Eliciting Risk and Time Preferences

We design experiments to jointly elicit risk and time preferences for the adult Danish population. Since subjects are generally risk averse, we find that joint elicitation provides estimates of discount rates that are significantly lower than those found in previous studies and more in line with what would be considered as a priori reasonable rates. The statistical specification relies on a theoretical framework that involves a latent trade‐off between long‐run optimization and short‐run temptation. Estimation of this specification is undertaken using structural, maximum likelihood methods. Our main results based on exponential discounting are robust to alternative specifications such as hyperbolic discounting. These results have direct implications for attempts to elicit time preferences, as well as debates over the appropriate domain of the utility function when characterizing risk aversion and time consistency.     

Are There Differences in the Health– Socio‐economic Status Relationship over the Life Cycle? Evidence from Germany

Abstract. Most research on the relationship between health and socio‐economic status (SES) controls for age or investigates the relationship for a particular age range. This paper, however, examines the effect of SES on health across different age groups. Using data from the German Socio‐Economic Panel and controlling for health–SES endogeneity, we find that the health–income relationship does vary across the life cycle and between genders and different labor force status, with the impact of income on health relatively more pronounced for younger cohorts. The unemployed also have lower levels of health at all levels of income.     

Bewertung intertemporaler Abh?ngigkeiten zwischen IT-Projekten

Companies often decide in favour of IT investments (especially IT infrastructure investments) only because these investments build the foundation for more lucrative follow-up investments. Those intertemporal interdependencies among IT projects have to be considered within the scope of a value-based IT portfolio management. Therefore, current literature suggests the use of real options analysis??and therefore the application of option pricing models such as the binomial model or the Black-Scholes model. Both models require a complete market. However, because IT projects are characterized by project specific risks, which cannot be duplicated on a capital market, the forthright application of these models is problematic. This issue has been addressed within the scope of the discrete binomial model so far. In this paper we transfer these findings to the Black-Scholes model. Furthermore, we apply this approach to a real case and illustrate how a correct consideration of project specific risks using the Black-Scholes model can affect investment decisions.     

Re‐storying the Business,Innovation and Entrepreneurial Ecosystem Concepts: The Model‐Narrative Review Method

We propose a novel literature review method in order to systematically trace and reveal the dominant narratives of a body of literature: the model‐narrative review method. We apply this method to an ever‐growing literature on ecosystems in business studies, as it resembles a rich knowledge base with somewhat competing, overarching stories, replete with emplotted characters, systematic puzzles and embellished scientific drama. To interpret these unfolding storylines, we both separately engage with and connect seminal work on business, entrepreneurial and innovation ecosystems. Through thematic reading we map the key themes and scientific puzzles in each ecosystem type. Through enstoried reading we identify how authors construct the plot, narrative setting, emplotted characters, narrative voices and moral lessons around ecosystems. Through rhetorical reading we explicate the rhetorical devices and strategies that claim the relevance of their work. Our findings expose a number of hidden meanings and underlying assumptions, adding transparency to ecosystem rhetorics and enhancing conceptual clarity. Altogether, this method offers a systematic construction of model‐narratives to synthesize and critically reflect upon similarities and differences between related concepts and opens up space for alternative research questions.     

„Social theory and the sociological discipline(s)“ Bericht über die Konferenz der Theoriesektion der European Sociological Association in Innsbruck, 11.–13. September 2008

Ohne Zusammenfassung     

WORK HOUR MISMATCH AND JOB MOBILITY: ADJUSTMENT CHANNELS AND RESOLUTION RATES

This paper analyses the role of job changes in overcoming work hour mismatches (i.e., differences between actual and desired work hours). It addresses two, yet neglected, questions: (1) How do adjustments in desired work hours, additionally to adjustments in actual work hours, contribute to the resolution of these mismatches? and (2) Does the well‐documented increased work hour flexibility of job movers help to actually resolve work hour mismatches? We find that job change increases the probability of resolving work hour mismatches, but far less than expected with free choice of hours across jobs. (JEL J21, J22)     

Inferring beliefs as subjectively imprecise probabilities

We propose a method for estimating subjective beliefs, viewed as a subjective probability distribution. The key insight is to characterize beliefs as a parameter to be estimated from observed choices in a well-defined experimental task and to estimate that parameter as a random coefficient. The experimental task consists of a series of standard lottery choices in which the subject is assumed to use conventional risk attitudes to select one lottery or the other and then a series of betting choices in which the subject is presented with a range of bookies offering odds on the outcome of some event that the subject has a belief over. Knowledge of the risk attitudes of subjects conditions the inferences about subjective beliefs. Maximum simulated likelihood methods are used to estimate a structural model in which subjects employ subjective beliefs to make bets. We present evidence that some subjective probabilities are indeed best characterized as probability distributions with non-zero variance.