On Myopic Stability Concepts for Hedonic Games

We present a unified look at myopic stability concepts for hedonic games, and discuss the status of the existence problems of stable coalition structures. In particular, we show that contractual strictly core stable coalition structures always exist, and present a sufficient condition for the existence of contractually Nash stable coalition structures on the class of separable games. We gratefully acknowledge financial support from the Alexander von Humboldt Foundation (D. Dimitrov)“by “D. Dimitrov gratefully acknowledges financial support from the Alexander von Humboldt Foundation.     

Deciding to use the emergency room: a qualitative survey of older veterans

Increasing use in the past decade has created pressure for hospital emergency rooms (ERs). Healthcare provided through an ER is expensive and is not designed to meet the complex needs of an older, chronically-ill population. ER visits are presented as the outcome of a decision-making process. Thirty veterans who had visited the ER in the previous year were asked about their decisions to use the ER. Their responses reflected four distinct approaches to ER use, which are characterized by frequency (frequent/infrequent) and risk for social isolation (low/high). Appropriate interventions by social work personnel might reduce inappropriate use of the ER and enhance the care of this vulnerable population.     

Whom should we believe? Aggregation of heterogeneous beliefs

We examine the collective risk attitude of a group with heterogeneous beliefs. We prove that the wealth-dependent probability distribution used by the representative agent is biased in favor of the beliefs of the more risk tolerant consumers. Moreover, increasing disagreement on the state probability raises the state probability of the representative agent. It implies that when most disagreements are concentrated in the tails of the distribution, the perceived collective risk is magnified. This can help to solve the equity premium puzzle. We show that the trade volume and the equity premium are positively correlated.

Environmental disasters as risk regulation catalysts? The role of Bhopal,Chernobyl, Exxon Valdez,Love Canal,and Three Mile Island in shaping U.S. environmental law

Unexpected events such as environmental catastrophes capture wide public attention. Soon after five major shocks—Three Mile Island, Love Canal, Bhopal, Chernobyl, and the Exxon Valdez oil spill—Congress voted on new risk regulation. This paper conducts an event study to test whether individual congressional representatives were “shocked” by these environmental disasters into increasing their probability of voting in favor of risk legislation. On average, representatives were less likely to vote in favor of bills tied to these five events. Significant heterogeneity in representatives’ responses to these shocks is documented. Liberal Northeast representatives were most likely to increase their pro-environment voting in the aftermath of these shocks.

Gender inequalities in European unemployment benefit systems

The most important structural change which has occurred on the labour market over the past 30 years is the sustained and continued growth of female labour supply. Two-earner couples have become a majority in most European countries and lone parents, mostly women, are also on the rise. On the other hand, since 1975, labour market policies have altered the quality and nature of employment in Europe by promoting atypical forms of employment where women are overrepresented. The analysis has shown us that atypical employment results in restricted access to unemployment benefits. Moreover, combining the presence of more stringent conditions with derived rights results in more and more women being dependent upon their spouses for financial as well as social protection and can even have a disincentive effect on formal labour market participation.     

Eating Its Own: The Whistleblower's Organization in Vendetta Mode

This paper reports on Australia's largest whistleblower study. Specifically it focuses on the experiences of whistleblowers in the Queensland public sector during the Goss Labor government's first term. Rather than being affirmed as good citizen-workers when they took disclosures of wrongdoing to their supervisors within the units in which they worked, the whistleblowers encountered obstruction and vilification. Their experiences offer a rare check-up on the state of workplace dissent.     

Can ranking techniques elicit robust values?

This paper reports two experiments which examine the use of ranking methods to elicit ‘certainty equivalent’ values. It investigates whether such methods are able to eliminate the disparities between choice and value which constitute the ‘preference reversal phenomenon’ and which thereby pose serious problems for both theory and policy application. The results show that ranking methods are vulnerable to distorting effects of their own, but that when such effects are controlled for, the preference reversal phenomenon, previously so strong and striking, is very considerably attenuated.

Conspicuous conservatism in risk choice

We analyze the risk levels chosen by agents who have private information regarding their quality, and whose performance will be judged and rewarded by outsiders. Assume that risk choice is observable. Agents will choose risk strategically to enhance their expected reputations. We show that conspicuous conservatism results: agents of different qualities choose levels below those that would be chosen if quality were observable. This happens because bad agents must cloak their identity by choosing the same risk level as good agents, and good agents are more likely to distinguish themselves if they reduce the risk level. Our results contrast starkly with those for the case when risk choice cannot be observed.

The ratio bias phenomenon: fact or artifact?

The ratio bias—according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers—has recently gained momentum, with researchers especially in health economics emphasizing the policy importance of the phenomenon. Although the bias has been replicated several times, some doubts remain about its economic significance. Our two experiments show that the bias disappears once order effects are excluded, and once salient and dominant incentives are provided. This holds true for both choice and valuation tasks. Also, adding context to the decision problem does not alter this finding. No ratio bias could be found in between-subject tests either, which leads us to the conclusion that the policy relevance of the phenomenon is doubtful at best.