Tribute to Jean-Yves Jaffray

Tribute to Jean-Yves Jaffray by the French Group of Decision Theory.     

Labor immigration and long-run welfare in a growth model with heterogenous agents and endogenous labor supply

This paper examines the consequences of labor immigration in an OLG economy in which agents have an elastic labor supply and differ with respect to degrees of altruism and rates of time preference. It focuses on three substantive questions. First, how do immigrants influence the bequest motive of altruistic natives? Second, what impact do immigrants have on the labor supply of natives? Finally, how does immigration affect the long-run welfare of both altruistic and non altruistic natives? Received: 25 November 1999/Accepted: 07 April 2000     

Analysis and treatment of self-neglectful behaviors in three elderly female patients

Three cases of self-neglect in elderly female patients are presented. Ranging in age from 84 to 92, subjects suffered from chronic, non-terminal illnesses, and engaged in such behaviors as refusal to eat, non-adherence to a prescribed therapeutic regimen, and extreme social withdrawal.One lived in the community and two resided in assisted living facilities in Louisville, Kentucky. Initial interviews strongly suggested that the patients' engagement in self-neglect was an inappropriate yet purposeful response to aversive events or other negative stimuli. Goals of treatment were to (1) identify specific factors which precipitated patient use of potentially life-threatening behavior, and (2) employ behavioral methods of intervention in response to the identified precipitators. Outcomes were moderately positive. Behavioral interventions reduced engagement in self-neglectful behaviors for each of the participants to a clinically significant degree. Positive results were maintained during the three-month period following treatment termination.     

Decisions with conflicting and imprecise information

When facing situations involving uncertainty, experts might provide imprecise and conflicting opinions. Recent experiments have shown that decision makers display aversion towards both disagreement among experts and imprecision of information. We provide an axiomatic foundation for a decision criterion that allows one to distinguish on a behavioral basis the decision maker’s attitude towards imprecision and disagreement. This criterion accommodates patterns of preferences observed in experiments that are precluded by two-steps procedures, where information is first aggregated, and then used by the decision maker. This might be seen as an argument for having experts transmitting a more detailed information to the decision maker.     

The ignorant observer

We propose an extension of Harsanyi’s Impartial Observer Theorem based on the representation of ignorance as the set of all possible probability distributions over individuals. We obtain a characterization of the observer’s preferences that, under our most restrictive conditions, is a convex combination of Harsanyi’s utilitarian and Rawls’ egalitarian criteria. This representation is ethically meaningful, in the sense that individuals’ utilities are cardinally measurable and fully comparable. This allows us to conclude that the impartiality requirement cannot be used to decide between Rawls’ and Harsanyi’s positions. We thank D. Bouyssou, A. Chateauneuf, M. Cohen, M. Fleurbaey, E. Karni, J.-F. Laslier, P. Mongin, J. Moreno-Ternero and especially J. Weymark, as well as seminar audiences at University Pompeu Fabra, University of Cergy-Pontoise, the Roy Seminar and RUD 2006 for useful comments. Comments by two anonymous referees have been extremely useful to improve the paper. Financial support from an ACI grant by the French Ministry of Research is gratefully acknowledged.     

Regular updating

This article presents a new model aimed at predicting behavior in games involving a randomized allocation procedure. It is designed to capture the relative importance and interaction between procedural justice (defined crudely in terms of the difference between one’s expected payoff and average expected payoff in the group) and distributive justice (difference between own and average actual payoffs). The model is applied to experimental games, including “randomized” variations of simple sequential bargaining games, and delivers qualitatively correct predictions. In view of the model redistribution of income can be seen as a substitute for vertical social mobility. This contributes to the explanation of greater demand for redistribution in European countries vis-a-vis the United States. I conclude with suggestions for further verification of the model and possible extensions.     

Ad-Hoc Reviewers from 2009

Acknowledgments

Ad-Hoc Reviewers from 2009     

Ambiguous life expectancy and the demand for annuities

In this paper, ambiguity aversion to uncertain survival probabilities is introduced in a static life-cycle model with a bequest motive to study the optimal demand for annuities. Provided that annuities’ return is sufficiently large, and notably when it is fair, positive annuitization is known to be the optimal strategy of ambiguity neutral individuals. Conversely, we show that the demand for annuities decreases with ambiguity aversion and that there exists a finite degree of aversion above which the demand is non-positive: the optimal strategy is then to either sell annuities short or to hold zero annuities if the former option is not available. To conclude, ambiguity aversion appears to be a relevant candidate for explaining the annuity puzzle.     

Redistributing wealth to families: the advantages of the MYRIADE model

This study aims to shed light on the main characteristics of the French system for redistributing wealth to families through tax revenues and social transfers. For the purposes of this exercise, the authors used the MYRIADE microsimulation model, which covers most of the redistribution system, though it is limited to monetary flows such as family benefits, housing allowances, minimum social welfare payments, income tax, and tax on furnished accommodation. The authors used a particular methodology to highlight the way this redistribution works; rather than calculate the difference between each family's disposable income and their gross primary income, they opted to isolate the variation in disposable income that could be attributed to the youngest member of each family where there is at least one child under the age of 25. The average increase in disposable income that this child contributes to his or her family amounts to in200 per month.     

Do Interactions between Finance and Labour Market Institutions Affect the Income Distribution?

This article analyses the linkages between financial development, labour market institutions and market income inequality for 18 Organisation for Economic Co‐operation and Development countries over the 1980 to 2012 period. With the help of a dynamic panel data model with an interacted term, one crucial contribution of this article is to analyse the interacted impact of labour market institutions (i.e. union density and employment protection legislation) on the one hand and financial development on the other hand on the income distribution. Our results indicate that changes in the financial/credit and labour market regulation affect the income distribution. Estimates of the marginal effects show that by increasing labour market regulation one also weakens the impact of the flexibilization in the financial/credit market on the increase in income inequality.