Belief elicitation in the presence of na?ve respondents: An experimental study

It is often of interest to elicit beliefs from populations that may include na?ve participants. Unfortunately, elicitation mechanisms are typically assessed by assuming optimal responses to incentives. Using laboratory experiments with a population that potentially includes na?ve participants, we compare the performance of two elicitation mechanisms proposed by Karni (Econometrica 77(2):603-606, 2009). These mechanisms, denoted as “declarative” and “clock,” are valuable because their incentive compatibility does not require strong assumptions such as risk neutrality or expected utility maximization. We show that, theoretically and empirically, with a sufficient fraction of na?ve participants, the clock mechanism elicits beliefs more accurately than the declarative. The source of this accuracy advantage is twofold: the clock censors na?ve responses, and participants are more likely to employ dominant strategies under the clock. Our findings hold practical value to anyone interested in eliciting beliefs from representative populations, a goal of increasing importance when conducting large-scale surveys or field experiments.     

Teachers' Reactions to Children's Aggression

Drawing on social schema theory ( Fiske & Taylor, 1991 ) and social identity theory ( Tajfel & Turner, 1979 ), this study examined the impact on teachers’ reactions to children's aggression of three variables, two of which were related to the aggressors and one was related to the teachers. Experienced female elementary school teachers (N =90) each read a scenario that described an aggressive episode committed by a group of boys against a boy from another class. The aggressors were either good or bad children, who were either popular or unpopular with their classroom peers. In addition, the scenario manipulated the teachers’ identification with, or commitment to, the class to be either high or low. Analysis of the teachers’ ratings of causal responsibility, liking, and recommended punishment revealed a consistent negative response from the teachers towards the aggressors versus the victim. However, the teachers’ responses were also interactively influenced by the aggressors’ goodness and popularity, as well as the teachers’ class identification. The results are discussed in relation to other findings on teachers’ responses to school aggression and bullying, as well as how their responses might best be explained.     

Individual vs. couple behavior: an experimental investigation of risk preferences

In this article, we elicit both individuals’ and couples’ preferences assuming prospect theory (PT) as a general theoretical framework for decision under risk. Our experimental method, based on certainty equivalents, allows to infer measurements of utility and probability weighting at the individual level and at the couple level. Our main results are twofold. First, risk attitude for couples is compatible with PT and incorporates deviations from expected utility similar to those found in individual decision making. Second, couples’ attitudes towards risk are found to be consistent with a mix of individual attitudes, women being more influent on couples’ preferences at low probability levels.     

Generalized Disappointment Models

Blessed is he who expects nothing, for he shall never be disappointed—Benjamin FranklinBased on our risk-value framework, this paper presents extensions for the disappointment models that were originally proposed by Bell (1985) and Loomes and Sugden (1986). We provide explicit functional forms for modeling the effect of disappointment on risky choice behavior that generalizes Bell's work and lends tractability to the efforts of Loomes and Sugden. Our generalized disappointment models can explain a number of decision paradoxes, and offer additional insights into nonexpected utility preferences based on the intuitive notions of disappointment and risk-value tradeoffs.     

Discriminating among probability weighting functions using adaptive design optimization

Probability weighting functions relate objective probabilities and their subjective weights, and play a central role in modeling choices under risk within cumulative prospect theory. While several different parametric forms have been proposed, their qualitative similarities make it challenging to discriminate among them empirically. In this paper, we use both simulation and choice experiments to investigate the extent to which different parametric forms of the probability weighting function can be discriminated using adaptive design optimization, a computer-based methodology that identifies and exploits model differences for the purpose of model discrimination. The simulation experiments show that the correct (data-generating) form can be conclusively discriminated from its competitors. The results of an empirical experiment reveal heterogeneity between participants in terms of the functional form, with two models (Prelec-2, Linear-in-Log-Odds) emerging as the most common best-fitting models. The findings shed light on assumptions underlying these models.     

Income inequality and risk taking: the impact of social comparison information

Theory and Decision - In contrast to the assumptions of standard economic theory, recent experimental evidence shows that the income of peers has a systematic impact on observed degrees of risk...     

Dynamics in risk taking with a low-probability hazard

The experiment reported in this paper identifies the effects of experience on revealed attitudes toward risk. Subjects in the experiment encountered an uncertain risk of experiencing a negative income shock over multiple periods and were able to purchase insurance at the start of each period. Subjects engaged in greater risk taking, insuring less frequently, when faced with the same risk over multiple periods. Subjects weighted experienced outcomes proportionately, in a manner consistent with rational Bayesian inference and contrary to the theory that individuals exhibit recency bias. On the other hand, subjects assigned a greater weight to outcomes that directly impacted their earnings compared to observed outcomes that had no effect on income. Unexplained autocorrelation across subjects’ choices suggests that inertia also plays an important role in repeated risk settings. I explore the relevance of these findings to public policy aimed at influencing market outcomes in the presence of infrequent environmental hazards.     

A theorem for Bayesian group decisions

This paper presents a natural extension of Bayesian decision theory from the domain of individual decisions to the domain of group decisions. We assume that each group member accepts the assumptions of subjective expected utility theory with respect to the alternatives from which they must choose, but we do not assume, a priori, that the group as a whole accepts those assumptions. Instead, we impose a multiattribute utility independence condition on the preferences of the group with respect to the expected utilities of its actions as appraised by its members. The result is that the expected utility of an alternative for the group is a weighted average of the expected utilities of that alternative for its members. The weights must be determined collectively by the group. Pareto optimality is not assumed, though the result is consistent with Pareto optimality.     

Inducing risk-neutral preferences: Further analysis of the data

The lottery payoff procedure does not successfully induce risk-neutral bidding behavior in first-price, sealedbid auctions. This conclusion follows from both ordinary-least-squares estimation with natural data and leastabsolute-deviation estimation with transformed data from numerous experimental designs. Lottery payoffs do not succeed in inducing behavior predicted from standard expected utility theory assumptions or from assumed utility from winning and/or income thresholds. In contrast, first-price auction experiments with monetary payoffs yield results that are consistent with general models of bidding in the independent private values information environment.     

Reconceptualising Social Exclusion: A Critical Response to the Neoliberal Welfare Reform Agenda and the Underclass Thesis

The application of free‐market principles to welfare reform in western industrialised nations is underpinned by contentious assumptions about human behaviour. In the postwar era, welfare policies largely considered disadvantage and exclusion as structural problems of the economy and society generally; disadvantaged individuals were considered ‘victims’ of their environment. More recently, conservative contributors have re‐emphasised disadvantage and exclusion as largely due to behavioural problems of the ‘undeserving poor’, manifest in what is believed to be an ‘underclass’. Critics of the current welfare reform agenda have voiced their concerns about the individualist assumptions that underpin it but their response to date is insufficient because they have generally neglected human agency and have failed to acknowledge individuals as capable actors. While there has been a revival of interest in human agency, greater recognition of agency in debates about welfare is required to mount a credible critique of the conservative assumptions about human behaviour in order to develop a more sensitive theory of the activities of the poor. One of the ways in which this may be achieved is by reconceptualising the concept of social exclusion and highlighting a ‘strong’ rather than a ‘weak’ version.     

Integration of Behavioral Frequency and Intention Information in Young Children's Trait Attributions

Two experiments examined three‐ to six‐year‐olds' use of frequency and intention information to make trait attributions and behavioral predictions. In experiment 1, participants were told a story about an actor who behaved positively once or four times on purpose or incidentally. Children were most likely to make trait‐consistent behavioral predictions after hearing about several positive, intentional behaviors. Trait attributions were largely positive. Experiment 2 examined children's use of the same cues concerning negative behavioral outcomes. Participants tended to predict that actors who engaged in negative behavior would do so again, irrespective of intention, although younger children required more exemplars than older children. Participants were most likely to make negative trait attributions after hearing about multiple intentional behaviors; however, there was reluctance with age to describe actors as mean. Implications for children's ‘theory of personality’ are discussed.     

Assessing small non-zero perceptions of chance: The case of H1N1 (swine) flu risks

Feelings of invulnerability, seen in judgments of 0% risk, can reflect misunderstandings of risk and risk behaviors, suggesting increased need for risk communication. However, judgments of 0% risk may be given by individuals who feel invulnerable, and by individuals who are rounding from small non-zero probabilities. We examined the effect of allowing participants to give more precise responses in the 0–1% range on the validity of reported probability judgments. Participants assessed probabilities for getting H1N1 influenza and dying from it conditional on infection, using a 0–100% visual linear scale. Those responding in the 0–1% range received a follow-up question with more options in that range. This two-step procedure reduced the use of 0% and increased the resolution of responses in the 0–1% range. Moreover, revised probability responses improved predictions of attitudes and self-reported behaviors. Hence, our two-step procedure allows for more precise and more valid measurement of perceived invulnerability.     

Strengths of caregivers raising a child with foetal alcohol spectrum disorder

Birth, foster and adoptive parents raising a child with foetal alcohol spectrum disorder know their children best and are well positioned to inform professionals how to help alcohol‐affected children. Telephone interviews with 32 parents were conducted to explore strengths of caregivers raising a child with foetal alcohol spectrum disorder, and responses analyzed using concept mapping methodology. Four themes emerged from 74 unique responses: ‘change parenting strategy for different children’, ‘use non‐verbal, sensory and physical strategies’, ‘stay patient and understanding’ and ‘locate and maintain external supports’. Results were compared and contrasted with the existing literature. Although many responses were consistent with the literature, strengths previously unreported by caregivers in the literature included cultural practices, communication, generalizability of skills, soothing music and use of a service dog.     

Probabilistic Insurance

Probabilistic insurance is an insurance policy involving a small probability that the consumer will not be reimbursed. Survey data suggest that people dislike probabilistic insurance and demand more than a 20% reduction in the premium to compensate for a 1% default risk. While these preferences are intuitively appealing they are difficult to reconcile with expected utility theory. Under highly plausible assumptions about the utility function, willingness to pay for probabilistic insurance should be very close to willingness to pay for standard insurance less the default risk. However, the reluctance to buy probabilistic insurance is predicted by the weighting function of prospect theory. This finding highlights the potential role of the weighting function to explain insurance.     

Estimating the demand for risky assets via the indirect expected utility function

This article obtains demand functions for risky assets without making a priori assumptions about the form of the utility function. In a simple portfolio model, the envelope theorem is applied to the indirect expected utility function to derive estimating equations. Tests for the existence of constant absolute or constant relative risk aversion are also developed. Empirical estimation of the demand for financial assets held by U.S. households for the period 1946–1985 indicates that aggregate household behavior is consistent with the existence of constant relative risk aversion, with the coefficient of risk aversion having a value of approximately 1.3.The authors gratefully acknowledge helpful comments from the editor and an anonymous referee.     

The magic in the (extra)ordinary: Intensive validation to recalibrate the life-worlds of adolescents exposed to abuse

This qualitative case study aimed to explore environmental circumstances and interactional processes that appeared to be relevant for the dynamics of resilience in adolescents exposed to child abuse. Fieldwork at a learning and coping centre for children and their families was combined with semi-structured interviews with adolescent participants aged 12 to 18 years. A critical realist approach was used to unpack what has been called the ‘ordinary magic’ of resilience. We found that intensively validating qualities of both the environment and relationships seemed to be driving components for resilience. Borrowing ideas from the sociometer theory, we propose that particularly the consistent intensiveness may offer a recalibration of the adolescents' immediate life-worlds, in terms of how they perceive the people they meet and the environments they step into. In keeping with the transactional-ecological model of resilience, we suggest that such a recalibration leads to altered social agency that becomes visible through their immediate social participation.     

The dynamic,complex and diverse living and care arrangements of young New Zealanders: implications for policy

The living arrangements of young people in New Zealand are diverse and often complex. In this article we report the range of care and living arrangements of 209 15-year-old New Zealanders, 47 of whom identified as Māori. These young people were participants in the second generation of a cohort study. Data were collected from their parents via a life history calendar and analysed for variety and consistency of care arrangements, household membership and transitions. Few participants had a consistent pattern of parental care arrangements and most had experienced multiple changes in household composition and frequent changes of address. We conclude that the whānau/family lives of many young New Zealanders are complex and dynamic. These observations contrast with the conventional notions of family life that form the basis for New Zealand’s family policies. We argue that social policies and services impacting on young people need to reflect the lived reality of young people if they are to meet young people’s needs.     

Resilience,Ambiguous Loss,and Older Same-Sex Couples: The Resilience Constellation Model

ABSTRACT

Secondary data analysis examined factors contributing to successful long-term same-sex relationships in older adults. An online survey of couple satisfaction and life factors provided data from 156 participants. Constructivist grounded theory methods were applied to analyze responses to open-ended questions regarding perceived supports and threats and ‘people or things’ contributing to relationship longevity. The resulting Resilience Constellation model identified concepts of: maturity, couple integration, compatibility, complementarity, and ambiguity of external support. This model can be used as a practitioner tool to assess couple resiliency and ambiguity related to societal, social, and intrarelationship stressors. Suggestions for application of the model and further research are explored.