The Chairman’s Paradox Revisited

This paper re-examines the so-called ‘chairman’s paradox‘ that was first noticed by Farquharson in his path breaking tract on sophisticated voting, Theory of Voting (1969). The Chairman’s paradox is concerned with the case of a three member committee in which a particular player who has a regular and a tie-breaking vote – the ‘chairman’ – not only will do worse in specific instances under the plurality procedure for three alternatives than if he did not have such a vote, but will also do worse overall. That is, the chairman’s a priori probability of success (‘getting what one wants’) for all possible games with linear (strict) preference orders is lower than that of the two regular members. It is demonstrated that this result, which comes about if voters act strategically rather than sincerely, is not as robust as it has been thought to be. By merely replacing the standard assumption of linear preference orders with weak preference orders, which allow for indifference, we can escape from the paradox for the canonical case of three players and three alternatives. With weak preference orders, the a priori success of the chairman is now greater than that of the other two players. We also point to a new paradox of sophisticated voting.     

Measuring power and satisfaction in societies with opinion leaders: an axiomatization

Opinion leaders are actors who have some power over their followers as they are able to influence their followers’ choice of action in certain instances. In van den Brink et al. (Homo Oeconomicus 28:161–185, 2011) we proposed a two-action model for societies with opinion leaders. We introduced a power and a satisfaction score and studied some common properties. In this paper we strengthen two of these properties and present two further properties, which allows us to axiomatize both scores for the case that followers require unanimous action inclinations of their opinion leaders to follow them independently from their own action inclinations.     

Leader evaluations after performance feedback: The role of follower mood

Team and organizational failures can negatively impact leadership perceptions, as followers tend to attribute performance outcomes to leadership. The current study explores how follower mood moderates this effect. In two experiments, the first with students (N = 132) and the second with a sample of the working population (N = 229), we show that performance information has a weaker effect on leadership evaluations when the follower is in a positive mood as compared with a negative mood. In addition, we show that this moderation effect holds for performance information about the team as well as the leader. We discuss how these findings extend the cognitive follower-centric perspective on leadership by acknowledging affective influences and explore several counter-intuitive implications of these findings.     

Grave fraudulence in medical device research: a narrative review of the PIN seeding study for the Pinnacle hip system

In 2001, DePuy, a wholly-owned subsidiary of Johnson & Johnson (J&J/DePuy), initiated a seeding study called the “Multi-center, Prospective, Clinical Evaluation of Pinnacle Acetabular Implants in Total Hip Arthroplasty” (PIN Study). J&J/DePuy designed this study to develop new business opportunities during the launch of their Pinnacle Hip System (PHS) and generate survivorship data for marketing. This article, the first review of a seeding trial for a medical device, examines internal company documents relating to the PIN Study; the analysis herein focuses on the integrity of J&J/DePuy’s research practices in conception, implementation, and analysis. J&J/DePuy violated the study protocol and manipulated data; consented participants in violation of standards protecting human subjects; and did not secure Institutional Review Board approval for all study sites. J&J/DePuy used PIN Study results as the “fundamental selling point” for the PHS. Medical device seeding trials are distinct from previously-documented pharmaceutical seeding trials because companies can profit directly from device sales and because these studies may be the first clinical evaluation of the device (as was the case for the PIN Study). Seeding trials are malleable marketing projects, not rigorous scientific studies. Regulatory bodies, physicians, and others should be vigilant for persuasive marketing accounts disguised as science.     

Do individual investors learn from their mistakes?

Based on recent empirical evidence which suggests that as investors gain experience, their investment performance improves, we hypothesize that the specific mechanism through which experience translates into better investment returns is closely related to learning from investment mistakes. To test our hypotheses, we use an administrative dataset which covers the trading history of 19,487 individual investors. Our results show that underdiversification and the disposition effect do not decline as investors gain experience. However, we find that experience correlates with less portfolio turnover. We conclude that compared to other investment mistakes, it is relatively easy for individuals to identify and avoid costs related to excessive trading activity. When correlating experience with portfolio returns, we find that as investors gain experience, their portfolio returns improve. A comparison of returns before and after accounting for transaction costs reveals that this effect is related to learning from overtrading.     

Reassessing the link between premarital cohabitation and marital instability

Premarital cohabitation has been found to be positively correlated with the likelihood of marital dissolution in the United States. To reassess this link, I estimate proportional hazard models of marital dissolution for first marriages by using pooled data from the 1988, 1995, and 2002 surveys of the National Survey of Family Growth (NSFG). These results suggest that the positive relationship between premarital cohabitation and marital instability has weakened for more recent birth and marriage cohorts. Using multiple marital outcomes for a person to account for one source of unobserved heterogeneity, panel models suggest that cohabitation is not selective of individuals with higher risk of marital dissolution and may be a stabilizing factor for higher-order marriages. Further research with more recent data is needed to assess whether these results are statistical artifacts caused by data weaknesses in the NSFG.     

Risk, complexity, and deviations from expected-value maximization: Results of a lottery choice experiment

Varying several parameters of single-stage lottery choice tasks we investigate the question which features of a decision task lead subjects to deviate from maximizing expected monetary value (EV). Despite small differences in EV between the two lotteries in the choice sets, the subjects on average chose the lottery with the higher EV in every task. Risk avoidance occurs, but not consistently over all tasks. Further results are that subjects prefer less complex lotteries over more complex ones, and that risk matters the more the less complex the decision task is.