Fairness and Contract Design

We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts in a moral hazard context. Bonus contracts that offer a voluntary and unenforceable bonus for satisfactory performance provide powerful incentives and are superior to explicit incentive contracts when there are some fair‐minded players, but trust contracts that pay a generous wage up front are less efficient than incentive contracts. The principals understand this and predominantly choose the bonus contracts. These results are consistent with recently developed theories of fairness, which offer important new insights into the interaction of contract choices, fairness, and incentives.     

Some Limitations of Aggregate Exposure Metrics

Aggregate exposure metrics based on sums or weighted averages of component exposures are widely used in risk assessments of complex mixtures, such as asbestos-associated dusts and fibers. Allowed exposure levels based on total particle or fiber counts and estimated ambient concentrations of such mixtures may be used to make costly risk-management decisions intended to protect human health and to remediate hazardous environments. We show that, in general, aggregate exposure information alone may be inherently unable to guide rational risk-management decisions when the components of the mixture differ significantly in potency and when the percentage compositions of the mixture exposures differ significantly across locations. Under these conditions, which are not uncommon in practice, aggregate exposure metrics may be "worse than useless," in that risk-management decisions based on them are less effective than decisions that ignore the aggregate exposure information and select risk-management actions at random. The potential practical significance of these results is illustrated by a case study of 27 exposure scenarios in El Dorado Hills, California, where applying an aggregate unit risk factor (from EPA's IRIS database) to aggregate exposure metrics produces average risk estimates about 25 times greater - and of uncertain predictive validity - compared to risk estimates based on specific components of the mixture that have been hypothesized to pose risks of human lung cancer and mesothelioma.     

Trends in the association between educational attainment and class destinations in West Germany: Looking inside the service class

The paper investigates long-term trends in the association between educational attainment and class destinations in Germany. Most recent evidence for several European countries reveals a downward effect of education on social class. To test changes in the association in Germany I use the 1976–2007 waves of the German Microcensus (GMC), which is a nationally representative, repeated cross-sectional survey. For Germany, log-linear models indicate that the relationship between education and class destinations remains rather constant for both sexes. I also find that returns to higher education in access to service class positions do not consistently decline either. Only university graduates’ relative access chances slightly decreased in comparison to Abitur-holders from the 1980s to the 1990s. In order to consider compositional changes in the service class in more detail, I further disaggregate the service class into three types of employment: administrative/managerial positions, professional experts and professional positions in the social services. In fact, I find that access to administrative and managerial positions is less dependent on education than access to the professions. While professional positions in the social services become less stratified by education over time, it is compensated by a reverse development for professional experts. As substantially more employees work in administrative and managerial jobs since the 1970s, the slight reduction in university returns can indeed be attributed to a compositional effect. In spite of these qualitative and quantitative changes, the strong impact of education on access to the service class does not become blurred. The paper concludes that the persistent institutional framework in Germany does not lead to a decline in the overall association between educational attainment and class destinations.     

How Probabilistic Risk Assessment Can Mislead Terrorism Risk Analysts

Traditional probabilistic risk assessment (PRA), of the type originally developed for engineered systems, is still proposed for terrorism risk analysis. We show that such PRA applications are unjustified in general. The capacity of terrorists to seek and use information and to actively research different attack options before deciding what to do raises unique features of terrorism risk assessment that are not adequately addressed by conventional PRA for natural and engineered systems—in part because decisions based on such PRA estimates do not adequately hedge against the different probabilities that attackers may eventually act upon. These probabilities may differ from the defender's (even if the defender's experts are thoroughly trained, well calibrated, unbiased probability assessors) because they may be conditioned on different information. We illustrate the fundamental differences between PRA and terrorism risk analysis, and suggest use of robust decision analysis for risk management when attackers may know more about some attack options than we do.     

Risk vulnerability: a graphical interpretation

The article gives a graphical interpretation of the concept of risk vulnerability. It shows that in a specific context of binary lotteries the assumption of risk vulnerability adds to prudence what the assumption of decreasing absolute risk aversion adds to risk aversion. We end the presentation showing that results can be extended to the concept of multiplicative risk vulnerability.     

Three Centuries of Global Population Growth: A Spatial Referenced Population (Density) Database for 1700–2000

The Earths surface has changed considerably over the past centuries. Since the start of the Industrial Revolution in the early 1700s, humans from the Old World started to colonize the New World. The colonization processes lead to major changes in global land use and land cover. Large parts of the original land cover have been altered (e.g., deforestation), leading to extra emissions of GHGs to the atmosphere and enhancing global climate change. The spatial and temporal aspects are still not very well known. More and more global integrated environmental assessments concerning global sustainability require long time series of global change indicators, of which population is an important one. This study presents an update of the geo-referenced historical population maps for the period 1700–2000, part of the History Database of the Global Environment (HYDE), which can be used in integrated models of global change and/or global sustainability.     

Are Adolescent Substance Users Less Satisfied with Life as Young Adults and if so,Why?

The present study investigated whether adolescent cigarette, alcohol, marijuana, and hard drug use predicts life satisfaction in young adulthood. Survey data were used from a longitudinal cohort of 2376 adolescents at ages 18 and 29, originally recruited from California and Oregon middle schools at age 13. Results of multivariate models indicated that use of cigarettes and hard drugs at age 18 was associated with lower life satisfaction at age 29, controlling for adolescent environmental, social, and behavioral factors related to lower life satisfaction, including poor mental health, loneliness, poor social skills, and Black race. Adolescent alcohol and marijuana use were not significantly related to adult life satisfaction. Low income, poor health, and cigarette use during adulthood each independently mediated the relationship between adolescent cigarette use and adult life satisfaction, together explaining 84.58% of the effect. Adult hard drug use mediated the effect of adolescent hard drug use, explaining 54.79% of the effect. Results suggest that some forms of adolescent substance use limit socio-economic opportunities, and have a lasting effect on health, consequently decreasing life-satisfaction. Continued use of substances may also lead to lower subjective well-being over time. Findings indicate a need for programs that increase social skills and effectively prevent adolescents from using substances, perhaps by incorporating information about consequences of use for socio-economic status, health, and well-being over the long term. This research was funded by grant #R01 DA 13515 from the National Institute on Drug Abuse.     

Discrimination in mortgage lending: The Home Mortgage Disclosure Act

There exists a long history of legislation at the national and state levels in the United States designed to have an impact on the home mortgage lending market. The present research makes use of data available through one national legislative act, the Home Mortgage Disclosure Act, to ascertain if some census tracts in Memphis, Tennessee are experiencing lower than expected rates of mortgage lending from conventional and governmental sources due to the percent of their population which is black. The data indicate that even after instituting objective controls, i.e., income, neighborhood conditions, and two dimensions of demand, the percent of the population which is black significantly affects (negatively) lending rates. These results are discussed in regard to (1) the implications for patterns of city growth and development, and (2) further legislative action required to make the study of such dis-crimination easier for a public charged with that responsibility.     

?Durch Dick und D��nn.�� Zum Einfluss von Partnerschaft und Partnermarkt auf das K?rpergewicht

This article analyzes how body weight is associated with the existence of an intimate partner and with the sex ratio in the marriage market. The data rely on a representative sample of the 16?C55 years old population in Germany, carried out in 2009 (Partner Market Survey 2009). In this data set, individuals?? mating opportunities for the first time are measured by their integration in a network of friends as well as in foci of activity as conceptualized by Scott Feld. Results confirm a weight increase after an intimate relationship has started (negative protection) and they also confirm a mating disadvantage corresponding to high weight (selection). Further results lead to the discovery that the weight difference between individuals with and without a partner varies according to the sex ratio in the marriage market: higher competition in the marriage market obviously corresponds to relatively lower weight of individuals without partner. Moreover, similar BMI of partners is not a result of adaption between partners over time but solely is a result of assortative mating. Consequently, mating patterns with respect to obesity have no effect on the individuals?? weight.