Linear Regression for Panel With Unknown Number of Factors as Interactive Fixed Effects

In this paper, we study the least squares (LS) estimator in a linear panel regression model with unknown number of factors appearing as interactive fixed effects. Assuming that the number of factors used in estimation is larger than the true number of factors in the data, we establish the limiting distribution of the LS estimator for the regression coefficients as the number of time periods and the number of cross‐sectional units jointly go to infinity. The main result of the paper is that under certain assumptions, the limiting distribution of the LS estimator is independent of the number of factors used in the estimation as long as this number is not underestimated. The important practical implication of this result is that for inference on the regression coefficients, one does not necessarily need to estimate the number of interactive fixed effects consistently.     

Split‐Award Procurement Auctions—Can Bayesian Equilibrium Strategies Predict Human Bidding Behavior in Multi‐Object Auctions?

We analyze if and when symmetric Bayes Nash equilibrium predictions can explain human bidding behavior in multi‐object auctions. We focus on two sealed‐bid split‐award auctions with ex ante split decisions as they can be regularly found in procurement practice. These auction formats are straightforward multi‐object extensions of the first‐price sealed‐bid auction. We derive the risk‐neutral symmetric Bayes Nash equilibrium strategies and find that, although the two auction mechanisms yield the same expected costs to the buyer, other aspects of the two models, including the equilibrium bidding strategies, differ significantly. The strategic considerations in these auction formats are more involved than in single‐lot first‐price sealed‐bid auctions, and it is questionable whether expected utility maximization can explain human bidding behavior in such multi‐object auctions. Therefore, we analyzed the predictive accuracy of our equilibrium strategies in the laboratory. In human subject experiments we found underbidding, which is in line with earlier experiments on single‐lot first‐price sealed‐bid auctions. To control for regret, we organize experiments against computerized bidders, who play the equilibrium strategy. In computerized experiments where bid functions are only used in a single auction, we found significant underbidding on low‐cost draws. In experiments where the bid function is reused in 100 auctions, we could also control effectively for risk aversion, and there is no significant difference of the average bidding behavior and the risk‐neutral Bayes Nash equilibrium bid function. The results suggest that strategic complexity does not serve as an explanation for underbidding in split‐award procurement auctions, but risk aversion does have a significant impact.     

Relative Risk Aversion: What Do We Know?

The relative risk aversion measure that represents the risk preferences of a decision maker depends on the outcome variable that is used as the argument of the utility function, and on the way that outcome variable is defined or measured. In addition, the relationship between any two such relative risk aversion measures is determined by the relationship between the corresponding outcome variables. These well-known facts are used to adjust several reported estimates of relative risk aversion so that those estimates can be directly compared with one another. After adjustment, the significant variation in the reported relative risk aversion measures for representative decision makers is substantially reduced. JEL Classification: D81     

Social Workers' Responses to Experiences of Fear

Correspondence to Martin Smith, EDT c/o Social Services Department, Easton Street, High Wycombe, Buckinghamshire, HP11 1NH. E-mail: msmith{at}buckscc.gov.uk Summary This paper follows on from the paper ‘Social workers’experiences of fear’, written by the same authors, reportingon a research study that showed how social workers interviewedexperienced fears of assault, death, losing control and rejectionfrom their seniors during their working hours. Now, from thesame study, examples are given that illustrate ways in whichparticipants were affected by, and responded to, these fears.Substantive quotations from in-depth interviews are providedshowing effects of fears as being physical, cognitive and emotionaland as manifesting themselves differently with the passing oftime. Also given are examples of what it was that participantsfound to be helpful, or unhelpful, when attempting to deal withtheir fears and particular attention is paid to supervisionin this respect. The paper argues that drama therapy literaturehas much relevance to the management of fear as participantsoften reported different parts of themselves performing roleswhen affected by and responding to fears. Implications for socialwork training are considered in this light. Generally, it isclaimed that the more social workers can learn about fear andits manifestations and implications in their work, the betterthey will be able to respond to it and deal with it.     

Testing the Validity of the Sibling Sex Ratio Instrument

We test the validity of the sibling sex ratio instrument suggested by Angrist and Evans using the methods proposed by Kitagawa and Huber and Mellace. The sex ratio of the first two siblings is arguably randomly assigned and influences the probability of having a third child, which makes it a candidate instrument for fertility when estimating the effect of fertility on female labor supply. However, identification hinges on the random assignment of the instrument, an instrumental exclusion restriction, and the monotonicity of fertility in the instrument. We find that the instrumental variable tests of Kitagawa and Huber and Mellace do not point to a violation of these assumptions in the Angrist and Evans data (which can, however, not be ruled out even asymptotically as the tests cannot detect all possible violations).     

Group psychotherapy with pathological gamblers

This paper reviews some of the group therapy techniques utilized in the authors' work with pathological gamblers. These conceptual tools ranged from rational-emotive psychotherapy to Zen philosophy which provided a background and foundation for working with pathological gamblers. Many therapeutic and antitherapeutic beliefs and behaviors of gamblers are discussed including narcissism, manipulative behavior, and rejection of Gamblers Anonymous. Each technique, behavior or belief discussed is explained in terms of how each affects the group process and how each is managed in group therapy.This paper represents a discourse on the group treatment of pathological gamblers primarily from the experiences of Julian Ingersoll Taber, Ph.D. who was the coordinator of the Gambling Treatment Program at the Cleveland Veterans Administration Medical Center for seven years. Dr. Taber is currently Chief of the Addictive Disorders Treatment Program at the Veterans Administration Medical Center in Reno, Nevada. Martin Paul Chaplin, Ph.D., who is specializing in the treatment of addiction, assisted in the theoretical and editorial aspects of this article. He worked under the aegis of Dr. Taber as an intern at the Gambling Treatment Program and currently has a position at Community Mental Health Services of Medina in Ohio.     

Changing class complexions on and in the British countryside

This paper explores the class complexion of the English and Welsh countryside utilising the National Statistics Socio-Economic Classification (or NS-SEC), as well as reflecting on the value of this classification given claims as to the ‘death of class’ as a meaningful subject of analysis. The paper situates analysis using the NS-SEC in a paradoxical context, whereby its very use appears, on the one hand, to demonstrate successful incorporation of academic constructions of class into the agencies of governmental social statistical production, while, on the other hand, academic discourses, including some within rural studies, appear to have undermined its very rationale. The paper argues that the classification lends support to claims that rural studies have used an overly aggregative concept of the middle class that obscures the spatial distribution of classes in the British countryside, although interpretation of the classification also needs to consider a range of broader criticisms of class analysis. The paper concludes by suggesting that the paradox surrounding the classification and rural class analysis more generally might be viewed through Latour's, [1999. Pandora's hope. Harvard University Press, London] concept of knowledge as a ‘circulatory system.’     

Markov Poisson regression models for discrete time series. Part 1: Methodology

This paper proposes and investigates a class of Markov Poisson regression models in which Poisson rate functions of covariates are conditional on unobserved states which follow a finite-state Markov chain. Features of the proposed model, estimation, inference, bootstrap confidence intervals, model selection and other implementation issues are discussed. Monte Carlo studies suggest that the proposed estimation method is accurate and reliable for single- and multiple-subject time series data; the choice of starting probabilities for the Markov process has little eff ect on the parameter estimates; and penalized likelihood criteria are reliable for determining the number of states. Part 2 provides applications of the proposed model.