the nature of diversified business groups a research design and two case studies diversified business groups dominate the private sectors of most of the world s economies several of these economies have undergone sudden policy changes that significantly increase domestic competitive intensity the authors demonstrate how the changes in corporate scope that accompany such competitive shocks can be used to weigh the importance of different explanations for the existence of diversified business groups the authors illustrate their reasoning by studying the restructuring of two of india s largest business groups following a comprehensive post 1991 package of policy reforms the case studies also elucidate aspects of the restructuring process that should inform larger sample empirical analyses copyright 1998 by blackwell publishing ltd

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

implications of bid design and willingness to pay distribution for starting point bias in double bounded dichotomous choice contingent valuation surveys we examine starting point bias in double bounded dichotomous choice contingent valuation surveys we investigate 1 the seriousness of the biases for the location and scale parameters of the willingness to pay wtp in the presence of starting point bias 2 whether or not these biases depend on the distribution of wtp and on the bid design and 3 how well a commonly used diagnostic for starting point bias a test of the null that bid set dummies entered in the right hand side of the wtp model are jointly equal to zero performs under various circumstances monte carlo simulations suggest that the effect of ignoring starting point bias depends on the bid design and on the true distribution of wtp a well balanced symmetric bid design may result in very modest biases even when the anchoring mechanism is very strong the power of bid set dummies in detecting starting point bias is low they tend to account for misspecifications in the distribution assumed by the researcher for the latent wtp rather than capturing the presence of starting point bias

is there an inflation productivity trade off some evidence from the manufacturing sector in greece this paper examines the effect of inflation on total factor productivity growth tfp using time series data for every two digit greek manufacturing industries in order to do the above a translog flexible cost function is estimated and used to decompose tfp growth into scale economies inflation and technical change the advantage of estimating a very general and flexible cost function is that it allows us for the first time to examine empirically a large number of significant relationships between tfp growth and economies of scale inflation and technical change the main conclusion drawn from this analysis is that inflation reduces tfp growth in a way which is sizeable furthermore using standard causality test the direction of causality between inflation and tfp growth was tested at the manufacturing level

the market for quacks a group of n quacks plays a price competition game facing a continuum of patients who recover with probability whether or not they acquire a quack s treatment if patients chose rationally the market would be inactive i assume however that patients choose according to a boundedly rational procedure which re ects anecdotal reasoning this element of bounded rationality has signi cant

modelling heterogeneity in response behaviour towards a sequence of discrete choice questions a probabilistic decision process model there is a growing body of evidence in the non market valuation literature suggesting that responses to a sequence of discrete choice questions tend to violate the assumptions typically made by analysts regarding independence of responses and stability of preferences decision processes or heuristics such as value learning and strategic misrepresentation have been offered as explanations for these results while a few studies have tested these heuristics as competing hypotheses none has investigated the possibility that each explains the response behaviour of a subgroup of the population in this paper we make a contribution towards addressing this research gap by presenting a probabilistic decision process model designed to estimate the proportion of respondents employing defined heuristics we demonstrate the model on binary and multinomial choice data sources and find three distinct types of response behaviour the results suggest that accounting for heterogeneity in response behaviour may be a better way forward than attempting to identify a single heuristic to explain the behaviour of all respondents

estimation using contingent valuation data from a dichotomous choice with follow up questionnaire reply abstract our original article proposed that the two yes no willingness to pay wtp responses produced by this survey format should be viewed as a pair of jointly distributed correlated discrete random variables the comparison model the conventional approach to estimation using these types of data contained a programming error correction alters the results from the comparison model but our original claim that estimation by conventional methods can produce misleading inferences if ours is the appropriate specification still stands this is especially true if negative wtp is precluded when e wtp is calculated

incentive incompatibility and starting point bias in iterative valuation questions we test for incentive incompatibility and starting point bias to describe the effects of iterative valuation questions on willingness to pay we compare double triple and multiplebounded models with data from two surveys with similar designs of the valuation questions we find that incentive incompatibility is present in both sets of data and starting point bias is present in one the efficiency of the willingness to pay estimate is improved in only one set of data the potential loss from using iterative questions without controlling for both incentive incompatibility and starting point bias is biased willingness topay estimates

an economic approach to influence activities in organizations members of organizations spend considerable time effort and ingenuity attempting to influence decision makers such influence activities may bring benefits to the organization but they also involve real costs this essay offers an economic rationale for such influence activity as representing rational self interested behavior in the presence of informational asymmetries and an analysis of how the design of the organization s structure and policies should respond to the incentives for attempting influence it is posited that information valuable for the organization s decision making is directly available only to members of the organization who have some personal stake in the decisions these individuals may then have an incentive to try to manipulate the information they develop and provide in order to influence the resulting decisions to their benefits this can be costly both in degrading the quality of decision making and in diverting the attention and effort of the organization s members from more productive activities the organization has three different methods it can employ to discourage excessive influence activities and to encourage more directly productive uses of time and effort it can limit access to decision makers and participation in decision making it can alter its decision making criteria to favor those performing well in productive activities and it can provide direct financial incentives to encourage the desired allocation of effort it is shown that an efficiently designed organization will use such financial incentives only as a last resort instead it will always first alter its decision participation policies and decisionmaking criteria

the implications of the historical decline in us energy intensity for long run co2 emission projections this paper analyzes the influence of the long run decline in us energy intensity on projections of energy use and carbon emissions to the year 2050 we build on our own recent work which decomposes changes in the aggregate us energy gdp ratio into shifts in sectoral composition structural change and adjustments in the energy demand of individual industries intensity change and identifies the impact on the latter of price induced substitution of variable inputs shifts in the composition of capital and embodied and disembodied technical progress we employ a recursive dynamic computable general equilibrium cge model of the us economy to analyze the implications of these findings for future energy use and carbon emissions comparison of the simulation results against projections of historical trends in gdp energy use and emissions reveals that the range of values for the rate of autonomous energy efficiency improvement aeei conventionally used in cge models is consistent with the effects of structural changes at the sub sector level rather than disembodied technological change even so our results suggest that us emissions may well grow faster in the future than in the recent past

why do people non demand reveal in hypothetical double referenda for public goods hypothetical contingent valuation surveys used to elicit values for environmental and other public goods often employ variants of the referendum mechanism due to the cognitive simplicity and familiarity of respondents with this voting format one variant the double referendum mechanism requires respondents to state twice how they would vote for a given policy proposal given their cost of the good data from these surveys often exhibit anomalies inconsistent with standard economic models of consumer preferences there are a number of published explanations for these anomalies mostly focusing on problems with the second vote this article investigates which aspects of the hypothetical task affect the degree of nondemand revelation and takes an individual based approach to identifying people most likely to non demand reveal a clear profile emerges from our model of a person who faces a negative surplus i e a net loss in the second vote and invokes non self interested non financial motivations during th

characterizing the effects of valuation methodology in function based benefits transfer abstract meta analyses have demonstrated that willingness to pay wtp estimates vary systematically according to methodological factors the benefits transfer literature provides little guidance with regard to the treatment of such effects transfers are typically conducted by ignoring such effects using ad hoc adjustments or otherwise suppressing information regarding the sensitivity of wtp to methodological attributes this paper illustrates a means to characterize methodological effects within benefits transfer based on an application of the common bootstrap drawing from meta analysis the approach characterizes the sampling distribution of wtp with respect to patterns of methodological variation present in underlying studies results provide a means to characterize the extent of variation associated with predefined groups of methodological attributes providing transparent information on the sensitivity of wtp not typically available in benefits transfer

testing preference formation in learning design contingent valuation using advance information and repetitive treatments policymakers have largely replaced single bounded discrete choice valuation by the more statistically efficient repetitive method double bounded discrete choice and discrete choice experiments repetitive valuation permits classification into rational and irrational preferences 1 a priori well formed 2 consistent nonarbitrary values discovered through repetition and experience 3 consistent but arbitrary values as shaped by preceding bid level and 4 inconsistent and arbitrary values policy valuations should demonstrate behaviorally rational preferences we outline novel methods for testing this in double bounded discrete choice experiments applied to renewable energy premiums in chile

a bayesian approach to double bounded contingent valuation in this paper we propose a bayesian approach to model double bounded contingent valuation data the double bounded elicitation method is interpreted as a two tier iterated process in which the subject is allowed to have a second thought about his her valuation for the environmental good prior information is modelled from the answers to the first dichotomous choice question the model is quasi bayesian q b in that the prior distribution refers to mean willingness to pay while the likelihood function refers to the proportions of a multinomial distribution this model is applied to empirical data from a contingent valuation survey involving the valuation expressed by european tourists for access to natural areas in the canary islands results show that point estimate of consumer surplus computed with the q b model does not differ substantially from single bounded model estimation in addition double bounded seems to be quite robust to the choice of the prior model of willingness to pay responses comparison with open ended suggests that the q b model might be useful to control for strategic response and starting point biases

the role of information processing cost as the foundation of bounded rationality in game theory abstract this paper explores whether the existence of information processing costs in game theory leads to a model of bounded rationality the model of bounded rationality is derived from an enumeration framework which yields the result that a search process for the nash equilibria is information cost efficient in a pure strategy

household willingness to pay for green electricity in urban and peri urban tigray northern ethiopia determinants and welfare effects abstract this paper set out to estimate household willingness to pay for green electric services and welfare gains attributed to such schemes for this purpose contingent valuation survey was conducted on 300 urban and peri urban households in northern ethiopia a bivariate probit model was used to elicit willingness to pay and analyze determinants of household willingness to pay on the other hand welfare gains were analyzed using consumer and producer surpluses the mean willingness to pay was estimated to be birr 12 5 0 66 usd per month per household for five years on top of monthly electricity bill among others income played positive role on willingness to pay while difference in willingness to pay behavior was observed between male and female headed households in addition distance to wood and charcoal alternative energy markets played encouraging role for willingness to pay results from the welfare analysis show that there is significant societal gain to be made both in terms of surplus for households and producers government if the previously untapped green electricity service was implemented the revenue producer surplus for the state would be instrumental in contributing to the state s endeavor to generate a much needed capital for investment in and expansion of renewable energy

stated preferences real behaviour and anchoring some empirical evidence we compare different contingent valuation question formats with each other and with observed behaviour for a non monetary estimation task the expected number of kilometers travelled by automobile open ended questions open ended follow up questions dichotomous choice dc questions and double bound dc questions are included the single and double bound dc questions result in an estimated mean about twice as high as the actual value and the open ended mean the dc question overestimation seems to be due to an anchoring effect leading to yea saying behaviour our results about the difference between dc questions and open ended questions is consistent with the pattern observed in contingent valuations studies of the willingness to pay our results indicates that dc questions seem to be associated with a general overestimation problem that is present even for simple non monetary estimation tasks

economic growth and human capital accumulation simultaneity and expanded convergence tests abstract earlier economic growth studies are extended to account for simultaneity between economic growth and human capital accumulation the speed of income convergence and contribution of human capital to economic growth are underestimated if contemporaneous human capital growth effects are ignored

gender specific starting point bias in choice experiments evidence from an empirical study abstract in this paper we test whether preferences and willingness to pay estimates obtained in a choice experiment study are susceptible to starting point bias as is often the case in dichotomous choice contingent valuation studies on the basis of a multinomial probit model we find that preferences are indeed susceptible to starting point bias in a split sample design our results suggest that varying the price levels displayed in a so called instructional choice set presented prior to the actual preference eliciting choice sets significantly impacts respondents preferences and willingness to pay for protecting danish nature areas from new motorway development in particular our results show that the bias is gender specific only female respondents are significantly affected results further reveal that the impact of the starting point bias decays as respondents evaluate more and more choice sets this supports the discovered preference hypothesis and on the basis of this we suggest a number of ways to potentially mitigate the starting point bias

complexity considerations and market behavior the article is concerned with market behavior when firms have limited ability to handle effectively the complexity of changing market conditions and strategic interaction modelling the managerial bounded rationality by using the concept of strategic complexity as measured by afinite automaton we show that market behavior can be considerably altered once there is a limit on the complexity ofstrategies in particular we demonstrate that when an incumbent firm operates in several markets an entry to one market may induce the incumbent to exit from another market divestiture in order to concentrate on the competition it faces for different parameters the incumbent may react to such an entry by exit from the same market creating specialization we also demonstrate that bounded complexity can serve as an entry barrier giving an advantage to the established incumbent firm

productivity and economic growth in japan and the united states during the period from 1960 to 1973 the economic growth rate in japan was at the rate of 10 or 11 percent per year japan was not the only country that grew rapidly during that period france and germany grew at 5 9 and 5 4 percent per year between 1960 and 1973 and italy grew at 4 8 percent per year even the united kingdom grew at a respectable 3 8 percent per year the united states grew at 4 3 percent per year during this period to fill out the roster of the seven major industrialized countries canada grew at 5 1 percent per year after the first oil crisis in 1973 and even more so after the second oil crisis in 197879 there was a dramatic decline of economic growth among industrialized countries growth in the oecd countries dipped to 2 6 percent per year between 1973 and 1979 japanese growth dropped from the doubledigit levels of the 1960 s and the early 1970 s to 3 8 percent per year from 1973 to 1979 in the united states the growth rate dropped to slightly above the oecd average at 2 8 percent per year the rate of economic growth in germany dropped to 2 4 percent and in france to 3 1 percent in every major industrialized country there was a precipitous fall in the rate of economic growth the sources of economic growth in japan and the united states over the whole period from 1960 to 1979 are given in table 1 if we compare japan and the united states during the period 1960 79 we see that the growth of output over the whole period was 8 3 percent in japan and only 3 5 percent in the united states we can allocate this growth in output in the two countries among its three sources namely the contribution of capital input the contribution of labor input and the rate of technical change by far the most important contributor to economic growth in both countries is the growth of capital input this growth source accounts for about 5 percentage points of the japanese economic growth rate and about 1 5 percentage points of the u s economic growth rate this amounts to 60 percent of japanese growth and 40 percent of u s growth labor input in the two countries is a major contributor to economic growth accounting for 1 5 percent of the japanese growth rate and 1 2 percent of the u s growth rate the rate of technical change is an important contributor as well at nearly 2 percent in japan and 0 7 percent in the united states i conclude that by far the most important contributor to economic growth in the two countries is the growth of capital input the relative importance of capital input is much greater in japan than in the united states focusing attention on the period from 1973 to 1979 after the energy crisis we can see that capital input retained its lead as a source of economic growth in both countries however the decline in the growth of tdiscussants john w kendrick george washington university j randolph norsworthy rensselaer polytechnic institute rolf r piekarz national science foundation

controlling starting point bias in double bounded contingent valuation surveys in this paper we study starting point bias in double bounded contingent valuation surveys this phenomenon arise in applications that use multiple valuation questions indeed response to follow up valuation questions may be influenced by the bid proposed in the initial valuation question previous research have been conducted in order to control for such an effect however they find that efficiency gains are lost when we control for undesirable response effects relative to a single dichotomous choice question contrary to these results we propose a way to control for starting point bias in double bounded questions with gains in efficiency

enhanced geospatial validity for meta analysis and environmental benefit transfer an application to water quality improvements meta regression models are commonly used within benefit transfer to estimate willingness to pay wtp for environmental quality improvements theory suggests that these estimates should be sensitive to geospatial factors including resource scale market extent and the availability of substitutes and complements valuation meta regression models addressing the quantity of non market commodities sometimes incorporate spatial variables that proxy for a subset of these effects however meta analyses of wtp for environmental quality generally omit geospatial factors such as these leading to benefit transfers that are invariant to these factors this paper reports on a meta regression model for water quality benefit transfer that incorporates spatially explicit factors predicted by theory to influence wtp the metadata are drawn from stated preference studies that estimate per household wtp for water quality changes in united states water bodies and combine primary study information with extensive geospatial data from external sources results find that geospatial variables are associated with significant wtp variations as predicted by theory and that inclusion of these variables reduces transfer errors

the welfare cost of perceived policy uncertainty evidence from social security policy uncertainty reduces individual welfare when individuals have limited opportunities to mitigate or insure against the resulting consumption fluctuations we field an original survey to measure the degree of perceived policy uncertainty in social security benefits and to estimate the impact of this uncertainty on individual welfare our central estimates show that on average individuals are willing to forgo 6 percent of the benefits they are supposed to get under current law to remove the policy uncertainty associated with their future social security benefits this translates to a risk premium from policy uncertainty equal to 10 percent of expected benefits

an experimental testing of anchoring effects in discrete choice questions this paper re examines the openended dichotomous choice question in the lab it hasearlier been suggested that the dichotomous choiceformat suffers from anchoring and yea saying comparing actual economic commitments for a privategood with a significant market value we cannot rejectthe null hypothesis of equal wtp for the two formats we conclude that problems with dc might be due toissues of how the survey is framed not the dcquestion itself

are french consumers ready to pay a premium for eco labeled seafood products a contingent valuation estimation with heterogeneous anchoring could the future french eco label for fresh seafood products find its place in the french market this study employs a contingent valuation method to estimate french consumers willingness to pay wtp for eco labeled fresh seafood products we exploit original data from a survey carried out in 2010 where 626 participants responded to a double bounded dichotomous choice model through an ascending or descending bid system controlling for shift and anchoring effects in random effect probit models we significantly improve estimation of wtp and its determinants for the three species studied monkfish lobster sole in particular when using heterogeneous anchoring we show that wtp is positively correlated to respondents income and also to their environmental concern to living alone to living far from the coast and to trusting ngos or public institutions more than producer organizations to implement an eco label we also show that the mean price premiums do not differ between species finally on average the maximum premium consumers accepted to pay is approximately 10 of the product price

starting point bias in dichotomous choice valuation with follow up questioning abstract follow up questions are frequently used to improve the efficiency of dichotomous choice contingent valuation questionnaires however a number of authors e g 12 16 have noted a significant difference between the wtp distributions implied by initial and follow up question responses this paper investigates starting point bias as one explanation for the phenomenon we develop a model of starting point bias in the context of dichotomous choice questioning with follow up using a monte carlo simulation to illustrate the potential bias imparted to wtp estimates an application is provided based on data from a cv study in northcentral iowa

contingent valuation a new perspective after several decades of academic research on the contingent valuation cv method a consistent behavioral explanation of hypothetical bias is still lacking based on evidence from economics economic psychology and the political sciences i propose an explanation that is based on two simple working hypotheses about respondent behaviour in contingent valuation surveys the first hypothesis is that survey respondents are unable to form consistent preferences about unfamiliar goods unless the choice context offers reliable informative cues that can be rationally exploited in simplified heuristics the second hypothesis is that the probability and impact of strategic responses in dichotomous choice questions about public goods depends on the extent to which the presented hypothetical costs differ from the actual costs the literature on hypothetical bias is revisited in the light of these behavioral hypotheses i find that the hypotheses are generally supported by the empirical data moreover the hypotheses are able to explain several important empirical phenomena that previous research has not been able to explain in particular they solve the puzzle that pre election polls but not cv surveys are able to predict actual referendum outcomes and they explain why income effects on willingness to pay are lower in cv responses than in actual votes if confirmed by further studies the hypotheses will have important implications for future research and practice first the hypothetical costs presented in the dichotomous choice question should to be close enough to the actual costs to be credible to all respondents this can be achieved by specifying the costs as a percentage rather than absolute change in taxes second the respondents should be given the option to answer based on information about the positions of large parties and interest groups with known political orientation rather than based on the raw policy information theory and evidence suggest that this new survey paradigm largely eliminates the fundamental problems of the conventional stated preference methods

exploring preference anomalies in double bounded contingent valuation double bounded dichotomous choice dbdc contingent valuation offers increased efficiency of willingness to pay wtp estimates compared with the single bounded format however evidence suggests dbdc generates anomalous respondent behaviour this paper provides the first investigation and explanation of these anomalies in health results suggest the incentives for truthful preference revelation are altered in the presence of a follow up question this result is found using both regression techniques and analysis of raw responses although findings suggest very certain respondents exhibit less anomalous behaviour inconsistencies remain across bounds the results of this study question the use of iterative valuation formats

necessary conditions for demand revelation in double referenda abstract this paper demonstrates a set of necessary conditions that should generate unbiased internally consistent estimates of willingness to pay wtp from a double referendum mechanism these conditions are also sufficient for demand revelation in an experimental laboratory environment however the control over the mechanism achieved in the lab may not be transferrable to the field and wtp estimates derived from field surveys may remain biased

deriving and testing efficient estimates of wtp distributions in destination choice models estimation of welfare measures is often a dominant driver in the empirical literature on nonmarket valuation to this end qualitative choice models based on random utility theory have been widely employed in outdoor recreation studies a frequent goal of applied studies has been the estimation of welfare changes associated with site attribute changes at recreation sites in order to inform regulatory policy and resource management we review the evolution of the methodology of random utility theory in this field with a focus on taste heterogeneity models and then focus on the recent proposal of specifying utility in the wtp space train k weeks m 2005 discrete choice models in preference space and willing to pay space in scarpa r alberini a eds applications of simulation methods in environmental and resource economics chapter 1 springer dordrecht pp 1 16 our empirical application is on outdoor alpine recreation data we emphasize the efficiency and direct testing that using the maximum simulated likelihood estimator affords to practitioners using the wtp space approach and illustrate these with examples

modeling shifts in willingness to pay from a bayesian updating perspective this paper derives a structural shift empirical specification for a double bound dichotomous choice contingent valuation methodology premised upon willingness to pay wtp shifts ensuing from a representative model of respondent bayesian updating behavior we demonstrate by way of data simulations that a traditional structural shift specification may often fail at estimating true wtp in this context further simulations demonstrate that a simple extension of the traditional structural shift model derived explicitly from our bayesian framework can correct for much of the wtp bias with an empirical application confirming the simulation outcomes finally we investigate the relationship between strategic behavior and wtp shifts

contingent valuation of community forestry programs in ethiopia controlling for preference anomalies in double bounded cvm this study examines the welfare effects of community plantations in ethiopia via contingent valuation both single bounded and double bounded survey methods were considered and with respect to double bounded methods the potential for anomalous response behaviour was also taken into account the results generally confirm that there are statistically significant welfare benefits to be derived from community forestry however the range of the estimated benefits is large after controlling for anomalous response behaviour the range of estimated benefits narrows and our preferred estimates place the welfare gain between ethiopian birr etb 20 14 and 30 41 per household which is much lower than the estimated benefits without controlling for anomalous preference responses

procedural invariance testing of the one and one half bound dichotomous choice elicitation method the contingent valuation method for estimating willingness to pay for public goods typically adopts a single referendum question format which is relatively statistically inefficient as an alternative cooper hanemann and signorello 2002 propose the one and one half bound oohb format allowing researchers to question respondents about both a lower and higher limit on project costs thereby securing substantial gains in statistical efficiency using an experimental design we find that responses to oohb valuation questions fail crucial tests of procedural invariance we test various competing models of observed response patterns including strategic misrepresentation of standard preferences and nonstandard models of preference formation

increasing returns to size and their limits a model of organization is proposed in which factors for increasing returns to size and factors for decreasing returns to size are in conflict the former effect reflects standard efficiency gains associated with economies of scale the latter arises from inefficiencies which are modelled in a crude way in decision making of large organizations generalizing our previous work we give a criterion the existence of n multilateral merging agreements which is reasonably simple in view of the complexity of the problem and ensures that increasing returns unambiguously dominate decreasing returns the basic result is then extended in several directions

benefit evaluation of the country of origin labeling in taiwan results from an auction experiment this research is aimed at investigating the consumer s preference for food produced in taiwan and the economic benefits for the country of origin labeling cool the study used vickrey second price sealed bid auction to elicit the consumer s willingness to pay wtp for products under cool the study compared the bid functions estimated with tobit model and the premium functions estimated with ordinary least squares ols due to price affiliation it is more reliable to use the estimated premium functions the estimated premiums are 67 5 84 7 and 99 for taiwan products over their alternatives of china olives china oolong tea and vietnam oolong tea respectively the study concludes that enacting and rigorously enforcing a cool law would increase economic benefits to consumers in taiwan and at the same time placing the imported products in the leveled playing field

learning design contingent valuation ldcv noaa guidelines preference learning and coherent arbitrariness we extend the contingent valuation cv method to test three differing conceptions of individuals preferences as either i a priori well formed or readily divined and revealed through a single dichotomous choice question as per the noaa cv guidelines k arrow r solow p r portney e e leamer r radner h schuman report of the noaa panel on contingent valuation fed reg 58 1993 4601 4614 ii learned or discovered through a process of repetition and experience j a list does market experience eliminate market anomalies q j econ 2003 41 72 c r plott rational individual behaviour in markets and social choice processes the discovered preference hypothesis in k arrow e colombatto m perleman c schmidt eds rational foundations of economic behaviour macmillan london st martin s new york 1996 pp 225 250 iii internally coherent but strongly influenced by some initial arbitrary anchor d ariely g loewenstein d prelec coherent arbitrariness stable demand curves without stable preferences q j econ 118 1 2003 73 105 findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning in doing so we show that such a learning design cv method overturns the stylised facts of bias and anchoring within the double bound dichotomous choice elicitation format

partial outsourcing monitoring cost and market structure we investigate firms outsourcing decisions when production requires a large number of inputs the novelty of our approach is that it provides a testable framework to characterize the equilibrium fraction of outsourced inputs we demonstrate that intensified competition in a cournot market for the final good typically enlarges the set of outsourced components relative to those produced in house the proportions of outsourced inputs are found to be strategic substitutes independently of whether firms compete with respect to quantities or prices in the market for the final good jel classification d20 l22 sous traitance partielle cout de monitarisation et structure de marche l auteur examine les decisions de sous traitance des entreprises quand la production reclame un grand nombre d intrants la nouveaute de l approche proposee est qu elle fournit un cadre conceptuel testable pour definir en equilibre la fraction des intrants obtenue en sous traitance on montre qu une concurrence plus intense pour le produit final dans un marchea la cournot accroit l ensemble des intrants obtenus en sous traitance par rapport a l ensemble de ceux qui sont produit a l interne il s avere que les proportions des divers intrants obtenus en sous traitance sont des substituts que les firmes se concurrencent par les prix ou les quantites dans le marche du produit final

the stock market and the productivity slowdown international evidence extending baily s model of the productivity slowdown to the manufacturing sectors of five other countries we find that a decline in the growth of capital services reflected in declines in the stock market can explain much of the 1973 1978 decline in productivity abroad as well as in the united states we also show however that the stock market declines often preceded the declines in productivity growth and the model is less successful when the sample period is extended through 1981

respondent uncertainty and ordering effect on willingness to pay for salt marsh conservation in the brest roadstead france abstract this paper explores the potential link between the sensitivity of willingness to pay wtp to the order of presenting bid amounts in contingent valuation questions ordering effect and respondent uncertainty the resource being valued is a public project to protect salt marshes against the spread of an invasive aquatic plant in the brest roadstead france valuation uncertainty is captured through a variant of payment card format where respondents are given the opportunity to report their wtp as either a single value option a or an interval of values option b the ordering effect is tested using both parametric models that ignore and control for the potential sample selection bias related to the choice between option a and option b as well as non parametric models the results suggest that 1 respondents place substantial wtp values on salt marsh conservation and 2 the ordering effect is linked to respondent uncertainty since only uncertain respondents react differently to changes in the order of presenting bid amounts specifically for uncertain respondents putting bid amounts in ascending order yields lower welfare estimates than putting bid amounts in descending order or random order policy recommendations and options to deal with ordering effect are discussed

salt or sludge exploring preferences for potable water sources decision makers often use information about public preferences to guide public policy several disciplines gather information on preferences through surveys by asking respondents to make hypothetical choices over potential policies however the context of the choice question differs between approaches with some failing to make the full consequences of the respondent s choice explicit in the question in this study we investigate whether question context matters by exploring whether economic and psychology approaches yield a similar understanding of community preferences towards a large scale recycled wastewater scheme we find that stated preferences differ depending on whether the preference question is contextualised using economic incentives the findings provide insight into the implications of inappropriately contextualised preference questions methodological considerations in attitude identification and estimation and the diversity of values and public attitudes towards recycled wastewater

repeated dichotomous choice formats for elicitation of willingness to pay simultaneous estimation and anchoring effect repeated dichotomous choice contingent valuation data are generated from responses to a succession of binary questions regarding alternative prices for an environmental good in this paper we propose a simultaneous equation model that allows for endogeneity and error correlation across the responses at each stage of the bidding process the model allows us to study the evolution of anchoring effects after the second dichotomous choice question estimation involves the bayesian techniques of gibbs sampling and data augmentation and the application focuses on the preservation value of a natural area the results for a data set involving up to four successive dichotomous choice questions show that restricted multiple bounded models are rejected by the data with the general model in addition willingness to pay tends to stabilize after the second stage in the elicitation process for the general unrestricted model when taking anchoring effects into consideration it is revealed that individuals responses in the latter stages are influenced by the sequence of bid prices offered in earlier questions nevertheless they do not have a significant effect on welfare estimates