marriage market divorce legislation and household labor supply this paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply in our approach the sex ratio in the marriage market and the rules governing divorce are examples of distribution factors these factors are defined as variables that affect the household members bargaining position but not preferences or the joint budget set we extend the collective labor supply model developed by chiappori to allow for distribution factors we show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process the model is estimated using psid data for the year 1988 our results do not reject the restrictions imposed by the model also the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects

consideration review of research and prospects for future insights the authors review the behavioral underpinnings of consideration set formation and revisit the theoretical and empirical evidence that led them to develop an individual level model of consideration

designing products and services for consumer welfare theoretical and empirical issues in this paper we examine the theoretical and empirical issues that arise for a public sector decision maker who wishes to use the target population s preferences as an input for designing new products and services the marketing literature suggests using essentially the same approach as that for the private sector problem with one exception instead of maximizing profits share or volume the sum of benefits to society is maximized however the social welfare literature has suggested several other measures of welfare and shows that no single welfare function dominates all others therefore to choose an appropriate welfare function to maximize the decision maker must first examine the theoretical and empirical similarities between the alternatives for six prominent welfare functions we examine the theoretical differences in terms of the notion of fairness promoted and the kind of preference data required empirically we examine the similarities in social rankings and first choices induced by these welfare functions under various preference configurations we also examine their sensitivity to measurement error and preference normalization

a two stage disaggregate attribute choice model a two stage disaggregate attribute choice model is proposed and empirically implemented the first stage of the model is attribute processing to screen the number of alternatives down to a lesser number the second stage is brand alternative processing which considers the attributes simultaneously while allowing for tradeoffs among the attributes this two stage approach is then applied to the same real world data set as two single stage disaggregate models logit and maximum likelihood hierarchical mlh which are state of the art models representing the alternative and attribute processing approaches respectively the predictive accuracy of the two stage approach compares favorably to the single stage models in addition it seems to offer diagnostic information that can provide managerial insights not found in the output of the single stage model

the effectiveness of alternative preference elicitation procedures in predicting choice in a large scale national study the authors evaluated the effectiveness of several preference elicitation techniques for predicting choices the criteria for accuracy included both individual hit

nash s theory of cooperative games as a predictor of the outcomes of buyer seller negotiations an experiment in media purchasing the authors report an experimental investigation of the ability of nash s theory of cooperative games to predict the outcomes of buyer seller negotiations using the purchase of media time as an ex

toward a reconciliation of market power and information theories of advertising effects on price elasticity prior work on the economic effects of advertising has presented conflicting views some authors have suggested that advertising creates market power by artificially differentiating brands and thereby lowering price elasticity others have viewed advertising as an efficient source of information about the existence of substitutes arguing that advertising increases price elasticity the present research proposes a unifying theoretical model in which advertising affects price elasticity through its influence on two mediating constructs the size of the consideration set and the relative strength of preference pretests 1 and 2 examine the effects of advertising on these two constructs results from the main experiment show that in accordance with the theoretical framework the same advertisements that increased price elasticity in some decision environments decreased it in others

wives time allocation and intrahousehold power evidence from the philippines utilizing a rich survey data collected in the southern part of the philippines this paper examines the time allocation of wives within the collective household framework by investigating not only the role of socioeconomic factors but also the influence of various intrahousehold power indicators analysis of autonomy and finality of intrahousehold decisions discloses that decisions are not unilaterally decided by a single household member a result which confirms the prediction of collective household framework adopting a simple test procedure this paper also examines which of the competing household models collective or unitary best describes these philippine time use data testing results lend support to the validity of the collective household framework

a hierarchical bayes model of primary and secondary demand product design pricing policies and promotional activities influence the primary and secondary demand for goods and services brand managers need to develop an understanding of the relationships between marketing mix decisions and consumer decisions of whether to purchase in the product category which brand to buy and how much to consume knowledge about factors most effective in influencing primary and secondary demand of a product allows firms to grow by enhancing their market share as well their market size the purpose of this paper is to develop an individual level model that allows an investigation of both the primary and secondary aspects of consumer demand unlike models of only primary demand or only secondary demand this more comprehensive model offers the opportunity to identify changes in product features that will result in the greatest increase in demand it also offers the opportunity to differentially target consumer segments depending upon whether consumers are most likely to enter the market increase their consumption level or switch brands in the proposed hierarchical bayes model an integrative framework that jointly models the discrete choice and continuous quantity components of consumer decision is employed instead of treating the two as independent the model includes parameters that capture individual specific reservation value attribute preference and expenditure sensitivity the model development is based upon the microeconomic theory of utility maximization heterogeneity in model parameters across the sample is captured by using a random effects specification guided by the underlying microeconomic model this requires that some of the effects are strictly positive this is accommodated through the use of a gamma distribution of heterogeneity for some of the parameters a normal distribution of heterogeneity is used for the remaining parameters gibbs sampling is used to estimate the model the key methodological contribution of this paper is that we show how to specify a hierarchical bayes continuous random effects model that integrates consumer choice and quantity decisions such that individual level parameters can be estimated individual level estimates are desirable because insights into primary demand involve nonlinear functions of model parameters for example consumers not in the market are those whose utilities for the choice alternatives fall below some reservation value the proposed methodology yields individual specific estimates of reservation values and expenditure sensitivity which allow assessment of the origins of demand other than the switch ing behavior of consumers the methodology can also be used to help identify changes in product features most likely to bring new customers into a market our work differs from previous research in this area as we lay the framework needed to obtain individual level parameter estimates in a continuous random effects model that integrates choice and quantity the methodology is demonstrated with survey data collected about consumer preferences and consumption for a food item for the data available a large response heterogeneity was observed across all model parameters in spite of limited data available at the individual level a majority of the individual level estimates were found to be significant predictive tests demonstrated the superiority of the proposed model over existing latent class and aggregate models particularly significant gains in predictive accuracy were observed for the no buy behavior of the respondents these gains demonstrate that by structurally linking the choice and quantity models results in a more accurate characterization of the market than existing finite mixture approaches that model choice and quantity independently we show that our joint model makes more efficient use of the available data and results in better parameter estimates than those that assume independence finally the individual level demand analysis is illustrated through a simple example involving a 1 00 price cut we demonstrate practical usefulness of the model for targeting by developing the demographic attitudinal and behavioral profiles of consumer groups most likely to increase consumption enter the market or switch brands because of a price cut decision

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

redistributive taxation in a simple perfect foresight model abstract we investigate the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation first even unanticipated redistributive capital taxation is severely limited in its effectiveness since it depresses wages second under any convergent redistributive tax policy which maximizes a paretian social objective the capital income tax will converge to zero independent of the factor supply elasticities these results are independent of workers holdings of capital

market share constraints and the loss function in choice based conjoint analysis choice based conjoint analysis is a popular marketing research technique to learn about consumers preferences and to make market share forecasts under various scenarios for product offerings managers expect these forecasts to be realistic in terms of being able to replicate market shares at some prespecified or base case scenario frequently there is a discrepancy between the recovered and base case market share this paper presents a bayesian decision theoretic approach to incorporating base case market shares into conjoint analysis via the loss function because defining the base case scenario typically involves a variety of management decisions we treat the market shares as constraints on what are acceptable answers as opposed to informative prior information our approach seeks to minimize the adjustment of parameters by using additive factors from a normal distribution centered at 0 with a variance as small as possible but such that the market share constraints are satisfied we specify an appropriate loss function and all estimates are formally derived via minimizing the posterior expected loss we detail algorithms that provide posterior distributions of constrained and unconstrained parameters and quantities of interest the methods are demonstrated using discrete choice models with simulated data and data from a commercial market research study these studies indicate that the method recovers base case market shares without systematically distorting the preference structure from the conjoint experiment

estimating heterogeneous eba and economic screening rule choice models consumer choice in surveys and in the marketplace reflects a complex process of screening and evaluating choice alternatives behavioral and economic models of choice processes are difficult to estimate when using stated and revealed preferences because the underlying process is latent this paper introduces bayesian methods for estimating two behavioral models that eliminate alternatives using specific attribute levels the elimination by aspects theory postulates a sequential elimination of alternatives by attribute levels until a single one the chosen alternative remains in the economic screening rule model respondents screen out alternatives with certain attribute levels and then choose from the remaining alternatives using a compensatory function of all the attributes the economic screening rule model gives an economic justification as to why certain attributes are used to screen alternatives a commercial conjoint study is used to illustrate the methods and assess their performance in this data set the economic screening rule model outperforms the eba and other standard choice models and provides comparable results to an equivalent conjunctive screening rule model

optimal fiscal policy with labor selection this paper characterizes long run and short run optimal scal policy in the labor selection framework quantitatively the time series volatility of the labor income tax rate is orders of magnitude larger than the tax smoothing results based on walrasian labor markets but is a few times smaller than the results based on search and matching labor markets to understand these results in terms of model primitives we develop a welfare relevant analytic concept of externalities for the selection model which we label tightness this concept of tightness is the source of the decentralized economy s inecient cross sectional wage premia between the average newly hired worker and the marginal newly hired worker compared to the traditional concept of labor market tightness in the search and matching literature this new concept of tightness plays a highly similar role and like in the matching model is crucial for understanding eciency and optimal policy

optimal capital taxation revisited abstract we revisit the question of how capital should be taxed we allow for a rich set of tax instruments that consists of taxes widely used in practice including consumption dividend capital and labor income taxes we restrict policies to those that respect pre existing promises regarding the current value of wealth we show that capital should not be taxed i e there should be no intertemporal distortions if households have preferences that are standard in the macroeconomics literature we show that ramsey outcomes that must respect such promises are time consistent we show that the presumption in the literature that capital should be taxed for some length of time arises because the tax system is restricted

the effect of local consideration sets on global choice between lower price and higher quality a set of alternatives under consideration is often divided into subsets or local sets by some external e g product display format at the store or internal e g a decision rule factor we propose that the manner in which a global set of alternatives varying in price and quality is divided into local sets can have a systematic effect on consumer choice between a lower price alternative and a higher quality alternative three such effects are investigated 1 consumers who first choose from pairs of products a b b c a c and then choose from the set of all three products a b c are more likely to prefer the cheapest alternative than consumers who only choose from the complete set 2 the choice share of a low price low quality brand is greater when alternatives varying in price quality and features are displayed by brand i e each display presents different models of one brand as compared to a display by feature level i e each display presents comparable models of different brands and 3 consumers considering a pair of two option local sets each consisting of different brands and feature levels e g a feature enhanced model of a low quality brand vs a basic model of a high quality brand are more likely to select a feature enhanced model from the global set of four options than those who consider the same alternatives in other local set configurations or consider only the global set these predictions were supported in seven studies which also provided insights into the boundaries of the effects focusing on the paired comparison effect we discuss the theoretical and practical implications of the findings

college choice as a collective decision although the choice between colleges can be thought of as being made collectively by a family models of educational choice almost universally portray the decision as made by the student alone using a novel experimental method for identifying collective decision functions i find that students have more influence than parents over the decision but not exclusive control students care more than parents about classroom experience and future earnings ignoring the dual agent nature of the decision can weaken predictions and lead to poorly targeted policy designs jel i21 j24 d13

on the optimal taxation of capital income abstract we show that in models in which labor services are supplied jointly with human capital the chamley and judd result on zero capital income taxation in the limit extends to labor taxes as long as accumulation technologies are constant returns to scale moreover for a class of widely used preferences consumption taxes are zero in the limit as well however we show by the construction of two examples that these results no longer hold for certains types of restrictions on tax rates or if there are profits generated journal of economic literatureclassification numbers e62 h21

the ability of nash s theory of cooperative games to predict the outcomes of buyer seller negotiations a dyad level test this research develops and implements a dyad level procedure for testing whether the outcomes of buyer seller negotiations correspond to settlements prescribed by nash s theory of cooperative games the procedure entails a multivariate statistical test in which some parameters are estimated by simulation while others are provided directly from the assessment of negotiator utility functions by means of conjoint analysis the procedure is applied to an experiment in which subjects participated in a realistic role playing exercise that replicated the purchase of television advertising time results indicate that at the 0 01 significance level 57 8 of the dyads can be rejected as not having achieved nash solutions these results and their implications for marketing practitioners as well as future research are discussed

tax smoothing in frictional labor markets we re examine the optimality of tax smoothing from the point of view of frictional labor markets our central result is that whether or not this cornerstone optimal scal policy pre

modeling gift choice the effect of uncertainty on price sensitivity abstractgift giving generates high revenues for retailers it is also marked with significant welfare or deadweight loss in that givers tend to pay more than the receivers valuation previous research has attributed this discrepancy to givers inaccurate predictions of the receivers preferences this research demonstrates that reduced price sensitivity is another important source of the deadweight loss givers use gift prices to signal the importance of their relationship with the receiver in order to demonstrate this mechanism the authors develop a new bayesian gift choice model that captures both preference predictions as well as the signaling value of price the model is estimated on two choice based conjoint studies for gift giving that allow for the manipulation of the giver s uncertainty about the receiver s preferences both studies show the strong signaling value of price especially when givers are uncertain about receivers preferences decomposition of the deadweight loss shows that the s

intangible investment and ramsey capital taxation the standard analysis of optimal fiscal policy aggregates different types of assets into a unique capital good and all types of capital taxes into a unique capital tax this paper considers a disaggregated framework an economy with corporate and dividend taxes where firms invest in both tangible and intangible assets which can be expensed or sweat in our setup firms can always respond to changes in the timing of taxation we find that the optimal long run policy features zero corporate taxes and positive dividend taxes with labor and dividend taxes being identical moreover the initial capital levy is relatively small

dyadic compromise effect existing research on the compromise effect has focused exclusively on the individual this paper investigates compromise effects in a setting that involves multiple individuals making a choice we study whether the dyadic compromise effect dce exists the association between dyadic and individual compromise effects and strategies to mitigate the dce we build a statistical model of dyadic choice that formally incorporates dce we conduct two studies to test our proposed models empirically in study 1 we begin with an investigation of the dce with student subjects in study 2 we test for the presence of dce among married couples when making retirement investment choices in both studies model free and model based evidence provides strong support for the presence of dce a model that incorporates dce provides a better fit than models that do not evidence in support of dce is shown to be robust to alternative compromise effect model specifications and utility aggregation methods we find that the indi

predicting joint choice using individual data choice decisions in the marketplace are often made by a collection of individuals or a group examples include purchase decisions involving families and organizations a particularly unique aspect of a joint choice is that the group s preference is very likely to diverge from preferences of the individuals that constitute the group for a marketing researcher the biggest hurdle in measuring group preference is that it is often infeasible or cost prohibitive to collect data at the group level our objective in this research is to propose a novel methodology to estimate joint preference without the need to collect joint data from the group members our methodology makes use of both stated and inferred preference measures and merges experimental design statistical modeling and utility aggregation theories to capture the psychological processes of preference revision and concession that lead to the joint preference results based on a study involving a cell phone purchase for 214 parent teen dyads demonstrate predictive validity of our proposed method

a note on incomplete factor taxation abstract optimal capital taxes may be positive in the steady state in ramsey models with an incomplete set of factor taxes i show this possibility crucially depends on how fiscal policy is constrained at date t 0 if the government is barred from manipulating the value of initial assets the chamley judd result reappears the optimal capital tax is always zero in the steady state

brand retrieval consideration set composition consumer choice and the pioneering advantage recent research on the pioneering advantage has shown that consumers often prefer pioneering brands to follower brands recent research on consumer choice suggests that information about brands is filtered through a series of sequential cognitive processes this study attempts to integrate these two separate lines of research by investigating the effects of pioneering on each stage of the multistage decision process a within subjects longitudinal experiment was conducted to simulate brand order of entry into a new market we also developed a sequential logit model to isolate the direct impact of pioneering on each stage of the decision process while controlling for indirect effects of pioneering on previous stages the results revealed that the pioneering brand vs followers is more likely to be retrieved considered and selected moreover the results revealed that consumers are more likely to bypass consideration set formation when the choice decision is simple vs complex theoretical and practical implications of the results are discussed

household labour supply in britain and denmark some interpretations using a model of pareto optimal behaviour this paper analyses the labour supply behaviour of households in denmark and britain it employs models in which the preferences of individuals within the household are explicitly represented the households are then assumed to decide on their labour supply in a pareto optimal fashion describing the structure of the household decision in this way allows preliminary results to be obtained on the internal weighting of utilities within the household

accounting for preference and scale heterogeneity in establishing whether it matters who is interviewed to reveal household automobile purchase preferences the choice of automobile purchases in households often involves participation of more than one household member each of which exerts some degree of influence on the final choice outcome the influence of more than one agent has been recognised for many years and yet the majority of automobile choice studies develop choice models as if a single agent is involved in the preference revelation process what is not clear is whether it makes any substantive difference in preference revelation according to who is interviewed in a household using a generalised mixed logit framework that accounts for preference and scale heterogeneity we estimate a series of models to investigate whether there are significant differences between the preferences of each individual in a household when assessed in isolation from other household members as well as their joint preferences when expressing their preferences through a group choice task the context is choosing amongst petrol diesel and hybrid fuelled vehicles associated with specific levels of fuel efficiency and engine capacity when faced with a mix of vehicle prices fuel prices fixed annual registration fees annual emission surcharges and vehicle kilometre emission surcharges using a stated choice experiment we find that sampling a single individual as a representative of the household s preferences is less appropriate than utilising preference information from the relevant group of decision makers in the household

productivity of men and women and the sexual division of labor in peasant agriculture of the peruvian sierra abstract this paper estimates the productivity of men and women in the peasant agriculture of the peruvian sierra using recent household survey data a sexual division of labor on the farm implies that male and female labor are not perfectly substitutable evidence is found for female specialization on livestock production a translog production function reveals that the use of animal traction and land affect the marginal productivity of male and female labor differently suggesting that the two types of labor cannot be aggregated overall adult male labor is found to contribute more to farm output at the margin than adult female labor though the extent of the difference is sensitive to how farm output and the labor inputs are measured

modeling choice interdependence in a social network this paper investigates how individuals product choices are influenced by the product choices of their connected others and how the influence mechanism may differ for fashion versus technology related products we conduct a novel field experiment to induce and observe choice interdependence in a closed social network in our experiment we conceptualize individuals choices to be driven by multiattribute utilities and we measure their initial attribute preferences prior to observing their choice interdependence and collecting network information these design elements help alleviate concerns in identifying social interaction effects from other confounds given that we have complete information on choices and their sequence we use a discrete time markov chain model nonetheless we also use a markov random field mrf model as an alternative when the information on choice sequence is missing we find significant social interaction effects our findings show that whereas experts exert asymmetrically gre

should capital income be taxed in the steady state this paper provides a new economic interpretation of the well known dynamic optimal taxation principle that capital income should not be taxed in the steady state we show that the result is related to the minimization of distortions at the intratemporal margin when every factor of production can be taxed at the optimal rate capital income should not be taxed in the steady state but when there are restrictions on the taxation of production factors the tax rate on capital income in the steady state is different from zero

the value and allocation of time in rural botswana abstract time use data indicate that there is substantial surplus labor in rural areas of botswana with the incidence of underutilization varying by age sex and asset position time allocations are influenced by economic incentives i e income and productivity effects the more productive capital the household has the more productive work its members perform particularly its children the positive productivity effect of capital on economic work somewhat outweighs its negative income effect time allocations also are constrained by a culturally determined division of labor by age and sex which however shows some flexibility at the margin

optimal taxation of capital income in general equilibrium with infinite lives this paper analyzes the optimal tax on capital income in general equilibrium models of the second best agents have infinite lives and utility functions which are extensions from the koopmans form the population is heterogeneous the important property of the models is the equality between the social and the private discount rates in the long run i find that the optimal tax rate is zero in the long run for a special case of additively separable utility functions i then determine the tax rates along the dynamic path and conditions that are sufficient for the local stability of the steady state

intertemporal distortions in the second best we consider a very general class of public nance problems that encompasses ramsey models of optimal taxation as well as economies with limited commitment private information and political economy frictions we identify a su cient condition to rule out permanent intertemporal distortions at the optimum if there exists an admissible allocation that converges to the rst best steady state then all intertemporal distortions are temporary in the second best we analyze a series of applications to illustrate the signi cance of this result

the influence of living with parents on women s decision making participation in the household evidence from the southern philippines abstract this article analyses the dynamics of women s participation in the decisions made in the household by looking at the effects of events that transpired in the recent period results suggest that the wife s participation status is positively affected by the presence of parents either hers or the spouse s in the household results also show that the wife s parents significantly affect participation in minor issues while the spouse s parents significantly affect the more relevant financial issues the article also offers a cursory discussion on the role of household headship

asymmetric decoy effects on lower quality versus higher quality brands meta analytic and experimental evidence prior research demonstrates that adding decoys to choice sets can increase choice shares of brands similar to decoys while reducing shares of brands dissimilar to decoys such effects have been dubbed attraction effects and violate the principles of independence of irrelevant alternatives ha and regularity we report a meta analysis that in addition to revealing heretofore unsupported range effects demonstrates an effect of brand quality decoys reduce shares of lower quality competitors more than they reduce shares of higher quality competitors moreover whereas iia is violated throughout regularity is violated only when higher quality brands are targeted decoys increase shares of higher quality brands but typically do not increase shares of lower quality brands to assess the generalizability of the meta analytic pattern we tested decoy effects on two distinct populations in a large experiment the more traditional population replicated the meta analytic pattern standard asymmetry while the more nontraditional population reversed it these findings suggest that while the standard asymmetry is replicable it may not generalize to all market segments

a generalized utility model of disappointment and regret effects on post choice valuation in this paper we show that performance information about forgone alternatives i e alternative that were considered but not chosen can have a significant impact on post choice valuation our approach introduces a new and parsimonious way of looking at satisfaction that combines the literature on post choice valuation with research regarding generalized expected utility theory while the post valuation literature focuses on the selected brand as the valuation s basis e g anderson and sullivan anderson e w m w sullivan 1993 the antecedents and consequences of customer satisfaction for firms marketing sci 12spring 125 143 bolton and drew bolton r j drew 1991 a multistage model of customers assessments of service quality and value j consumer res 17 375 384 we draw on a stream of research in generalized expected utility theory that considers both chosen and forgone alternatives as the basis for valuation e g bell bell d 1983 risk premiums for decision regret management sci 29 1156 1166 and bell d 1985 disappointment in decision making under uncertainty oper res 33 1 27 loomes and sugden loomes g r sugden 1982 regret theory an alternative theory of rational choice under uncertainty the econom j 92 805 824 and loomes g r sugden 1986 disappointment and dynamic consistency in choice under uncertainty rev econom stud 53 271 282 the result is a combined model of post choice valuation that explicitly incorporates both concepts specifically we extend the existing paradigm of post choice valuation to include buyers regret concerning forgone alternatives proposing a generalized utility theory based treatment of post choice product assessment that uses the intuitively appealing concepts of disappointment and regret as the basis we propose a model for conceptualizing post choice valuation that is consistent with the existing literature discuss how this model extends the construct to consider the influence of forgone alternatives and report results of an empirical test that contrasts our model to important recent work in the area e g boulding et al boulding w a kalra r staelin v a zeithaml 1993 a dynamic process model of service quality from expectations to behavioral intentions j marketing res 30february 7 27 our generalized model of post choice valuation is based on the sum of three components that represent factors that may contribute to consumers assessment of a chosen product or service the first component is expected performance the second component is disappointment which captures the discrepancy between actual and expected performance much as the disconfirmation construct in traditional satisfaction research the third component is regret which captures the difference between the performance of the chosen product service and the performance of a forgone product service this perspective is useful in that risk is captured by the disappointment and regret terms providing an intuitively appealing decomposition of post choice valuation and offering several advances over previous representations of disappointment and regret we test our model via a choice experiment participants in the empirical study were asked to make choices between successive lottery pairs they were then given outcome feedback on the forgone alternative as well as on the chosen alternative in each lottery pair immediately following outcome feedback for each choice subjects were asked to evaluate their decision our results clearly suggest an effect of regret on post choice valuation information about the forgone alternative influenced subjects valuation of the chosen alternative we also find evidence that as predicted the effects of disappointment and regret on post choice valuation are asymmetric specifically the negative effect of disappointment on post choice valuation was greater than the positive effect of elation similarly the negative effect of regret was greater than the positive impact of rejoicing our research offers five contributions to the literature on post choice valuation first our results illustrate the advantage of using generalized utility theory as the basis for conceptualizing and modeling post choice valuation we derive a model of post choice valuation that formally captures the components of disappointment and regret and show that the outcome of both the chosen alternative through disappointment and a forgone alternative through regret can influence the chosen alternative s valuation second we formally integrate the concepts of disappointment and regret which have been examined separately for many years into a single model based on a multiattribute preference structure third we argue that the effects of disappointment and regret on post choice valuation are asymmetric and present empirical evidence in this regard fourth our results suggest that word of mouth regarding forgone alternatives may affect post choice valuation extending research that has not heretofore considered forgone outcomes role in this process finally our development provides a preconsumption measure of potential disappointment and regret in modeling choice at the time of choice consumers may visualize the feelings of disappointment and or regret that will be derived at consumption taking into account both the chosen brand and forgone brands our generalized utility theory based approach to the post choice valuation construct can be useful in examining the role of disappointment and regret as preconsumption constructs

estimation of a labour supply model with censoring due to unemployment and underemployment this study proposes and implements a method of labour supply estimation which is appropriate when the sample contains unemployed and underemployed workers the estimation method consists of excluding unemployed and underemployed workers from the sample and then using to avoid selection bias an extension of heckman s approach to the case where two correlated selection rules generate the sample hausman s specification test is then used to determine whether ignoring constrained workers has led to biases in traditional labour supply estimates and the empirical results suggest that previous estimates of several important parameters are biased since the biases go in the direction that would be predicted by the hypothesis that the unemployed and underemployed are constrained the results support this hypothesis

limited choice sets local price response and implied measures of price competition it is becoming increasingly evident that a consumer s brand choice decision in low involvement categories does not involve full search evaluation and comparison of price information of all brands available at point of purchase global price response the authors propose a two stage choice process in which the consumer first identifies a subset of brands within the universal set of brands called the choice set and then evaluates only those brands that are in the choice set relative to one another to select a single brand the authors find that consistent with reports of the extent of external price search of consumers response to shelf price variations is limited to the brands in the choice set local price response their results indicate that employing the assumption of global price response may lead to biased estimates of price elasticity and derived measures of clout and vulnerability to enable a managerially meaningful and useful assessment of a brand s competitive clout and vulnerability the

optimal fiscal policy in a stochastic growth model although most neoclassical growth models focus on competitive equilibria which are pareto optimal and ignore the role of government recent works by romer 28 29 judd 20 baxter and king s and bizer and judd 7 have shown that government can be introduced into and suboptimal equilibria can be studied in these models as well their studies however are positive analyses of the effects of fiscal policy in competitive equilibria the purpose of this paper is to apply ramsey s 27 theory of optimal taxation to the normative study of fiscal policy in a stocastic growth model ramsey studied a static representative consumer economy with many goods in his formulation a government consumes a fixed amount of these goods which it purchases at market prices and finances by levying flat rate excise taxes prices and quantities are determined in a competitive equilibrium the government is benevolent and its objective is to choose the optimal tax rates to maximize the representative consumer s utility a number of economists among them kydland and prescott 23 barro 3 turnovsky and brock 31 and lucas and stockey 26 have noted that ramsey s formulation can be applied to dynamic economies with uncertainty if one reinterprets the goods in static problems as dated state contingent goods in this framework a fiscal policy is a rule which specifies state contingent tax rates and the amount of public debt issue in each date the optimal fiscal policy is defined as the one which leads to a quantity