Consistent judgement aggregation: the truth-functional case

Generalizing the celebrated “discursive dilemma”, we analyze judgement aggregation problems in which a group of agents independently votes on a set of complex propositions (the “conclusions”) and on a set of “premises” by which the conclusions are truth-functionally determined. We show that for conclusion- and premise-based aggregation rules to be mutually consistent, the aggregation must always be “oligarchic”, that is: unanimous within a subset of agents, and typically even be dictatorial. We characterize exactly when consistent non-dictatorial (or anonymous) aggregation rules exist, allowing for arbitrary conclusions and arbitrary interdependencies among premises.     

The validity of subjective information as a formal concept applied to empirical analysis

Theoretical concepts which may be applicated in formalized contexts as well as by empirical research are relatively rare. The concepts of subjective information used in cybernetically oriented pedagogists (learning theorists) seems to be applicable in both ways. An analysis of its logical and empirical validity shows, however, that the basis of this concept is ambiguous. The concept is defined on the basis of statistical probability, but implicitly interpreted on the base of inductive probability. Thus the measurement and also the strategic application of subjective information are doubtful. This concept does not seem to be useful as a paradigm for the solution of analogous problems.     

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.     

Children,Kitchen, Church: does ethnicity matter?

Ethnic differences in the allocation of non-market time are important, as they may shed more light on the integration level of ethnic minorities and on the factors that affect both household productivity and ethnic identity. In this paper we examine the role of ethnicity and gender by analyzing differences in the time spent on a range of activities employing the 2000 UK Time Use Survey. Based on the economics of religion and identity economic models, we hypothesize that if ethnic minority women have lower opportunity costs of time and a strong ‘ethnic’ or ‘traditionally female’ identity, they will engage more in ‘traditional’ home activities. Double-hurdle regression results indicate that while the effect for childcare is not significant when estimated for parents only, non-white women spend significantly more time on food management and particularly religious activities than white women, with the greatest effect of the latter being for Pakistani and Bangladeshi women.     

Contingent capital makes credit crunches less likely: but do banks want to have it?

We analyze whether the use of CoCo bonds as a financing instrument improves credit supply and therefore reduces the likelihood of a credit crunch. In our simple model, banks decide about granting an additional loan. In case of the bank violating the regulatory constraint, it needs to issue equity associated with adjustment costs. The contribution of the paper is threefold: First, this simple model explains credit crunches in the sense that the loan decision does not only depend on loan characteristics but also on the bank’s prospects. Second, CoCo bonds can always be designed such that all loans with non-negative net present value are granted, which prevents the danger of a credit crunch. Third, banks might not want to issue CoCo bonds even though these instruments help to improve credit supply. This problem primarily concerns banks with favorable prospects, thereby challenging the notion that CoCo bonds should be issued in good times as a protection during bad times.