Expected utility paradoxes

The expected utility (EU) model is widely used for predicting and describing choices under uncertainty. Its usefulness, however, is limited because of its widely acknowledged inconsistencies and paradoxes. This paper describes how important EU model paradoxes can be resolved by accounting for the influences of socio-emotional goods (SEGs) embedded in word and other symbolic frames.     

UNDERSTANDING ATTITUDES TOWARD PROGRESSIVE TAXATION

This article examines attitudes toward and understanding ofprogressive taxation by comparing subjects' choices of fairtax rate structures in response to questions framed in bothabstract and concrete terms. Consistent with surveys of thegeneral public, a majority of the subjects indicated a preferencefor progressive taxation in response to abstract questions.However, consistent with results from social psychology andpolitical science research, the subjects' preferences for progressivetaxation were significantly different (lower) in response toconcrete questions. The observed preference reversal betweenprogressive taxes in the abstract and flat taxes (i.e., proportionalto income) in concrete situations is hypothesized to be associatedwith subjects' ignorance (their lack of understanding of theabstract concept of progressive taxation). Thus, between-subjectstests are conducted to examine (1)differences in order effectsof the abstract and concrete frames that might cue the subjectsto a greater understanding of the abstract terms, (2) the effectsof definitions and illustrations on subjects' choices, and (3)the use of different scales and reference points to measureresponses. Consistent results (preference reversals from preferencesfor progressivity in the abstract to nonprogressive preferencesin concrete frames) were obtained across all of the between-subjectsexperimental manipulations. A within-subjects design also includesa posttest knowledge test that demonstrates the tendency ofa majority of subjects to misidentify concrete comparisons asprogressive when they actually are regressive. Subjects whowere able to correctly identify the concrete comparisons weremore likely to be consistent in their responses to abstractand concrete frames. However, 36 percent of these "knowledgeable"subjects still preferred progressive taxes in the abstract butflat or regressive taxes in the concrete situations. These resultsraise concerns about conclusions from public opinion polls usingabstract questions regarding preferences for progressive taxrates.     

Learning in social networks: Selecting profitable choices among alternatives of uncertain profitability in various networks

Social capital theory assumes that information is valuable. However, only rarely is this value explicitly modeled, and there are few examples of empirical tests of mechanisms that connect social network structure to valuable information. We model an individual decision problem in which individuals make choices that yield uncertain outcomes. The individuals can learn about the profitability of options from their own choices and from the network. We generate computer-simulated data to derive hypotheses about the effect of network characteristics on making profitable choices. We conduct a laboratory experiment to empirically test these hypotheses and find that, at the individual level, degree centrality has a positive effect on making profitable choices whereas betweenness centrality has no effect. At the network level, density has a positive effect on making profitable choices, whereas centralization does not have an effect.     

Modelling reference dependence for repeated choices: A horse race between models of normalisation

In the logit model, a choice between options is driven by payoff differences. Existing evidence on repeated choices suggests that the way payoff differences are evaluated depends on historically observed differences. We capture such reference dependence using the value normalisation approach developed in neuroscience. We use experimental data and run a horse race between various models with normalisation, including widely used divisive and range normalisation. We show that a parsimonious logit model with maximum difference normalisation has both the best goodness of fit and a strong quasi-out-of-sample predictive power. In this structural parameter-free logit model, an agent makes a choice based on the difference in payoffs in the previous period, normalised by the maximum difference in payoffs in two previous periods. The model has a wide range of applications, from studying learning dynamics in repeated games to predicting retirement plans choices.     

THE ROLE OF EXPECTATIONS IN ADOLESCENT SCHOOLING CHOICES: DO YOUTHS RESPOND TO ECONOMIC INCENTIVES?

We address the role of youths' own choice-conditioned expectations in understanding their schooling choices by constructing a choice (or "switching") model. We emphasize the effect of individual student perceptions regarding the returns associated with graduating from high school versus dropping out, while controlling for an extensive set of family and community factors. We find that youths' expected income returns to graduating from high school are influential in their schooling choices, even when an extensive set of background, economic, family, and neighborhood variables, designed to capture the effects of parental and governmental decisions, is introduced into the analysis. (JEL I20 , J24 )     

What Gets Covered? An Examination of Media Coverage of the Environmental Movement in Canada

This article analyzes press releases from the World Wildlife Fund (WWF) and Greenpeace (GP) to assess how their tactics and frames affect the amount of coverage they receive in The Globe and Mail and National Post from 2000 to 2010. While it is clear that some tactics are more likely to garner media coverage, the full range of tactics and frames are not effective for all groups. For example, calling to the public to engage in a social issue leads to increased media coverage for GP but not WWF. And, using research does not affect media coverage for WWF, but decreases coverage for GP. This study demonstrates that the effect of tactical choices on media coverage is contingent on the identity of the group using them.     

Markets,contingency and preferences: contemporary managers’ narrative identities1

We explore work identity amongst managers, a key group in the ‘new’ capitalism. Some existing accounts of such workplace identities emphasize new ‘cultures of control’, others focus on new requirements and possibilities of individual autonomy through reflective identity formation, while others identify a crisis in workplace identity formation. Focusing on these issues, we analyse the career narratives of 136 managers and show that our empirical data do not neatly fit any existing models. Managers’ career stories were dominated by a ‘market’ narrative, in which they placed themselves as strategic actors making choices in a social world constituted by market‐like interactions. We show that the market narrative frames how managers understand risks to their careers arising from the contingent actions of firms, and how it provides a space for managers to reflectively identify their preferences and pleasures. We consider the consequences of this analysis for contemporary understandings of work and identity.     

Back to the future: The potential relationship between leisure and education

There is a long, documented history of the relationships among leisure, recreation, and education dating back to Greek philosophy.Originally there was little differentiation among the terms as they were presented as a unified process for youth and human development. Over time, each of these fields has developed, and their definitions have been shaped and reshaped. Using some of the original conceptions from Aristotle and Plato, coupled with foundational premises suggested by Dewey, this article frames current youth development efforts in a historical context. The authors suggest that perhaps what the separate professions might define as high-quality leisure, recreation, and educational experiences still maintain links among each. They further suggest that planned experiences with increasing levels of coordination can strengthen these links and develop an "education-for-leisure" perspective among participating youth and the choices they make. Self-determination theory (SDT) refers to the autonomy in choosing a particular behavior or action. Youth development opportunities that make connections between the content of a regular school day and choice of activity during out-of-school time can inculcate self-determined leisure choices that are productive. Planned and intentional educational experiences expand the possibilities for productive recreational choices. This article therefore proposes a framework for increasing levels of coordination among educational and recreational entities so that participating youth can develop and adopt an education-for-leisure disposition.     

A characterization of prudent choices

We define and axiomatize prudent choices for two criteria. Given two criteria, the alternatives chosen by the prudent choice procedure are the ones maximizing some composition of the criteria. This composition is such that (1) it contains the first criterion and a part of the second one, and (2) the new binary relation is not cyclic and cannot be enlarged with preferences of the second criterion without becoming cyclic. We also make the link between prudent choices, classical rational choices, sequentially rational choices (Manzini and Mariotti in Am Econ Rev 97(5):1824–1839, 2007a) and lexicographic binary choice rational choices (Tadenuma in J Econ Theory 104(2):462–472, 2002).     

Return Chasing as a Driver in Individual Retirement Savings Investment Choices: Evidence from Australia

Australia’s retirement savings regime requires employers to make contributions to a superannuation fund for their employees. Workers who may have no experience of investment are asked to make relatively complex decisions, which have significant implications for their retirement lifestyle. Evidence suggests individuals may be unduly influenced by recent historical returns when making investment choices. Such a bias may produce sub-optimal results over the longer-term. This paper uses a large database from four not-for-profit retirement savings funds to investigate members’ investment choices using logistic regression and multi-variate tests. We find evidence that choices are driven by recent historical returns. We also investigate demographics and find a link between age and return chasing behaviour.     

TOXIC CONTAMINATION AND COMMUNITIES:

The ecological-symbolic perspective posits that community response to toxic contamination is shaped by both the nature of the environmental disruption and the interpretive frames through which those disruptions are apprehended. Full utilization of this perspective has been hampered by the deterministic underpinnings of the current chronic technological disaster model, which presents local conflict as a virtually inevitable outcome of these events. We draw upon the more contingent framing of the ecological-symbolic perspective to analyze the experiences of two communities that displayed consensual response patterns. We identify ecological and organizational factors that facilitated an interpretive framing of "limited danger".     

NEIGHBORHOOD DISADVANTAGE, SOCIAL CAPITAL, STREET CONTEXT, AND YOUTH VIOLENCE

This article integrates arguments from three perspectives on the relationship between communities and crime—constrained residential choices, social capital, and street context perspectives—to specify a conceptual model of community disadvantage and the violence of individual adolescents. Specifically, we propose that status characteristics (e.g., race, poverty, female headship) restrict the residential choices of families. Residence in extremely disadvantaged communities, in turn, increases the chances of violent behavior by youths by influencing the development and maintenance of community and family social capital, and by influencing the chances that youths are exposed to a criminogenic street context. We assess our conceptual model using community contextual and individual-level data from the National Longitudinal Study of Adolescent Health. Our findings suggest that individual or family status characteristics influence violence largely because of the communities in which disadvantaged persons and families reside. Although we find that community social capital does not predict individual violence, both family social capital and measures of an alternative street milieu are strong predictors of individual violence. Moreover, our street context variables appear to be more important than the social capital variables in explaining how community disadvantage affects violence.     

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).     

Dual criteria decisions

The most popular models of decision making use a single criterion to evaluate projects or lotteries. However, decision makers may actually consider multiple criteria when evaluating projects. We consider a dual criteria model from psychology. This model integrates the familiar tradeoffs between risk and utility that economists traditionally assume, allowance for rank-dependent decision weights, and consideration of income thresholds. We examine the issues involved in full maximum likelihood estimation of the model using observed choice data. We propose a general method for integrating the multiple criteria, using the logic of mixture models, which we believe is attractive from a decision-theoretic and statistical perspective. The model is applied to observed choices from a major natural experiment involving intrinsically dynamic choices over highly skewed outcomes. The evidence points to the clear role that income thresholds play in such decision making, but does not rule out a role for tradeoffs between risk and utility or probability weighting.     

Efficient child care subsidies: any need for cash for care?

We model choices between caring for an infant at home or through some market provision of child care. Maternal labor supply necessitates child care purchas     

Laying or delaying the groundwork? A critical framing analysis of Australia’s National Disability Strategy from an implementation planning perspective

National disability strategy implementation is challenging. Competing needs and interests of government and different stakeholders mean that implementation is rarely straightforward. This study undertakes a critical framing analysis of publically available responses to the draft implementation plan for Australia’s National Disability Strategy (2010–2014) provided by five peak disability organisations. We seek to understand the frames that peak bodies advocate in order to further the interests of people experiencing disability while mapping these against the broader Australian disability policy context and good policy practice more generally. Our research reveals that the peak bodies promote frames which focus on consistency, responsibility, resourcing, inclusivity, co-production, innovation, leadership, accountability and language. In relation to these frames, the final government implementation plan demonstrates a shift in which process-related frames of resourcing and innovation are incorporated into the plan while the other predominantly actor-oriented frames are excluded and thus represented as natural and incontestable.     

Organizational Practices and Prefigurative Spaces in European Queer Festivals

Social movement scholars have been actively debating the importance of organizational structures for solidarity and new social movements. This article investigates how queer festivals build on the horizontal structure legacy of those movements, constructing their own prefigurative models through a set of specific organizational practices. Queer festivals constitute a dynamic repertoire of action of queer politics in Europe, expanding across the continent. Based upon their belief in the limits of strict identity politics of gender and sexuality, queer festivals attempt to construct new identities, based upon their anti-identitarian ethos. Beyond their discursive frames, queer festivals, as prefigurative spaces, attempt to build their new identities through specific practices, reflected among others on their organizational choices. The article posits three key elements for the prefigurative model that queer festivals attempt to build: (1) Squats as the spaces in which queer movement actors build their anti-authoritarian identity; (2) the organizational choice based on horizontality; (3) the role of the Do-It-Yourself model for festivals' deployment. Insight into queer festivals is based on ethnographic research conducted in five European capitals, including semi-structured interviews.     

Reference dependent preferences,hedonic adaptation and tax evasion: Does the tax burden matter?

We study the effects of the tax burden on tax evasion both theoretically and experimentally. We develop a theoretical framework of tax evasion decisions that is based on two behavioral assumptions: (1) taxpayers are endowed with reference dependent preferences that are subject to hedonic adaptation and (2) in making their choices, taxpayers are affected by ethical concerns. The model generates new predictions on how a change in the tax rate affects the decision to evade taxes. Contrary to the classical expected utility theory, but in line with previous applications of reference dependent preferences to taxpayers’ decisions, an increase in the tax rate increases tax evasion. Moreover, as taxpayers adapt to the new legal tax rate, the decision to evade taxes becomes independent of the tax rate. We present results from a laboratory experiment that support the main predictions of the model.     

The saga of the Crown Pilot: framing,reframing, and reconsideration

In 1996, Nabisco discontinued production of its longest running product, the Crown Pilot cracker. This move prompted public protest and subsequently garnered widespread media attention. Based on the sustained news coverage and a barrage of telephone calls, e-mails, and letters, Nabisco eventually relented and resumed production of the Crown Pilot.This case study focuses upon the “frames” used in the media coverage to help audiences interpret news stories about the Crown Pilot situation. The research attempts to explain how the public relations efforts of both the protesters and Nabisco influenced the framing. Because framing choices are among the most critical strategic decisions in the public relations process, the study has ramifications for public relations researchers interested in the concept and practitioners concerned with publicizing a variety of issues.     

Showing a tree to sell the forest: The impact of attribute- and alternative-based information presentation on consumers’ choices

Consumers can be provided with information in either an attribute- or an alternative-based way. We consider the literature on information presentation through the theoretical lenses of the Construal Level Theory. We propose and find that providing product-related information in an attribute- rather than an alternative-based way shifts choices. The attribute-based pattern leads to high construal levels and choices driven by desirability-related, high-level attributes (e.g., design). But when the same information is acquired following the alternative-based pattern, it leads to low construal levels and choices driven by feasibility-related, low-level attributes (e.g., price). As a consequence, choice shares for products whose strength lies in convenience and other feasibility-related features are boosted by the presentation of alternative-based information. Conversely, choice shares for products whose strength lies in design and other desirability-related features are increased by the presentation of attribute-based information. We further find that consumers acquiring information in an alternative-based way envision consumption much closer in the future than those acquiring information in an attribute-based way. Finally, we find that attribute-based information leads to more clicking.