Net-Loss Reciprocation and the Context Dependency of Economic Choices

This paper proposes a novel explanation for the context dependency of individual choices in two-player games. Context dependency refers to the well-established phenomenon that a player, when choosing from a given opportunity set created by the other player’s strategy, chooses differently in different situations because of different alternatives to the other player’s strategy. The utility model used to explain this kind of context dependency incorporates a preference for net-loss reciprocation. Net-loss reciprocation means that a player’s willingness to impose a net loss (i.e., loss minus gain) on the other player increases in the net loss that he or she derives from the other player’s strategy. I show that net-loss reciprocation together with the method for calculating net losses developed in this paper explains the context dependencies in individual behaviour that have been documented in a number of experimental studies, whereas existing models of intention-based reciprocity fail to explain all the evidence

A Stitch in Time: Changing Cultural Constructions of Craft and Mending

Over the course of the twentieth century, the availability of cheap, mass-produced fashion has contributed to a decline in everyday domestic mending skills. Indeed, as mass-manufactured goods have become cheaper for the global population it has become normative consumer behaviour to dispose of any item that is less than per-fect, even when the damage is entirely superficial, leading Clark to claim that: ‘mending has died out’ (2008: 435). However, in recent years there has been an apparent revival in domestic mending, aided and evidenced by the emergence of sewing and mending groups in the UK, mainland Europe and North America. This has coincided with a growing interest in more sustainable material goods (McDonough & Braungart 2002; Fletcher 2008), and a small body of academic work around the notion of craftsmanship (e.g. Sennett 2008; Crawford 2009). Of particular interest here is the history of mending of clothing and household goods, as well as recent incarnations of mending as both an individual and group activity. In the past year, researchers from diverse theoretical backgrounds have also highlighted the role of mending in everyday material goods providing further insights into the subject (Laitala & Boks 2012; Middleton 2012; Portwood-Stacer 2012). An examination of mending reveals a complex picture in which gender, class, aesthetics and social motivations interweave with the imperatives of consumer culture. Whilst historically it is generally constructed as a feminine activity, and carried connotations of material deprivation, contemporary mending is often motivated by environmental concerns and a desire to reduce consumption. Ultimately, mending is demonstrated to be an under-researched subject loaded with cultural meaning, and ultimately, is shown to be anything but a trivial activity

Does social interaction destabilise financial markets?

With this paper, I propose a simple asset pricing model that accounts for the influence from social interaction. Investors are assumed to make up their mind about an asset's price based on a forecasting strategy and its past profitability as well as on the contemporaneous expectations of other market participants. Empirically analysing stocks in the DAX30 index, I provide evidence that social interaction rather destabilises financial markets. At least, it does not have a stabilising effect

Analyst behaviour: the geography of social interaction

An analyst who works in Germany is more likely to publish a high (low) price target regarding a DAX30 stock if other Germany based analysts are also optimistic (pessimistic) about the same stock. This finding is not biased by the fact that DAX30 companies are headquartered in Germany. In times of bull markets, price targets of analysts who regularly exchange their opinion are higher correlated compared to other analysts. This effect vanishes in a bearish market environment. This suggests that communication among analysts indeed plays an important role. However, analysts’ incentives induce them not to deviate too much from the overall average during an economic downturn