contingent upon an uncertain event, especially when the information is available to someone else. We demonstrate that the unknowable uncertainty –- falls in preference somewhere in between the known and the known uncertainty.     

Black portraits in African-American literature: A perpective from 1920–1996, including the midwest

What is the effect of sociocultural conditioning in creating black portraits in African-American literature? As twentieth century cultural attitudes change, stereotyped portraits have evolved to more individualized portraits. The question of how these changes have occurred caused me to research the “spirit or ethos” of selected black literature from 1920–1996. After screening various works, I selected authors representing the Harlem Renaissance 1920–1930; the Depression Era 1930–1940; World War II and the Post-War Period 1940–1960; Civil Rights/Black Power Movement 1960–1970; and Contemporary Literature 1970–1996. The results show these particular qualities in African-American Literature: use of explicit, distinctive language and folk idioms; protests against dehumanization and victimization; awakened moral and racial consciousness; emphasis on cultural nationalism; rebellion against racism, and a private search for self-realization by the characters.     

Does financial development cause economic growth? Implication for policy in Korea

The causal relationship between financial development and economic growth is examined, utilizing the superexogeneity methodology. We use annual data for Korea during 1971–2002, during which Korea has experienced both phenomenal economic growth and a variety of financial liberalization and reforms. In our tests for superexogeneity, we find that financial development control causes economic growth, but the reverse is not true. Our empirical results provide evidence in favor of the ‘finance causes growth’ view for the case of Korea while rejecting the ‘growth causes finance’ view. The policy implication is that Korea should give policy priority to financial reform rather than economic growth, because only a decisive and accelerated pace of financial restructuring can ensure a sustainable growth in the medium or long term.     

Are corrupt acts contagious?: Evidence from the United States

This paper adds to the literature by shedding new light on the causes of corruption. Specifically, we provide evidence on the extent to which corruption might be contagious. In other words, what is the extent to which a demonstration effect is at play at inducing corrupt acts? Using state-level U.S. data over the 1995–2004 period, the results show that the effect of neighboring corruption is positive and statistically significant in all cases, implying that corruption does appear to be contagious. Specifically, a 10% increase in corruption in neighboring states appears to increase corruption in a state by about 4–11%. Of the different types of government activity, the size of defense and non-defense federal sectors in a state seem to have opposite effects on corruption, with the former contributing to corruption and the latter serving as a deterrent. The size of the state and local governments does not seem to be relevant. Of the variables controlling for detection and punishment of corrupt individuals, greater corrections employment reduces corruption, while greater judicial employment seems to increase corruption. Changes in the police force do not seem to have a statistically significant impact. These findings generally hold when we control for the disproportionate effects of the Washington, DC area and when a pooled data set is estimated. Contagion effects are also found for other crimes. Policy implications are discussed.     

Economic globalization and violent civil conflict: Is openness a pathway to peace?

There has been little systematic assessment of the impact of globalization on armed conflict within states. Drawing from bargaining theories of conflict, we posit that the global marketplace functions as an “audience” that rewards or punishes the policy choices of states. Globalization, which connotes an increased exposure to this marketplace, increases the relevance of the “costs” that this “audience” may impose. These prospective costs thus encourage peace and stability, as states that are integrated into the global economy have more to lose by instigating and sustaining violent conflict within their borders. Employing a two-stage Heckman Model, we assess the impact of various facets of globalization, including access to information, trade, foreign investment and aid flows, on intrastate conflict within the developing countries for 1990–1996.     

The Right to Remain Silent

The paper points out that in dynamic games a player may be better-off if other players do not know his choice of strategy. That is, a player may benefit by not revealing (or not pre-determining) the choice of his action in an information set he (thereby) hopes will not be reached. He would be better-off by exercising his ``right to remain silent' if he believes –- as the empirical evidence shows –- that players display aversion to ``Knightian uncertainty'. In this case, a player who behaves strategically, may wish to avoid revealing his strategy. This is true under various interpretations of the notion of ``strategy profiles'.     

High Stakes and Acceptance Behavior in Ultimatum Bargaining:

This paper presents the results of a within-subject experiment testing whether an increase in the monetary stakes by a factor of 50 – which had never been done before – influences individual behavior in a simple ultimatum bargaining game. Contrary to current wisdom, we found that lowest acceptable offers stated by the responder are proportionally lower in the high-stake condition than in the low-stake condition. This result may be interpreted in terms of the type of utility functions which characterize the subjects. However, in line with prior results, we find that an important increase of the monetary stakes in the ultimatum game has no effect on the offers made by the proposer. Yet, the present research suggests that the reasons underlying these offers are quite different when the stakes are high.     

Judgments about the capabilities of city councillors and support for female representation on city council

Building on an earlier analysis of this data set, this study investigates the association between respondents' gender-stereotyping of city councillors with respect to work-related capabilities and their support for female representation on city council under conditions of low information. The earlier research found substantial gender-stereotypic bias in respondents' judgments about the office-related capabilities of male and female city council members. This analysis finds that the more positively women's capabilities to perform in office are evaluated, the more support there is for increased female representation on city council. In general, being “qualified” gets a candidate support but being female, for the most part, does not garner additional support. The double bind of this situation, however, is that female candidates are at a disadvantage because voters (in the sample) see men generically as being more able to meet the demands of serving on city council and increased female representation on city council can not occur unless individual female candidates are elected.     

The Instruction set of Questionnaires can Affect the Structure of the Data: Application to Self-Rated State Anxiety

The present study tested the assumption that self-ratings, such as those used for measuring state anxiety, do not measure a one-dimensional transcendent entity but involve decisions based on a multi-dimensional judgment. Two groups of subjects were presented with a balanced nine-item state anxiety questionnaire. Each group received a different set of instructions (a standard set and an altered instruction set suggesting unidimensionality of the questions in the questionnaire). It was hypothesized that this change in instructions would impact the structure of the data. The impact of the instructions was detectable at the level of the observed correlation between the negative and positive composites, Cohen's (1988) q=–0.27$. A multigroup confirmatory factor analysis showed that positive and negative wording factors correlated more strongly when unidimensionality was suggested than when standard instructions were used, q=–0.54. Theoretical and practical implications are discussed.     

Efficiency of the Greek banking system in view of the EMU: a heteroscedastic stochastic frontier approach

The paper estimates empirically cost efficiency of the Greek banking system for the period 1993–1998. The beginning of the examination period coincides with the acceleration of liberalization and deregulation of the Greek financial system, in view of the country joining the EMU. The study uses a multi-input, multi-output technology and adopts a heteroscedastic frontier model instead of a commonly used homoscedastic one to measure cost efficiency in the banking system. The empirical results show that larger banks are less efficient than smaller ones. Also, it is found that economic performance, bank loans and investments are positive related to the cost efficiency of the Greek commercial banking sector.     

Seeing The World Through Rose‐colored Glasses? Neglect of Consensus Information in Young Children's Personality Judgments

The present study examined the use of consensus information in early childhood. Ninety‐six three‐ to six‐year‐olds watched a demonstration that depicted the positive or negative behavior of one or several actors toward a recipient (low vs. high consensus, respectively). Subsequently, participants made behavioral predictions and personality judgments about the actors and recipients. Participants viewed all story characters favorably and were reluctant to assign blame for negative outcomes, although the appropriate use of consensus information increased with age for behavioral predictions. These findings suggest that there is a positivity bias in young children's personality judgments even in the face of explicit contradictory behavioral evidence. Children's early ‘theory of personality’ is apparently driven by a baseline assumption that people are nice.     

Action Bias and Environmental Decisions

Individuals have a penchant for action, often for good reasons. But action bias arises if that penchant is carried over to areas where those reasons do not apply, hence is nonrational. Action bias is explored theoretically, and then empirically, using data from surveys of hypothetical environmental decisions. Quite apart from agency considerations, individuals like to affect outcomes when gains are reaped. Given the ability to help one of two sites, we find that decision makers choose to foster improvement rather than prevent deterioration, despite framing that makes it arbitrary which site is improved, which preserved. Strong action bias—individuals choosing to reap gains even though they must impose losses—is also observed. These concepts are related to loss aversion, status quo bias, omission bias for losses, and bright-line behavior.     

On the predictive power of the term structure of interest rates for future inflation changes in the presence of political instability: the Turkish economy

This study investigates whether the term structure contains useful information about future inflation for Turkey during 1990–2000, a period of high inflation, high budget deficits, and political instability. Constant parameter and time varying parameter models are rejected by the data. The relationship between term structure of interest rates and inflation changes is found to be explained by a time-varying-parameter model with Markov-switching heteroskedastic disturbances. Thus, the term structure of interest rates is limited as a guide for monetary policy in an economy subject to regime changes such as that of Turkey. Stability can be achieved only by reducing inflation through circumscribing substantial government budget deficits and the political instability underlying them.     

Calibrating Hypothetical Willingness to Pay Responses

Experimental data comparing hypothetical and real dichotomous choice responses for two different goods were used to estimate a statistical bias function to calibrate the hypothetical yes responses. The probability that a hypothetical yes response would be a real yes response was estimated as a function of the individual's self-assessed certainty of the hypothetical yes response (assessed on a 0–10 scale) and a variable representing the price level. Without calibration the hypothetical yes responses significantly exceeded the proportion of real yes responses, but after calibration the null hypothesis of no difference between hypothetical and real responses could not be rejected in any of the experiments.     

Unemployment, Wage Pressure and Sectoral Shifts: Permanent and Temporary Consequences of Intersectoral Shocks

The main purpose of this study is to examine the effect of allocative disturbances using Italian labour market data and a VECM (vector error correction model). In order to measure sectoral shifts in labour demand, we use Neumann-Topel's [Neumann, G.R., & Topel, R.H. (1991). Employment risk, diversification, and unemployment. Quarterly Journal of Economics 106:1341–1365] employment-based dispersion index. In searching for a restricted cointegration space, we set down, and identify a stylized version of the battle of the mark-ups model. Lilien [Lilien, D. (1982). Sectoral shifts and cyclical unemployment. Journal of Political Economy 90:777–793] argued that an important part of cyclical unemployment comes from permanent shifts in the composition of labour demand. Our findings emphasize that an important source of the persistence of unemployment comes from sectoral shifts.