Sharing beliefs and the absence of betting in the Choquet expected utility model

Choquet expected utility maximizers tend to behave in a more “cautious” way than Bayesian agents, i. e. expected utility maximizers. We illustrate this phenomenon in the particular case of betting behavior. Specifically, consider agents who are Choquet expected utility maximizers. Then, if the economy is large, Pareto optimal allocations provide full insurance if and only if the agents share at least on prior, i. e., if the intersection of the core of the capacities representing their beliefs is non empty. In the expected utility case, this is true only if they have a common prior. Received: July 2000; revised version: May 2001     

Income Satisfaction Inequality and its Causes

In this paper, the concept of Income Satisfaction Inequality is operationalized on the basis of individual responses to an Income Satisfaction question posed in the German Socio-Economic Panel (GSOEP). Income satisfaction is the subjective analogue of the objective income concept. The paper introduces a method to decompose Income Satisfaction Inequality according to the contributions from variables such as income, education, and the number of children. Given the panel structure of the data, inequality may be attributed partly to permanent individual circumstances and partly to transitory changes. The paper shows that by far the largest part of the satisfaction inequality has to be ascribed to unobserved heterogeneity. Distinguishing between a structural and an unexplained part of inequality we find that income explains the largest part of structural Income Satisfaction Inequality together with household membership; for non-working individuals, the age distribution is very relevant as well.     

Social Protection: Values to be Defended!

Social protection is a part of human rights. I therefore believe it is important to react to the many reproaches levelled at it, which are undermining its legitimacy. This involves defending social protection, first and foremost in the name of its mission, its fundamental objectives and, consequently, the values upon which it is founded. After briefly reviewing the content of these values, I emphasize the fact that they should be promoted and cultivated at least as much as the economic values that are dominant in the world today.     

Allocation of research and development funds: A zero-one goal programming approach

The research and development project selection process is one of the most difficult and important problems faced by management. It is typically complicated by indivisibility of projects and multiple and conflicting objectives, in addition to limitations on funding, facilities, and qualified researchers. In this paper a case example involving a high technology electrical equipment manufacturer is developed to illustrate this problem using zero—one goal programming to accommodate indivisibility of projects in addition to multiple and conflicting goals. The model presented is an attempt to provide managers with a robust tool for allocating scarce resources among research and development projects.     

Small-sample results for maximum-likelihood estimation in branching processes

In this article, small sample properties of the maximum-likelihood estimator (m.l.e.) for the offspring distribution (pk) and its mean m are considered in the context of the simple branching process. A representation theorem is given for the m.l.e. of (Pk) from which the m.l.e. of m is obtained. The case where p0 + p1 + p2 = 1 is studied in detail: numerical results are given for the exact bias of these estimators as a function of the age of the process; a curve fitting analysis expresses the bias of m? as a function of the mean and the variance of the offspring distribution and finally an “approximate m.l.e.” for (pk) is given.     

The reversal small-world experiment

This paper is an attempt to examine and define the world network of a typical individual by discovering how many of his or her acquaintances could be used as first steps in a small-world procedure, and for what reasons. The town and occupation of each target was provided, together with the ethnic background, where this could not be inferred from the name. Starters were instructed in the small-world experiment and asked to write down their choice, amongst the people they knew, for the first link in a potential chain from them to each of 1267 targets. Starters provided information on each choice made (e.g. mother, cousin, friend, acquaintance, etc.) together with the sex of the choice) and the reason that choice had been made. The reason could be in one or more of four categories: something about the location of the target caused the starter to think of his or her choice; the occupation of the target was responsible for the choice; the ethnicity of the target; or some other, unspecified, reason.Six main conclusions may be drawn from the data: (1) A mean of 210 choices per starter account for the “world” (i.e. the 1267 targets). This number is probably an underestimate. Only 35 choices are necessary to account for half the world, however. Of the 210, 95 (45%) were chosen most often for location reasons, 99 (47%) were chosen most often for occupation reasons, and only 7% of the choices were mainly based on ethnicity or other reasons. (2) Choices were mainly friends and acquaintances, with strong cleavage by sex. For any given target, the type of choice used by the majority of starters was a friend or acquaintance, and not family. For any given target, the most likely sex of the choice (i.e. over all starters) can be predicted accurately on 82% of occasions. This sex tends to be male, unless both starter and target are female, or if the target has a low-status occupation. Additionally, any given starter is most likely to pick a male choice for any target, except for the female starter-female target combination, when female choices are more likely. This was correct on 64% of occasions. (3) Location was the usual reason for choice (out of the four categories), with occupation second, and ethnicity or other reasons rarely used. This most popular reason for choice may be correctly predicted for any given target 81% of the time. (4) The decision as to which choice was made appears to depend primarily on the occupation of the target, and secondly on the distance (near/far) from Morgantown, West Virginia, where the experiment took place. (5) The expression “having one's man in …” can be partially quantified. We may define a choice to “handle” a state in the U.S. if he or she was chosen for two-thirds or more of the targets in that state for which choices were made on the basis of location. Then, for any starter, on average, half the states are each handled by a single choice. (6) The accuracy of starters' recall about their networks is low, in the sense that their recall is incorrect more often than it is correct (i.e. their recall could not be put to any other use with any reliability). This confirms previous experiments on informant accuracy.     

Estimators of shift based on statistics of the Kolmogorov-Smirnov type

This paper is concerned with the estimation of a shift parameter δ_o, based on some nonnegative functional Hg₁ of the pair (D^δ_N(x), f?^δ_N(x)), where D^δ_N(x) = K_N/b {F_2,n(x)—F_1,m (x + δ)}, +^δ_N(x) = {mF_1,m (x + δ) + nF_2,n(x)}/N, where F_1,m and F_2,n are the empirical distribution functions of two independent random samples (N = m + n), and where K²_N = mn/N. First an estimator δ_N, is defined as a value of δ minimizing a functional H of the type of H₁. A second estimator δ¹_N is also defined which is a linearized version of the first. Finite and asymptotic properties of these estimators are considered. It is also shown that most well-known test statistics of the Kolmogorov-Smirnov type are particular cases of such functionals H₁. The asymptotic distribution and the asymptotic efficiency of some estimators are given.