Civil War and Human Development: Impacts of Finance and Financial Infrastructure

In this paper interactions between finance, development and armed conflict are explored to demonstrate that financial factors are crucial in sustaining conflict-underdevelopment feedback loops. Military expenditure drains resources, financial instability leads to conflict (and vice versa), war retards the development of financial institutions/infrastructure, and interactions between finance and conflict are exacerbated by distributional struggles. Some of these feedback effects are captured within a two-stage model of war, finance and development and this is used as the basis for an empirical analysis. Econometrically, the model is estimated using panel estimation and two stage Probit least squares (2SPLS) binary dependent variable estimation techniques to control for simultaneity and heterogeneity. The results suggest that financial constraints and financial instability increase the chances of civil war directly and, via negative impacts on development, indirectly too

Civil War and Human Development: Impacts of Finance and Financial Infrastructure

In this paper interactions between finance, development and armed conflict are explored to demonstrate that financial factors are crucial in sustaining conflict-underdevelopment feedback loops. Military expenditure drains resources, financial instability leads to conflict (and vice versa), war retards the development of financial institutions/infrastructure, and interactions between finance and conflict are exacerbated by distributional struggles. Some of these feedback effects are captured within a two-stage model of war, finance and development and this is used as the basis for an empirical analysis. Econometrically, the model is estimated using panel estimation and two stage Probit least squares (2SPLS) binary dependent variable estimation techniques to control for simultaneity and heterogeneity. The results suggest that financial constraints and financial instability increase the chances of civil war directly and, via negative impacts on development, indirectly too

A Behavioural Analysis of Online Privacy and Security

Psychological and sociological factors constrain economic decision-making in many contexts including the online world. Behavioural economics and economic psychology emphasise that people will make mistakes in processing information and in planning for the future; these mistakes will also distort learning processes. Emotions and visceral factors will play a key role - not only a ecting people's actions but also distorting the interactions between information, learning and choices. This will have wide-ranging implications for online behavior and information security management, making people more vulnerable to security/privacy abuses including hacking, spam attacks, phishing, identity theft and online financial exploitation. These vulnerabilities raise crucial policy questions - recently made more pressing in the light of recent phone-hacking scandals in the UK. This paper outlines some of the behavioural factors affecting people's online behaviour and analyses real-world reactions to online fraud using evidence from the British Crime Survey 2009-10

Energy, the Environment and Behaviour Change: A survey of insights from behavioural economics

Evidence of climate change is largely undisputed but moderating the impacts not only of climate change but also of resource depletion is a complex, multi-faceted problem. Technical solutions will have a large role to play but engineering behaviour change within households and firms is essential to harnessing the potential for energy efficient consumption, production and investment. To inform debates about behavior change, this paper explores some insights from behavioural economics including analyses of bounded rationality, cognitive bias / heuristics, temporal discounting, social influences, well-being and emotions

Group Decision-Making: An Economic Analysis of Social Influence and Individual Difference in Experimental Juries

In a jury decision-making, individuals must compromise in order to reach a group consensus. If individuals compromise for non-rational reasons, such as a preference for conformity or due to erroneous information, then the final decision of the group may be biased. This paper presents original experimental data which shows that groups do have a significant tendency to compromise in jury-like settings. Econometric evidence also shows that features of groups, including the generosity of the group overall, will dictate the extent of compromise. The data also reveal that individual traits such as gender and capacity for empathy are associated with the extent of compromise in a jury-type setting. The implications are that interactions between individual and group characteristics limit the objectivity of decision-making

Behavioural Macroeconomic Policy: New perspectives on time inconsistency

This paper brings together divergent approaches to time inconsistency from macroeconomic policy and behavioural economics. Behavioural discount functions from behavioural microeconomics are embedded into a game-theoretic analysis of temptation versus enforcement to construct an encompassing model, nesting combinations of time consistent and time inconsistent preferences. The analysis presented in this paper shows that, with hyperbolic/quasihyperbolic discounting, the enforceable range of inflation targets is narrowed. This suggests limits to the effectiveness of monetary targets, under certain conditions. The paper concludes with a discussion of monetary policy implications, explored specifically in the light of current macroeconomic policy debates

GOTCHA Password Hackers!

We introduce GOTCHAs (Generating panOptic Turing Tests to Tell Computers and Humans Apart) as a way of preventing automated offline dictionary attacks against user selected passwords. A GOTCHA is a randomized puzzle generation protocol, which involves interaction between a computer and a human. Informally, a GOTCHA should satisfy two key properties: (1) The puzzles are easy for the human to solve. (2) The puzzles are hard for a computer to solve even if it has the random bits used by the computer to generate the final puzzle --- unlike a CAPTCHA. Our main theorem demonstrates that GOTCHAs can be used to mitigate the threat of offline dictionary attacks against passwords by ensuring that a password cracker must receive constant feedback from a human being while mounting an attack. Finally, we provide a candidate construction of GOTCHAs based on Inkblot images. Our construction relies on the usability assumption that users can recognize the phrases that they originally used to describe each Inkblot image --- a much weaker usability assumption than previous password systems based on Inkblots which required users to recall their phrase exactly. We conduct a user study to evaluate the usability of our GOTCHA construction. We also generate a GOTCHA challenge where we encourage artificial intelligence and security researchers to try to crack several passwords protected with our scheme.Comment: 2013 ACM Workshop on Artificial Intelligence and Security (AISec

Addressing self-disconnection among prepayment energy consumers: A behavioural approach

This paper uses insights from the study of self-control in decision-making to remedy the problem of self-disconnection among energy prepayment consumers. Self-disconnection happens when consumers exhaust all available credit in their meter and are left without supply of energy. This has serious consequences for the wellbeing of consumers and may increase firms' costs. We design a mechanism composed of a commitment contract and a reminder in order to minimize the number of self–disconnectons. We empirically assess this mechanism by examining (1) the determinants of self-disconnecton and (2) the choice of different commitment contracts. we show that self-control plays a role in self-disconnection and we are able to identify in our sample, those consumers who benefit from a commitment contract. Moreover we find a demand to commitment and an opportunity to save among those consumers who need a commitment contract

Integrated cross-domain object storage in working memory: Evidence from a verbal-spatial memory task

Working-memory theories often include domain-specific verbal and visual stores (e.g., the phonological and visuospatial buffers of Baddeley, 1986), and some also posit more general stores thought to be capable of holding verbal or visuospatial materials (Baddeley, 2000; Cowan, 2005). However, it is currently unclear which type of store is primarily responsible for maintaining objects that include components from multiple domains. In these studies, a spatial array of letters was followed by a single probe identical to an item in the array or differing systematically in spatial location, letter identity, or their combination. Concurrent verbal rehearsal suppression impaired memory in each of these trial types in a task that required participants to remember verbal-spatial binding, but did not impair memory for spatial locations if the task did not require verbal-spatial binding for a correct response. Thus, spatial information might be stored differently when it must be bound to verbal information. This suggests that a cross-domain store such as the episodic buffer of Baddeley (2000) or the focus of attention of Cowan (2001) might be used for integrated object storage, rather than the maintenance of associations between features stored in separate domain-specific buffers

Insensitivity of visual short-term memory to irrelevant visual information

Several authors have hypothesised that visuo-spatial working memory is functionally analogous to verbal working memory. Irrelevant background speech impairs verbal short-term memory. We investigated whether irrelevant visual information has an analogous effect on visual short-term memory, using a dynamic visual noise (DVN) technique known to disrupt visual imagery (Quinn & McConnell, 1996a). Experiment 1 replicated the effect of DVN on pegword imagery. Experiments 2 and 3 showed no effect of DVN on recall of static matrix patterns, despite a significant effect of a concurrent spatial tapping task. Experiment 4 showed no effect of DVN on encoding or maintenance of arrays of matrix patterns, despite testing memory by a recognition procedure to encourage visual rather than spatial processing. Serial position curves showed a one-item recency effect typical of visual short-term memory. Experiment 5 showed no effect of DVN on short-term recognition of Chinese characters, despite effects of visual similarity and a concurrent colour memory task that confirmed visual processing of the characters. We conclude that irrelevant visual noise does not impair visual short-term memory. Visual working memory may not be functionally analogous to verbal working memory, and different cognitive processes may underlie visual short-term memory and visual imagery