168 research outputs found
Probabilistic Insurance
Probabilistic insurance is an insurance policy involving a small probability that the consumer will not be reimbursed. Survey data suggest that people dislike probabilistic insurance and demand more than a 20% reduction in the premium to compensate for a 1% default risk. While these preferences are intuitively appealing they are difficult to reconcile with expected utility theory. Under highly plausible assumptions about the utility function, willingness to pay for probabilistic insurance should be very close to willingness to pay for standard insurance less the default risk. However, the reluctance to buy probabilistic insurance is predicted by the weighting function of prospect theory. This finding highlights the potential role of the weighting function to explain insurance
Recommended from our members
We are the Change that we Seek: Information Interactions During a Change of Viewpoint
There has been considerable hype about filter bubbles and echo chambers influencing the views of information consumers. The fear is that these technologies are undermining democracy by swaying opinion and creating an uninformed, polarised populace. The literature in this space is mostly techno-centric, addressing the impact of technology. In contrast, our work is the first research in the information interaction field to examine changing viewpoints from a human-centric perspective. It provides a new understanding of view change and how we might support informed, autonomous view change behaviour. We interviewed 18 participants about a self-identified change of view, and the information touchpoints they engaged with along the way. In this paper we present the information types and sources that informed changes of viewpoint, and the ways in which our participants interacted with that information. We describe our findings in the context of the techno-centric literature and suggest principles for designing digital information environments that support user autonomy and reflection in viewpoint formation
Social marketing and social influences: Using social ecology as a theoretical framework
Social marketing has traditionally been dominated by an individualistic model of design. In this work, the authors apply a social ecology model to the theory and practice of social marketing, demonstrating that a multilevel framework is required to fully expose and account for the complexity of sociocultural and environmental effects. The authors have generated a diagnostic tool for this use. The paper then provides a detailed demonstration of the potential power of the tool by applying it to three illustrative case studies: one on encouraging safer driving, the second promoting sustainable travel, and the third increasing early detection of lung cancer. © 2010 Westburn Publishers Ltd
Crises and collective socio-economic phenomena: simple models and challenges
Financial and economic history is strewn with bubbles and crashes, booms and
busts, crises and upheavals of all sorts. Understanding the origin of these
events is arguably one of the most important problems in economic theory. In
this paper, we review recent efforts to include heterogeneities and
interactions in models of decision. We argue that the Random Field Ising model
(RFIM) indeed provides a unifying framework to account for many collective
socio-economic phenomena that lead to sudden ruptures and crises. We discuss
different models that can capture potentially destabilising self-referential
feedback loops, induced either by herding, i.e. reference to peers, or
trending, i.e. reference to the past, and account for some of the phenomenology
missing in the standard models. We discuss some empirically testable
predictions of these models, for example robust signatures of RFIM-like herding
effects, or the logarithmic decay of spatial correlations of voting patterns.
One of the most striking result, inspired by statistical physics methods, is
that Adam Smith's invisible hand can badly fail at solving simple coordination
problems. We also insist on the issue of time-scales, that can be extremely
long in some cases, and prevent socially optimal equilibria to be reached. As a
theoretical challenge, the study of so-called "detailed-balance" violating
decision rules is needed to decide whether conclusions based on current models
(that all assume detailed-balance) are indeed robust and generic.Comment: Review paper accepted for a special issue of J Stat Phys; several
minor improvements along reviewers' comment
DES13S2cmm: the first superluminous supernova from the Dark Energy Survey
We present DES13S2cmm, the first spectroscopically-confirmed superluminous
supernova (SLSN) from the Dark Energy Survey (DES). We briefly discuss the data
and search algorithm used to find this event in the first year of DES
operations, and outline the spectroscopic data obtained from the European
Southern Observatory (ESO) Very Large Telescope to confirm its redshift (z =
0.663 +/- 0.001 based on the host-galaxy emission lines) and likely spectral
type (type I). Using this redshift, we find M_U_peak = -21.05 +0.10 -0.09 for
the peak, rest-frame U-band absolute magnitude, and find DES13S2cmm to be
located in a faint, low metallicity (sub-solar), low stellar-mass host galaxy
(log(M/M_sun) = 9.3 +/- 0.3); consistent with what is seen for other SLSNe-I.
We compare the bolometric light curve of DES13S2cmm to fourteen similarly
well-observed SLSNe-I in the literature and find it possesses one of the
slowest declining tails (beyond +30 days rest frame past peak), and is the
faintest at peak. Moreover, we find the bolometric light curves of all SLSNe-I
studied herein possess a dispersion of only 0.2-0.3 magnitudes between +25 and
+30 days after peak (rest frame) depending on redshift range studied; this
could be important for 'standardising' such supernovae, as is done with the
more common type Ia. We fit the bolometric light curve of DES13S2cmm with two
competing models for SLSNe-I - the radioactive decay of 56Ni, and a magnetar -
and find that while the magnetar is formally a better fit, neither model
provides a compelling match to the data. Although we are unable to conclusively
differentiate between these two physical models for this particular SLSN-I,
further DES observations of more SLSNe-I should break this degeneracy,
especially if the light curves of SLSNe-I can be observed beyond 100 days in
the rest frame of the supernova.Comment: Accepted by MNRAS (2015 January 23), 13 pages, 6 figures, 2 table
Variety of Methodological Approach in Economics
It has been argued by some that the distinction between orthodox economics and heterodox economics does not fit the growing variety in economic theory, unified by a common methodological approach. On the other hand, it remains a central characteristic of heterodox economics that it does not share this methodological approach, but rather represents a range of alternative methodological approaches. The paper explores the evidence, and arguments, for variety in economics at different levels, and a range of issues which arise. This requires in turn a discussion of the meaning of variety in economics at the different levels of reality, methodology, method and theory. It is concluded that there is scope for more, rather than less, variety in economic methodologies, as well as within methodologies. Further, if variety is not to take the form of “anything goes”, then critical discussion by economists of different approaches to economics, and of variety itself, is required
- …