Frames and decisions under uncertainty in economics theory

Theory and Decision -     

A note on decisions under uncertainty: the impact of the choice of the welfare measure

The paper addresses the question, how policy decisions under uncertainty depend on the underlying welfare concept. We study three different welfare measures: The first is directly based on the ex ante (expected) utility of a representative consumer whereas the second relies on an ex ante and the third on an ex post valuation of policy changes compared to the status quo. We show that decisions based on these measures coincide if and only if risk-neutral expected utility maximization is applied. Differences between the decisions are analyzed for both, risk-averse expected utility maximization and the MaxiMin criterion. For risk-averse decision makers, differences between the first and the second concept arise if the absolute risk-aversion of the decision maker is not constant in income. For risk-aversion and the MaxiMin criterion, the effort levels to provide a public good based on an optimization of ex post utility changes exceed those based on the first or second concept. Implications for environmental policy decisions based on the concepts of abatement costs and benefits from abatement are discussed.     

The regulatory challenge of occupational safety and health in the online platform economy

The online platform economy raises a range of intricate legal questions connected to labour law and social security protection. In particular, the atypical forms of labour relationships used by many online platforms (e.g. multilateral, hyper‐temporary, off‐site, autonomous), often contractually defined as independent contracting, have challenged the application of labour and occupational health and safety law in many countries across the world, as the application of these norms tends to be dependent on the existence of an “employment relationship”. These developments are compounding the general increase in atypical employment, especially as a result of the 2007–08 financial and economic crisis. It has mostly fallen to courts to resolve the disputes between online platforms and their online platform workers, but some European Union (EU) Member States (such as France) have taken specific legal measures in response to these difficulties. Also, the EU‐level as such is becoming increasingly involved, with the Court of Justice’s ruling in the case of Uber providing some guidance on the “employment question”, and a pending legislative initiative on a Directive for Transparent and Predictable Working Conditions which may provide minimum labour protection for online platform workers in the EU. This article analyzes the problem of labour law in the online platform economy and surveys the various responses by courts and policy‐makers across the EU, which may furthermore set the tone for developments outside the EU in this area.     

Public Attitudes toward Abortion in Israel: A Research Note

Objective . For the first time since the mid-1970s, this study explored sociodemographic correlates of abortion attitudes among Israeli Jews and compared them with those reported by the General Social Survey in the United States. Methods . A survey in the representative sample of Jewish adults living in urban areas across Israel ( N = 546) that included two related items on the attitude toward abortion for nonvital reasons. Results . Using multiple regression, four statistically and socially significant correlates of antiabortion attitudes were identified: Greater religiosity (especially Ultra-Orthodox affiliation), lower than average income, greater number of children, and right-wing political preference. Gender and age did not emerge as significant correlates of abortion attitudes. Whereas American Jews form the mainstay of the prochoice camp, Jews in Israel are clearly divided along the lines of religiosity, ethnicity, socioeconomic status, and political views. Conclusions . In both Israel and the United States, the sociodemographic profiles of abortion supporters and opponents have been rather similar and stable over the last 25 years. This may point to the stable patterns of religiosity in both societies, since antiabortion sentiments have mainly been fueled by religious fundamentalism, regardless of formal denomination.     

The influence of fear in decisions: Experimental evidence

This article studies decisions made under conditions of fear, when a catastrophic outcome is introduced in a lottery. It reports on experimental results and seeks to compare the predictions of the expected utility (EU) framework with those of a new axiomatic treatment of choice under uncertainty that takes explicit account of emotions such as fear (Chichilnisky 1996, 2000, 2002, 2009). Results provide evidence that fear influences the cognitive process of decision-making by leading some subjects to focus excessively on catastrophic events. Such heterogeneity in subjects’ behavior, while not consistent with EU-based functions, is fully consistent with the new type of utility function implied by the new axioms.     

Patterns of change in youth unemployment regimes: France and Switzerland compared

The comparison between France and Switzerland enables us to compare a country that has a strong interventionist tradition in the labour market and whose youth unemployment is endemically high with a more liberal country that is faced with a more recent increase in youth unemployment but which, nevertheless, remains relatively measured. Starting from different rules and values, the two youth unemployment systems resemble each other insofar as both exclude most unemployed youth from all available benefits. From this angle, French egalitarianism rejoins Swiss differentialism. In both cases, it is not the least of paradoxes that the system of unemployment insurance so little benefits those who are most vulnerable to the economic crisis and the present dearth of jobs.     

Landscape quality payments in Switzerland: The congruence between policy and preferences

Swiss landscape quality payments (LQPs) are a form of agricultural subsidy that provides funding for farmers engaged in maintaining or creating different elements that contribute to landscape quality. This study is the first step to analyse the effect of different measures to increase landscape quality using four indicators of perceived landscape quality (beauty, authenticity, uniqueness and complexity) from two nationally representative public surveys conducted in 2011 and 2020. While most LQP categories do not have a significant effect, both payments for productive grassland and those connected to stone structures have an effect on more than one of the four indicators of perceived landscape quality. These payments seem to cause a visible change in the landscape or preserve elements that are important for landscape quality. Such payments help to provide ecosystem services, while those not causing any visible change can be conceptualised as a form of rent-seeking. In the future, more efforts are needed to evaluate the payments to enable evidence-based policy-making and steer payments towards measures that result in improvements to landscape quality that are visible and notable to the public.     

All Politics is Not Local: National Forces in State Abortion Initiatives

Objective. Although research suggests that national forces can play a role in local and state elections, most of this work has only recently begun to examine the potential role of national forces in state or local ballot initiative or referenda elections. Methods. Our research addresses this gap in the literature by exploring the influence of national forces, such as the timing of elections, Supreme Court rulings, the activities of interest groups, and public opinion, on state direct legislation elections. We incorporate national forces into the morality politics framework and derive specific hypotheses. We then test these hypotheses by conducting a multivariate analysis of county–level voting patterns across 16 abortion–related direct legislation elections. Results. Our results confirm most of the hypotheses derived from the morality politics framework, including those concerning the role of national forces. Conclusions. Voting patterns on abortion tend to be influenced by the presence of presidential elections, Supreme Court rulings, interest–group activity, public opinion, partisanship, college education, and conservative religious forces. We discuss the implications of our findings for research on elections, abortion policy, and morality politics.     

阳光下的阴影:现代旅游的一种价值隐喻——东南亚旅游发展的思考与案例

作为世界上最大的产业,现代旅游在世界政治经济、区域战略和社会方式等方面起到了越来越重要的作用。本文从当代世界旅游的发展情况,旅游在政治经济舞台上所所扮演的角色,旅游的可持续性发展以及在旅游东南亚国家所产生的作用和变化等方面进行阐释和分析;以旅游在东盟国家的一些情况描述和案例分析,以强调现代旅游给这一地区所带来的机遇及挑战。     

Subsidiarity and social citizenship: Social assistance schemes in Austria,Belgium, Switzerland and Norway

Previous research has emphasised that conditionality impinges on social citizenship. However, a systematic assessment examining the impact of functional and territorial subsidiarity has been overlooked. Developing seven operational criteria – rights, means testing, conditionality, voice and choice, discretion, benefit's adequacy and supplementary system – we determined levels of subsidiarity and social citizenship in social assistance schemes. Analysing the benefit reform trajectories of Austria, Belgium, Norway and Switzerland, we conclude that social assistance schemes have not improved. Low benefits, means testing and work linkage have strengthened functional subsidiarity, whereas questions of voice and choice are rarely on the agenda. Caseworkers’ discretion and local administration have sustained territorial subsidiarity. Therefore, considering the potential role that benefits could play in the welfare state, low up‐take minimises the redistributive potential and, in general, risk has substantially shifted towards social assistance.     

A paradox in decision theory and some experimental results: The relative nature of decisions

A simple two-choice single outcome valued decision under risk is presented which should show up the limitations in the classical approach of von Neumann, its extensions and its alternatives. An empirical testing of this hypothesis strongly supports this criticism. A rationale for explaining the apparent irrational decision is put forward and the case is made for understanding the relative nature of decision choices especially when multi-criteria are involved.     

Care leaver needs and accessibility: Findings from the first large‐scale project in Switzerland

Leaving out‐of‐home care is a challenging situation not only for young people leaving care but also for the child welfare system. However, systematic and multiorganizational transitional programmes are often lacking. This study investigated Switzerland's first large‐scale care leaver programme and analysed associations between care leavers' needs and contactability in a sample of 459 care leavers. A first track compared the characteristics of successfully contacted care leavers and of not contactable care leavers (‘dropouts’). The second track analysed the association between need for support and self‐rated or proxy‐rated quality of life in the subsample of 235 successfully contacted care leavers. Odds for indicators of lower educational attainment were substantially increased for dropouts. Additionally, self‐reported need for support was significantly associated with lower self‐ratings of quality of life in seven areas. Care leavers who accepted the programme's offer of coaching rated their quality of life lower than participants who reported no need for support and participants who reported a need for support but turned down coaching. For successfully contacted care leavers, the programme gave access to coaching sessions to the young people the most in need. However, dropouts appeared more vulnerable and might therefore benefit even more from aftercare support.     

It is Whether You Win or Lose: The Importance of the Overall Probabilities of Winning or Losing in Risky Choice

Imagine that you own a five-outcome gamble with the following payoffs and probabilities: ($100, .20; $50, .20; Imagine that you own a five-outcome gamble with the following payoffs and probabilities: ($100, .20; $50, .20; $0, .20; –$25, .20; –$50, .20). What happens when the opportunity to improve such a gamble is provided by a manipulation that adds value to one outcome versus another outcome, particularly when the opportunity to add value to one outcome versus another outcome changes the overall probability of a gain or the overall probability of a loss? Such a choice provides a simple test of the expected utility model (EU), original prospect theory (OPT), and cumulative prospect theory (CPT). A study of risky choices involving 375 respondents indicates that respondents were most sensitive to changes in outcome values that either increased the overall probability of a strict gain or decreased the overall probability of a strict loss. These results indicate more support for OPT rather than CPT and EU under various assumptions about the shape of the utility and value and weighting functions. Most importantly, the main difference between the various expectation models of risky choice occurs for outcomes near the reference value. A second study of risky choice involving 151 respondents again demonstrated the sensitivity of subjects to reducing the probability of a strict loss even at the cost of reduced expected value. Consequently, we argue that theories of how people choose among gambles that involve three or more consequences with both gains and losses need to include measures of the overall probabilities of a gain and of a loss.JEL Classification  D81     

When the Export of Social Problems Is No Longer Possible: Immigration Policies and Unemployment in Switzerland

Throughout the twentieth century, Switzerland has been one of the OECD countries with the highest proportion of immigrants in its population. The aim of this article is to show how institutional factors have shaped the opportunities for change in immigration and immigrant‐employment‐related policies there in the 1990s. Whereas unemployment had remained low in the 1970s and 1980s, there was a marked increase at the beginning of the 1990s. Existing migration policies were considered a central cause of this increase, since the great majority of foreigners who had come and settled in Switzerland in the periods of economic expansion were low‐skilled, and were now over‐represented among the unemployed. The reforms undertaken in the field of immigration and integration policy to respond to these new problems have been determined by specific institutional factors: direct democracy, a defensive migration regime, the development of immigrant rights and the weak autonomy of the central state. These factors account to a large extent for the limited scope and specific pathways of policy reforms in these two domains.