PERFORMANCE OF THE EXPECTED UTILITY METHOD AND TWO OTHER NORMATIVE METHODS IN INSURANCE DECISION MAKING*

In an experiment, thirty-six professional insurance men employed the utility method, the worry method, and the comparison method in two insurance problems to determine the appropriate insurance coverage. It was found that the best act with the utility method almost always was no insurance, whereas the best act with the other two methods tended to be complete insurance. The utility method best act rarely agreed with the subject's actual preferred act, while the comparison method best act usually was the same or almost the same as the actual preferred act. While the worry method suggests that the subjects typically are risk averse, the utility functions obtained tend to show that the subjects typically are not risk averse.     

A new heteroscedastic regression to analyze mass loss of wood in civil construction in Brazil

A heteroscedastic regression based on the odd log-logistic Marshall–Olkin normal (OLLMON) distribution is defined by extending previous models. Some structural properties of this distribution are presented. The estimation of the parameters is addressed by maximum likelihood. For different parameter settings, sample sizes and some scenarios, various simulations investigate the performance of the heteroscedastic OLLMON regression. We use residual analysis to detect influential observations and to check the model assumptions. The new regression explains the mass loss of different wood species in civil construction in Brazil.     

Physician career management: organizational strategies for the 21st century.

Burnout is a state of physical, emotional, and mental exhaustion caused by long-term involvement in situations that are emotionally demanding. It is not stress, per se, that causes burnout, as many thrive in stressful, demanding careers. Rather, burnout results when stress continuously outweighs the sense of effectiveness, accomplishment, and reward. And, this fate is sealed when one feels helpless to effect significant change in the conditions that fuel the stress. Establishing an organizational environment that reduces the risk of physician burnout requires a new commitment of resources, one that can be challenging to justify to decision-makers with a strictly short-term, bottom line orientation. The key issues to consider in shaping a physician career management program include: (1) entry of new physician employees into the organization; (2) productivity measures; (3) responsiveness to safety concerns; (4) administrative and policy issues; and (5) variety and growth opportunities.     

On the number of separable partitions

Consider partitions of a given set A of n distinct points in general position in ℝ ^d into parts where each pair of parts can be separated by a hyperplane that contains a given set of points E. We consider the problem of counting and generating all such partitions (correcting a classic 1967 result of Harding about the number of such partitions into two parts). Applications of the result to partition problems are presented.     

“How Exposed Is Exposed Enough?” Lay Inferences About Chemical Exposure

The concept of exposure is central to chemical risk assessment and plays an important role in communicating to the public about the potential health risks of chemicals. Research on chemical risk perception has found some indication that the model lay people use to judge chemical exposure differs from that of toxicologists, thereby leading to different conclusions about chemical safety. This paper presents the results of a series of studies directed toward developing a model for understanding how lay people interpret the concept of chemical exposure. The results indicate that people's beliefs about chemical exposure (and its risks) are based on two broad categories of inferences. One category of inferences relates to the nature in which contact with a chemical has taken place, including the amount of a chemical involved and its potential health consequences. A second category of inferences about chemical exposure relates to the pragmatics of language interpretation, leading to beliefs about the motives and purposes behind chemical risk communication. Risk communicators are encouraged to consider how alternative models of exposure and language interpretation can lead to conflicting conclusions on the part of the public about chemical safety.     

Why the Infinite Decision Puzzle is Puzzling

Pulier (2000, Theory and Decision 49: 291) and Machina (2000, Theory and Decision 49: 293) seek to dissolve the Barrett–Arntzenius infinite decision puzzle (1999, Theory and Decision 46: 101). The proposed dissolutions, however, are based on misunderstandings concerning how the puzzle works and the nature of supertasks more generally. We will describe the puzzle in a simplified form, address the recent misunderstandings, and describe possible morals for decision theory.     

Does Privatization Protect Natural Resources? Property Rights and Forests in Guatemala

Objectives . Property rights are central to debates about natural resource policy. Governments traditionally have been seen as the appropriate custodians of natural resources for their citizens. More recently, many argue the privatization of property rights will ensure that users have incentives to manage their resources well. Common property, to the extent it is discussed at all, is seen as leading to the tragedy of the commons. We evaluate these claims by assessing property rights and forest conditions in two private and three communal forests in Guatemala. Methods . Data on biological and social phenomena from five forests (151 plots) and their associated communities were collected using the International Forestry Resources and Institutions Research Program protocols. Ordinary least squares regression was used to analyze four models. We examined t -scores for differences in coefficients for the different models. Results . The models demonstrate that de jure property rights are not a powerful predictor of variations among the sampled forests. Conclusions . We argue that de facto institutions and their enforcement are much more important than de jure property rights to forest management. Communities holding a forest in common can, under certain circumstances, create institutions to manage their resources as successfully as—or more successfully than—private owners.     

Choices at various levels of uncertainty: An experimental test of the restated diversification theorem

Our “Restated diversification theorem” (Skogh and Wu, 2005) says that risk-averse agents may pool risks efficiently without assignment of subjective probabilities to outcomes, also at genuine uncertainty. It suffices that the agents presume that they face equal risks. Here, the theorem is tested in an experiment where the probability of loss, and the information about this probability, varies. The result supports our theorem. Moreover, it tentatively supports an evolutionary theory of the insurance industry—starting with mutual pooling at uncertainty, turning into insurance priced ex ante when actuarial information is available.     

The Proportion of Gaming Revenue Derived from Problem Gamblers: Examining the Issues in a Canadian Context

The legitimacy of government-sponsored gambling and its continued expansion depends in part on the impact that gambling has on society and the extent to which gambling revenue is derived from vulnerable individuals. The purpose of the present article is to try to establish a valid estimate of the proportion of gaming revenue derived from problem gamblers in Canada. Using recent secondary data collected in eight Canadian provinces, we estimate this proportion to be 23.1%, compared to a problem gambling prevalence rate of 4.2%. This estimate must be seen as tentative, however, as self-reported expenditures are 2.1 times higher than actual provincial gaming revenues.