Testing Fair Wage Theory

Fairness considerations often are invoked to explain wage differences that appear unrelated to worker characteristics or job conditions, but non-experimental tests of fair wage models are rare because market data rarely permit researchers to measure individual workers’ productivity and its value. We use data from the baseball labor market to address this problem, and find no support for fair wage theory. We do find, however, that fairness premia can be illusory: Wages appear to incorporate fairness premia in regressions that control for variation in individuals’ physical output, but such premia evaporate when the value of that output is held constant.

Efficiency of Microfinance Institutions in the Mediterranean: An Application of DEA

By applying the non-parametric Data Envelopment Analysis (DEA) method, even with all the limitations where error could cause significant problems, this paper attempts to investigate the efficiency of 35 Microfinance institutions in the Mediterranean zone during the period of 2004–2005. The estimated results prove that eight institutions are relatively efficient, and have a notable level of average efficiency and a potential of evolution while being referent to their technical efficiency. The survey also reveals that the size of the MFIs has a negative effect on their efficiency since the MFIs of medium size are more efficient than the eminent.

Intertemporal choice under timing risk: An experimental approach

This paper investigates how individuals evaluate delayed outcomes with risky realization times. Under the discounted expected utility (DEU) model, such evaluations depend only on intertemporal preferences. We obtain several testable hypotheses using the DEU model as a benchmark and test these hypotheses in three experiments. In general, our results show that the DEU model is a poor predictor of intertemporal choice behavior under timing risk. We found that individuals are averse to timing risk and that they evaluate timing lotteries in a rank-dependent fashion. The main driver of timing risk aversion is nothing but probabilistic risk aversion that stems from the nonlinear treatment of probabilities.     

Social closure in American elite higher education

Elite college admissions exemplify processes of social closure in which status-group conflict, organizational self-interest, the strategic use of cultural ideals of merit, and broader social trends and contingent historical events interweave to shape institutional power in the United States. The Chosen, Jerome Karabel’s monumental study of the history of college admissions at Harvard, Yale, and Princeton from 1900 to 2005, offers a political sociology of elite recruitment and a cultural and social history of the definition of merit that has guided these three schools and shaped much current thinking about college admissions. As Max Weber reminded us, the very definition of cultural ideals of an epoch bear the stamp of elite group domination: not cultural ideals but cultural interests and their strategic uses guide institutional power. The book provides an impressive empirical demonstration of that proposition: it identifies four different definitions of merit as organizational gatekeeping tools that have guided Harvard, Yale, and Princeton over the last hundred years and shows how these definitions were molded by status-group conflict and organizational interests. This essay outlines the central arguments of Karabel’s book; it identifies key contributions for our understanding of the history, culture, organizational interests, and politics of these three institutions; it highlights the social closure framework guiding the analysis; and it reflects on a fundamental ambiguity in Karabel’s thinking about meritocratic ideals as governing principles for modern stratified societies. A review essay on Jerome Karabel, The Chosen: The Hidden History of Admission and Exclusion at Harvard, Yale, and Princeton. Boston: Houghton Mifflin, 2005,

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An experimental investigation of risk sharing and adverse selection

Does adverse selection hamper the effectiveness of voluntary risk sharing? How do differences in risk profiles affect adverse selection? We experimentally investigate individuals’ willingness to share risks with others. Across treatments we vary how risk profiles differ between individuals. We find strong evidence for adverse selection if individuals’ risk profiles can be ranked according to first-order stochastic dominance and only little evidence for adverse selection if risk profiles can only be ranked according to mean-preserving spreads. We observe the same pattern also for anticipated adverse selection. These results suggest that the degree to which adverse selection erodes voluntary risk sharing arrangements crucially depends on the form of risk heterogeneity.     

Unfinished modernity or another modernity? The South Korean case

South Korea has experienced “compressed capitalist development” over the last five decades, characterized by unprecedented levels of industrialization and democratization, with other distinctive features. This development experience causes some scholars to view the country as a site for a new modernity, following the Western prototype. Concerning the underlying nature of emerging modernity in South Korea, however, there have been controversial insights: some scholars argue that the country is now experiencing a Western type of modernity, and others refute this, saying that it has not at all been modernized. This paper investigates the dynamics and contradictions of capitalist development in South Korea from a perspective of vertical modernization. It considers the origins, process, and outcomes of modernization mainly in terms of democracy, economic growth, and welfare. We assume that there are “different sites and forms of modernity” in the world, and that South Korea would be a good candidate to examine for non-Western modernity. Yet it is our contention that the country’s modernity has been distorted and unbalanced in the development of society, culture, politics, and economy. Historically, South Korea has progressed through traditional unmodernity, colonial undermodernity, and Western modernity. A clear examination of the country’s development experience reveals to no small degree the complex nature of modernity, in that tradition, modernity, and postmodernity coexist in the present time. We conclude that South Korean modernity is an incomplete project still in progress.     

An Experimental Evaluation of the Serial Cost Sharing Rule

This paper proposes an experimental test to evaluate the performance of the serial cost sharing rule, originally proposed by Shenker [Sigmetrics, 241–242 (1990)] and then analyzed by Moulin and Shenker [Econometrica 60, 1009–1037 (1992)]. We report measures of the performance and efficiency of the serial mechanism by comparing the choices and payoffs attained by the subjects to the expected equilibrium allocations. Experimental evidence shows that learning is needed for the subjects to converge to the equilibrium strategy. However, in terms of efficiency, the serial mechanism leads to almost efficient allocations.     

Extreme Copulas and the Comparison of Ordered Lists

We introduce two extreme methods to pairwisely compare ordered lists of the same length, viz. the comonotonic and the countermonotonic comparison method, and show that these methods are, respectively, related to the copula T _M (the minimum operator) and the Ł ukasiewicz copula T _L used to join marginal cumulative distribution functions into bivariate cumulative distribution functions. Given a collection of ordered lists of the same length, we generate by means of T _M and T _L two probabilistic relations Q ^M and Q ^L and identify their type of transitivity. Finally, it is shown that any probabilistic relation with rational elements on a 3-dimensional space of alternatives which possesses one of these types of transitivity, can be generated by three ordered lists and at least one of the two extreme comparison methods.