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.     

Applying State Space to SPC: Monitoring Multivariate Time Series

Monitoring cross-sectional and serially interdependent processes has become a new issue in statistical process control (SPC). In up-to-date SPC literature, Kalman filtering was reported to monitor univariate autocorrelated processes. This paper applies a Kalman filter or state-space method for SPC to monitoring multivariate time series. We use Aoki's approach to estimate the parameter matrices of a state-space model. Multivariate Hotelling T ² control charts are employed to monitor the residuals of the state-space. Examples of this approach are illustrated.     

ALTRUISM, MATCHING, AND NONMARKET INSURANCE

Incomplete market insurance gives rise to nonmarket arrangements for coinsurance. We find that the effort altruistically linked individuals take to avoid an accident increases with the degree of altruism. If the degree of altruism is sufficiently high, an economy with nonmarket insurance yields higher social welfare than an economy without nonmarket insurance. As altruism increases, the equilibrium level of effort approaches the second-best solution without the need for costly monitoring. Coinsurance is above (below) the socially optimal level if individuals place greater weight (less weight) on their own utility than on that of their partners.     

A Social Choice Lemma on Voting Over Lotteries with Applications to a Class of Dynamic Games

We prove a lemma characterizing majority preferences over lotteries on a subset of Euclidean space. Assuming voters have quadratic von Neumann–Morgenstern utility representations, and assuming existence of a majority undominated (or “core”) point, the core voter is decisive: one lottery is majority-preferred to another if and only if this is the preference of the core voter. Several applications of this result to dynamic voting games are discussed.This paper was completed after Jeff Banks’s death. John Duggan is deeply indebted to him for his friendship and his collaboration on this and many other projects.     

The Obese Smoker's Wage Penalty*

Objective. Smoking and obesity are associated with significant wage penalties when considered separately. We assess the combined effects of those behaviors. Methods. We estimate the effects of smoking and obesity on wages using multivariate regression analysis with 1979 National Longitudinal Survey of Youth data. Results. The raw data indicate that obese smokers experience large earnings penalties. However, these penalties are not found to be interactive or directly causal for most of the demographic subgroups we examine. One exception is the wage penalty associated with obesity for females, which remains significant throughout the analysis. Conclusions. In the absence of a demonstrable direct causal effect of those behaviors on wages, associated individual‐specific socioeconomic factors appear to be the driving forces behind the obese smoker wage penalty. Not included, but potentially significant, are the effects of employer and customer discrimination against obese smokers and the possible labor policy implications of such discrimination.     

A Small-Sample Estimator for the Sample-Selection Model

A semiparametric estimator for evaluating the parameters of data generated under a sample selection process is developed. This estimator is based on the generalized maximum entropy estimator and performs well for small and ill-posed samples. Theoretical and sampling comparisons with parametric and semiparametric estimators are given. This method and standard ones are applied to three small-sample empirical applications of the wage-participation model for female teenage heads of households, immigrants, and Native Americans.     

Place, Culture, and the Social Amplification of Risk

This article investigates the role of culture in the social production of risks and risk communication surrounding industrial development in a region located at a rural-urban interface. A case study examined a public consultation that was undertaken to inform local residents about an eco-industrial development proposal being planned near Edmonton, Alberta, Canada. The research employed the social amplification of risk framework (SARF) to examine the relationships among culture, place, and socially constructed risk. A total of 44 in-depth, semi-structured interviews were carried out with 33 landowners (farmers, acreage owners), public officials (municipal politicians, administrators), journalists, and industry representatives. Analysis revealed that risk communication occurred in relation to situated experiences of place that were based on conflicting cultural worldviews. The research shows that place is a useful component of the SARF, providing a spatial explanation for why some people amplify, and others attenuate, risks in locally contentious environmental debates.