A variational model of preference under uncertainty

A familiar example devised by Daniel Ellsberg to highlight the effects of event ambiguity on preferences is transformed to separate aleatory uncertainty (chance) from epistemic uncertainty. The transformation leads to a lottery acts model whose states involve epistemic uncertainty; aleatory uncertainty enters into the statedependent lotteries. The model proposes von Neumann-Morgenstern utility for lotteries, additive subjective probability for states, and the use of across-states standard deviation weighted by a coefficient of aversion to variability to account for departures from Anscombe-Aumann subjective expected utility. Properties of the model are investigated and a partial axiomatization is provided.     

Breast-feeding programs and lactational amenorrhea: evaluation using event history analysis

The purpose of this paper is to present an approach toward evaluating the effectiveness of breast feeding programs in relation to their impact on the duration of post partum amenorrhea. The current emphasis on improving reproductive health through family planning services is likely to increase the use of LAM as a birth spacing method. As a result, evaluation of the net impact of breast feeding duration on the length of post partum amenorrhea is essential for designing an effective family planning program. We present event history analysis as an useful tool in evaluating the effectiveness breast feeding programs on post partum amenorrhea. Data from NFH survey (India) of the State of Rajasthan are used to illustrate the event history approach toward outcome evaluation.     

Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation

We investigate the validity of contingent valuation (CV) estimates of the value per statistical life (VSL). We test for sensitivity of estimated willingness to pay (WTP) to the magnitude of mortality-risk reduction and for the theoretically predicted proportionality of WTP to risk reduction using alternative visual aids to communicate risk. We find that WTP is sensitive to the magnitude of risk reduction for independent subsamples of respondents presented with each of three alternative visual aids, but not for the subsample presented with no visual aid. Estimated WTP is consistent with proportionality to risk reduction for the subsamples presented with a logarithmic scale or an array of 25,000 dots, but not for the subsample receiving a linear scale. These results suggest that CV can provide valid estimates of WTP for mortality-risk reduction if appropriate methods are used to communicate the risk change to respondents.     

The axioms and algebra of ambiguity

This paper continues a study of event ambiguity as a primitive concept. Axioms are described for a comparative ambiguity relation on an arbitrary event set that are necessary and sufficient for a representation of the relation by a functional that is nonnegative, vanishes at the empty event, and satisfies complementary equality and submodularity. Uniqueness characteristics of representing functionals are discussed. The theory is extended to multifactor events, where marginal ambiguity and additive representations arise.     

A Rule For Updating Ambiguous Beliefs

When preferences are such that there is no unique additive prior, the issue of which updating rule to use is of extreme importance. This paper presents an axiomatization of the rule which requires updating of all the priors by Bayes rule. The decision maker has conditional preferences over acts. It is assumed that preferences over acts conditional on event E happening, do not depend on lotteries received on E ^c, obey axioms which lead to maxmin expected utility representation with multiple priors, and have common induced preferences over lotteries. The paper shows that when all priors give positive probability to an event E, a certain coherence property between conditional and unconditional preferences is satisfied if and only if the set of subjective probability measures considered by the agent given E is obtained by updating all subjective prior probability measures using Bayes rule.     

Risk,uncertainty and hidden information

People are less willing to accept bets about an event when they do not know the true probability of that event. Such uncertainty aversion has been used to explain certain economic phenomena. This paper considers how far standard private information explanations (with strategic decisions to accept bets) can go in explaining phenomena attributed to uncertainty aversion. This paper shows that if two individuals have different prior beliefs about some event, and two sided private information, then each individuals willingness to bet will exhibit a bid ask spread property. Each individual is prepared to bet for the event, at sufficiently favorable odds, and against, at sufficiently favorable odds, but there is an intermediate range of odds where each individual is not prepared to bet either way. This is only true if signals are distributed continuously and sufficiently smoothly. It is not true, for example, in a finite signal model.     

Hitting home: The nuclear freeze and the defense-dependent economy of Connecticut

This article examines the impact of a nuclear weapons freeze on the economy of Connecticut, which is per capita the most defense-dependent state in the nation. The study first lists the weapons contracts that would be lost to the state in the event of a freeze. The impact of these losses is then examined through the use of an input-output model of the state's economy. The results indicate a disruptive effect not only on military manufacturing but also on the civilian manufacturing and service sectors of Connecticut's economy. The importance of preplanning for a freeze or arms control is examined in the last part of the study, which discusses the process of economic conversion of defense production to civilian manufacturing.     

Communication Protocols with Belief Messages

This paper presents a communication protocol to reach consensus. In our setting, every player has asymmetric information and evaluates a fixed event on his information. According to the protocol, the sender sends non-partitional messages that he believes the event with a probability of at least his evaluation. We show that the posteriors for the event must be equal among the players after the communication. Journal of Economic Literature Classification: C62, C78.     

How to deal with partially analyzable acts?

In some situations, a decision is best represented by an incompletely analyzed act: conditionally on a given event A, the consequences of the decision on sub-events are perfectly known and uncertainty becomes probabilizable, whereas the plausibility of this event itself remains vague and the decision outcome on the complementary event [`(A)]{\bar{A}} is imprecisely known. In this framework, we study an axiomatic decision model and prove a representation theorem. Resulting decision criteria aggregate partial evaluations consisting of (i) the conditional expected utility associated with the analyzed part of the decision, and (ii) the best and worst consequences of its non-analyzed part. The representation theorem is consistent with a wide variety of decision criteria, which allows for expressing various degrees of knowledge on (A, [`(A)]{A, \bar{A}}) and various types of attitude toward ambiguity and uncertainty. This diversity is taken into account by specific models already existing in the literature. We exploit this fact and propose some particular forms of our model incorporating these models as sub-models and moreover expressing various types of beliefs concerning the relative plausibility of the analyzed and the non-analyzed events ranging from probabilities to complete ignorance that include capacities.     

The Impact of Internet Use on Residents’ Subjective Well-Being: An Empirical Analysis Based on National Data

Internet use has become an indispensable part of people’s daily lives, and the relationship between Internet use and residents’ subjective well-being is receiving increasing attention from researchers. However, the existing literature on the relationship between Internet use and residents’ subjective well-being is still controversial and inconclusive, and there has been relatively little discussion of the mechanisms by which Internet use affects well-being. On the basis of data from the China General Social Survey 2015 (CGSS2015), this paper provides an empirical analysis of the impact of Internet usage on residents’ subjective well-being. The study finds that while Internet use had no significant impact on the well-being of residents compared to non-use, frequency of Internet usage did significantly improve subjective well-being. On this basis, we tested the mechanisms by which Internet use affects residents’ well-being through the three channels of the personal income effect, the human capital effect and the social capital effect. The findings partially verify the hypothesis of the mediating effect of social capital between Internet use and residents’ subjective well- being, but do not verify the hypothesis of the moderating effect of personal income and human capital. Compared with previous studies, this paper is innovative in the following three ways: it uses the latest available representative national microdata, which is better able to reflect recent Internet usage and its impact on residents’ subjective well-being; on the basis of existing research on the impact of Internet usage on residents’ well-being, it analyzes the specific mechanisms through which Internet use affects well-being, using the moderating effect model and the mediating effect model to make up for the shortcomings of existing research on the impact mechanism; and it applies the Bioprobit model to deal with the potential endogeneity of key explanatory variables, using a variety of model estimation methods to obtain more robust estimation results.     

Testing independence conditions in the presence of errors and splitting effects

This paper presents experimental tests of several independence conditions implied by expected utility and alternative models. We perform repeated choice experiments and fit an error model that allows us to discriminate between true violations of independence and those that can be attributed to errors. In order to investigate the role of event splitting effects, we present each choice problem not only in coalesced form (as in many previous studies) but also in split forms. It turns out previously reported violations of independence and splitting effects remain significant even when controlling for errors. However, splitting effects have a substantial influence on tests of independence conditions. When choices are presented in canonical split form, in which probabilities on corresponding probability-consequence ranked branches are equal, violations of the properties tested could be reduced to insignificance or even reversed.     

Inferring beliefs as subjectively imprecise probabilities

We propose a method for estimating subjective beliefs, viewed as a subjective probability distribution. The key insight is to characterize beliefs as a parameter to be estimated from observed choices in a well-defined experimental task and to estimate that parameter as a random coefficient. The experimental task consists of a series of standard lottery choices in which the subject is assumed to use conventional risk attitudes to select one lottery or the other and then a series of betting choices in which the subject is presented with a range of bookies offering odds on the outcome of some event that the subject has a belief over. Knowledge of the risk attitudes of subjects conditions the inferences about subjective beliefs. Maximum simulated likelihood methods are used to estimate a structural model in which subjects employ subjective beliefs to make bets. We present evidence that some subjective probabilities are indeed best characterized as probability distributions with non-zero variance.     

Ambiguity and decision modeling: A preference-based approach

In this article, we develop a model that permits a decision maker's preferences to depend on the decision maker's ambiguity about the probability of an event that is relevant for decision-making purposes. We deal with ambiguity through preference modeling, with ambiguity leading to modifications in the utilities of outcomes. The behavior of ambiguity premiums and probability premiums as the payoffs are varied depends on the nature of the modifications in utilities. Particular forms of the model that arise under different sets of assumptions about preferences include additive, bilinear, and ratio forms. We conclude with a brief example and some thoughts about potential generalizations and implications of the model.     

When Do States Pursue Targeted Economic Development Policies? The Adoption and Expansion of State Enterprise Zone Programs*

Objective. The objective of this article is twofold. First, why did states adopt enterprise zones, which allow designated economically distressed areas to provide significant financial incentives to attract firms? Second, why did some states significantly increase the number of zones within the state and transform what began as a spatially targeted program aimed at helping poor places into a state‐wide incentive program aimed at improving the state's competitive position? We also demonstrate the value of examining how changes in a state's policy environment can undermine a policy innovation, namely, the adoption of place‐based economic development policies. Methods. We use event history analysis to model when states adopt enterprise zones and an event‐count model to estimate when states increase the number of enterprise zones, and thereby undermine the original intent of the program. Results. States with larger urban populations and neighboring states with enterprise zone programs are more likely to adopt enterprise zone programs. States are more likely to increase the number of enterprise zones when they have larger urban populations, more neighboring states with enterprise zone programs, professional legislatures, more centrist elected officials, and as the program ages. Conclusions. Although the adoption of enterprise zones signaled states' commitment to improve conditions in the most distressed areas of the states, that commitment gradually wanes in the face of internal political demands and external competition for investment and jobs. By extending our analysis to examine what happens after the adoption of enterprise zones, we develop a more pessimistic assessment of states' capacity to pursue spatially targeted economic development policies to help economically distressed areas.     

策略、规则及权力结构一所中学高三教师名单的公布

本文以改革后的苏北的一所县级重点中学为个案,以围绕高三教师名单公布的升级事件为切入点,从组织的微观视角出发,描述在升级事件中的教师在各种情境下如何利用手头的已有资源来展开行动的策略,并在游戏各方的行动中构建出一个特有的组织权力结构。     

The catastrophic effects of natural disasters on insurance markets

Natural disasters often have catastrophic risks on insurance companies as well as on the insured. Using a very large dataset on homeowners’ insurance coverage by state, by firm, and by year for the 1984 to 2004 period, this paper documents the positive effect on losses and loss ratios of both unexpected catastrophes as well as large events that the authors term “blockbuster catastrophes.” Insurers adapt to these catastrophic risks by raising insurance rates, leading to lower loss ratios after the catastrophic event. There is a widespread event of unexpected catastrophes and blockbuster catastrophes that reduces total premiums earned in the state, reduces the total number writing insurance coverage in the state, and leads to the exit of firms from the state. Firms with low levels of homeowners’ premiums are most adversely affected by the catastrophes.     

Affect,Heat and Tacos. A Speculative Account of Thermoception

Abstract

Current affective approaches in the experience of heat or thermoception focus on the capacity of control and regulation of temperature by means of consciously driven physical activity of the human body. With this paper, I suggest that thermoception is a complex process whose explanation requires considering events of production of heat that are not registered by conscious activity and that do not even appear in the strata of the organic body. In order to further expand the understanding of thermoception I turn to Whitehead’s philosophy to develop a speculative account of the experience of heat. I use his concept of prehension as well as his analysis of “division” to explain the relation between events of production of heat from three different scales of organization: molecular, organic, and cultural. I will explain how each event of production of heat modify the affective capacity of feeling heat as well as the way each event of heat inherits its quota of subjectivity all the way up to the production of human experience and the rise of anxiety as an emotion made of heat. To make my case, I will provide a division analysis of prehension in the experience of heat when eating tacos in the streets of Mexico City.