Is a good deal always fair? Examining the concepts of transaction value and price fairness

Previous research has shown that if consumers are aware that they are paying more than another customer for a similar transaction, then they may perceive the price to be unfair. A concept closely related to fairness is transaction value, defined as consumers’ perceptions of the psychological satisfaction or pleasure from taking advantage of a price deal. In this research, we conceptualize that although consumers’ perceptions of price fairness and transaction value share many similarities, nevertheless there are also important differences. Using three studies, we empirically examine these differences. We show that although a “bad deal” is typically perceived to be an unfair price, a “good deal” is not necessarily perceived to be the fairest price.     

Risk, complexity, and deviations from expected-value maximization: Results of a lottery choice experiment

Varying several parameters of single-stage lottery choice tasks we investigate the question which features of a decision task lead subjects to deviate from maximizing expected monetary value (EV). Despite small differences in EV between the two lotteries in the choice sets, the subjects on average chose the lottery with the higher EV in every task. Risk avoidance occurs, but not consistently over all tasks. Further results are that subjects prefer less complex lotteries over more complex ones, and that risk matters the more the less complex the decision task is.     

Subjective discount rates among Israeli Arabs and Israeli Jews

In this study, we compare the subjective discount rate for Israeli Jews and Arabs. All the subjects were bank customers, who were asked to bid and ask prices for delayed fixed amounts and for lotteries. The two populations live in the same country under the same laws. Nevertheless, according to the literature, Israeli Arabs seem to be a discriminated minority, who exhibit traits of a traditional collectivist culture, while Israeli Jews are a majority, who exhibit traits of an individualistic culture. As a discriminated minority, Israeli Arab may suffer from lower trust and as a result, according to the “trust” hypothesis, exhibit higher subjective discount rates and higher risk aversion. On the other hand, according to the “cushion” hypothesis, a collectivist society such as Israeli Arabs, provides a safety net for the individual and as a result, he will exhibit lower subjective discount rates and lower risk-aversion. The experimental findings show that the subjective discount rate and risk aversion of Israeli Arabs are significantly higher than that of Israeli Jews. Moreover, higher percent of Israeli Jews are at the low range of the discount rates (below 10%) and lower percent of Israeli Jews are at the high range of discount rate (above 20%) compared to Israeli Arabs. This is consistent with the “trust” hypothesis. For Israeli Jews, the discount rates are closer to the bank interest rate, while Israeli Arabs rates are much higher particularly for receipt. The dispersion of the distribution of discount rate is much larger for Arabs than for Jews.     

Market overreach: The student as customer

This paper explores the market model's influence in redefining the relationship between teachers and students within the college and university. Viewing the student as a customer rather than as a “worker” or “apprentice” is argued to have created several problems. The case is made that with market forces leading to the substitution of purchased commodities for “production for self,” the role of the student in actively participating in the learning process is threatened. Several trends, including grade inflation, shortened contact hours, and the redefinition of study time are offered as evidence that the non-salable components of higher education are declining in importance.     

Where are you from? Cultural differences in public good experiments

We study the effect of cultural differences on contributions in a public good experiment, analysing real-time interactions between Italian and British subjects in their home countries. In the first treatment, subjects play in nationally homogeneous groups. In the second treatment, Italian and British subjects play in heterogeneous groups, knowing the nationality of the group members. In the third treatment, we control for a possible “country effect” by giving players no information on nationality. The data suggest that, in homogeneous groups, British subjects contribute significantly more to the public good; contributions are lower in heterogeneous groups; there is no country effect.     

UNDERPRICING IN PUBLIC LOTTERIES: A CRITIQUE OF USER-PAY AND ALL-PAY TARIFFS

A body of literature spanning from medical ethics to public economics has amassed regarding the rationing of underpriced public resources. This study investigates the effects of price on entry, individual and aggregate expected consumer surplus, and tax revenues in user-pay and all-pay (AP) lotteries. Comparative statics indicate that expected surplus may increase (decrease) as price increases (decreases) if entry is sufficiently responsive though entry in AP lotteries is inelastic at all prices. Further, the lotteries are shown to be outcome equivalent under revenue equivalency. Selected results are evaluated numerically with simulations performed across a broad class of distributions describing individual private values. ( JEL D45, D61, H42)     

The role of non-profit organisations in migration policies: Spain and Italy compared

The aim of the paper is to investigate the relation between Non-Profit Organizations (NP) and immigration. In particular, we examine the services offered to immigrants in Italy and Spain, both noted for their similar patterns of migration. In these countries immigration is characterised by a lack of the so-called “real” (not just legislative) measures that take the needs of immigrants into consideration. Even though emergency policies exist to meet various contingencies, lack of awareness of population movements is probably behind the “absence” of the state.The hypothetic and causal connection between the NP sector and immigration will be studied using selected data. The positive results of the analysis are the first stage in considering the possible substitution of state institutions by the NP sector, with regard to immigrants.     

Compulsive buying: Does it matter how it’s measured?

The primary purpose of the present study is to compare and contrast the validity and reliability of the Faber and O’Guinn [Faber, R. J., & O’Guinn, T. C. (1992). A clinical screener for compulsive buying. Journal of Consumer Research, 19, 459–469] and Edwards [Edwards, E. A. (1993). Development of a new scale for measuring compulsive buying behavior. Financial Counseling and Planning, 4, 67–84] compulsive buying scales within a nomological network. Although both psychometric scales were designed to measure compulsive buying, the two instruments appear to be distinct in how they conceptualize the compulsive buying phenomenon. The seven-item compulsive buying scale developed by Faber and O’Guinn (1992) is the most commonly used scale for measuring compulsive buying. The Edwards scale in contrast is not as well-known. Empirical results of the present study suggest that the two compulsive buying scales may be capturing either separate constructs, or different dimensions of the same compulsive buying construct. Edwards (1993) compulsive buying scale, for instance, is correlated with materialism but not with attitudes toward money while the Faber and O’Guinn scale is not correlated with materialism but is correlated with attitudes toward money. The present study’s results suggest, among other things, that it does in fact appear to matter how compulsive buying is measured.     

Energy policy research in the consumer interest

How does the energy problem faced by western societies affect the consumer 10 years after the oil embargo? The steep increase in the energy bill of the average household has led to severe strains on the social fabric in terms of maldistribution, social conflict, environmental pollution, and probably also of unemployment. This is so because, by and large, the hard, supply-oriented path of merely substituting domestic energies and nuclear power for imported oil was chosen, and the task of conservation was left to the price mechanism. The fact that soft path has been largely neglected up to now, is being (raced to three factors: to the inertia of institutions, first the energy industry, second the political system at large, and third to an “ideological lag‘ in popular beliefs about the economy. The implications for policy are drawn. Rather than only on individual economic choice via information and motivation, consumer research and action in the energy field ought to focus on collective choice as well.     

The effects of income and inflation on personal satisfaction: Functional measurement in economic psychology

Controlled experimental designs and functional measurement procedures were used to study how people perceive the effects of changes in major economic variables. In experiment I one group of subjects rated economic well-being and another group of subjects rated personal satisfaction for a variety of economic scenarios described by variations in salary, rate of increase in salary (annual raise), and annual rate of inflation. Stimulus interaction effects were found for each response scale showing that there is not a simple subtractive relationship between wage gains and inflation in determining perceived economic impact. Experiment 2 further investigated the interactive effects of raise and inflation on personal satisfaction. Results were discussed in terms of two complementary psychological processes: a “negativity effect” whereby unfavorable levels of raise and inflation have disproportionate weight, and a comparison of raise and inflation rate whereby personal satisfaction is incremented disproportionately when raise changes from below the inflation rate to above the inflation rate. Psychological concepts revealed in this study were related to economic concepts of “elasticity of demand” and “money illusion”.     

Trust responsiveness. On the dynamics of fiduciary interactions

Trust and trustworthiness are key elements, both at the micro and macro level, in sustaining the working of modern economies and their institutions. However, despite its centrality, trust continues to be considered as a “conceptual bumblebee”, it works in practice but not in theory. In particular, its behavioural rationale still represents a puzzle for traditional rational choice theory and game theory. In this paper “trust responsiveness”, an alternative explanatory principle that can account for trustful and trustworthy behaviour, is proposed. Such principle assumes that people can be motivated to behave trustworthily by trustful actions. The paper discusses the philosophical roots, the historical development, as well as the relational nature of this principle as well as its theoretical implications.     

From civil rights to … civic engagement? Concerns of two older critical gerontologists about a “new social movement” and what it portends

In this essay, we draw on the political economic and humanities paths in critical gerontology, and on our own personal reflections, to further probe the notion of civic engagement in older adults. We ask why, as older women and critical gerontologists, we are so discomfited by this rallying cry. We ponder whether the status of contemporary later life as a unique time in human history necessitates the carving out of a new set of “productive” roles in order for its occupants to be valued. We also look more deeply at the calls for civic engagement (operationalized as volunteering) to fill gaping holes in the safety net and argue that this implicitly lets government off the hook in providing for basic human needs.     

Systems thinking

Evaluation is one of many fields where “systems thinking” is popular and is said to hold great promise. However, there is disagreement about what constitutes systems thinking. Its meaning is ambiguous, and systems scholars have made diverse and divergent attempts to describe it. Alternative origins include: von Bertalanffy, Aristotle, Lao Tsu or multiple aperiodic “waves.” Some scholars describe it as synonymous with systems sciences (i.e., nonlinear dynamics, complexity, chaos). Others view it as taxonomy—a laundry list of systems approaches. Within so much noise, it is often difficult for evaluators to find the systems thinking signal. Recent work in systems thinking describes it as an emergent property of four simple conceptual patterns (rules). For an evaluator to become a “systems thinker”, he or she need not spend years learning many methods or nonlinear sciences. Instead, with some practice, one can learn to apply these four simple rules to existing evaluation knowledge with transformative results.     

Inequality and public good provision: An experimental analysis

Recent studies report that economic inequality is associated with reduced government expenditures on social programs. Several prominent social scientists, including Putman (Putnam, R., 2000. Bowling Alone. Simon and Schuster, New York), attribute this to the detrimental “psychosocial effects” of group heterogeneity on cooperation. We test the hypothesis that inequality within a group reduces individual contributions in a public goods experiment. Unlike previous examinations of inequality and public good provision, we introduce inequality by manipulating the levels and distributions of fixed payments given to subjects. When made salient through public information about each individual's standing within the group, inequality reduces contributions to the public good for all group members.     

Getting my stories straight: A narrativist in quest of congruence

Drawing on his work in the area of narrative gerontology, the author reflects on the measure of congruence that exists between the theories he has been developing about the storied complexity of adult development and his lived experience as an aging individual himself. His reflections include a discussion of his former career as a parish minister and his ongoing passion for “the writing life”. He concludes with some speculation on the possibility of combining his interests in narrative and aging with his continuing interest in theological themes.     

Animal experiments in economic psychology

Psychologists working in the operant (Skinnerist) tradition are currently pursuing a rapprochement with economies. This trend arises from the preoccupation of operant psychology with problems like choice, and it involves the study of clinical populations in token economies and also of animal behaviour in laboratory settings. Problems with using animals include those of extrapolating across species, of the absence of a medium of exchange or rational forethought in animal social interaction, and the risk of producing too simple and formal an analysis. But there are compensating advantages, such as investigating fields where experimentation in. the real economy is impossible, securing continuity with disciplines like ecology, and investigating possible mechanisms for “rational” behaviour. Data collected so far do demonstrate continuities between animal and human economic behaviour.     

Sex hormones and choice under risk

We study the correlation of choice under risk in Holt–Laury lotteries for gains and losses with gender, the use of hormonal contraceptives, menstrual cycle information, salivary testosterone, estradiol, progesterone, and cortisol as well as the digit ratio (2D:4D; length of the index finger to the ring finger of the right hand) in more than 200 subjects (45% females). In males, salivary testosterone is negatively correlated with risk aversion for gains only. In females, salivary cortisol is positively correlated with risk aversion for gains only. No other significant correlations between risk preferences and salivary hormones are observed. No significant correlations between risk preferences and the menstrual cycle are observed in naturally cycling females. No significant correlations between risk preferences and the digit ratio are observed in either gender and/or race.     

Functional specificity in discussion networks: The influence of general and problem-specific networks on health outcomes

Though commonly used in social science research to measure the influence of social networks, the link between discussing “important matters” within networks and the achievement of instrumental ends is frequently unspecified or untested. To address this gap, we explore the consequences of using the general “important matters” approach versus one in which the substance of discussions is directly linked to the outcomes of interest. The egocentric social networks of people experiencing an acute health crisis are examined. We identify the characteristics of and the degree of membership overlap between “important matters” and “health matters” discussants, and explore their relative power in explaining a wide range of health and health services-related outcomes. We find no evidence for the influence of “important matters” networks, while characteristics of “health matters” networks demonstrate a significant effect across all models.     

Quantum decision theory augments rank-dependent expected utility and Cumulative Prospect Theory

Using experimental data on choices between pairs of lotteries, we compare a new parameterized Quantum Decision Theory (QDT) with Rank Dependent Utility Theory (RDU) and Cumulative Prospect Theory (CPT). At the aggregate level, CPT-based QDT outperforms. At the individual level, the considerable heterogeneity across subjects is best described by the RDU-based QDT, at odds with the conclusion using the representative agent approach. The quantum attraction factor thus plays a key role in describing subjects’ behaviors at both levels. A large fraction of subjects exhibit temporal stability of asset integration attitudes. Another significant fraction of subjects are diagnosed to be using mixtures of mental models, which are elicited selectively depending on the nature of the presented choice alternatives.