Rural Digital Services

The note gives details of the implementation of Rural Digital Services Program in Karnatakae-governance; rural; India; Citizen centric services

Ambiguity Aversion and Cost-Plus Procurement Contracts

This paper presents a positive theory about the contractual form of procurement contracts under cost uncertainty. While the cost of manufacture is uncertain it can be controlled, to an extent depending on the effort exerted by the agent. The effort exerted by the agent is not contractible but causes disutility to the agent. Hence, the amount of effort exerted depends on the power of incentives built into the terms of reimbursement agreed to in the contract. The analysis in the paper explicitly models the possibility that the belief about the cost uncertainty is ambiguous, in the sense that belief is described by a set of probabilities, rather than by a single probability. This allows us to incorporate ambiguity aversion (behavior of the kind seen in Ellsberg`s "paradox") into the players` objective functions. The paper finds that, provided the agent is more averse to ambiguity than the principal, the more the ambiguity of belief the lower the power of the optimal incentive scheme. The fix-price contract is optimal if there is no ambiguity, but if the ambiguity is high enough a cost-plus contract is optimal; in between, a cost-share scheme is optimal. It is contended that the finding is particularly useful in explaining facts about the wide use of cost-plus and similar low powered contracts in research and development (R&D) procurement by the U.S. Department of Defense.Procurement contracts, Incentive contracts, Uncertainty aversion, Ellsberg`s paradox, Cost reimbursement contracts, Cost-plus contracts, Fixed price contracts

Crowd Disasters as Systemic Failures: Analysis of the Love Parade Disaster

Each year, crowd disasters happen in different areas of the world. How and why do such disasters happen? Are the fatalities caused by relentless behavior of people or a psychological state of panic that makes the crowd 'go mad'? Or are they a tragic consequence of a breakdown of coordination? These and other questions are addressed, based on a qualitative analysis of publicly available videos and materials, which document the planning and organization of the Love Parade in Duisburg, Germany, and the crowd disaster on July 24, 2010. Our analysis reveals a number of misunderstandings that have widely spread. We also provide a new perspective on concepts such as 'intentional pushing', 'mass panic', 'stampede', and 'crowd crushs'. The focus of our analysis is on the contributing causal factors and their mutual interdependencies, not on legal issues or the judgment of personal or institutional responsibilities. Video recordings show that, in Duisburg, people stumbled and piled up due to a 'domino effect', resulting from a phenomenon called 'crowd turbulence' or 'crowd quake'. Crowd quakes are a typical reason for crowd disasters, to be distinguished from crowd disasters resulting from 'panic stampedes' or 'crowd crushes'. In Duisburg, crowd turbulence was the consequence of amplifying feedback and cascading effects, which are typical for systemic instabilities. Accordingly, things can go terribly wrong in spite of no bad intentions from anyone. Comparing the incident in Duisburg with others, we give recommendations to help prevent future crowd disasters. In particular, we introduce a new scale to assess the criticality of conditions in the crowd. This may allow preventative measures to be taken earlier on. Furthermore, we discuss the merits and limitations of citizen science for public investigation, considering that today, almost every event is recorded and reflected in the World Wide Web.Comment: For a collection of links to complementary video materials see http://loveparadevideos.heroku.com/ For related work see http://www.soms.ethz.c

A conceptual analysis of fake news

In this paper, I offer a conceptual analysis of fake news. In essence, I suggest analysing this notion as a species of Frankfurtian bullshit. This construal, I argue, allows us to distinguish it from similar phenomena like bad or biased journalism and satire. First, I introduce four test cases. The first three are, intuitively, not cases of fake news, while the fourth one is. A correct conceptual analysis should, hence, exclude the first three while including the fourth. Next, I go through some factors that could explain the difference between the first three cases and the fourth one before I offer my explanation. After that, I propose an analysis of fake news and show that it matches our intuitions about the four test cases. Finally, I consider a possible objection to my proposal

An attempt for an Emergent Scenario with Modified Chaplygin Gas

The present work is an attempt for emergent universe scenario with modified Chaplygin gas. The universe is chosen as spatially flat FRW space-time with modified Chaplygin gas as the only cosmic substratum. It is found that emergent scenario is possible for some specific (unrealistic) choice of the parameters in the equation of state for modified Chaplygin gas.Comment: 7 pages, 3 figure

Ambiguity aversion and the absence of wage indexation

This paper analyzes optimal wage contracting assuming agents are not subjective expectedutility maximizers but are, instead, ambiguity (or uncertainty) averse decision makers whomaximize Choquet expected utility. We show that such agents will choose not to include anyindexation coverage in their wage contracts even when inflation is uncertain, unless theperceived inflation uncertainty is high enough. Significantly, the exercise does not presume anyexogenous costs (e.g., transactions costs) of including indexation linksambiguity aversion; indexation

An overview of economic applications of David Schmeidler`s models of decision making under uncertainty

This paper surveys some economic applications of the decision theoretic framework pioneered by David Schmeidler to model effects of ambiguity. We have organized the discussion principally around three themes: financial markets, contractual arrangements and game theory. The first section discusses papers that have contributed to a better understanding of financial market outcomes based on ambiguity aversion. The second section focusses on contractual arrangements and is divided into two sub-sections. The first sub-section reports research on optimal risk sharing arrangements, while in the second sub-section, discusses research on incentive contracts. The third section concentrates on strategic interaction and reviews several papers that have extended different game theoretic solution concepts to settings with ambiguity averse players. A final section deals with several contributions which while not dealing with ambiguity per se, are linked at a formal level, in terms of the pure mathematical structures involved, with Schmeidler`s models of decision making under ambiguity. These contributions involve issues such as, inequality measurement, intertemporal decision making and multi-attribute choice.Ellsberg Paradox, Ambiguity aversion, Uncertainty aversion

Ambiguity Aversion and Incompleteness of Financial Markets

It is widely thought that incomes risks can be shared by trading infinancial assets. But financial assets typically carry some riskidiosyncratic to them, hence, disposing incomes risk using financial assetswill involve buying into the inherent idiosyncratic risk. However, standardtheory argues that diversification would reduce the inconvenience ofidiosyncratic risk to arbitrarily low levels. This argument is less robustthan what standard theory leads us to believe: ambiguity aversion canexacerbate the tension between the two kinds of risks to the point thatclasses of agents may not want to trade some financial assets. Thus,theoretically, the effect of ambiguity aversion on financial markets is tomake the risk sharing opportunities offered by financial markets lesscomplete than it would be otherwise.incomplete markets; ambiguity aversion

A smooth model of decision making under ambiguity.

We propose and axiomatize a new model of preferences that achieves a separation between ambiguity, identified as a characteristic of the decision maker's subjective information, and ambiguity attitude, a characteristic of the decision maker's tastes.Ambiguity; Uncertainty; Knightian Uncertainty; Ambiguity Aversion; Uncertainty Aversion; Ellsberg Paradox