Behavioral implications of shortlisting procedures

We consider two-stage “shortlisting procedures” in which the menu of alternatives is first pruned by some process or criterion and then a binary relation is maximized. Given a particular first-stage process, our main result supplies a necessary and sufficient condition for choice data to be consistent with a procedure in the designated class. This result applies to any class of procedures with a certain lattice structure, including the cases of “consideration filters,” “satisficing with salience effects,” and “rational shortlist methods.” The theory avoids background assumptions made for mathematical convenience; in this and other respects following Richter’s classical analysis of preference-maximizing choice in the absence of shortlisting

Priority for the Worse Off and the Social Cost of Carbon

The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC

Reciprocity as a foundation of financial economics

This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theories of mathematical probability that emerged in the seventeenth century in the context of the ethical assessment of commercial contracts in a framework of Aristotelian ethics. This observation, the main claim of the paper, is justified on the basis of results from the Ultimatum Game and is analysed within a framework of Pragmatic philosophy. The analysis leads to the explanatory hypothesis that markets are centres of communicative action with reciprocity as a rule of discourse. The purpose of the paper is to reorientate financial economics to emphasise the objectives of cooperation and social cohesion and to this end, we offer specific policy advice

Cooperation, Norms, and Revolutions: A Unified Game-Theoretical Approach

Cooperation is of utmost importance to society as a whole, but is often challenged by individual self-interests. While game theory has studied this problem extensively, there is little work on interactions within and across groups with different preferences or beliefs. Yet, people from different social or cultural backgrounds often meet and interact. This can yield conflict, since behavior that is considered cooperative by one population might be perceived as non-cooperative from the viewpoint of another. To understand the dynamics and outcome of the competitive interactions within and between groups, we study game-dynamical replicator equations for multiple populations with incompatible interests and different power (be this due to different population sizes, material resources, social capital, or other factors). These equations allow us to address various important questions: For example, can cooperation in the prisoner's dilemma be promoted, when two interacting groups have different preferences? Under what conditions can costly punishment, or other mechanisms, foster the evolution of norms? When does cooperation fail, leading to antagonistic behavior, conflict, or even revolutions? And what incentives are needed to reach peaceful agreements between groups with conflicting interests? Our detailed quantitative analysis reveals a large variety of interesting results, which are relevant for society, law and economics, and have implications for the evolution of language and culture as well

Dietary Heterogeneity among Western Industrialized Countries Reflected in the Stable Isotope Ratios of Human Hair

Although the globalization of food production is often assumed to result in a homogenization of consumption patterns with a convergence towards a Western style diet, the resources used to make global food products may still be locally produced (glocalization). Stable isotope ratios of human hair can quantify the extent to which residents of industrialized nations have converged on a standardized diet or whether there is persistent heterogeneity and glocalization among countries as a result of different dietary patterns and the use of local food products. Here we report isotopic differences among carbon, nitrogen and sulfur isotope ratios of human hair collected in thirteen Western European countries and in the USA. European hair samples had significantly lower δ13C values (−22.7 to −18.3‰), and significantly higher δ15N (7.8 to 10.3‰) and δ34S (4.8 to 8.3‰) values than samples from the USA (δ13C: −21.9 to −15.0‰, δ15N: 6.7 to 9.9‰, δ34S: −1.2 to 9.9‰). Within Europe, we detected differences in hair δ13C and δ34S values among countries and covariation of isotope ratios with latitude and longitude. This geographic structuring of isotopic data suggests heterogeneity in the food resources used by citizens of industrialized nations and supports the presence of different dietary patterns within Western Europe despite globalization trends. Here we showed the potential of stable isotope analysis as a population-wide tool for dietary screening, particularly as a complement of dietary surveys, that can provide additional information on assimilated macronutrients and independent verification of data obtained by those self-reporting instruments

Attentional learning helps language acquisition take shape for atypically developing children, not just children with Autism Spectrum Disorders

The shape bias-generalising labels to same shaped objects-has been linked to attentional learning or referential intent. We explore these origins in children with typical development (TD), autism spectrum disorders (ASD) and other developmental disorders (DD). In two conditions, a novel object was presented and either named or described. Children selected another from a shape, colour or texture match. TD children choose the shape match in both conditions, children with DD and 'high-verbal mental age' (VMA) children with ASD (language age > 4.6) did so in the name condition and 'low-VMA' children with ASD never showed the heuristic. Thus, the shape bias arises from attentional learning in atypically developing children and is delayed in ASD

Malinvaud on Wicksell’s legacy to capital theory: some critical remarks

This critique of Malinvaud’s article of 2003 on Wicksell’s legacy to capital theory focuses in particular on three points raised there. The first regards the given amount of existing capital that appears in Wicksell’s theory and its connection with his alleged “missing equation”, the second the particular notion of the marginal product of capital adopted by Malinvaud and the meaning of its equality with the rate of interest, and the third the concept of the average period of production taken by Malinvaud from Hicks and its inverse relation to the rate of interest

Revisiting consistency with random utility maximisation: theory and implications for practical work

While the paradigm of utility maximisation has formed the basis of the majority of applications in discrete choice modelling for over 40 years, its core assumptions have been questioned by work in both behavioural economics and mathematical psychology as well as more recently by developments in the RUM-oriented choice modelling community. This paper reviews the basic properties with a view to explaining the historical pre-eminence of utility maximisation and addresses the question of what departures from the paradigm may be necessary or wise in order to accommodate richer behavioural patterns. We find that many, though not all, of the behavioural traits discussed in the literature can be approximated sufficiently closely by a random utility framework, allowing analysts to retain the many advantages that such an approach possesses