Decision making with stochastic dominance: An expository review

This paper surveys the use of stochastic dominance to decision making under uncertainty. The first part presents the relevant definitions and some properties of distributions satisfying one of the stochastic dominance conditions. These properties include restrictions on moments, an invariance property, and properties of random variables related by an exact formula.The second part contains some applications of the stochastic dominance method and especially the problem of selecting optimal portfolios. Most of the results in this section deal with conditions that make diversification an optimal strategy.     

NONVERBAL RECIPROCITY IN NONDISTRESSED MARITAL PARTNERS: AN EXAMINATION OF BASE RATE CHANGE*

The present study sought to incorporate recent suggestions for reciprocity research into an experimental design which could use behavioral base rate change as a method for determining nonverbal reciprocity in nondistressed couples. This study examined reciprocity by surreptitiously manipulating the touching behavior of one spouse, and monitoring responses of the other spouse. Forty couples were randomly assigned to either an experimental or control group. Couples were videotaped engaging in an assigned task which permitted interaction. During the interaction, positive touches, smiles, and headnods were monitored. Following instruction to do so, selected spouses in the experimental group increased their rate of touches. Results indicated that, in response, naive spouses subsequently increased their rate of touches. The results of this experiment provide supportive evidence for the lawful nature of reciprocity. The implications of these findings, and suggestions for subsequent reciprocity research, are forwarded.     

Process and evaluation of a group intervention for mothers with parenting difficulties

Twenty-one mothers with severe parenting difficulties, including 12 children on the Child Protection Register, were involved in an intensive parenting intervention. The 4-month group-based package included psychotherapy to allow mothers to come to terms with past and present stressors, and direct and video work with mothers and children using a multi-dimensional model of parenting. Considerable positive change in interaction and child centredness was evident when before and after videotapes of the mothers and children were compared. Negative interaction dropped to one-quarter of the pre-group level and mothers were more effective in exercising appropriate control. Of the 12 children on the Child Protection Register, 10 subsequently had their names removed, with both remaining children returning to the mother's care from compulsory care. This compares favourably with area figures, suggesting that about one-third of children are removed annually from the register. The multi-dimensional model of parenting not only provided a basis for measuring mother's skills but a coherent focus for intervention.     

Rhythmic organization of social interaction and observer ratings of positive affect and involvement

Many investigators have speculated that a high degree of rhythmic patterning of social interaction and close coupling between the activity rhythms of partners are associated with positive affect, attachment, and interpersonal attraction. Others suggest that predictable or rhythmic patterning is an indication of inflexibility, and that close linkages between the physiological arousal of partners are associated with negative affect. In the present study, spectral and cross spectral analyses were applied to vocal activity and heart rates recorded during 12 conversations. Indexes of rhythmicity and strength of coupling were derived and used as predictors of observer ratings of pleasantness of affect and degree of involvement. There was a curvilinear relationship between affect and rhythmicity of vocal activity, such that moderately rhythmic social interactions were evaluated most positively. This relationship remained statistically significant even when other variables (such as mean and standard deviation of amount of vocal activity) were statistically controlled. Strength of coupling between partner vocal activity patterns and strength of coupling between the vocal activity and heart rate within speaker were not statistically significant predictors of ratings of pleasantness. Results suggest that there may be an optimum degree of rhythmicity in social interaction, with moderately rhythmic interactions evaluated most positively.We gratefully acknowledge support from the Central University Research Fund and from the Office of the Dean of Liberal Arts at the University of New Hampshire. Thanks to Kim Mooney, Charles Dufour, Mark Henn and Jay Goober for their contribution in developing the coding system.     

When opposites do (and do not) attract: Interplay of leader and follower self-identities and its consequences for leader–member exchange

Employees' self-identities, or the ways in which they define themselves relative to others, have implications for the quality of leader and follower relationships at work. Although self-identity has been examined within the context of transformational and charismatic leadership, its relevance for leader–member exchange (LMX) has received little attention. In this study we integrate LMX and self-identity theories. Doing so proved useful because it was found that leader and follower identities predicted LMX quality, as did the fit between leader and follower identities and interactions among fit at different self-identity levels. LMX quality fully mediated relationships of self-identity fit with job performance, regardless of whether LMX was reported by subordinates or their supervisors. Lastly, we also found that self-identity predicted LMX agreement across supervisors and subordinates. Implications of our findings for theory and practice are discussed.     

Detection of symmetry or lack of 11 and applications

Developed is a method for using a random sample to select between the model of symmetry of the sampled distribution and the model of skewness to the right. The technique is meant to be used as a preliminary step, in the analysis of data, which is to be followed by other inferential procedures. Two examples of this use, which pertain to robust regression and quantile estimation, are discussed.     

Alternative specifications of the demand for money and their implications for forecasting and policy analysis with large macroeconomic models

The demand for money is an important function in large macroeconomic models because of its central role in monetary policy. The interest rate responsiveness of money demand determines the interest rate changes consistent with the initial change in monetary policy and the subsequent changes on aggregate demand and the price level. This paper uses the DRI macroeconometric model to investigate these issues, finding that the model's predictive power and its estimates of the relative potency of monetary and fiscal policy are dependent upon the specification of the money demand function.