Coping with journal-price inflation: leading policy proposals and the quality-spectrum

This paper presents a simple model in which research universities stock their libraries with academic journals by picking a threshold level of quality below which no subscriptions are ordered. This framework is used to analyze two sets of initiatives aimed at dealing with journal-price inflation: (1) promoting low-cost modes of production and distribution, e.g., e-journals, and (2) changing tenure and promotion requirements in order to reduce the incentive for scholars to prioritize quantity over quality. Although these initiatives are, in the author's view, laudable in many respects, the model makes the point that the range of quality among journals that libraries subscribe to may shrink as a result. If there are gaps between contemporary standards of ``quality'''' in academic publishing, and what turns out to be useful to society in the long-run, then a ``scholarly communication'''' policy that is sensitive to pluralism with respect to journal-quality is recommended.

Imitation in location choice

Under the assumption of perfect competition, it is difficult to avoid the conclusion that abandoned properties and long undeveloped neighborhoods remain that way because they are unprofitable. In contrast, this paper introduces a model in which firms systematically overlook neighborhoods with little commercial activity because of a positive informational externality motivating later movers to condition choice of location on earlier movers’ locations. When this occurs, firms sometimes find it profitable to imitate early movers’ locations even though privately acquired information suggests locating elsewhere. The model facilitates normative analysis of imitation in location choice by explicitly quantifying losses in aggregate efficiency following a shift from centralized to decentralized regimes. The model provides a tool for investigating the hypothesis of inefficient lock-in as it relates to neighborhoods in U.S. urban centers that remain underutilized despite the presence of profitable business prospects.Imitation, Location, Ecological Rationality, Bounded Rationality, Lock-In, Neighborhood, Abandoned

Success from Satisficing and Imitation: Entrepreneurs’ Location Choice and Implications of Heuristics for Local Economic Development

Decisions about location choice provide an opportunity to compare the predictions of optimization models, which require exhaustive search through very large choice sets, against the actual decision processes used by entrepreneurs choosing where to allocate investment capital. This paper presents new data on entrepreneurs’ self-described decision processes when choosing where to locate, based on scripted interviews with 49 well-placed business owners and senior managers in charge of location choice. Consideration sets are surprisingly small, especially among those who are successful. According to entrepreneurs’ own accounts, locations are frequently discovered by chance rather than systematic search. Few describe decision processes that bear any resemblance to equating marginal benefit with marginal cost as prescribed by standard optimization theory. Nearly all interviewees describe location choice decisions based on threshold conditions, providing direct evidence of satisficing rather than optimization. Imitation is beneficial for small investment projects. Decision process data collected here suggests a need to rethink standard policy tools used to stimulate local economic development.Process Model, Bounded Rationality, Interview Data, Ethnic, Discrimination, Low income, Neighborhood, Lexicographic, Non-compensatory, Business Owners

New Reform Strategies and Welfare Participation in Canada

Heterogeneous welfare reform policies and timing of those policies among Canadian provinces reveal new information about the roles of different policy tools in accounting for declines in welfare participation. Work requirements, diversion, earnings exemptions, and time limits—referred to as new reform strategies—appear to explain at least 16 percent of observed welfare participation declines from 1994 to 2005, more than eligibility requirements and benefit levels explain. Conservative estimates imply that welfare participation falls by 1.9 percentage points (21 percent relative to mean welfare participation) in provinces and years with stringent combinations of new reform strategies in place.Social Assistance, PRWORA, TANF, Work Requirements, Diversion, Earnings, Exemptions, Time Limits, Natural Experiments

Peacemaking among inconsistent rationalities?

Kacelnik, Schuck-Paim and Pompilio (this volume, p. 377) show that rationality axioms from economics are neither necessary nor sufficient to guarantee that animal behavior is biologically adaptive. To illustrate that biological adaptiveness does not imply conformity with the consistency axioms of economics, Kacelnik et al describe animals that sensibly experiment with actions yielding sub-maximum levels of short-term energy intake to monitor their environments for change, leading to apparently intransitive patterns of choice that are nevertheless biologically adaptive. Invalidating the converse claim that economic rationality implies biological adaptiveness is Kacelnik et al’s example of female ruffs that are worse off when they conform to the constant-ratio rule, frequently interpreted as a normative consistency requirement of economic rationality. Together, the two examples demonstrate that axiomatic norms are both unnecessary and insufficient for determining whether a particular behavior is biologically adaptive. Additionally, Kacelnik et al call into question what has been reported in the animal behavior literature as preference reversals, such as risk attitudes among wild rufous hummingbirds or the food-hoarding propensities of grey jays. Kacelnik et al attribute apparent reversals to state-dependent fitness functions modulated by subtle differences in the training phase of animal experiments. For example, animals trained on menus that include a strictly dominated option will tend to have lower accumulated energy reserves and therefore exhibit systematically different patterns of choice––not because they fail to maximize, but because their training has induced systematically different nutritional states. Another possible explanation for preference reversals in animal studies with strictly dominated, or “decoy” options is that menus containing dominated items may convey valid information about future opportunities (Houston and McNamara, 1999). If menus are correlated through time, then menus with inferior options today predict scarcity in the future and imply a distinct optimal course of action, in violation of regularity assumptions that posit invariance with respect to the inclusion of strictly dominated alternatives. In environments with payoff structures that can be modeled as cooperative games, a family’s best response sometimes requires individual family members to behave suboptimally as part of a diversification strategy that reduces the risk of reproductive failure (Hutchinson, 1996). Futhermore, theoretical biologists have documented the fragility of expected fitness maximizing behaviour with respect to the assumption of stable environments. Once the model allows for shocks to the environment’s stochastic structure, simple behavior rules that are suboptimal (in terms of expected fitness) when viewed narrowly from the perspective of unchanging payoffs in a fixed environment may outperform rules based on maximazation within a static small world (Bookstaber and Langsam, 1985).Rationality, rationalities, irrationality, bounded rationality, biology, biological rationality

Demand for Self Control: A model of Consumer Response to Programs and Products that Moderate Consumption

Is it better to apply effort to increase personal consumption, or control what one wants? The model presented here provides a characterization of demand for self control, namely, its responsiveness to price and risk. Unlike most other models of self control, the model does not identify self control with time inconsistency or rely on the multiple-selves framework. Self control refers to resources allocated to preference transformation technology enabling consumers to moderate desire for ordinary consumption by reducing threshold levels required to achieve goals or target-levels of consumption. Consumers face a choice between allocating resources toward increasing expected levels of consumption or increasing chances of contentment through self control. Because of strong income effects, demand for self control turns out to be non-monotonic in price and sometimes discontinuous, revealing potential for unanticipated and sometimes surprisingly large responses to small changes in price. The model is used to analyze consumers’ willingness to follow new regulations, take up credit counseling, enroll in financial literacy programs, and purchase products aimed at improving financial decision making through cultivation of self control.Preference Choice, Preference Change, Moderation, Restraint, Desire, Financial, Decision Making, Consumer Credit, Consumer Finance, Institutional Design, Ecological Rationality, Bounded Rationality, Behavioral Economics

Does Consistency Predict Accuracy of Beliefs?: Economists Surveyed About PSA

Subjective beliefs and behavior regarding the Prostate Specific Antigen (PSA) test for prostate cancer were surveyed among attendees of the 2006 meeting of the American Economic Association. Logical inconsistency was measured in percentage deviations from a restriction imposed by Bayes’ Rule on pairs of conditional beliefs. Economists with inconsistent beliefs tended to be more accurate than average, and consistent Bayesians were substantially less accurate. Within a loss function framework, we look for and cannot find evidence that inconsistent beliefs cause economic losses. Subjective beliefs about cancer risks do not predict PSA testing decisions, but social influences do.logical consistency, predictive accuracy, elicitation, non-Bayesian, ecological rationality

Does consistency predict accuracy of beliefs?: Economists surveyed about PSA

Subjective beliefs and behavior regarding the Prostate Specific Antigen (PSA) test for prostate cancer were surveyed among attendees of the 2006 meeting of the American Economic Association. Logical inconsistency was measured in percentage deviations from a restriction imposed by Bayes’ Rule on pairs of conditional beliefs. Economists with inconsistent beliefs tended to be more accurate than average, and consistent Bayesians were substantially less accurate. Within a loss function framework, we look for and cannot find evidence that inconsistent beliefs cause economic losses. Subjective beliefs about cancer risks do not predict PSA testing decisions, but social influences do.logical consistency, predictive accuracy, elicitation, non-Bayesian, ecological rationality

Snowshoe Hare and Forest Structure Relationships in Western Wyoming

Snowshoe hares (Lepus americanus) are a critically important prey species for Canada lynx (Lynx canadensis). Determination of snowshoe hare distribution and abundance is needed in western Wyoming for lynx conservation. We used linear regression to examine the correlations between snowshoe hare density, as determined by mark-recapture estimates, and fecal pellet plot counts on both uncleared and annually cleared plots on the Bridger-Teton National Forest, western Wyoming. We found significant correlations between hare density estimates and fecal pellet counts for both uncleared and annually cleared pellet counts; however the relationship was much stronger for annually cleared pellet counts. Adjusting the buffer size by omitting hard habitat edges (not used by hares) around the trapping grids improved correlations between hare density and fecal pellet counts further. We recommend pellet counts from annually cleared plots be used when precise estimates of snowshoe hare abundance are required. Though precision is sacrificed when using uncleared plots, they are useful as a coarse index of habitat use by hares. The derived regression equations should be used to identify foraging habitat for lynx in western Wyoming. In addition to snowshoe hares, in western Wyoming red squirrels (Tamiasciurus hudsonicus) and grouse (Bonasa umbellus and Dendragapus obscurus) are used by Canada lynx. Whether young forests or older multi-storied forests contain more snowshoe hares, red squirrels, and grouse in western Wyoming is currently unknown. We estimated snowshoe hare density, and indexed red squirrel and forest grouse abundance in 3 classes of 30-70-year-old lodgepole pine (Pinus contorta) and 4 classes of mature multi-storied forest with a spruce (Picea engelmannii)-fir (Abies lasiocarpa) component. We recorded landscape and forest structure characteristics to understand how these influence lynx prey abundance. Overall, snowshoe hares, red squirrels, and forest grouse were more abundant in multi-storied forests than young forests. Forest attributes that predicted prey abundance were often more prevalent in multi-storied forests. Results from this study suggest that multi-storied forests with a spruce-fir component were disproportionately important to snowshoe hares, red squirrels, and forest grouse in western Wyoming. Canada lynx conservation efforts should focus on maintaining, enhancing, and promoting multi-storied forests in this region