Experimental payment protocols and the Bipolar Behaviorist

If someone claims that individuals behave as if they violate the independence axiom (IA) when making decisions over simple lotteries, it is invariably on the basis of experiments and theories that must assume the IA through the use of the random lottery incentive mechanism (RLIM). We refer to someone who holds this view as a Bipolar Behaviorist, exhibiting pessimism about the axiom when it comes to characterizing how individuals directly evaluate two lotteries in a binary choice task, but optimism about the axiom when it comes to characterizing how individuals evaluate multiple lotteries that make up the incentive structure for a multiple-task experiment. We reject the hypothesis about subject behavior underlying this stance: we find that preferences estimated with a model that assumes violations of the IA are significantly affected when one elicits choices with procedures that require the independence assumption, as compared to choices elicited with procedures that do not require the assumption. The upshot is that one cannot consistently estimate popular models that relax the IA using data from experiments that assume the validity of the RLIM.     

Boundedly rational expected utility theory

We build a satisficing model of choice under risk which embeds Expected Utility Theory (EUT) into a boundedly rational deliberation process. The decision maker accumulates evidence for and against alternative options by repeatedly sampling from her underlying set of EU preferences until the evidence favouring one option satisfies her desired level of confidence. Despite its EUT core, the model produces patterns of behaviour that violate standard EUT axioms, while at the same time capturing systematic relationships between choice probabilities, response times and confidence judgments, which are beyond the scope of theories that do not take deliberation into account.

     

Citizen‐agency versus state‐agency at the frontline in prisons and probation services: A systematic literature review

Street‐level bureaucrats play a key role in the delivery of public services to the citizens with whom they interact. Using the Preferred Reporting Items for Systematic Review and Meta‐Analyses approach, we rely on a street‐level perspective to report a systematic review of 46 studies about officer–offender interactions in prisons and probation services. In doing so, we examine how correctional officers articulate state‐agency – whereby they focus on the implementation of rules and policies – and citizen‐agency – whereby their decisions regarding offenders are based on judgements of offenders' worth. Our results provide evidence that frontline work in prisons and probation services stems from a mix of citizen‐ and state‐agencies in which the former is prioritized over the latter: when rule enforcement allows it, correctional officers often make discretionary decisions based on professional judgements rooted in professional norms. In this respect, the managerial and actuarial approach to risk management and public protection involved by contemporary correctional reforms comes with new role expectations that conflict with correctional officers' rehabilitative ideals. At the same time, the literature provides many instances of officers coping with workload in order to meet policy objectives and organizational demands while maintaining satisfactory working conditions. In other words, there is an increasingly elaborate and fragile articulation of state‐ and citizen‐agencies at the frontline, in prisons and probations services. We conclude with some implications and an agenda for future research.     

Prospect theory and tax evasion: a reconsideration of the Yitzhaki puzzle

The standard expected utility (EUT) model of tax evasion predicts that evasion is decreasing in the marginal tax rate (the Yitzhaki puzzle). Recent literature shows cases in which incorporating prospect theory (PT) does and does not overturn the Puzzle. In a general environment that nests both PT and EUT preferences, we provide a detailed study of how the elements of PT affect the Puzzle. PT does not always reverse the Puzzle, hence we give and interpret conditions for when it does and does not. When allowing for stigma and/or variable audit probability, PT reverses the Puzzle in the same way and with the same limitations as does EUT, if equally augmented.     

Evidence in Norwegian child protection interventions – Analysing cases of familial violence

How is expert evidence used in care order proceedings when children are considered for foster care placement because of familial violence? What are important factors and how do the decision-makers use and evaluate evidence from specialists and experts? In this in-depth analysis of 104 published care order decisions from the Norwegian County Boards, I investigate how decision-makers use and evaluate evidence from expert witnesses to determine whether a care order may be granted. The analysis shows that the evidence largely revolves around social functioning, care context and topics about how parents and children relate to each other. Led by the law, the decision-makers use this evidence to determine whether the child's situation is harmful, whether support services are viable and whether a care order is in the child's best interests. I find that decision-makers draw unevenly on evidence with regards to these legal requirements, and that the use predominantly defers to expert authority. However, there is also evidence of independent reasoning, where deferral to the epistemic authority of the experts is weakened. This is shown through evaluative and critical assessments and scrutiny of the disciplinary evidence.     

Availability Crises in Insurance Markets: Optimal Contracts with Asymmetric Information and Capacity Constraints

Insurance markets sometimes exhibit "crises" in which prices rise dramatically and coverage is unavailable or is rationed at the new prices. A recent explanation for such crises is the "capacity constraint" model of Gron and Winter. Crises usually follow sudden and large depletions in insurers' equity or surplus. The capacity constraint model argues that frictional costs in replacing surplus, and limited liability, give rise to a kinked insurance supply function and that crises arise from discontinuous short term adjustments around the kink. While this model explains much about liability insurance crises, it still leaves unexplained their most prominent feature; that insurance is rationed or unavailable. We follow their insight in looking to equity shocks and capital market frictions to explain crises and combine this with a model of optimal risk sharing contracts under the information conditions characteristic of this market. We use implicit long term contracts with truth telling constraints to address information asymmetries and this allows us to model crises that exhibit rationing. Our model is tested in the market most dramatically affected by such crises in the 1980‘s, the general liability insurance market.     

Facilitating Future Planning for Ageing Adults with Intellectual Disabilities Using a Planning Tool that Incorporates Quality of Life Domains

Abstract

When ageing families of an adult with a lifelong disability embark on a process of planning for the future, they generally think in terms of making hard and fast decisions about: (1) where the person with the disability is going to live when “the time comes”; and (2) who will take on their direct care. However, there is common trepidation among many families when it comes to launching their son or daughter with a lifelong disability. Generally, many families ignore, neglect, or simply do not engage in making any formal plans at all. When ageing families do make plans, they often focus only a place to live. This can mean that other significant aspects of a person's life (i.e., quality of life factors) are negated or neglected. Reviewing population demographics for both the Republic of Ireland and Northern Ireland, it was ascertained that a sizable number of parents will be aging in the near future and that some formalized assistance for future planning was needed. To this end, a planning instrument, What the Future Holds, was developed in order to help families and other carers with planning for the future and involving a variety of quality of life domains, including health, financial, vocational, social, civil, and residential well-being.     

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.     

Decisions concerning the allocation of scarce medical resources

This paper aimed to determine the criteria participants use to make decisions about scarce medical resources (allocation to use a kidney machine). It varied information about patients on 4 factors (sex, smoking, employment status, community service). It also set out to see if decisions made in groups differed from aggregated decisions of those made alone. In the first study, participants completed a simple questionnaire requiring them to rank-order sixteen hypothetical patients. In the second study, a group discussion (in groups of three participants) preceded the group putting an agreed rating on the identical questionnaire. Participants favoured patients who were employed, non-smokers and participated in community service. This suggests that participants adopted a utilitarian moral ideology. Participants' smoking habits interacted with the hypothetical patients' smoking habits, indicating in-group favouritism. In the second study it was found that when the decision was made in a group of three it amplifies the decision made by an individual. In this sense there was clear evidence of group polarization.     

Health Policy and the Politics of Evidence

National decisions on the drugs, treatments and medical devices that should be funded through public expenditure are a fundamental element of health policy. But despite a political emphasis upon evidence‐based policy, the results of rigorous clinical trials and statistical modelling techniques rarely speak for themselves. So, does the pre‐eminence traditionally accorded to quantitative data in the medical field underpin policy decisions on a consistent basis? Or are more subtle, less transparent characteristics of context and interaction evident in the shaping of attendant decisions? This article considers these questions by drawing on a study of decision‐making in the National Institute for Health and Clinical Excellence (NICE)—an organization established by the British government in 1999 to decide whether selected health technologies should be made available throughout the National Health Service in England and Wales. In broad terms, the findings point to the primacy of arguments based on quantitatively oriented, experimentally derived data but also to a discursive hegemony of clinicians and health economists in mediating, including or debarring more qualitative, experientially based evidence. A more complex, dynamic understanding of policy governance in the field of health technology appraisal—founded on a discursive appropriation of the idea of the “common good”—goes some way to explaining the persistence of this hegemony despite an avowedly inclusive, plural approach to decision‐making.     

On a concept of representative democracy

Political theory distinguishes between two concepts of representative democratic decisions. Under the first concept, representatives do not decide issues as independent individuals but merely reflect the will of their constituencies; under the second, the decisions are made by the elected representatives themselves on the basis of their independent judgments on political issues. In the literature of democratic choice, the first concept has been formalized by Murakami, Fishburn, Pattanaik among others, in terms of decision procedures where the representative is identified with the preference-pattern emerging from the aggregation of the preferences of individual voters in a given constituency. Here we formalize the second type of representative democracy and show that it comes into conflict with certain essential features of a democratic group decision rule. In particular decisiveness and monotonicity are violated. The violation of monotonicity is of particular significance because it has come to be regarded as one of the fundamental principles for the ethical acceptability of democratic decision procedures.I am also grateful to the University Grants Commission of India for the financial assistance in carrying out this study.I wish to acknowledge my great debt to Professor Prasanta K. Pattanaik, my supervisor, both for initiating me to this problem and for his invaluable comments, criticisms and guidance. The paper acquired much of its present status through the discussions I had with him. Responsibility for any error, of course, rests with me.     

Status quo bias in decision making

Most real decisions, unlike those of economics texts, have a status quo alternative—that is, doing nothing or maintaining one's current or previous decision. A series of decision-making experiments shows that individuals disproportionately stick with the status quo. Data on the selections of health plans and retirement programs by faculty members reveal that the status quo bias is substantial in important real decisions. Economics, psychology, and decision theory provide possible explanations for this bias. Applications are discussed ranging from marketing techniques, to industrial organization, to the advance of science.     

Fit for Work? The Influence of Sick Pay and Job Flexibility on Sickness Absence and Implications for Presenteeism

Recent developments in UK policy on health and employment have sought to change perceptions about what constitutes ‘fitness for work’. With the aim of reducing the incidence and duration of sickness absence, a range of initiatives, including the introduction of the ‘fit note’, are challenging the belief that it is necessary to be 100 per cent well in order to be at work. However, this article suggests that contextual factors independent of health may also influence people's decisions about whether or not to attend work at times of reduced wellness. Drawing upon data from a qualitative study of mental health and employment, this article illustrates how the terms and conditions of a person's employment may influence sickness absence decisions in a number of ways. It is argued that sick pay provisions, size of employer and nature of work may influence both decisions to take time off and decisions about when to return to work. The degree of flexibility to manage one's workload around times of poorer health may also have a bearing on whether people feel able to carry on with their work without recourse to sickness absence. Therefore, it may be important for policy interventions to consider not only health circumstances but also structural/contextual influences on conceptualizations of being ‘fit for work’. The implications of such contextually‐influenced decision‐making for ‘presenteeism’ are also considered. It is suggested that current conceptualizations of presenteeism are somewhat ambiguous; employees coming to work despite ill health is simultaneously presented as a problem and an aspiration.     

Risk aversion and physical prowess: Prediction,choice and bias

This paper reports on experiments where individuals are asked to make risky decisions for themselves, and to predict the risky decisions of others. Prior research shows that people predict women to be more risk averse than men, a result we confirm. We investigate whether differences in physical prowess underlie actual and perceived gender differences, a hypothesis suggested by both evolutionary and economic theories. Overall we find that perceptions of others’ risk attitudes reflect stereotypes about gender and strength but tend to exaggerate the underlying relationships. Physically stronger and taller people and those perceived as attractive are predicted to be more risk tolerant, while women are perceived to be more risk averse. The impact of gender and physical prowess measures on actual gamble choices is much weaker. Sources of prediction bias are examined, showing that specific characteristics of the target and predictor lead to systematic over-prediction or under-prediction of risk aversion.     

Psychological Aspects of Predictive Genetic-Test Decisions: What Do We Know So Far?

Advances in molecular biology are facilitating the elucidation of the genetic basis of disease at an astonishing rate. Consequently, predictive genetic testing of healthy individuals may soon become a routine component of medical care. How and why is the decision to have a predictive genetic test taken? This article reviews some psychological aspects of predictive genetic-test decisions and discusses the limitations of research to date. A notable limitation is the nontheoretic nature of much of the research. It is argued that theoretical models are needed from which hypotheses about decision making in this context can be derived and tested. Suggestions are offered for future research, and policy implications of research in this area are offered.     

Sickness and disability benefit programmes: What is driving policy convergence?

In this paper we explore the reasons for the apparent convergence in sickness and disability policies across the OECD, asking whether and to what extent policy convergence should be seen as a product of policy learning. We conclude that convergence is the result of policy imitation more than policy learning and that learning (from past mistakes) is more likely within countries than across borders. Given limited evidence on what really "works", when it comes to designing policies that both provide adequate income security and still encourage labour-force participation, governments look abroad or to bodies like the OECD for possible models and ideas to underlie a reform. However, translating those ideas into workable policies requires great sensitivity to the institutional and political-economic context — especially the role of the social partners and the nature of policies in existence. When it comes to policy implementation, such contextual learning may be crucial.     

The role of funding on research and science: The impact of glyphosate herbicides on health and the environment

The objective of this research is to determine the factors that influence the outcomes of previous scientific research on the potential adverse effects of glyphosate-based herbicides (GBH) on human and animal health and the environment. The emphasis is placed on answering the questions about the causal linkages between who funds and performs the research and the research outcomes. A lack of change in use of the GBHs in agriculture stems directly from public (Government) support of the position how the GBHs are safe for humans and the environment. The results of our meta-analysis clearly demonstrate how large and growing majority of influential research on the subject suggests otherwise. Early research on the subject, prior to 2010, done by private and public sector researchers was strongly indicating how GBHs are safe for humans, animals and the environment. It is possible that there is inertia in food safety policy leading to this large gap and disconnect between the results of hundreds of more recent studies and the (current) course of public policy. This study helps us better understand why science on this subject has not been conclusive and thus not the main driver of “science-based” policies about the GBH based production of genetically modified foods. The importance and the implications of this research are obvious: Evidence-based decisions and policies informed by rigorous research and unimpeded by other interested parties are necessary when it comes to developing public policy that affects food safety and in turn human and animal health, and the environment.     

The ranking assumption

This paper is an attempt to raise some general objections to the whole concept of making decisions on teleological principles. Its scope is finally the whole concept of how we rationally decide, on a teleological basis, to do any act at all. However the arguments developed here arise from the recent discussions about one particular species of teleological decision-making - utilitarianism. Therefore, while I hope that the paper has consequences that are important far beyond this one ethical theory, my objections are phrased in terms of direct arguments about utilitarianism. The recent lively debates on this topic make it easy to ask some interesting questions about this sort of goal-oriented theory. However, if my objections are correct, the scope of these questions is much wider than any one utilitarian theory (or cluster of theories) because my objections are about an assumption that is common to all teleological theories and not just to classical utilitarianism.     

Failing to learn from experience about catastrophes: The case of hurricane preparedness

This paper explores the question of whether there are inherent limits to our ability to learn from experience about the value of protection against low-probability, high-consequence, events. Findings are reported from two controlled experiments in which participants have a monetary incentive to learn from experience making investments to protect against hurricane risks. A central finding is that investments display a short-term forgetting effect consistent with the use of reinforcement learning rules, where a significant driver of investments in a given period is whether storm losses were incurred in the precious period. Given the relative rarity of such losses, this reinforcement process produces a mean investment level below that which would be optimal for most storm threats. Investments are also found to be insensitive to the censoring effect of protection itself, implying that the size of experienced losses??rather than losses that are avoided??is the primary driver of investment decisions.