Selecting universities: personal preference and rankings

Polyhedral geometry can be used to quantitatively assess the dependence of rankings on personal preference, and provides a tool for both students and universities to assess US News and World Report rankings

Perceptions of Risk: an Experimental Approach using Internet Questionnaires

Building on previous studies on perceptions of inequality, welfare and risk we investigate the structure of individuals' rankings of uncertain prospects in terms of risk and their relationship to individual preferences. We examine three interlinked propositions that are fundamental to the standard economic approach to risk: (i) that rankings by risk are simply the reverse of ranking by preference over distributions with a given mean; (ii) that risk-rankings respect the principle of mean-preserving spreads; (iii) that risk-rankings are independent of whether the individual is personally involved in the gains/losses associated with the uncertain prospects. To do this we use a set of questionnaires implemented through the Virtual Laboratory, a novel experimental setting for the study of normative issues in experimental economics. The results from the questionnaires provide an evaluation of the similitude between individual perceptions of risk and theoretical axioms. They also help identify the individual characteristics that might affect such perceptions.Inequality, risk, experiment, transfer principle, mean-preserving spread.

Preserving preference rankings under non-financial background risk

We investigate the impact of a non-financial background risk ˜" on the preference rankings between two independent financial risks ˜z1 and ˜z2 for an expected-utility maximizer. More precisely, we provide necessary and sufficient conditions for the alternative (x0 + ˜z1, y0 + ˜") to be preferred to (x0 + ˜z2, y0 + ˜") whenever (x0 + ˜z1, y0) is preferred to (x0 + ˜z2, y0). Utility functions that preserve the preference rankings are fully characterized. Their practical relevance is discussed in light of recent results on the constraints for the modeling of the preference for the disaggregation of harms.Multivariate risk, Background risk, Disaggregation of harms, Risk independence

Look Who's Talking Now: Implications of AV's Explanations on Driver's Trust, AV Preference, Anxiety and Mental Workload

Explanations given by automation are often used to promote automation adoption. However, it remains unclear whether explanations promote acceptance of automated vehicles (AVs). In this study, we conducted a within-subject experiment in a driving simulator with 32 participants, using four different conditions. The four conditions included: (1) no explanation, (2) explanation given before or (3) after the AV acted and (4) the option for the driver to approve or disapprove the AV's action after hearing the explanation. We examined four AV outcomes: trust, preference for AV, anxiety and mental workload. Results suggest that explanations provided before an AV acted were associated with higher trust in and preference for the AV, but there was no difference in anxiety and workload. These results have important implications for the adoption of AVs.Comment: 42 pages, 5 figures, 3 Table

Do performance measures of donors' aid allocation underperform?

Indices of donor performance abound. Their recent popularity has occurred within the context of pessimism over aid's impact and optimism over the effect of changes in donor behaviour. Rankings of donor allocative performance aim to change donor behaviour, either through direct pressure on governments or indirectly through public engagement. The indices themselves rely on descriptive measures, and typically claim methodological superiority over positive alternatives due to their simplicity. However, there are two problems. First, measures do not seem robust to simple variations in methodology. Second, correlation amongst competing indices is low, leading to a host of contradictory judgements. This offers neither clear technical guidance nor consistent political pressure. The advantages and disadvantages of the approach are discussed, building upon the more general critique of aggregate indices. I suggest a graphical solution that embraces the advantages of the descriptive approach (including ease of public communication) while avoiding some of its major weaknesses (which typically stem from aggregation)

Preference for Flexibility and the Opportunities of Choice

A decision-maker exhibits preference for flexibility if he always prefers any set of alternatives to its subsets, even when two of them contain the same best element. Desire for flexibility can be explained as the consequence of the agent’s uncertainty along a two-stage process, where he must first preselect a subset of alternatives from which to make a final choice later on. We investigate conditions on the rankings of subsets that are compatible with the following assumptions: (1) the agent is endowed with a VN-M utility function on alternatives, (2) the agent attaches a subjective probability to the survival of each subset of alternatives, and (3) the agent will make a best choice out of any set which becomes available, and ranks sets ex-ante in terms of the expected utility of the best choices within them. We first prove that any total ordering respecting set inclusion is rationalizable in these terms. This result is essentially the same obtained by Kreps (1979) under an alternative interpretation. We also show that we cannot learn anything about the underlying utilities of agents unless we impose further restrictions on the admissible distributions of survival probabilities. Then we investigate the additional consequences of assuming that the survival probabilities of individual alternatives are independently distributed. We prove that this reduces significantly the class of set rankings which can be rationalized and that then one can infer some of the characteristics of the agent’s preferences. We offer a full characterization for the case of three alternatives. We also provide necessary conditions for rationalizability in the general case.

Eliciting trade-offs between water charges and service benefits in Scotland. ESRI Working Paper No. 655 March 2020

If it is the responsibility of a regulatory body to decide where to prioritise future investment, then it is important to understand the priorities of the citizenry it represents. This paper, in collaboration with the OECD and the Scottish water industry, presents the results of an online (n= 500) and face-to-face laboratory (n= 99) study that utilised experimental behavioural science to explore how Scottish citizens trade-off costs and potential improvements to their water service. Participants’ priorities for investment were elicited using a novel ‘slider task’ methodology that forced them to explicitly consider the trade-offs required to allocate limited resources across multiple possible water service improvements. The provision of additional cost and timing information was systematically varied. Results suggest that citizens are increasingly accepting of price rises when provided this information. Results also suggest that citizens’ priorities for specific improvements are not sensitive to the costs of different improvements but are sensitive to the lengths of time improvements take to be made. Findings from this study are designed to inform the regulatory process of the Scottish water industry and highlight the potential role of behavioural science in regulation more generally

Preference for Flexibility and the Opportunities of Choice

A decision-maker exhibits preference for flexibility if he always prefers any set of alternatives to its subsets, even when two of them contain the same best element. Desire for flexibility can be explained as the consequence of the agent's uncertainty along a two-stage process, where he must first preselect a subset of alternatives from which to make a final choice later on. We investigate conditions on the rankings of subsets that are compatible with the following assumptions: (1) the agent is endowed with a VN-M utility function of alternatives, (2) the agent attaches a subjective probability to the survival of each subset of alternatives, and (3) the agent will make a best choice out of any set which becomes available, and ranks sets ex-ante in terms of the expected utility of the best choices within them. We first prove that any total ordering respecting set inclusion is rationalizable in these terms. This result is essentially the same obtained by Kreps (1979) under an alternative interpretation. We also show that we cannot learn anything about the underlying utilities of agents unless we impose further restrictions on the admissible distributions of survival probabilities. Then we investigate the additional consequences of assuming that the survival probabilities of individual alternatives are independently distributed. We prove that this reduces significantly the class of set rankings which can be rationalized and that then one can infer some of the characteristics of the agentís preferences. We offer a full characterization for the case of three alternatives. We also provide necessary conditions for rationalizability in the general case.NULL