Higher-order perturbation solutions to dynamic, discrete-time rational expectations models

We present an algorithm and software routines for computing nth order Taylor series approximate solutions to dynamic, discrete-time rational expectations models around a nonstochastic steady state. The primary advantage of higher-order (as opposed to first- or second-order) approximations is that they are valid not just locally, but often globally (i.e., over nonlocal, possibly very large compact sets) in a rigorous sense that we specify. We apply our routines to compute first- through seventh-order approximate solutions to two standard macroeconomic models, a stochastic growth model and a life-cycle consumption model, and discuss the quality and global properties of these solutions.Macroeconomics - Econometric models ; Business cycles ; Monetary policy

Ambiguity Attitudes and Social Interactions: An Experimental Investigation

This paper reports the results of experiments designed to test (a) whether and to what extent individuals display non-neutral ambiguity attitudes in their choice behavior and (b) if and how do ambiguity attitudes change as a result of interpersonal interactions and persuasion. To address the first question we designed and conducted experiments involving individual choice between betting on ambiguous and unambiguous events of their choice. We found that a large majority of subjects display ambiguity-neutral attitudes, many others display ambiguity-incoherent attitudes, and few subjects display either ambiguity-averse attitudes or ambiguity-seeking attitudes. To address the second question we introduced a new experimental design with a built-in incentive to persuade. We found that interpersonal interactions without incentive to persuade have no effect on behavior, but when incentives were introduced, the ambiguity-neutral subjects were better able to persuade ambiguity seeking and ambiguity-incoherent subjects to follow ambiguity-neutral choice behavior. No such influence was detected with respect to ambiguity-neutral subjects.

Ambiguity attitudes: An experimental investigation

This paper reports the results of experiments designed to test (a) whether and to what extent individuals display non-neutral ambiguity attitudes in their choice behavior and (b) if and how do ambiguity attitudes change as a result of interpersonal interactions and persuasion. To address the first question we designed and conducted experiments involving individual choice between betting on ambiguous and unambiguous events of their choice. We found that a large majority of subjects display ambiguity-neutral attitudes, many others display ambiguity-incoherent attitudes, and few subjects display either ambiguity-averse attitudes or ambiguity-seeking attitudes. To address the second question we introduced a new experimental design with a built-in incentive to persuade. We found that interpersonal interactions without incentive to persuade have no effect on behavior, but when incentives were introduced, the ambiguity-neutral subjects were better able to persuade ambiguity seeking and ambiguity-incoherent subjects to follow ambiguity-neutral choice behavior. No such influence was detected with respect to ambiguity-neutral subjects

Information Privacy Management: Proactive vs. Reactive Approaches

Information privacy is an important information management issue that continues to challenge managers, policy makers, and researchers. Although we have investigated information privacy concerns at individual and national levels, there remains a significant gap in our understanding of the costs and benefits accruing to the organization when it does—or does not—develop business processes to protect customer and employee information. This panel focuses on the organization in the privacy equation, asking, “Is it possible to successfully institutionalize good privacy practices? Can organizations prevent privacy disasters?

DOI 10.1007/s11166-012-9157-1 Ambiguity attitudes and social interactions: An

Abstract This paper reports the results of experiments testing prevalence of nonneutral ambiguity attitudes and how these attitudes change as a result of interpersonal interactions. To address the first question we conducted experiments involving individual choice between betting on ambiguous and unambiguous events of the subject’s choice. We found that a large majority of subjects display ambiguity neutral attitudes, many others display ambiguity incoherent attitudes, and few subjects display either ambiguity-averse attitudes or ambiguity-seeking attitudes. To address the second question we designed a new experiment with a built-in incentive to persuade. We found that interpersonal interactions without incentives to persuade have no effect on behavior. However, when incentives were introduced, the ambiguity neutral subjects were better able to persuade ambiguity seeking and ambiguity incoherent subjects to adopt ambiguity neutral choice behavior and, to a lesser extent, also ambiguity averse subjects. We are grateful to Stefan Trautmann, Peter Duersch, Luca Rigotti and an anonymous referee for their useful comments. We also benefited from comments and suggestions of the participants of the conference on “Ambiguity: Theory and Experiments, ” at the Center for the Economic Analysi

Ariel - Volume 12(13) Number 4

Co-Editors Gary Fishbein Lynn Solomon Business Manager Rich Davis Assistant Business Manager Jeff Lavanier Layout Editors Paul J. Berlin Tracy A. Glauser Photography Editor Ben Alma

Information Privacy: Management, Marketplace, and Legal Challenges

A panel at ICIS 2004 in Washington, D.C. explored many of the information privacy issues facing management in a post 9/11 environment. The panel was composed of privacy scholars, regulators, and practitioners. The panelists examined privacy disasters as a way of exposing these management challenges, discussed government and self-regulatory approaches to information privacy, and raised opportunities for research. This paper extends and deepens the examination begun at the panel and the discussions of issues raised by the audience during the question and answer session. In addition, a list of research questions is offered. The panelists provided key privacy information sources. A privacy bibliography is included

The combined role of task, child’s age and individual differences in understanding decision processes

It is important to understand the impact of individual differences in decision making from childhood to adulthood. This cohort-based study extends our knowledge by comparing decision making of children across the age range of 8 to 17 years and their parents. Based on prior research and theory focusing on different types of framing effects, we uncover several key differences across ages, including levels of risk taking and sensitivity to expected value differences between risky and riskless choices. Furthermore, we find that measures such as Numeracy and Surgency help explain both age-related and individual differences on our tasks, especially for decisions involving risk. We discuss the role of diverse task measures in understanding how individual difference factors affect different aspects of decision making, including the ability and effort to process numerical information and the ability to suppress affective reactions to stimulus labels