Local utility functions

In Machina's approach to generalised expected utility theory, decision makers maximise a choice functional which is smooth but not linear in the probabilities. When evaluating small changes, the choice functional can be approximated by the expectation of a local utility function. This local utility function is not however invariant under large changes in risk. This paper gives a simple explicit formula which can be used to write down the local utility functions of some common decision rules.     

Dynamic reasoning and time pressure: Transition from analytical operations to experiential responses

Based upon the Decision Field Theory (Busemeyer and Townsend 1993), we tested a model of dynamic reasoning to predict the effect of time pressure on analytical and experiential processing during decision-making. Forty-six participants were required to make investment decisions under four levels of time pressure. In each decision, participants were presented with experiential cues which were either congruent or incongruent with the analytical information. The congruent/incongruent conditions allowed us to examine how many decisions were based upon the experiential versus the analytical information, and to see if this was affected by the varying degrees of time pressure. As expected, the overall accuracy was reduced with greater time pressure and accuracy was higher when the experiential and analytical cues were congruent than when they were incongruent. Of great interest was the data showing that under high time pressure participants used more experiential cues than at other time pressures. We suggest that the dynamic reasoning paradigm has some future potential for predicting the effects of experiential biases in general, and specifically under time pressure.     

Who gains from information asymmetry?

This article considers an asymmetric contest with incomplete information. There are two types of players: informed and uninformed. Each player has a different ability to translate effort into performance in terms of the contest success function. While one player’s type is known to both players, the other is private information and known only to the player himself. We compare the Bayesian Nash equilibrium outcome of a one-sided private information contest to the Nash equilibrium with no private information, in which both players know the type of the other player. We show conditions under which uncertainty increases the investment of the uninformed player and the rent dissipation of the contest, while decreasing the expected net payoff of the informed player. In addition, we consider conditions under which the informed player—before knowing his own type—prefers that the uninformed player knows his type. Moreover, we show conditions for the existence/non-existence of equilibrium in a two-stage contest in which the informed player declares his type (or does not declare) in the first stage and in the second stage the two players play according to the information available to them.     

Trajectory of problem behaviours of Korean adopted children: using piecewise hierarchical linear growth modelling

This study examined the trajectory of problem behaviours in domestically adopted children in South Korea as they aged. This study used the Panel Study on Korean Adopted Children's longitudinal, three‐wave data (2006, 2008 and 2010). Although data were collected at three time points, our data consisted of six time points, which covered the 5–10 years age range of the adopted children at the time of survey. One hundred sixty‐four children were included in the analysis, 75 of whom contributed to one time point, 74 to two time points and 15 to three time points. The trajectory of the problem behaviours of adopted children was examined using a piecewise hierarchical linear growth model. Because the initial exploration of the data suggested non‐linear changes in behaviour problems over time, we split the growth trajectory into two time periods: Time 1 (5–7 years) and Time 2 (7–10 years). A two‐rate model was used to estimate separate slopes for the two time periods. Results showed that the externalizing and internalizing problems of adopted children have different trajectories. Internalizing problems did not show significant changes after 5 years of age, while externalizing problems increased until 7 years of age and decreased significantly thereafter.     

我国社会保障管理信息系统构建探析

社会保障即是保障公民基本生存权利的重要体现,也是保障社会经济稳定发展的重要因素,而使用信息技术对社会保障工作进行管理升级必将是未来社会保障管理工作的发展趋势。解决目前社会保障管理系统建设中存在的体制、技术、人才等问题,就需要适应政策变化,扩大系统覆盖面;建设统一的信息管理系统,实现数据充分集中;加大资金、技术、人才投入,确保信息安全;体现“以人为本”,向服务型系统转变。     

后金融危机时期公允价值的适用性

对公允价值顺周期效应的批评,其逻辑基础是给公允价值计量模式赋予了平滑经济周期的公共品职能,由此应该充分肯定公允价值作为市场主体决策最具相关性的计量模式的地位。在特殊条件下,由于缺少可观察性和可参考性的有用信息,对资产的价值只能依靠模型估计,这种估值的主观不确定性最大,误差和风险也最大。相对于经济衰退期由公允价值带来的低估风险来说,在经济繁荣期,由公允价值计量所带来的资产泡沫更值得警惕。就我国来说,在微观层面上,对企业的资产计量应坚持以公允价值为主、辅以多种计量属性并存的计量模式。市场主体在操作上可以通过合理纳入反映宏观经济景气因素的相关变量,改进公允价值估值模型来消除公允价值对经济的不利影响。在宏观层面上,加强金融市场的监管力度,建立针对金融机构的风险预警机制,强化金融市场主体的自律行为,以减少市场非理性对危机的推波助澜。     

The role of ambiguity in manipulating voter behavior

In the standard account of ambiguous political rhetoric, ambiguity is equated with voter uncertainty: a politician takes an ambiguous stance on an issue by announcing to the voters a lottery over the positions he might take on that issue. The present account equates ambiguity with multiple meanings: a politician takes an ambiguous stance on an issue if his rhetoric admits of different meanings in different contexts. The linguistic account of ambiguity is based upon the formal logical concept of a piecewise definition. Piecewise defined terms provide the politician with the means of uttering statements each of which has seperate meanings for different voters.This paper formalizes the multiple-meaning account of ambiguity and traces the implications of the formalization for political strategy. The findings are: ambiguous rhetoric is often optimal; the conditions under which it is optimal are simple; and the selection of optimal ambiguous rhetoric is rarely simple.     

Hidden information acquisition and static choice

This note explores the consequence of hidden information acquisition for static choice theory. We show that any choice function in the observable problem can be consistent with some well-behaved choice function in a metaproblem with unobservable costly information acquisition. This illustrates how choices may not satisfy consistency conditions because a decision maker's decision process (in this case, information acquisition) depends on her feasible set. It also illustrates the importance of modeling the source of violations of consistency conditions, rather than simply weakening axioms on preferences.     

Piecewise linear rank-dependent utility

Choice under risk is modelled using a piecewise linear version of rank-dependent utility. This model can be considered a continuous version of NEO-expected utility (Chateauneuf et al., J Econ Theory 137:538–567, 2007). In a framework of objective probabilities, a preference foundation is given, without requiring a rich structure on the outcome set. The key axiom is called complementary additivity.     

What can the regression model of human judgment learn from multi-attribute decision theory?

Zeleny's recent conjecture that multi-attribute decision theory may help to overcome the inadequacies of the linear regression model is incorrect. Recognition of the information processing advantages inherent in multiple -attribute decision situations combined with a requirement of transitivity itself implies linear objective functions. This follows from some recent developments by a psychologist and an economist in the analysis of individual and collective decision processes, developments which do not take as their starting point the paradigm of choice offered in utility theory.     

The Use of Base Rate Information as a Function of Experienced Consistency

Three experiments examine the effect of base rate consistency under direct experience. Base rate consistency was manipulated by blocking trials and setting base rate choice reinforcement to be either consistent or inconsistent across trial blocks. Experiment 1 shows that, contrary to the usual finding, participants use base rate information more than individuating information when it is consistent, but less when it is inconsistent. In Experiment 2, this effect was replicated, and transferred in verbal questions posed subsequently. Despite experience with consistent base rates increasing sensitivity to base rates in word problems, verbal responses were far from normative. In Experiment 3, participants’ use of base rates was once again moderated by its consistency, but this effect was itself moderated by the diagnosticity of base rate information. Participants were highly accurate in estimating experienced base rates. These studies demonstrate that base rate usage is complex and a function of how base rates are presented (experienced versus summary statistics) and response format (choice proportions versus probability estimates). Knowledge of base rates was insufficient for proper usage in verbal word problems. Although choice proportions showed a sophisticated sensitivity to experienced base rate information, participants seemed unable to demonstrate a similar sophistication when given typical word problems indicating that base rate neglect is a function of information representation and not an inherent processing bias.     

Private Information and the ‘Information Function’: A Survey of Possible Uses

Under certain conditions private information can be a source of trade. Arbitrage for instance can occur as a result of the existence of private information. In this paper we want to explicitly model information. To do so we define an ‘information function’. This information function is a mathematical object, also known as a so called ‘wave function’. We use the definition of wave function as it is used in quantum mechanics and we attempt to show the usefulness of this wave function in an economic context. We attempt to answer the following questions. How does the information function relate to private information? How can we use the information function to define the ‘quantity’ of information? How can we use the information function in arbitrage-based option pricing? How can the information function be used in the formulation of a so called Universal Brownian motion?     

自愿性信息披露均衡机制探析

拥有私人信息的公司管理层,根据其报酬与业绩之间的敏感性水平,产生了不同的自愿性信息披露动机,在一定的金融微观市场结构条件下,公司管理层的自愿性信息披露均衡处于从完全披露到部分披露再到不披露的动态过程。     

The implications of irreversibility in emergency response decisions

The irreversibility effect implies that a decision maker who neglects the prospect of receiving more complete information at later stages of a sequential decision problem will in certain cases too easily take an irreversible decision, as he ignores the existence of a positive option value in favour of reversible decisions. This option value represents the decision maker's flexibility to adapt subsequent decisions to the obtained information. In this paper we show that the economic models dealing with irreversibility as used in environmental and capital investment decision making can be extended to emergency response decisions that produce important irreversible effects. In particular, we concentrate on the decision whether or not to evacuate an industrial area threatened by a possible nuclear accident. We show in a simple two-period evacuation decision model that non-optimal conclusions may be drawn when evacuation is regarded as a `now or never decision'. The robustness of these results is verified by means of a sensitivity analysis of the various model parameters. The importance of `options thinking' in this decision context is illustrated in an example.     

Preparedness within the municipal social services in Sweden: planning for the home help service organization for elderly people in war and crisis from two organizational perspectives

A study aiming at presenting the effects of increases in work strain during war and crisis on the home help service organization within the social service sector in Stockholm was carried out in 1991. This has given rise to a discussion about achieving the goals for the organization in war and crisis. Organizations are supposed to encompass qualities that allow them to achieve operative goals even if operative conditions are changed. The principle underlying preparedness planning is the maintenance of peace-time functions in organizations during war and crisis, although such functions may be restricted. Changes influencing preparedness planning within the social service organization include ongoing organizational restructuring in terms of decentralization and increases in private enterprising within the municipal social service sector. Two factors of decisive importance to organizational appropriateness are information generation and information processing. The results from the study show deficiencies within the organization's ability to generate and process information between different organizational levels about demands put on the organization in situations of war and crisis.     

The aggregation of preferences: can we ignore the past?

The article shows that a Paretian social welfare function can be history independent and time consistent only if a stringent set of conditions is verified. Individual utilities must be additive. The social welfare function must be a linear combination of these utilities. Social preferences are stationary only if, in addition, all individuals have the same constant discount rate. The results are implemented in two frameworks: deterministic dynamic choice and dynamic choice under uncertainty. The applications highlight that the conditions are unlikely to be met by individual preferences, and that they severely restrict social preferences.     

历史个体与普遍历史:历史主义脉络中的社会变迁

发端于18世纪的德国历史主义思想脉络中,包含着一种从历史个体到历史个体的普遍历史解释模式。这种独特的社会变迁思想是在同启蒙思想的对话中确立起来的。起先包裹在天意历史论的目的论外衣中,后来历史主义的发展逐步脱去了这层外衣,在解释社会学传统中演变成了一种经验科学意义上的独特社会变迁思想。随着社会理论对韦伯的去历史化,蕴含在解释社会学中的这种社会变迁思想逐渐被淹没了。有鉴于此,本文将在赫尔德以来的历史主义脉络节点中梳理这种社会变迁思想的形成。     

A National Governance Perspective on the Transformation of Rural Property Rights: The Chinese Experience*

Property rights have multiple attributes, and these are correlated with national governance. In the West, property rights have the economic function of maximizing efficiency and the political function of rights protection, but in China, they also have a strong social character. With the modernization of national governance, these functions interact with and transform each other. When the state’s ability to supply public goods is relatively weak, property rights take on more of a social character, meeting public demand for welfare at the grassroots level. When the state is better able to provide public goods, the social function of property rights lessens as their economic function grows. The social character of property rights was the institutional foundation for China, as a huge agrarian state, to realize “governance through inaction,” and at the same time was the secret key that could break the code to the millennial continuity of Chinese agrarian civilization. Reforms including the collectivization of rural property rights after 1949, the “separation of two rights” (to collective ownership and household contracted land, with a focus on the latter), and the “separation of three rights,” (to collective ownership, household contracts and revitalized land management). These changes constitute a process in which the economic function of property rights has been growing while their social character has lessened under conditions of national governance modernization.     

R&;D cooperation in emerging industries,asymmetric innovative capabilities and rationale for technology parks

Starting from the premise that firms are distinct in terms of their capacity to create innovations, this article explores the rationale for R&D cooperation and the choice between alliances that involve information sharing, cost sharing or both. Defining innovative capability as the probability of creating an innovation, it examines firm strategy in a duopoly market, where firms have to decide whether or not to cooperate to acquire a fixed cost R&D infrastructure that would endow each firm with a firm-specific innovative capability. Furthermore, since emerging industries are often characterized by high technological uncertainty and diverse firm focus that makes the exploitation of spillovers difficult, this article focuses on a zero spillover context. It demonstrates that asymmetry has an impact on alliance choice and social welfare, as a function of ex-post market competition and fixed costs of R&D. With significant asymmetry no alliance may be formed, while with similar firms the cost sharing alliance is dominant. Finally, it ascertains the settings under which the equilibrium outcome is distinct from that maximizing social welfare, thereby highlighting some conditions under which public investment in a technology park can be justified.