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on Utility Models and Prospect Theory |
| By: | Elisabeth Gugl (Department of Economics, University of Victoria) |
| Abstract: | Consider a two-person economy in which allocative efficiency is independent of distribution but cardinality of the agents' utility functions precludes transferable utility. I show that both agents either benefit or lose with any change of production possibilities under the Nash Bargaining and the Kalai-Smorodinsky solutions. |
| Keywords: | Axiomatic bargaining, resource monotonicity, transferable utility, risk aversion |
| JEL: | C71 D13 D63 |
| Date: | 2007–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:vic:vicddp:0702&r=upt |
| By: | Guido, Cataife |
| Abstract: | This paper models the strategic encounter of two office-motivated candidates who may or may not announce policy. In the case of no announcement, the voters rank the candidates according to prior beliefs. In the case of announcement, the candidates cannot avoid a degree of noise in the voters' interpretation of their announcements. We show that this simple deviation from the standard Downsian setting suffices to overcome previous impossibility results which suggest that not announcing policy can never occur in equilibrium. Also, we extend the model to study the equilibrium when candidates are ambiguity averse. An ambiguity averse candidate is interpreted as being concerned about an ongoing negative campaign against him. This negative campaign would consist in inducing the voters to adopt some interpretation of the candidate's announcement unfavorable to his electoral performance. We show that under ambiguity aversion the candidates opt not to announce position under less stringent conditions than expected utility. Finally, we use data on U.S. Senate elections to test an empirical implication of the model. We find that the relevant coefficient has the sign predicted by the theory and is statistically significant. |
| Keywords: | Voting; Salience; Electoral Ambiguity; Ambiguity Aversion; Media Politics |
| JEL: | D72 C13 C72 |
| Date: | 2007–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4473&r=upt |
| By: | Marc Fleurbaey (CNRS, Université Paris 5, IDEP); Cyrille Hagneré (OFCE, IDEP); Alain Trannoy (EHESS, GREQAM-IDEP) |
| Abstract: | The distribution of the population across households of different size may change over time, in addition to a change in the income distribution. We propose dominance criteria for comparing income distributions from a welfare viewpoint which take account of both dimensions. In our approach, welfare is computed as the average individual utility instead of the average household utility as in most known criteria. Besides, we consider classes of individual utility functions which allow for some indeterminacy about the average optimal family size, by resorting to the bounded approach to dominance analysis due to Fleurbaey et al. (2003). In so doing, we are able to extend several criteria proposed previously such as those of Jenkins and Lambert (1993), Ebert (1997), Shorrocks (2004). An application of the criteria to French data (French Household Expenditure Survey) highlights that shifting from household criteria to individualistic criteria substantially alters the conclusions. |
| Keywords: | Family size, dominance, equivalence scale, welfare comparison |
| JEL: | D31 D63 D13 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:iep:wpidep:0702&r=upt |
| By: | Wolfgang Härdle; Sigbert Klinke; Uwe Ziegenhagen |
| Abstract: | Students of introductory courses consider statistics as particularly difficult, as the understanding of the underlying concepts may require more time and energy than for other disciplines. For decades statisticians have tried to enhance understanding with the help of technical solutions such as animation, video or interactive tools. However it is not clear if the added value generated by these e-learning tools justifies the work invested. In this paper the experience with various e-learning solutions in terms of utility and the impact on teaching is discussed. |
| Keywords: | E-Learning, Statistics, Web-based Learning. |
| JEL: | I21 C19 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2007-050&r=upt |
| By: | Nicolas Gravel (Centre de Sciences Humaines, Delhi & IDEP-GREQAM); Abhiroop Mukhopadhyayz (Indian Statistical Institute) |
| Abstract: | This paper provides a robust normative evaluation of the spectac- ular growth episode that India has experienced in the last 15 years. Speci cally, the paper compares the evolution, between 1988, 1996 and 2001 of the distribution of several important individual attributes on the basis of ethically robust dominance criteria. The individual at- tributes considered are real consumptions (measured at the individual level), literacy rate, infant mortality and violent crime rates (all mea- sured at the district levels). District level variables are interpreted as (local) public goods which, along with consumption, are assumed to contribute to individual well-being. The robust criteria used are gen- eralizations, to more than two attributes, of the rst and second order dominance criteria of Atkinson and Bourguignon (1982) and are known to correspond to the unanimity of utilitarian value judgements taken over a specific class of individual utility functions. The main result of the empirical analysis is that all utilitarian rankings of distributions of the four attributes who assume that individual utility functions satisfy the assumptions of second order dominance aggree that India is better o¤ in 2002 than in 1996. Furthermore, if one removes crime from the list of attributes, the dominance is shown to apply steadily over the whole period and to be of first order on the period 1988-1996. |
| Keywords: | Poverty, welfare, Dominance, Multidimensional, Development, local public goods |
| JEL: | D31 D63 H4 I12 I2 I31 I32 I38 N35 O18 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:iep:wpidep:0704&r=upt |