Flexibility of choice versus reduction of ambiguity

This paper explores the problem of a social planner willing to improve the welfare of individuals who are unable to compare all available alternatives. The optimal decision trades off the individuals’ desire for flexibility versus their aversion towards ambiguous choice situations. We introduce an axiom system that formalizes this idea. Our main result characterizes the preference maximizing opportunity set. It is a maximal set that consists of mutually comparable alternatives. It also has the property that it maximizes the sum of the distances between its ordered elements for some appropriate pseudometric imposed on the set of possible choices.     

Cultural Organizations and the State: Art and State Support in Contemporary Britain

Only a small proportion of research in the sociological field of arts and culture is on the state and its effects. Literature which touches on this topic often comes from the policy arena and the wide variety of disciplines interested in public policy. Research tends to focus on two key themes: funding and censorship. But the effects of state actions are much broader. Moreover, state support is often set in opposition to the market, but markets and state systems usually exist together. It is ironic that the effects of the state on cultural organizations are increasingly studied at just this point in time, when states are scaling back their involvement and privatization is coming to the fore. Focusing on cultural organizations usually associated with the fine arts (museums and performing arts organizations), I illustrate some of these themes with a discussion of recent events in the UK.     

Resisting the Neo‐liberal Poverty Discourse: On Constructing Deadbeat Dads and Welfare Queens

This article describes the impact of both neo‐liberal and conservative discourse upon poverty policy and welfare reform. In it, I summarize the discursive construction of welfare queens and deadbeat dads and the influence upon welfare reform while incorporating globalization in the discursive critique. This paper also describes the resistance to the discourse evidenced by those most affected by the poverty or welfare reform discourse. I suggest ways of critically examining our own discourse as well as the welfare reform discourse and our participation in it or resistance to it. The conclusion questions assumptions about dependency, welfare receipt and justice.     

OPTIMAL EXCHANGE RATES: A MARKET MICROSTRUCTURE APPROACH

Motivated by the observation that exchange‐rate management resembles market‐making, we use microstructure theory to conduct a welfare analysis of exchange‐rate management, including the “corner solutions” of a free float and a fixed peg. We show that a policy that smoothes out exchange‐rate fluctuations needs to trade off the welfare gain due to lower risk exposure of local producers against the trading losses that the policy would generate due to speculation. We identify the conditions under which exchange‐rate management can increase welfare and argue that these conditions are more likely to be satisfied in illiquid markets, mainly small economies and emerging markets. We also explore the role of a Tobin tax (assuming enforceability) in facilitating exchange‐rate management. (JEL: E58, F31, G14, O24)     

NORMS MAKE PREFERENCES SOCIAL

We explore the idea that prosocial behavior in experimental games is driven by social norms imported into the laboratory. Under this view, differences in behavior across subjects is driven by heterogeneity in sensitivity to social norms. We introduce an incentivized method of eliciting individual norm‐sensitivity, and we show how it relates to play in public goods, trust, dictator, and ultimatum games. We show how our observations can be rationalized in a stylized model of norm‐dependent preferences under reasonable assumptions about the nature of social norms. Then we directly elicit norms in these games to test the robustness of our interpretation.