Behavioral Economics Commons^™

The Pigou-Dalton Principle And The Structure Of Distributive Justice, Matthew D. Adler

Faculty Scholarship

The Pigou-Dalton (PD) principle recommends a non-leaky, non-rank-switching transfer of goods from someone with more goods to someone with less. This Article defends the PD principle as an aspect of distributive justice --- enabling the comparison of two distributions, neither completely equal, as more or less just. It shows how the PD principle flows from a particular view, adumbrated by Thomas Nagel, about the grounding of distributive justice in individuals' "claims." And it criticizes two competing frameworks for thinking about justice that less clearly support the principle: the veil-of-ignorance framework, and Larry Temkin's proposal that fairer distributions are those concerning …

Can We Build Behavioral Game Theory?, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

The way economists and other social scientists model how people make interdependent decisions is through the theory of games. Psychologists and behavioral economists, however, have established many deviations from the predictions of game theory. In response to these findings, a broad movement has arisen to salvage the core of game theory. Extant models of interdependent decision-making try to improve their explanatory domain by adding some corrective terms or limits. We will make the argument that this approach is misguided. For this approach to work, the deviations would have to be consistent. Drawing in part on our experimental results, we will …

Ethics And The Economist: What Climate Change Demands Of Us, Julie A. Nelson

Economics Faculty Publication Series

Climate change is changing not only our physical world, but also our intellectual, social, and moral worlds. We are realizing that our situation is profoundly unsafe, interdependent, and uncertain. What, then, does climate change demand of economists, as human beings and as professionals? A discipline of economics based on Enlightenment notions of mechanism and disembodied rationality is not suited to present problems. This essay suggests three major requirements: first, that we take action; second, that we work together; and third, that we focus on avoiding the worst, rather than obtaining the optimal. The essay concludes with suggestions of specific steps …

Ties That Bind: A Network Perspective On University Spinouts, Patrick Mchugh

2013

Research universities execute technology transfer initiatives to transition university inventions to marketplace innovations. This process requires ties to bridge the gap between two disparate networks: a university's research community and a licensing corporate entity. One type of licensing corporate entity, and the focus of this research, is a newly formed university spinout. Utilizing a network lens, this study focuses on the ties between university inventors and spinout licensees and on the impact of various inter-organizational relationships on a spinout's success. This thesis investigates the following research questions: 1. How, if at all, does variation in the nature of the tie …

Effects Of Global Competitiveness, Human Development, And Corruption On Inward Foreign Direct Investment, Tamilla Curtis, Dawna L. Rhoades, Tom Griffin

Management, Marketing and Operations - Daytona Beach

The purpose of this paper is to investigate which of Dunning's location-specific advantages of host countries, presented as composite indices for Global Competitiveness, Human Development and Corruption Perception, better predict the level of inward Foreign Direct Investment (FDI).

A stepwise multiple regression method was applied on a sample of 129 countries, which was further divided into two subgroups: OECD members and non-OECD members. The study provides evidence that global competitiveness and the level of corruption of the host country are important determinants for inward FDI. For non-OECD countries the Human Development index appears to be an additional FDI determinant. More …

Carrots, Sticks, And Salience, Brian Galle

Georgetown Law Faculty Publications and Other Works

This Article considers the second-best design of Pigouvian taxes and subsidies in the presence of agents who are imperfectly aware of the instrument. Until very recently, the price instrument literature has assumed perfect rationality, and even the handful of prior attempts to account for “hidden” prices focus mainly on the income tax. I extend these efforts in several directions. First, I show that the best available instrument for correcting negative externalities is often one whose price is partially adjusted upwards -- or, in the case of subsidies, downwards -- to counter-act the neglect of irrational actors. In addition, I argue …

Arrow-Fisher-Hanemann-Henry And Dixit-Pindyck Option Values Under Strategic Interactions, Tomoki Fujii, Ryuichiro Ishikawa

Research Collection School Of Economics

We extend the Arrow–Fisher–Hanemann–Henry (AFHH) and Dixit–Pindyck (DP) option values to a game situation. By reinterpreting the AFHH option value as a change in the surplus from conservation because of the prospect of future information, we deal with a conceptual difficulty associated with the AFHH option value in the presence of strategic interactions. We then introduce the DP option value into a game situation. We show that the equivalence between the expected value of information and the DP option value in the standard model does not hold under strategic interactions.

Economic And Psychological Consequences Of Long-Term Unemployment, Lauren D. Appelbaum

Employment Research Newsletter

No abstract provided.

Cafio-Prg Develops Novel Approach To Policy Research, Konstantinos Giannakas

CAFIO: Policy Research Group Policy Pagers

The University of Nebraska-Lincoln has received a grant from the United States Department of Agriculture under the Policy Research Centers Program. This grant has supported the establishment of a Policy Research Group (PRG) as part of the Center for Agricultural and Food Industrial Organization (CAFIO) in the Department of Agricultural Economics. CAFIO-PRG is led by the Project Director, Professor Konstantinos Giannakas, and its main focus is on the development of a novel, empirically relevant, integrated, multi-market framework of policy analysis.

Consumer Attitudes And Labeling Regime Key To The Market Potential Of Food Nanotechnology, Miah Tran, Amalia Yiannaka, Konstantinos Giannakas

CAFIO: Policy Research Group Policy Pagers

Research shows that, even though most consumers lack knowledge and understanding of the technology, they nevertheless have strong opinions as to its potential risks and benefits. Advocates are determined to not repeat the mistakes of biotechnology. Understanding the factors determining the market acceptance of food nanotechnology and its potential impact on the different interest groups involved can inform the design of effective policies and strategies governing food nanotechnology innovations.

Country-Of-Origin-Labeling Creates Winners And Losers Among Consumers, Producers, And Retailers, Konstantinos Giannakas, Alejandro Plastina, Daniel Pick

CAFIO: Policy Research Group Policy Pagers

Public Law 107-171, the United States Farm Security and Rural Investment Act of 2002, required country-of-origin labeling (COOL) for beef, lamb, pork, fish, perishable agricultural commodities, and peanuts. While the aim is to benefit domestic consumers by allowing them to make informed decisions, the effects of COOL have been the subject of a heated on-going debate. Advocates of COOL argue the existence of an “overwhelming” consumer support for country of origin information and benefits that substantially outweigh the costs of this labeling regime. Opposing groups have expressed concerns about the potential competitive disadvantage that non-integrated producers might face due to …

Consumer-Oriented Gm Products Can Hurt Producers, Konstantinos Giannakas, Rim Lassoued

CAFIO: Policy Research Group Policy Pagers

Despite their important agronomic benefits to agricultural producers, GM products (GMPs) have been facing a, rather strong, consumer opposition. This opposition varies significantly between countries and so does the countries’ regulatory response to products of biotechnology. While the US treats biotech products as substantially equivalent to their conventional counterparts and does not require their segregation and labeling, the European Union (EU), based on its “precautionary principle” and consumers’ “right to know,” has instituted a mandatory labeling regime that is regarded as the strictest in the world.

Food Labeling Standards Have Significant Welfare And Distributional Impacts, Konstantinos Giannakas, Nicholas Kalaitzandonakes, Alexandre Magnier

CAFIO: Policy Research Group Policy Pagers

Discussions on the appropriate regulatory norms for genetically modified (GM) foods date back to the early 1980s. Thirty years later, a consensus on what such norms should be remains elusive. Some countries, including the United States and Canada, consider GM foods substantially equivalent to their conventional counterparts and do not require segregation and labeling of these products. Others, including the European Union, Japan, South Korea, New Zealand, Australia, and China have introduced mandatory labeling regimes.

Empathy Nudging Increases Conservation Of Farming Land, Natalia V. Czap, Hans J. Czap, Gary D. Lynne, Mark E. Burbach

CAFIO: Policy Research Group Policy Pagers

One of the major challenges of environmental policy with regard to conservation is that it must often rely on voluntary and non-selfish actions of individuals. Traditionally policy makers rely on direct regulation and financial incentives, but both approaches face problems. Regulations may lead to resentment and the costs of perfect enforcement are prohibitively high. Financial incentives can be perverse and may lead to unintended consequences, including crowding out of intrinsic motivation. In addition, behavioral economics and economic psychology studies demonstrate that the assumptions of the neoclassical economic models (such as self-interest only, rationality, and willpower) on which the policy design …

2013 Farm Bill: An Experimental Test Of The Senate And House Proposals, Natalia V. Czap, Hans J. Czap, Gary Lynne, Mark E. Burbach

CAFIO: Policy Research Group Policy Pagers

The 2008 Farm Bill currently guides agricultural and related environmental/conservation policy. Versions proposed by the United States Senate and the House of Representatives, to be implemented in the 2013 Farm Bill after differences are resolved, aim to achieve environmental (and other food related) goals, while also seeking significant spending cuts. While both versions propose to eliminate the Direct Payments program, they differ with respect to how other crop supports should work and whether crop insurance subsidies should be linked to conservation practices. The Senate Bill supports a policy design based on cross‐compliance, that is, crop insurance subsidies are conditional on …

Choking Under Pressure On The Pga Tour, Madison Friedman

CMC Senior Theses

The productivity of individuals can be altered by cognitive environmental factors such as those that induce psychological pressure. The goal of this analysis is to determine the extent to which a selection of variables influences an individual’s perception of pressure and its subsequent effect on productivity. To do so, the performance of golfers under pressure on the PGA TOUR was proxied using the scrambling percentage statistic. Two regressions, one using data from players who were cut at the end of the second round and the other using data from players who were not cut at the end of the second …

Ex Post Destruction In The Hold-Up Problem, Huan Wang, Juyuan Zhang, Yi Zhang

Research Collection School Of Economics

We investigate whether or not ex post destruction can solve the hold-up problem. After clarifying the difference between ex post destruction and nontrade when negotiation breaks down, we show that the option of ex post destruction is not sufficient to enhance ex ante efficiency. In particular, only if the information about the spitefulness of the supplier is coarse enough, will the option of ex post destruction alleviate the inefficiency of underinvestment caused by the hold-up problem.

Distinguishing Probability Weighting From Risk Misperceptions In Field Data, Levon Barseghyan, Francesca Molinari, Ted O'Donoghue, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

The paper outlines a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries with more than two outcomes and (ii) the ranking of outcomes differs across lotteries. We first present an abstract model of risky choice that elucidates the identification problem and our strategy. The model has numerous applications, including insurance choices and gambling. We then consider the application of insurance deductible choices and illustrate our strategy using simulated data.

Incarceration And The Economic Fortunes Of Urban Neighborhoods, Jeffrey A. Fagan, Valerie West

Faculty Scholarship

This chapter turns to the response of the criminal justice system to neighborhood violence, in particular examining to what extent persistently high levels of incarceration can depress economic well-being and human capital in disadvantaged and racially segregated communities. A panel analysis of New York City neighborhoods between 1985 and 1996, a period in which the city's violent-crime rates both rose and fell sharply, provides evidence that high incarceration rates reduce income growth, educational attainment, and work experience in disadvantaged and racially segregated neighborhoods. To rectify this, targeted micro investment and housing development in such areas can break the connection between …

What's A Name Worth?: Experimental Tests Of The Value Of Attribution In Intellectual Property, Christopher Jon Sprigman, Christopher Buccafusco, Zachary C. Burns

Faculty Scholarship

Despite considerable research suggesting that creators value attribution – i.e., being named as the creator of a work – U.S. intellectual property (IP) law does not provide a right to attribution to the vast majority of creators. On the other side of the Atlantic, however, many European countries give creators, at least in their copyright laws, much stronger rights to attribution. At first blush it may seem that the U.S. has gotten it wrong, and the Europeans have made a better policy choice in providing to creators a right that they value. But for reasons we will explain in this …

Against Endowment Theory: Experimental Economics And Legal Scholarship, Greg Klass, Kathryn Zeiler

Faculty Scholarship

Endowment theory holds the mere ownership of a thing causes people to assign greater value to it than they otherwise would. The theory entered legal scholarship in the early 1990s and quickly eclipsed other accounts of how ownership affects valuation. Today, appeals to a generic “endowment effect” can be found throughout the legal literature. More recent experimental results, however, suggest that the empirical evidence for endowment theory is weak at best. When the procedures used in laboratory experiments are altered to rule out alternative explanations, the “endowment effect” disappears. This and other recent evidence suggest that mere ownership does not …