Risk taking on behalf of others: The role of social distance

Individuals take decisions on behalf of others in many different contexts. In this paper, we focus on lotteries with negative expected value and study if (and how) risky choices made on behalf of another person differ i) compared to decisions which do not affect anyone else, and ii) depending on the social distance between who makes the decision and who is affected by it. Our results show that social distance (i.e., whether the person affected by one’s decision is an unknown stranger or a friend) is an important determinant when people decide on behalf of others. Moreover, when deciding on behalf of a friend rather than only for themselves or a stranger, average individual behavior is closer to expected value maximization, exhibiting less risk taking. These findings suggest that responsibility for others’ outcome and the empathy gap affect the decision making process, particularly when the social distance is shortened. The results are robust to different feedback frequencies. Controlling for order effects shows that experiencing a decrease in social distance is crucial in activating this mechanism.     

Global imbalances and household savings: The role of wealth

Many claim that fluctuations in U.S. private savings help to create and to sustain global imbalances because of their influence on the current account deficit. To test this claim, this paper investigates the determinants of aggregate household savings using a panel of 18 developed countries for the period 1980–2005. We weave two strands of literature: the first strand from consumer theory, considering specifically the ‘wealth effect’, the second strand from aggregate private savings theory. The original contribution of this paper derives from the main explanatory variables of the household savings function: two measures of household wealth, the first a financial variable and the second a variable for tangible/housing stock. The salience of these variables has not been tested before. The model is then enriched with variables taken from the private savings literature. To find the best technique to estimate the long run savings function, unit root and cointegration tests are carried out, from which evidence of a cointegrating relationship is found. The group means FMOLS is used to estimate the model. The empirical evidence suggests effects consistent with theory: an increase in wealth negatively affects household savings. Furthermore, when important explanatory variables, such as government savings and population dependency ratios, are included in the model, tangible wealth becomes the only kind of wealth to (weakly and negatively) influence household savings in developed countries. In the U.S. however, wealth does not seem to affect household savings negatively, it seems instead that government savings and population changes better explain the decline of savings during the past two decades. This finding provides additional evidence on the issue of global imbalances, and suggests that the recent booms of the stock and the real estate markets should not be blamed for the decline in U.S. household and private savings.     

Longitudinal patterns of anger reactivity and risk‐taking: The role of peer‐context

The current study examined the interplay between children's dispositional anger and susceptibility to peers' influence in increasing children's risk‐taking behaviors. Participants in the current study were children from a larger study of temperament and social–emotional development who were followed across 9, 24, 36, 48, and 60 months. Dispositional anger was measured using mothers' reports across 9 and 48 months. At 60 months, children played a risk‐taking computer game in presence of an unfamiliar peer who watched the child play. The child's risk‐taking was assessed during the game as the unfamiliar peers' reactions were coded based on comments that were peer directed, reflective of praising the target child's performance, or object directed, indicative of excitement toward the game. A latent profile analysis revealed three longitudinal anger profiles across infancy to early childhood: high stable, average stable, and low stable anger. Results suggested that as peers' object‐directed comments predicted risk‐taking independent of children's anger, the association between peer‐directed comments and risk‐taking was dependent on children's dispositional anger. Specifically, when peers praised the target child's performance, children in the high stable anger profile showed increased risk‐taking propensity. Findings are discussed based on the importance of considering both temperamental characteristics and aspects of the peer context in relation to children's risk‐taking.     

The wealth effect: A contemporary update to the age of affluence

At the end of World War II there was a great interest in estimation of reconversion prospects for the United States economy. A main question was: Would be the United States return to the conditions of the Great Depression of the 1930s or maintain a high level of employment and grow without inflation? Franco Modigliani and James Duesenberry independently proposed dynamic versions of the macroeconomic consumption function, and A.C. Pigou had recently suggested that the consumption function should include a term for real cash balances, a wealth effect which was relevant, given the accumulation of liquid assets during the austere consumer environment of the War. Also, from the original discussions of the mathematical models of the Keynesian system, there was consideration about the effects of the distribution of income on aggregate consumer spending. Those various lines of thought were discussed in a memorial conference for Franco Modigliani at the New School University in 2005. The present paper was on the memorial program, and examines the statistical content of the questions about reconversion prospects in the mid 1940s. It also extend the analysis through the rest of the 20th Century, with consideration of the macrodynamics of the early postwar period into the age of affluent consumer.     

The task of taking care of children: methodological perspectives and empirical implications

Methods are not neutral instruments but construct the phenomena under investigation and convey meaning about what is important. This paper explores a methodological framework to investigate parental care for children. As part of the results, the following characteristics of how parents take care of their children are presented: continuous responsibility; predictable routines that are adjusted to the child; and interpretations and negotiations about developmental goals. The argument is that methodological approaches that analyse larger temporal units of contextualized practices as presented by the participants themselves open up for more context‐sensitive knowledge about the task of taking care of children. Thus, the understanding of the process of development is widened and specified in a way that may be useful for fields of practice where developmental psychology is ‘at work’.     

The world of parents and peers: coercive exchanges and children's social adaptation

The relation among child antisocial behavior, child coercive exchanges with parents and peers, and the social adaptation of middle-childhood-aged boys and girls was investigated. The 374 children were observed during laboratory tasks with their parents and during recess with peers. A covariance model was tested that hypothesized that coercive exchanges with parents and peers would contribute uniquely to a multiple-agent assessment of child antisocial behavior, supporting an ecological view of social development. A single model described both boys and girls adequately, although minor gender-specific variations in effect size did produce a better fit. Children's antisocial behavior was associated with school maladaption primarily among boys, as represented by academic engagement in the classroom and peer nominations of social preference. Children's antisocial behavior and coercive interactions, in contrast, were correlated with peer antisocial behavior in both girls and boys.     

The effect of fast and slow decisions on risk taking

We experimentally compare fast and slow decisions in a series of experiments on financial risk taking in three countries involving over 1700 subjects. To manipulate fast and slow decisions, subjects were randomly allocated to responding within 7 seconds (time pressure) or waiting for at least 7 or 20 seconds (time delay) before responding. To control for different effects of time pressure and time delay on measurement noise, we estimate separate parameters for noise and risk preferences within a random utility framework. We find that time pressure increases risk aversion for gains and risk taking for losses compared to time delay, implying that time pressure increases the reflection effect of Prospect Theory. The results for gains are weaker and less robust than the results for losses. We find no significant difference between time pressure and time delay for loss aversion (tested in only one of the experiments). Time delay also leads to less measurement noise than time pressure and unconstrained decisions, and appears to be an effective way of decreasing noise in experiments.     

Tracing wealth,cooperation and trust: A comparison of two great plains communities

This research examines the relationships between wealth, cooperation, and trust. Utilizing implications from the social capital literature and democratic theory, we found that trust directly affects patterns of socio-economic interactions, especially shopping. We also found that commuting was widespread and it created a rural sprawl deficit that affected trust. Specifically, the results indicated that trust of others in the community (generalized to a certain degree) tended to encourage people to shop more in town, thus contributing to the development of the community, even when controlling for commuting. Findings from this study suggest that further community level research will yield more specifics about how trust (and social capital) works to increase wealth in a community.     

The role of productivity growth and farmers’ income protection policies in the decline of relative farm prices in the United States

The paper emphasizes three interrelated questions about the decline in relative farm to non-farm prices in the United States since 1973: (1) Is it unusual, (2) What caused it, and (3) Is it likely to continue? We find that based on historical and international evidence this phenomenon may be considered unusual. Separating farm price and income support in 1973 and growing relative productivity in agriculture have been the major contributors to changing the trend of the relative farm goods inflation. This trend is likely to continue based on predicted steady growth of relative agricultural productivity and continuation of direct payments and other forms of farm income support policies.     

环境风险感知的影响因素和作用机理:基于核风险感知的混合方法分析

在质性研究和已有文献基础上,本文提出了影响公众环境风险感知的“双因素假说”,并对这一假说进行验证。通过“扎根理论”发现了影响公众环境风险感知的四个维度：环境亲和感、系统信任感、信息丰富性和利益趋向性。前两种属于情感因素,后两者属于情境因素。通过结构方程模型进一步证实,情感、情境因素都对公众环境风险感知具有显著影响。同时发现了信息丰富性与环境风险感知的倒“U”型关系,利益趋向性对公众的环境风险感知具有决定性影响等结果。     

A paradox in decision theory and some experimental results: The relative nature of decisions

A simple two-choice single outcome valued decision under risk is presented which should show up the limitations in the classical approach of von Neumann, its extensions and its alternatives. An empirical testing of this hypothesis strongly supports this criticism. A rationale for explaining the apparent irrational decision is put forward and the case is made for understanding the relative nature of decision choices especially when multi-criteria are involved.     

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...     

Diabetic Risk Taking: The Role of Information,Education and Medication

Diet adherence is a key determinant in minimizing the risk of diabetic health complications. Diabetics who ignore their doctor's advice, concerning diet, smoking and exercise, are taking a gamble. Food product innovation, improved understanding about the benefits of tight diabetic compliance, and increased information dissemination all provide incentives for diabetics to modify their behavior. This paper uses repeated cross-sections of the NHANES from 1971–1994 to document that diabetics are making better choices over time relative to earlier cohorts and relative to non-diabetics. They smoke less than their non-diabetic counterparts. Their consumption of cholesterol has fallen sharply and they are reducing their alcohol and sweets consumption. New medications have played an important role in improving diabetic quality of life. This paper studies whether access to improved diabetic medicine has created offsetting incentives such that diet compliance falls. I find little evidence that the more medicated display worse health habits.     

综合平衡:陈云社会主义建设思想的根本点

在综合平衡中发展既是陈云经济思想的根本点,也是陈云全部社会主义建设思想的根本点。深刻领会陈云探索我国社会主义发展规律的这一重要成果,对当前落实科学发展观,构建社会主义和谐社会,促进经济社会全面、协调、可持续发展具有重要意义。     

The repeated public goods game: A solution using Tit-for-Tat and the Lindahl point

This paper demonstrates how a repeated public goods problem may be solved by using Tit-for-Tat (TFT) on the Lindahl point. The general solution is developed; geometric and numerical examples are offered.I wish to thank an anonymous reviewer for very helpful comments on earlier drafts of this paper.     

Genetic Risk Factors and Offsetting Behavior: The Case of Skin Cancer

This paper analyzes the extent of offsetting behavior using survey data on risk beliefs about skin cancer and precautionary actions that people can take to avoid this disease. The perspective taken is that, at conception, people are "installed" with differing genetic characteristics, such as skin type and complexion, which affect the likelihood of contracting skin cancer. The main issue addressed deals with how people's risk beliefs respond to the "safety features" reflected in their own genetic characteristics. Empirical results presented suggest that precautions against solar radiation exposure are chosen so as to partially offset genetic skin cancer protection.     

Working with managers to improve services: changes in the role of research in social care

The setting of specific objectives for children's services and the identification of key outcome indicators, together with the development of a core information specification for children's services with its practical application in the implementation of the Integrated Children's System, all mean that substantially more data are now available to child welfare agencies. Not so long ago in the UK it was the role of research teams to collect and analyse such data. Now that so much of it is already available to agencies, are researchers who work in this area of applied social policy research becoming redundant? Using data from the cohorts of looked after children being studied at the Centre for Child and Family Research, Loughborough University, the paper demonstrates how researchers can work in consultation with the managers of child welfare agencies to make better sense of the data at their disposal. It considers three issues: what additional variables need to be explored to help agencies better understand their performance; how groups of children could be identified who follow predictable pathways through social care; and how qualitative information is necessary to gain a true picture of what is happening. All of these examples demonstrate a fundamental role for researchers in working with social services personnel to identify how services can be improved.     

Parental sensitivity and friendship development: The mediating role of cooperation

Interactions with mothers and fathers form a critical foundation for youths’ later peer relationships. This study focused on the associations of maternal and paternal sensitivity in third grade with friendship outcomes in sixth grade. Because interactions with parents provide the earliest opportunities for children to learn prosocial behaviors such as cooperation, and cooperation is theoretically conceptualized as a foundation of friendship, cooperation may play a role in the link between parenting and children’s later social relationships. Using the National Institute of Child Health and Human Development Study of Early Child Care and Youth Development sample (N = 955; 51% female; 83% White), and a multimethod, multireporter longitudinal design, children’s cooperation was tested as a mediating mechanism that linked parental sensitivity to early adolescent friendship. Results indicated that most indirect paths from both mothers and fathers’ sensitivity to observed friendship interactions and perceived friendship quality, via cooperation, were significant. Findings provide a more concrete understanding of how parental sensitivity translates to better friendships.     

Inward FDI and growth: The role of macroeconomic and institutional environment

This paper contributes to the discussion on the role played by the absorptive capacities within host economies in their ability to grow and to exploit FDI efficiently. The outcomes for a sample of developing economies during the period 1976-2005 show differences associated to both the method of estimation (the system GMM vs OLS method) as well as the level of economic development. They also reveal the importance of controlling for those local capacities related to the macroeconomic and institutional environment. Thus, host country governments should develop a set of policies that are not only focused on inward FDI promotion but also on the improvement of their political and economic framework.     

Theory of mind and peer relationships: The role of social anxiety

Recent research has shown that individual differences in theory of mind (ToM) during middle childhood are linked with individual differences in children's peer relationships. The present longitudinal study investigated this association more deeply, exploring the potential mediating role played by children's social anxiety. We tested a group of 66 children (11.5 years old at Time 1) three times over one year after their transition to secondary school. Over and above language, SES and stability in individual differences, ToM performance shortly after starting secondary school (Time 1) predicted higher peer acceptance, as well as lower peer rejection, one year later (Time 3) via lower levels of social anxiety over time (Time 2). This study extends our knowledge about the links between social understanding and interpersonal relations in middle childhood. The results suggest that ToM may play an important role in children's adjustment when confronting new social contexts.