Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change

Willingness to support public programs for risk management often depends on individual subjective risk perceptions in the face of uncertain science. As part of a larger study concerning climate change, we explore individual updated subjective risks as a function of individual priors, the nature of external information, and individual attributes. We examine several rival hypotheses about how subjective risks change in the face of new information (Bayesian updating, alarmist learning, and ambiguity aversion). The source and nature of external information, as well as its collective ambiguity, can have varying effects across the population, in terms of both expectations and uncertainty.JEL Classification  D8, Q51, Q54     

Smoking Restrictions as a Self-Control Mechanism

Using data from Current Population Survey Tobacco Use Supplements spanning 1992–2002, this study shows that smokers who plan to quit smoking are more supportive of regulations than are other smokers. Failed quitters who plan to try again are more supportive of restrictions than are smokers planning to quit for the first time. These findings indicate that many smokers support regulatory restrictions to reduce their costs of quitting by exploiting the discipline offered by regulatory control. From 1992 to 2002, support for smoking restrictions in public areas rose dramatically among both nonsmokers and smokers.JEL Classification: I180, I120, H000     

A Learning-Efficiency Explanation of Structure in Language

This paper proposes a learning-efficiency explanation of modular structure in language. An optimal grammar arises as the solution to the problem of learning a language from a minimal number of observations of instances of the use of the language. Agents face symmetry constraints that limit their ability to make a priori distinctions among symbols used in the language and among objects (interpreted as facts, events, speakers intentions) that are to be represented by messages in the language. It is shown that if it is commonly known that the object space is modular and messages are strings, then modularity of the language is sufficient and (essentially) necessary for learning efficiency. Journal of Economic Literature Classification Number: C72.I am grateful to Hsueh-Ling Huynh, Bart Lipman, Ariel Rubinstein and Birger Wernerfelt for stimulating discussions and comments. Many thanks are due to the anonymous referee for suggestions that have helped to improve the focus and presentation of the paper. I have benefitted from comments by seminar participants at Arizona State University, Boston University, the University of California-San Diego, the University of Pittsburgh, the Wissenschaftszentrum Berlin für Sozialforschung (WZB), the Midwest Mathematical Economics Meetings, and the Summer in Tel Aviv (SITA). This research was supported by a Grant from the National Science Foundation.     

SLOW INFORMATION DIFFUSION AND THE INERTIAL BEHAVIOR OF DURABLE CONSUMPTION

This paper studies the aggregate dynamics of durable and nondurable consumption under slow information diffusion (SID) due to noisy observations and learning within the permanent income hypothesis framework. We show that SID can significantly improve the model's predictions on the joint behavior of income, durable consumption, and nondurable consumption at the aggregate level. Specifically, we find that SID can significantly improve the model's predictions for: (i) smoothness in durable and nondurable consumption, (ii) autocorrelation of durable consumption, and (iii) contemporaneous correlation between durable and nondurable consumption.     

Union magazines’ coverage of the NAFTA controversy before congressional approval

Congressional consideration of the North American Free Trade Agreement (NAFTA) in 1993 drew intense labor lobbying. Unions acted to motivate members to contact their representatives and senators, including use of their magazines as advocacy and informational tools. Union magazines, which are littlestudied but potentially influential advocacy tools, attacked the pact and urged readers to take political action. Their coverage focused on jobrelated critiques, especially predictions of a job drain to Mexico and lower wages for U.S. workers. Much less attention went to environmental and other perceived flaws of NAFTA. Language in those articles was frequently more heated than in the mainstream media.     

AN ANALYSIS OF THE IMPACT OF CONGRESSIONAL TERM LIMITS

We examine the impact of a six-term tenure limit on members of the U.S. House of Representatives. The first part of this study develops a methodological framework for simulating the quantitative impact of term limits. The second part of this study uses this framework to estimate the effects of term limits on (i) the value of holding office, (ii) turnover, and (iii) the size of the Democratic majority in the House. Both steady-state and transition period effects are explored.     

Estimation of a multivariate mean with constraints on the norm

Estimation of the mean θ of a spherical distribution with prior knowledge concerning the norm ||θ|| is considered. The best equivariant estimator is obtained for the local problem ||θ|| = λ₀, and its risk is evaluated. This yields a sharp lower bound for the risk functions of a large class of estimators. The risk functions of the best equivariant estimator and the best linear estimator are compared under departures from the assumption ||θ|| = λ₀.     

Explaining the Third Sector in South Korea

The paper presents the main characteristics and the distinctive nature of the South Korean third sector compared to most Western countries. Differences are explained in terms of cultural embededdness and political embededdness—in particular with respect to the import of Confucianism (or neo-Confucianism) and of human rights abuse in articulation with a strong ideology of anticommunism that has been developed by a succession of dictatorial regimes since the end of the Japanese colonization of Korea. The paper concludes by highlighting positive factors for the future development of the third sector in Korea.