On the economic foundations of decision theory

Theory and Decision - Economics bases the choice theory on the mental experiment that introduces the choice correspondence, which associates to every set of possible actions the subset of preferred...     

Structure of University Education and Education for Social Work in Italy

The single-case design, with its potential integration of practice and research roles, has roots extending back to the “scientific charity” movement of the late 1800s. While the goals of “scientific charity” were never realized, the new research technology bears promise of achieving them. This background, together with the related experiences of behavioral psychology and of medicine, is briefly highlighted and the prospects, pitfalls, and challenges involved are discussed.     

On some aspects of decision theory under uncertainty: rationality,price-probabilities and the Dutch book argument

Theory and Decision - Choice under uncertainty is treated in economics by different approaches. We can distinguish three of them, two of which concern individual choice, while the third frames...     

Probability of Exporting Infected Carcasses from Vaccinated Pigs Following a Foot‐and‐Mouth Disease Epidemic

Emergency vaccination is an effective control strategy for foot‐and‐mouth disease (FMD) epidemics in densely populated livestock areas, but results in a six‐month waiting period before exports can be resumed, incurring severe economic consequences for pig exporting countries. In the European Union, a one‐month waiting period has been discussed based on negative test results in a final screening. The objective of this study was to analyze the risk of exporting FMD‐infected pig carcasses from a vaccinated area: (1) directly after final screening and (2) after a six‐month waiting period. A risk model has been developed to estimate the probability that a processed carcass was derived from an FMD‐infected pig (P_carc). Key variables were herd prevalence (P_H), within‐herd prevalence (P_A), and the probability of detection at slaughter (P_SL). P_H and P_A were estimated using Bayesian inference under the assumption that, despite all negative test results, ≥1 infected pigs were present. Model calculations indicated that P_carc was on average 2.0 × 10^?5 directly after final screening, and 1.7 × 10^?5 after a six‐month waiting period. Therefore, the additional waiting time did not substantially reduce P_carc. The estimated values were worst‐case scenarios because only viraemic pigs pose a risk for disease transmission, while seropositive pigs do not. The risk of exporting FMD via pig carcasses from a vaccinated area can further be reduced by heat treatment of pork and/or by excluding high‐risk pork products from export.     

Representing Preferences with a Unique Subjective State Space

We extend Kreps' (1979) analysis of preference for flexibility, reinterpreted by Kreps (1992) as a model of unforeseen contingencies. We enrich the choice set, consequently obtaining uniqueness results that were not possible in Kreps' model. We consider several representations and allow the agent to prefer commitment in some contingencies. In the representations, the agent acts as if she had coherent beliefs about a set of possible future (ex post) preferences, each of which is an expected‐utility preference. We show that this set of ex post preferences, called the subjective state space, is essentially unique given the restriction that all ex post preferences are expected‐utility preferences and is minimal even without this restriction. Because the subjective state space is identified, the way ex post utilities are aggregated into an ex ante ranking is also essentially unique. Hence when a representation that is additive across states exists, the additivity is meaningful in the sense that all representations are intrinsically additive. Uniqueness enables us to show that the size of the subjective state space provides a measure of the agent's uncertainty about future contingencies and that the way the states are aggregated indicates whether these contingencies lead to a desire for flexibility or commitment.     

A weighted cramer-von mises statistic derived from a decomposition of the anderson-darling statistic

Two goodness of fit statistics with asymmetric weight function are derived from a decomposition of the Anderson-Darling statistic, For each one, the asymptotic null distribution is found for a simple null hypothesis and some upper percentties are calculated. The asymptotic power of the tests are obtained for some contiguous alternatives around a normal null hypothesis. The tests allow the user to choose to which tail to give more weight and it is intended to be used for that purpose. Therefore it should be not considered as a competitor of the classical goodness of fit tests.     

Forced homecoming: Ghanaians' resettlement in their rural hometown. A case study

This case study examines the conditions of families and individuals who resettled in Ghana. These Ghanaians (about 7000) had migrated to Liberia in search of a better life many years before, but they left Liberia because of Liberia's civil war. Many of these involuntary migrants were in fact Ghanaian "returnees." Many of the migrants who returned were from the fishing village of Senya Beraku. This study includes a brief summary of findings from an evaluation of the Senya Beraku Cooperative Society, a nongovernmental credit organization providing loans to returnee families. Funding was available for loans to 120 families. Repayment rates showed that 80% of women and 60% of men repaid their loans. Refugee board members were accurate in predicting the success of repayment. 95% of loans were repaid by persons predicted to repay, and 40% of loans were repaid among persons considered unlikely to repay. The 75 members of the Cooperative were not considered representative of the 6500 returnee population. There were 7 defaulters and 12 nondefaulters among the interviewed population of Cooperative members. Findings indicate that the timing of loans was a critical issue for investment. Many loans were small and given at the beginning of the dry season when there was little economic activity. Most respondents had little or no formal education, but this appeared to be unrelated to loan performance. Readjustment was a function of many factors, including, for instance, family connections, degree of financial success abroad, and prevailing attitudes toward returnees. Defaulters more frequently reported negative social exchanges on their return. Most returnees were considered failures and suffered from a loss of status due to the forced return from Monrovia. 10 out of 19 experienced the loss of all their property and one or more close relatives. The 9 remaining lost some property and some relatives. More defaulters "struggled with self-pity and a sense of paralysis." All respondents who were members of indigenous African churches were defaulters. A secure belief in God strengthened coping skills. Nondefaulters had more self-confidence in dealing with their situations. Many experienced guilt for a variety of reasons. It is suggested that strategies for reintegration must be long term and supportive of returnees needs.     

Representing Preferences with a Unique Subjective State Space: A Corrigendum1

Dekel, Lipman and Rustichini (2001) (henceforth DLR) axiomatically characterized three representations of preferences that allow for a desire for flexibility and/or commitment. In one of these representations (ordinal expected utility), the independence axiom is stated in a weaker form than is necessary to obtain the representation; in another (additive expected utility), the continuity axiom is too weak. In this erratum we provide examples showing that the axioms used by DLR are not sufficient, and provide stronger versions of these axioms that, together with the other axioms used by DLR, are necessary and sufficient for these two representations.     

The risk aversion measure without the independence axiom

The risk premium (conveniently normalized) is defined as the measure of risk aversion. This measure does not require any relevant assumption in the theory of choice under uncertainty except the existence of a certainty equivalent. In particular, the independence axiom is not required. The measure of risk aversion of an action is provided not only for the case with one commodity and two consequences but also for the case with many commodities and consequences. The measure of mean risk aversion of all actions with given consequences is introduced and the local measure of risk aversion is obtained by making all these consequences approach the consequence under consideration. This measure is demonstrated to be zero when the von Neumann-Morgenstern utility function exists. In this case a measure of risk aversion of the second order is introduced, which turns out to be equal to the Arrow-Pratt absolute index when there is only one commodity and similar to the generalized measures proposed by several authors when there are many commodities and two consequences.Helpful comments by I. Gilboa and suggestions by the referee are gratefully acknowledged.