Essays on Individual Decision Making under Risk and Uncertainty

This thesis aims to empirically test the validity of economic theories of the individual decision making under risk and uncertainty with a laboratory experiment. The first chapter outlines this thesis. The second chapter experimentally tests Manski's theory of satisficing (2017). He proposes solutions to two key questions: when should the decision-maker (DM) satisfice?; and how should the DM satisfice? The results show that some of Manski's proposition (those relating to the “how”) appear to be empirically valid while others (those relating to the “when”) are less so. The third chapter extends the findings from the previous chapter, mainly relating to “how to satisfice”. I propose an alternative story with a different assumption of the subjects' preference functional and of the payoff distribution. The results suggest that my alternative story appears to better-explain the subjects' behaviour than that of Manski's story. The fourth chapter explores the individual behaviour towards randomisation of the choice. I use the elicitation method that provides an additional option between two alternatives, namely “I am not sure what to choose” as an alternative of two standard options: "I choose A" or "I choose B". It gives a consequence where the subjects' payoff is determined by a randomisation of two alternatives through the flipping a coin. I propose four stories to account for the choice of this option. The results show that the most of the subjects either have strictly convex preferences with random risk attitude or simply cannot distinguish the two alternatives. The fifth chapter empirically tests Nicolosi's model (2018). He derives the optimal strategy for the fund manager under a specific payment contract and the investment environment. I compare his model with other strategies. The results show that Nicolosi's model receives strong empirical support to explain the subjects' behaviour

APPLICATION OF RULE OF LAW~BYJURISDICTION SYSTEM ON ILLEGAL LOGGING CASE IN INDONESIA 2002-20081

The aim of this research is to analyze behavior of Supreme Court\u27s judge on detention period sentence for illegal logging defendants in Indonesiafrom year 2002 through 2008. Thefirst analysis is censored normal regression method using detention period indictment by prosecutor, detention period sentence by district court, defendant\u27s gender, appeal effort, defendant\u27s age, and defendant\u27s job variables. Those variables are used to analyze how each variable affect on Supreme Court\u27s verdict on detention period sentence for illegal logging defendants in Indonesia. Second analysis is descriptive statistic involves three levels of jurisdiction\u27s considerations (prosec1:ltor,district court, and Supreme Court) on determining detention period sentence for illegal logging defendants in Indonesia and suitability those three levels of jurisdiction to law. Research\u27s result shows that detention period indictment by prosecutor, detention period sentence by district court, and defendant\u27s age significantly affect on Supreme Court\u27s verdict on detention period sentence for illegal logging defendants in Indonesia. But, on the other hand there is unsuitable verdict made by those three levels ofjurisdiction to law. Keywords: court\u27s verdict, illegal logging, censored normal regressio

APPLICATION OF RULE OF LAW BY JURISDICTION SYSTEM ON ILLEGAL LOGGING CASE IN INDONESIA 2002-2008

The aim of this research is to analyze behavior of Supreme Court’s judge on detention period sentence for illegal logging defendants in Indonesia from year 2002 through 2008.The first analysis is censored normal regression method using detention period indictment by prosecutor, detention period sentence by district court, defendant’s gender, appealeffort, defendant’s age, and defendant’s job variables. Those variables are used to analyze how each variable affect on Supreme Court’s verdict on detention period sentence forillegal logging defendants in Indonesia. Second analysis is descriptive statistic involves three levels of jurisdiction’s considerations (prosecutor, district court, and SupremeCourt) on determining detention period sentence for illegal logging defendants in Indonesia and suitability those three levels of jurisdiction to law. Research’s result showsthat detention period indictment by prosecutor, detention period sentence by district court, and defendant’s age significantly affect on Supreme Court’s verdict on detention period sentence for illegal logging defendants in Indonesia. But, on the other hand there is unsuitable verdict made by those three levels of jurisdiction to law.Keywords: court’s verdict, illegal logging, censored normal regressio

Investigation of the Stochastic Choice under Risk using Experimental Data

This paper extends the analysis of the data from the experiment undertaken by Pradiptyo et al. (2015), to help explain the subjects’ behaviour when making decisions under risk. This study specifically investigates the relative empirical performance of the two general models of the stochastic choice: the random utility model (RUM) and the random preference model (RPM) where this paper specifies these models using two preference functionals, expected utility (EU) and rank-dependent expected utility (RDEU). The parameters are estimated in each model using a maximum likelihood technique and run a horse-race using the goodness-of-fit between the models. The results show that the RUM better explains the subjects’ behaviour in the experiment. Additionally, the RDEU fits better than the EU for modelling the stochastic choice.

When and how to satisfice: an experimental investigation

This paper is about satisficing behaviour. Rather tautologically, this is when decision-makers are satisfied with achieving some objective, rather than in obtaining the best outcome. The term was coined by Herbert Simon in 1955, and has stimulated many discussions and theories. Prominent amongst these theories are models of incomplete preferences, models of behaviour under ambiguity, theories of rational inattention, and search theories. Most of these, however, seem to lack an answer to at least one of two key questions: when should the decision-maker (DM) satisfice; and how should the DM satisfice. In a sense, search models answer the latter question (in that the theory tells the DM when to stop searching), but not the former; moreover, usually the question as to whether any search at all is justified is left to a footnote. A recent paper by Manski (2017) fills the gaps in the literature and answers the questions: when and how to satisfice? He achieves this by setting the decision problem in an ambiguous situation (so that probabilities do not exist, and many preference functionals can therefore not be applied) and by using the Minimax Regret criterion as the preference functional. The results are simple and intuitive. This paper reports on an experimental test of his theory. The results show that some of his propositions (those relating to the ‘how’) appear to be empirically valid while others (those relating to the ‘when’) are less so

Testing the Existence of Wagner Law and Government Expenditure Volatility in Indonesia Post-Reformation Era

Aim of this study is to identify the existence of Wagner’s Law in Indonesia economy during post-reformation era. This study takes period sample of five regimes during 1999 – 2011, which are following: a) Development Reformation Regime; b) National Unity Regime; c) Mutual Cooperation Regime; d) Indonesia Unite I Regime; e) Indonesia Unite II Regime. In order to test the existence of Wagner’s Law, we also elaborate exogenous variable (tax revenue and population) as variable control. We find the result that Wagner Law did occur in post-reformation era by performing an ARDL co-integration model, yet volatility of government expenditure has to be captured. Hence, we run a GARCH model to estimate the volatility of government expenditure by elaborating the regime variable. The ARDL approach, causality test and co-integration test also support the existing of Wagner Law in this study Keywords: Co-integration, GARCH, Wagner Law, post-reformation regime

Application of Rule of Law by Jurisdiction System on Illegal Logging Case in Indonesia 2002-2008

The aim of this research is to analyze behavior of Supreme Court\u27s judge on detention period sentence for illegal logging defendants in Indonesia from year 2002 through 2008.The first analysis is censored normal regression method using detention period indictment by prosecutor, detention period sentence by district court, defendant\u27s gender, appealeffort, defendant\u27s age, and defendant\u27s job variables. Those variables are used to analyze how each variable affect on Supreme Court\u27s verdict on detention period sentence forillegal logging defendants in Indonesia. Second analysis is descriptive statistic involves three levels of jurisdiction\u27s considerations (prosecutor, district court, and SupremeCourt) on determining detention period sentence for illegal logging defendants in Indonesia and suitability those three levels of jurisdiction to law. Research\u27s result showsthat detention period indictment by prosecutor, detention period sentence by district court, and defendant\u27s age significantly affect on Supreme Court\u27s verdict on detention period sentence for illegal logging defendants in Indonesia. But, on the other hand there is unsuitable verdict made by those three levels of jurisdiction to law

ANALISA KEPADATAN TANAH PADA TIMBUNAN DI SALURAN IRIGASI DENGAN METODE PENGUJIAN PROCTOR DAN SAND CONE

Irigasi merupakan upaya yang dilakukan manusia untuk mengairi lahan pertanian. Dalam dunia modern, saat ini sudah banyak model irigasi yang dapat dilakukan manusia. Pada zaman dahulu, jika persediaan air melimpah karena tempat yang dekat dengan sungai atau sumber mata air, maka irigasi dilakukan dengan mengalirkan air tersebut kelahan pertanian. Pengelolaan Infrastruktur Irigasi telah berkontribusi dalam meningkatkan intensitas tanaman padi sawah khususnya pada daerah Irigasi, serta mengupayakan pengelolaan infrastruktur sumber daya air untuk meningkatkan ketersediaan air baku, mengurangi luas areal banjir, dan pengendalian banjir. Tujuan dari penelitian ini Untuk mengetahui kepadatan dari suatu tanah di lapangan secara langsung dengan membandingkan berat isi kering tanah di lapangan dengan berat isi kering tanah laboratorium. Dan Mengetahui karakteristik tanah dari beberapa titik Proctor Test dan Sand cone Test yang akan diambil, sebagai perwakilan yang akan dijadikan sebagai jaringan irigasi Leuwigoong AMS-19 Kabupaten Garut. Data pemadatan tanah dengan menggunakan Proctor Test dan Sand cone Test ini bisa berguna sebagai bahan acuan untuk pemadatan tanah tidak hanya pada pembangunan irigasi tapi juga bisa digunakan untuk pembangunan jalan, jembatan, bangunan gedung, dan lain sebagainya. Metode penelitian yang digunakan dalam analisis ini berdasarkan ketentuan SNI 03-2828-1992 (Metoda Pengujian Kepadatan Lapangan dengan Alat Konus Pasir) dan SNI-R-03-1742-1989 (Cara Uji Kepadatan Ringan Untuk Tanah) dan data penunjang lainnya. Dari hasil analisa yang dilakukan d maks = 1,142 g/cm3 dan Kepadatan tanah maksimum (D) = 9,81 %. Massa air yang membebani tanah timbunan pada saluran irigasi yang dipadatkan yaitu 2.059 kg/detik. Tanah timbunan dengan angka kepadatan tanah lebih dari 95% dan tanah timbunan tersebut dapat menahan massa air lebih dari 2 ton/detik maka bangunan saluran irigasi tersebut berada dalam batas aman, karena tidak aka nada rembesan dan tidak akan tergerus oleh air meski dengan debit maksimal

Effectiveness of Modified Traps for Protection Against Fruit Flies on Mango

Mango is one of the primary fruit export commodities in Indonesia. The productivity of mango can be increased by controlling the pest population, including fruit flies Bactrocera spp. Various efforts to control the population of fruit flies have been carried out, either by implementing traditional methods or by using synthetic pesticides. However, synthetic pesticides can cause pollution, and therefore we need to control the fruit flies’ population by using the most effective fruit fly trap mode. The study was conducted in the mango yield (monoculture) of Department of Agriculture in Majalengka. The traps in this study were modified Steiner traps with funnels, modified Steiner traps without funnels, bottle traps with funnels, bottle traps without funnels, and modified gypsy moth traps. Each trap was fed with 0.2 ml of Methyl eugenol dripped on a cotton roll and hung in the trap. The results showed that the number of fruit flies caught in each trap every week is significantly different. The highest number of fruit flies caught in each trap every week was achieved by bottle traps without funnels that caught 135 flies, while the lowest number of fruit flies caught was recorded by the gypsy moth traps with 16 flies. The transparent color of the bottles and a large number of holes effectively lured the fruit flies into the bottle traps without funnels