The St. Petersburg Paradox at 300

Nicolas Bernoulli’s discovery in 1713 that games of hazard may have infinite expected value, later called the St. Petersburg Paradox, initiated the development of expected utility in the following three centuries. An account of the origin and the solution concepts proposed for the St. Petersburg Paradox is provided. D’Alembert’s ratio test is used for a uniform treatment of the manifestations of the St. Petersburg Paradox and its solution proposals. It is also shown that a St. Petersburg Paradox can be solved or regained by appropriate transformations of the winnings or their utilities on the one hand or the probabilities on the other. This last feature is novel for the analysis of the St. Petersburg Paradox.     

The Relationship Between Disadvantaged Fathers’ Employment Stability,Workplace Flexibility,and Involvement With Their Infant Children

ABSTRACT

In the United States, the slow pace of economic recovery and change in the workplace has created barriers for disadvantaged fathers to engage with their infant children. Using secondary data from the Fragile Families and Child Well-Being Study (n = 1,548), one of a few national studies that examine disadvantaged fathers, we conducted a series of regression analyses examining the relationship between disadvantaged fathers’ employment stability, workplace flexibility, and involvement with their infant children. The results showed that resident, younger, Black, higher income-earning fathers and fathers with stable employment and workplace flexibility were more involved with their infant children. This study provides additional evidence to the literature espousing the importance of workplace policies and arrangements that provide employees with stability and flexibility in the workplace. In doing so, policymakers, employers, and practitioners should develop and implement workplace policies and arrangements strengthening the relationships between disadvantaged fathers and their children and families, employees and their employers, businesses and their consumers, and businesses and their communities. With changes in the American household and workforce nationwide, especially as they relate to men and disadvantaged fathers, it is important that future research continue to examine the relationship between these two entities.     

COUNTERVAILING POWER AND DYNAMIC EFFICIENCY

This paper studies the impact of buyer power on dynamic efficiency. We consider a bargaining model in which buyer power arises endogenously from size and may impact on a supplier’s incentives to invest in lower marginal cost. We challenge the view frequently expressed in policy circles that the exercise of buyer power stifles suppliers’ incentives. Instead, we find that the presence of larger buyers keeps a supplier “more on his toes” and induces him to improve the competitiveness of his offering, in terms of both price and quality, relative to buyers’ alternative options.     

Cognitive differentiation in consumer product judgments

The investigations reported in this article examined some of the individual and situational determinants of the level of cognitive product differentiation in consumer products judgements, Subjects consisted of four large samples of male and female consumers in two large metropolitan areas in the USA. These four independent studies found empirical support for the following hypothesis: consumers tend to have more differentiated judgments of negatively valenced products than positively valenced products. These findings were discussed in the context of the “vigilance”. “justification” and “Pollyanna” hypotheses. Finally, as a promising direction for future research. the need for an interactionist approach to cognitive functioning was emphasized.     

Financial Market Variables do not Predict Real Activity: Further Evidence

Previous studies argue that financial variables do not help forecast U.S. output growth. F statistics for excluding financial variables from output growth equations depend on the sample period and the inclusion of 1974:12 in the sample. Also, an autoregressive model of output growth often provides better forecasts than models with lagged financial variables included. I decompose output into permanent and cyclical components and ask whether financial variables help forecast either component in isolation. The paper‐bill spread does improve in‐sample forecasts of cyclical output, but no financial variable helps forecast either cyclical output or permanent output growth out of sample.     

The probability of inconsistencies in complex collective decisions

Many groups make decisions over multiple interconnected propositions. The doctrinal paradox or discursive dilemma shows that propositionwise majority voting can generate inconsistent collective sets of judgments, even when individual sets of judgments are all consistent. I develop a simple model for determining the probability of the paradox, given various assumptions about the probability distribution of individual sets of judgments, including impartial culture and impartial anonymous culture assumptions. I prove several convergence results, identifying when the probability of the paradox converges to 1, and when it converges to 0, as the number of individuals increases. Drawing on the Condorcet jury theorem and work by Bovens and Rabinowicz (2001, 2003), I use the model to assess the truth-tracking performance of two decision procedures, the premise- and conclusion-based procedures. I compare the present results with existing results on the probability of Condorcets paradox. I suggest that the doctrinal paradox is likely to occur under plausible conditions.The author wishes to express his gratitude to Luc Bovens, Matthew Braham, Steven Brams, Bruce Chapman, Philip Pettit, Wlodek Rabinowicz and two anonymous reviewers for helpful comments or discussion. A previous version of this paper was presented at the 2002 Annual Meeting of the European Public Choice Society, Belgirate, Lago Maggiore, Italy, April 2002, and at the Sixth International Meeting of the Society for Social Choice and Welfare, held at the California Institute of Technology, Pasadena, California, July 2002.     

Liberalism,Postmaterialism, and the Growth of Freedom

An influential analysis by Przeworski and Limongi (1997 Przeworski A Limongi F (1997) ‘Modernization: Theories and facts’ World Politics vol. 49 pp. 155–183  [Google Scholar]) argued that a pro-democratic culture may help existing democracies survive, but political culture does not contribute to the process of democratization, which is entirely done by elites. We challenge this conclusion, arguing that it neglects the very nature of democratization. For (as Human Development theory argues), democratization is a liberating process that maximizes human freedom by establishing civil and political rights. Consequently, the aspect of political culture that is most relevant to democratization is mass aspirations for freedom – and if a given public emphasizes these values relatively strongly, democratization is likely to occur. To test this thesis, we use data from the Values Surveys, demonstrating that a specific component of postmaterialism (‘liberty aspirations’) had a major impact on the extent to which societies gained or lost freedom during the Third Wave of democratization. This effect holds up in tests of Granger causality, remaining strong when we control for prior levels of freedom. No other indicator, including GDP/capita and social capital, can explain away the impact of liberty aspirations on democratization. Mass liberty aspirations play a role in democratization that has been greatly underestimated.