ADAM SMITH'S RATIONAL CHOICE LINGUISTICS

Adam Smith offers an account, based on rational choice considerations, of the grammatical change experienced by languages when adults attempt to communicate across languages in such a way as to minimize transactions costs. His model predicts what is known to linguists as a "pidgin," a language learned by adults in which to make trades. His model can be extended to predict the grammatical trajectory toward pidgin experienced by dying languages. (JEL A1, B3)     

THE WORLD OIL CRISIS: A PORTFOLIO INTERPRETATION

This paper applies the mean-variance portfolio model to the analysis of one facet of the production decision confronting the oil exporting countries. Specifically we assume that the countries in question seek the optimal solution to the problem of diversifying their assets between oil reserves in the ground and other non-petroleum investment alternatives. With respect to the group of countries which tend to accumulate money resources in excess of their domestic development needs (e. g., Saudi Arabia and Kuwait) the availability of an "inflation-proof" investment outlet whose principal and interest are linked to a general index of the change in world prices is likely to enhance these countries' incentive to extract oil from the ground on portfolio considerations alone.     

SOLUTION PROCEDURES WITH LIMITED SAMPLE DATA FOR THE OPTIMAL REPLACEMENT PROBLEM

Recently we have developed solution procedures for the optimal replacement problem when the distribution of the time-to-failure (ttf) is partially specified by the first two moments, partial and complete. However, we have later learned, using Monte-Carlo simulation, that when moments are unknown and have to be estimated from sample data, the most accurate procedure developed therein is in practice extremely sensitive to sampling fluctuations. In this paper we modify the procedure to render it less susceptible to sampling variation. In addition, we introduce a new solution procedure that requires specification of only the median and the partial means of the ttf distribution. For both procedures, it is demonstrated that when the moments required for the distribution fitting are known, highly accurate optimal solutions are obtained. Conversely, when the moments are unknown and sample estimates based on small samples are used, both procedures result in stable solutions (low mean-squared-errors).     

What Makes a Good Decision? Robust Satisficing as a Normative Standard of Rational Decision Making

Most decisions in life involve ambiguity, where probabilities can not be meaningfully specified, as much as they involve probabilistic uncertainty. In such conditions, the aspiration to utility maximization may be self‐deceptive. We propose “robust satisficing” as an alternative to utility maximizing as the normative standard for rational decision making in such circumstances. Instead of seeking to maximize the expected value, or utility, of a decision outcome, robust satisficing aims to maximize the robustness to uncertainty of a satisfactory outcome. That is, robust satisficing asks, “what is a ‘good enough’ outcome,” and then seeks the option that will produce such an outcome under the widest set of circumstances. We explore the conditions under which robust satisficing is a more appropriate norm for decision making than utility maximizing.     

SIMULATING A MULTIPRODUCT BARTER EXCHANGE ECONOMY

We describe a multiproduct barter trading experiment in which students exchange real goods in an open market based on their own personal preference. The experiment is designed for simulating a pure exchange market in order to demonstrate the role of money and its functions in real economies by showing the limitations and inefficiencies of the traditional barter economy. In addition, the simulation is very effective in highlighting some of the key features that an object that serves as money needs to possess in order to function as an efficient medium of exchange, unit of account, and store of value.     

The Methodology and Performance of Election Day Polls

Methodological details are presented of a survey research techniqueknown as exit or election day polling. Using this technique,major American news organizations collect and analyze votingand attitude data from samples of persons who have just castballots. On the basis of the 1980 elections, differences inpolling strategies and performance of the exit poll method areexamined. How election day survey data are used by journalistsis discussed.     

Opinion Leadership and Television News Uses

Current Research: This section of POQ is reserved for brief reports of researchin progress, discussions of unsolved problems, methodologicalstudies, and public opinion data not extensively analyzed orinterpreted. Succinct case histories are welcomed, as well ashypotheses and insights that may be useful to other studentsof public opinion. Usually, material in this section is shorter,more informal, and more tentative than in preceding pages     

SELF-INTEREST AND PUBLIC OPINION TOWARD SMOKING POLICIES; A REPLICATION AND EXTENSION

Numerous studies report that self-interest has a non significantinfluence upon various political and social attitudes. In contrast,a recent article by Green and Gerken (1989) reports a Californiastudy showing that cigarette smokers are significantly moreopposed than nonsmokers to public smoking restrictions and tobaccosales tax increases. The present article replicates and extendsthis analysis with data from two different states—Illinois(in 1984, N=458)—and North Carolina (in 1985, N=488)—andusing analysis techniques that differ from and expand upon theCalifornia study. Despite these methodological differ ences,self-interest is again shown to have a significant influenceon opinions concerning public smoking restrictions and taxation,as well as on several additional issues relating to smokingand tobacco.     

Executives’ Views of Factors Affecting Governance Change in a Not‐for‐Profit Setting

Knowing the factors that executives deem critical to governance change can improve our understanding of how such changes come about and can help us evaluate those changes. Interviews with business and finance executives at 11 colleges reveal the importance to governance change of chief executive and board member leadership and interactions, as well as executive communication style. Costs are clear constraints to action, particularly since benefits are not quantified and are difficult to describe. Efforts to discuss governance with internal stakeholders require persistence to overcome narrow, individualized concerns. Communication about governance to external stakeholders is rare and represents a missed opportunity for stakeholder feedback and the development of trust. Executives appear willing to adopt governance forms without considering the idiosyncrasies of their institutional field, limiting the working definition of governance and its potential. For corporations and not‐for‐profit enterprises these findings hold implications for the context in which leadership is exercised and the shape of governance structures. They also pose a fundamental ethical dilemma for leaders to address.