do greens drive hummers or hybrids environmental ideology as a determinant of consumer choice this paper uses several california data sets to test for differences in consumption patterns between greens and browns a person s environmentalism is rarely observed in consumer data sets in california a community s share of green party registered voters is a viable proxy for community environmentalism environmentalists are more likely to commute by public transit purchase hybrid vehicles and consume less gasoline than non environmentalists

the power of green defaults the impact of regional variation of opt out tariffs on green energy demand in germany abstract the present paper focuses on green defaults as demand side policies supporting the uptake of renewable energy in germany it sets out to gain a better understanding of whether and for whom green electricity defaults work the present study is one of the first to use a large scale data set to investigate this question we combine micro level data from the german socio economic panel gsoep covering private households including a wealth of individual information with macro level information such as population density of a region and proportion of energy suppliers in a given region that use a green opt out tariff within their basic supply we show that in germany green defaults automatically enrolling customers in renewable energy sources tend to stick especially but not only among those who are concerned about the problem of climate change this finding based on real world rather than experimental evidence attests to the power of automatic enrollment in addressing environmental problems in germany and potentially beyond including climate change and also adds to the growing literature on the substantial effects of shifting from opt in to opt out strategies

strategic extremism why republicans and democrats divide on religious values party platforms differ sharply from one another especially on issues with religious content such as abortion or gay marriage given the high return to attracting the median voter why do vote maximizing politicians take extreme positions in this paper we find that strategic extremism depends on an intensive margin where politicians want to induce their core constituents to vote or make donations and the ability to target political messages toward those core constituents our model predicts that the political relevance of religious issues is highest when around one half of the voting population attends church regularly using data from across the world and within the united states we indeed find a nonmonotonic relationship between religious extremism and religious attendance

financial incentives to mobilise local citizens as investors in low carbon technologies a systematic literature review abstract mobilising greater levels of private finance through local citizen investment in low carbon technologies can help bridge the capital shortfall to meeting climate objectives while also building societal support for the low carbon transition within this context we undertake a systematic review of literature assessing the impact of technology specific economic and financial incentives promoting greater levels of investment in low carbon technologies from local citizen investors both individuals and community groups we focus in particular on the impact of feed in tariffs compared to quota schemes grants tax incentives and soft loans the analysis suggests that local citizen investors do not necessarily act in an economically rational manner in response to these incentives it underscores the importance of understanding the preferences of target demographics the local context as well as the characteristics of the technologies in question and suggests interventions should be considered as part of wider policy packages while identifying challenges to be overcome through instrument design we find that feed in tariffs grants and tax incentives can be successful in mobilising greater levels of investment from local citizen investors but that soft loans tend to be less effective as a stand alone instrument the review identifies areas meriting further exploration in this emerging field of research

green electricity policies in the united states case study while there has been interest in promoting the use of renewable energy in electricity production for a number of years in the united states the market share of non hydro renewable energy sources in electricity production has remained at about 2 percent over the past decade the paper reviews the principal energy resources used for electricity production considers the changing regulatory environment for the electricity industry and describes government policies that have been used to promote green electricity in the united states with an emphasis on measures adopted by state governments factors influencing the development of green power markets are also discussed including underlying economic issues public policy measures the regulatory environment external costs and subsidies without significant increases in fossil fuel prices much more stringent environmental regulations or significant changes in electricity customer preferences green electricity markets are likely to develop slowly in the united states

a dynamic model of redistribution inheritance and inequality comparing steady states of an overlapping generations economy gary s becker and nigel tomes 1979 and james b davies 1986 have noted that redistributive taxation can be disequalizing this paper solves for the full transition path of inequality after a redistributive tax increase the authors find in contrast to the steady state results that redistribution works in the first generation under quite general conditions even when fully anticipated by all previous generations further inequality is likely to fall for several generations before approaching its new steady state level from below

the effects of moral licensing and moral cleansing in contingent valuation and laboratory experiments on the demand to reduce externalities recent field experiments show that peer information can induce people to reduce their production of negative externalities related work in psychology demonstrates that inducing feelings of relative culpability in one domain can induce spillover pro social behavior in another domain we use a contingent valuation and parallel lab experiment to explore patterns of cross domain responses to norm based interventions asymmetric responses between those whose impacts are above or below the norm are found to be robust across decision settings substantial heterogeneity in responses is observed across a number of dimensions not explored in large field experiments raising questions about the universality of peer information effects and the design of such programs

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

integrating marketing and production planning in make to order companies abstract make to order companies are in the business of supplying products only in response to a customer s order they may supply unique products made to a customer s specification and or a limited range of products they range from the traditional job shop e g cutting pieces of metal to a specific shape to producers of machine tools e g a vulcanising line a major problem is the divide between sales marketing and production the production function is often faced with unrealistic delivery dates for incoming orders this arises when the sales force quote delivery dates and prices which will maximise the chance of the company winning the order the lack of coordination with production often leads to confirmed orders being delivered later than promised by sales and or being produced at a loss or alternatively production has to delay other orders with consequent extra costs the need to integrate sales and production planning considerations at the customer enquiry stage in deciding how to respond has been pointed out by several authors yet little research has been carried out the paper will discuss some possible approaches to the problem these essentially depend on estimating routinely the probability of winning an enquiry order dependent on many factors including price and lead time etc companies do not traditionally keep records of this data particularly records of unsuccessful bids and on competitors in addition the paper describes the experience of setting up a system to collect such data in a major uk company and the potential uses of such a database

nudging the poor and the rich a field study on the distributional effects of green electricity defaults abstract choice defaults are an increasingly popular public policy tool yet there is little knowledge of the distributional consequences of such nudges for different groups in society we report results from an elicitation study in the residential electricity market in switzerland in which we contrast consumers actual contract choices under an existing default regime with the same consumers active choices in a survey presenting the same choice set without any default we find that the default is successful at curbing greenhouse gas emissions but it leads poorer households to pay more for their electricity consumption than they would want to while leaving a significant willingness to pay for green electricity by richer households untapped

social norms and pro environmental behavior a review of the evidence in light of the growing attention that social norm interventions have garnered as policy tools we review the current body of evidence on their effectiveness with respect to pro environmental behaviors we identify the various conceptualizations of social norms currently in use and inventory the experimental economics and social psychology literature that has examined the impacts of social norm interventions on pro environmental behavior for each study included in this inventory we note several contextual features the data collection and analytical methods used and any significant main effects attributed to the social norm intervention we also review several theoretical models of behavior that incorporate social norms based on this empirical and theoretical review we draw a number of policy implications and identify avenues for future research on the role of social norms with respect to pro environmental behavior

behavioral study of personalized automated demand response in the workplace abstract this paper presents a quasi randomized controlled trial in a workplace with personalized lighting control and investigates the impact of automated demand response dr on employees it also clarifies what type of conditions will make employees participate in dr to meet this objective we set up four treatment groups opt in performance incentive opt in fixed incentive opt out performance incentive and opt out fixed incentive in the experiment the group with the highest participation rate is the opt out fixed incentive subsequently we estimate two average treatment effects intent to treat and treatment on treated for dr the results reveal a significant reduction in electricity consumption during peak hours for all four treatment groups we find that although the dr participation rate is high for the opt out group its average energy saving effect is not significantly different than that for the opt in group and the average energy saving amount of opt in consumers is larger than that of opt out consumers we also show a similar trade off between the participation rate and the power saving effect for employees participating in dr

making the implicit explicit a look inside the implicit discount rate implicit discount rates idrs are employed in energy models to capture household investment decisions yet the factors behind the idr and their respective implications for policy making usually remain blurred and fractional the proposed comprehensive framework distinguishes three broad categories of factors underlying the idr for household adoption of energy efficient technologies eets preferences notably over time risk loss debt and the environment predictable ir rational behavior bounded rationality rational inattention behavioral biases and external barriers to energy efficiency existing empirical findings suggest that the factors underlying the idrs that differ across household characteristics and technologies should be accounted for in energy models furthermore the framework allows for a fresh look at the interplay of idrs and policies we argue that a simple observation of high idrs or observing correlations between idrs and socio economic characteristics does not provide guidance for policy making since the underlying sources cannot be identified instead we propose that some of the factors underlying the idr notably external barriers can be changed through directed policy interventions whereas other factors notably preferences and predictable ir rational behavior are innate and can only be taken into account through reactive policy interventions

good bye lenin or not the effect of communism on people s preferences preferences for redistribution as well as the generosities of welfare states differ significantly across countries in this paper we test whether there exists a feedback process of the economic regime on individual preferences we exploit the experiment of german separation and reunification to establish exogeneity of the economic system from 1945 to 1990 east germans lived under a communist regime with heavy state intervention and extensive redistribution we find that after german reunification east germans are more in favor of redistribution and state intervention than west germans even after controlling for economic incentives this effect is especially strong for older cohorts who lived under communism for a longer time period we further find that east germans preferences converge towards those of west germans we calculate that it will take one to two generations for preferences to converge completely

expectations as endowments evidence on reference dependent preferences from exchange and valuation experiments while evidence suggests that people evaluate outcomes with respect to reference points little is known about what determines them we conduct two experiments that show that reference points are determined at least in part by expectations in an exchange experiment we endow subjects with an item and randomize the probability they will be allowed to trade subjects that are less likely to be able to trade are more likely to choose to keep their item in a valuation experiment we randomly assign subjects a high or low probability of obtaining an item and elicit their willingness to accept for it the high probability treatment increases valuation of the item by 20 30 copyright 2011 oxford university press

behavioral economics and energy conservation a systematic review of non price interventions and their causal effects abstract research from economics and psychology suggests that behavioral interventions can be a powerful climate policy instrument this paper provides a systematic review of the existing empirical evidence on non price interventions targeting energy conservation behavior of private households specifically we analyze four nudge like interventions referred to as social comparison commitment devices goal setting and labeling in 44 international studies comprising 105 treatments this paper differs from previous systematic reviews by solely focusing on studies that permit the identification of causal effects we find that all four interventions have the potential to significantly reduce energy consumption of private households yet effect sizes vary immensely we conclude by emphasizing the importance of impact evaluations before rolling out behavioral policy interventions at scale

carbon geography the political economy of congressional support for legislation intended to mitigate greenhouse gas production over the last 5 years the u s congress has voted on several pieces of legislation intended to sharply reduce the nation s greenhouse gas emissions given that climate change is a world public bad standard economic logic would predict that the united states would free ride and wait for other nations to reduce their emissions within the congress there are clear patterns to who votes in favor of mitigating greenhouse gas emissions this paper presents a political economy analysis of the determinants of pro green votes on such legislation conservatives consistently vote against such legislation controlling for a representative s ideology representatives from richer districts and districts with a lower per capita carbon dioxide footprint are more likely to vote in favor of climate change mitigation legislation representatives from districts where industrial emissions represent a larger share of greenhouse gas emissions are more likely to vote no jel q54 q58 r50

behavioral environmental economics promises and challenges environmental issues provide a rich ground for identifying the existence and consequences of human limitations in this paper we present a growing literature lying at the interface between behavioral and environmental economics this literature identifies alternative solutions to traditional economic instruments in environmental domains that often work imperfectly but it also faces a set of challenges including the difficulty of computing welfare effects and the identification of a robust environmental policy based on context dependent socio psychological effects we illustrate our critical discussion with two behavioral schemes that have been widely implemented green nudges and corporate environmental responsibility

social mobility and redistributive politics just like economists voters have conflicting views about redistributive taxation because they estimate its incentive costs differently we model rational agents as trying to learn from their dynastic income mobility experience the relative importance of effort and predetermined factors in the generation of income inequality and therefore the magnitude of these incentive costs in the long run left wing dynasties believing less in individual effort and voting for more redistribution coexist with right wing dynasties this allows us to explain why individual mobility experience and not only current income matters for political attiitudes and how persistent differences in perceptions about social mobility can generate persistent differences in redistribution across countries

prices versus nudges what matters for search versus purchase of energy investments abstract we report the results of a field experiment where we exogenously vary the use of social comparison nudges and subsidies for participation in an in home energy audit program we follow subjects through to subsequent purchase of durable goods we therefore can compare the causal effect of financial incentives and nudges along two margins audits which we liken to search and purchase of durables using data on nearly 100 000 households we document that both prices and nudges cause a statistically significant increase in audits comparing point estimates effective nudges are worth roughly 50 70 however we find that neither nudges nor subsidies do not significantly impact installations

choosing what i want versus rejecting what i do not want an application of decision framing to product option choice decisions abstract the authors examine the effects of using a subtractive versus an additive option framing method on consumers option choice decisions in three studies the former option framing method presents consumers with a fully loaded product and asks them to delete options they do not want the latter presents them with a base model and asks them to add the options they do want combined the studies support the managerial attractiveness of the subtractive versus the additive option framing method consumers tend to choose more options with a higher total option price when they use subtractive versus additive option framing this effect holds across different option price levels study 1 and product categories of varying price study 2 moreover this effect is magnified when subjects are asked to anticipate regret from their option choice decisions study 2 however option framing has a different effect on the purchase likelihood of the product category itself depending on the subject s initial inter

testing the effect of defaults on the thermostat settings of oecd employees default options have been shown to affect behaviour in a variety of economic choice tasks including health care and retirement savings less research has tested whether defaults affect behaviour in the domain of energy efficiency this study uses data from a randomized controlled experiment in which the default settings on office thermostats in an oecd office building were manipulated during the winter heating season and employees chosen thermostat setting observed over a 6 week period using difference in differences panel and censored regression models to control for maximum allowable thermostat settings we find that a 1 c decrease in the default caused a reduction in the chosen setting by 0 38 c on average sixty five percent of this effect could be attributed to office occupant behaviour p value 0 044 the difference in differences model shows that small decreases in the default 1 led to a greater reduction in chosen settings than large decreases 2 we also find that office occupants who are more apt to adjust their thermostats prior to the intervention were less susceptible to the default we find no evidence that offices with multiple occupants displayed different patterns in thermostat choices than single occupant offices we conclude that this kind of intervention can increase building level energy efficiency and discuss potential explanations and broader policy implications of our findings

due date dd quotation and capacity planning in make to order companies results from an empirical analysis the current competitive context puts manufacturers under increasing pressure to provide products and services that meet the particular requirements of individual customers calling for high flexibility in business processes the complexity and the uncertainty of demand are particularly high in customized contexts such as the make to order mto and engineer to order eto sectors where the ability to deal with more and more differentiated requirements in terms of product features delivery lead time and cost is crucial in order to be competitive in such a context due date dd quotation and capacity evaluation at the customer enquiry stage are of strategic importance having a large impact on the company performance despite the large impact on company performance the importance of dd setting and order acceptance processes and related decisions is often underestimated in practice and the issue is underexposed in the literature as the applicability of most of the proposed models is limited and there are too few empirical studies describing the practices adopted for capacity and delivery lead time management in industrial contexts this study is aimed at developing an understanding of these practices based on a sample of 15 italian capital goods manufacturers an interpretative framework is proposed in order to identify the main contextual factors impacting company choices a model that formalizes the decision process for setting dds in the analyzed cases is then proposed suggesting different procedures depending on the type of enquiry submission dd set by companies or customers and customer order fast or slow

design and evaluation of a dynamic capacity apportionment procedure abstract deploying a decision theory based approach we develop a heuristic for short term constrained capacity allocation to multiple product classes in make to order manufacturing attempting to maximize profit by discriminating between product classes efficacy of the heuristic is evaluated by comparing its performance to a base case and an upper bound under a wide variety of operational conditions such as variations in profit attractiveness capacity tightness customer order size structure customer order rate structure and demand coefficient of variation considering three different scenarios of time variant order rate of products the results indicate that the heuristic is effective in obtaining increased profit when capacity is very tight and products are well differentiated on average it yields an increase of 9 38 in total profit with a concomitant decrease of 0 85 in capacity utilization the results of this study serve to highlight the value of proactively seeking to differentiate products particularly when demand exceeds capacity

environmental ideology and household energy conservation in beijing abstract during a period of extraordinary urban growth china s per capita carbon footprint could soar a growth in households willingness to purchase green products and to engage in voluntary restraint could help offset this pollution increase as the free market will design products to cater to this group of consumers we study whether chinese urbanites who label themselves as environmentalists consume fewer resources than the average urbanite based on a sample of beijing s micro data drawn from the household survey on energy consumption in china we document the association between a household s environmental ideology and its energy conservation behavior our findings imply that government s demand side efforts such as environmental education and persuasion may help to bring about more sustainable behaviors

inheritance and wealth inequality evidence from population registers we use new population wide register data on inheritances and wealth in sweden to estimate the causal impact of inheritances on wealth inequality we find that inheritances reduce relative wealth inequality e g the gini coefficient falls by 5 10 percent but that absolute dispersion increases examining different parts of the wealth distribution we find that the top decile s wealth share decreases substantially whereas the wealth share of the bottom half increases from a negative to a positive share in essence wealthier heirs inherit larger amounts but less wealthy heirs inherit more relative to their pre inheritance wealth we also find that post inheritance behavioral adjustments mitigate the equalizing effect of inheritances because less wealthy heirs consume larger shares of their inheritances moreover we find that the swedish inheritance tax reduced the equalizing inheritance effect but that the redistribution of tax revenues could reverse this result finally we show that inheritances increase wealth mobility

evaluating changes in the distribution of capital wealth i introduction over the last several years increasing concern has been expressed about wealth and income inequality 1 while most of the concern centers on the deteriorating economic condition of the poor some of it is directed against the very wealthy 2 proposals are being put forward from direct taxation of wealth to taxation of inheritances whose purpose is to foster greater equality in the distribution of wealth and particularly in the distribution of capital wealth 3 serious study of the potential economic consequences of greater capital wealth equality has been limited many economic models utilized to examine policy issues either ignore capital wealth distribution or take it as a given as a result opinions on the matter tend to be influenced largely by ideological preconceptions some tend to view very large capital fortunes mainly as desirable incentives to vigorous entrepreneurial effort and or high saving while others tend to view them mainly as a dysfunctional outgrowth of the institution of inheritance together with a high degree of randomness in the determination of capital asset values it is widely accepted that there are at least two principal justifications for capital property income as a return to the active process of entrepreneurship and or investment analysis and as a return to the passive process of saving 4 in a strict logical sense these justifications for capital property income even if legitimate do not necessarily justify a high level of inequality in capital wealth if a small number of very wealthy capitalists were replaced by a much larger number of less wealthy capitalists the amount of entrepreneurship investment analysis and saving provided to the economy would not necessarily be reduced the purpose of this research is to throw some objective light on the potential economic consequences of greater capital wealth equality by specifying implementing and computing a small scale general equilibrium model in which the distribution of capital wealth is a key parameter the model is designed to address directly various concepts and issues which at the present time lie mostly within the province of ideological preconception rather than scientific analysis the model includes saving as a primary factor of production provided by the household but many other general equilibrium models include saving and hence are able to some extent at least to evaluate the saving justification for capital property income and by extension for capital wealth inequality the innovative feature of the present model is its inclusion as a primary factor of production provided by the household of capital management effort capital management effort is defined as any and all active behavior by the household designed to increase the rate of return on its capital wealth such behavior might include corporate supervision such as provided by a member of a board of directors corporate supervision is distinguished from corporate management provided by salaried executives investment analysis such as provided by a private investor or entrepreneurship such as provided by the founder owner of a new business firm households allocate their available time resources to labor capital management effort and leisure standard household theory encompasses only labor and saving as primary factors adding the capital management effort concept enables a direct assessment of the role of such critical factors as entrepreneurship in the economy and thereby enables a more thorough and reliable evaluation of the potential economic consequences of increasing equality in capital wealth distribution 5 on the whole the results described below support the conclusion that greater equality in capital wealth would be economically beneficial the results are strong in the sense that every performance indicator examined in the research aggregate income consumption equality social welfare in the sum of utilities sense and aggregate saving is improved by greater capital wealth equality

strategies for promoting healthier food choices between 1960 and 2004 the proportion of americans meeting standard criteria for obesity increased from 13 percent to 31 percent katherine m flegal et al 2002 and it has been proposed that if this trend is not reversed obesity may soon overtake smoking as the leading preventable cause of death ali h mokdad et al 2004 consequently obesity is now one of the major causes of rising health care costs eric a finkelstein christopher j ruhm and katherine m kosa 2005 empirical analyses suggest that an increase in caloric intake rather than a change in calorie expenditure is responsible for much of the trend david m cutler edward l glaeser and jesse m shapiro 2003 the main policy response to what is often referred to as the obesity epidemic has been to enhance access to information the most prominent example of such a policy is the nutrition labeling and education act united states food and drug administration 1994 but recently the tactic has been receiving more attention after new york city required restaurants with 15 or more outlets to post the caloric content of each food item next to its price on menu boards lawmakers and independent companies alike are now following new york city s lead kim severson 2008 however there is little evidence that information alone does much to improve diet jayachandran n variyam and aq 1 the psychology of food consumption

motivating non ratepaying households with feedback and social nudges a cautionary tale abstract behavioral interventions have been shown to be valuable instruments in reducing energy use among ratepaying customers but their effect on non ratepayers has received less attention this study uses a randomized controlled trial research design to examine the effect of feedback and a social nudge in the form of peer comparison on energy consumption of non ratepaying households the study setting is a university family housing complex and findings are based on hourly observations of energy use by 62 households over thirteen weeks our results suggest that neither feedback or peer comparison is an effective instrument to reduce energy use of non ratepaying households and may even increase energy consumption in some contexts we find heterogeneous effects among households that are low and high users of energy in the pre treatment period with high users increasing energy consumption in response to feedback thus caution is needed in applying behavioral interventions when financial incentives to reinforce intended effects are absent

conservation from voluntary restraint to a voluntary price premium this paper investigates how concern for the environment translates into predictable patterns of consumer behavior two types of behavior are considered first individuals who care about environmental quality may voluntarily restrain their consumption of goods and services that generate a negative externality second individuals may choose to pay a price premium for goods and services that are more environmentally benign a theoretical model identifies a symmetry between such voluntary restraint and a voluntary price premium that mirrors the symmetry between environmental policies based on either quantities quotas or prices taxes we test predictions of the model in an empirical study of household electricity consumption with introduction of a price premium green electricity program we find evidence of voluntary restraint and its relation to a voluntary price premium the empirical results are consistent with the theoretical model of voluntary conservation

simulating the transmission of wealth inequality via bequests abstract this paper develops calibrates and simulates a dynamic 88 period olg model to study the intergenerational transmission of u s wealth inequality via bequests the model features marriage realistic fertility patterns random death assortative mating based on skills heterogeneous skill endowments heterogeneous rates of return skill inheritability progressive income taxation and resource annuitization via social security all bequests arise from imperfect annuitization nonetheless the model generates a realistic ratio of aggregate wealth to aggregate labor income a realistic bequest flow relative to the stock of wealth and a realistic wealth distribution at retirement skill differences assortative mating social security and the time preference are the primary determinants of wealth inequality bequests do propagate wealth inequality but only in the presence of social security which disproportionately disinherits the lifetime poor intergenerational wealth immobility also considered here is primarily determined by the inheritance of skills from one s parents and the magnification of the impact of this inheritance by marital sorting

who chooses annuities an experimental investigation of the role of gender framing and defaults research suggests that women are more risk averse and less financially literate than men as evidenced by their choice of less risky asset investments we contribute to the literature by focusing on the role of gender in an increasingly important financial decision facing individuals at retirement the choice between purchasing an annuity in this case a fixed immediate lifetime annuity or investing their savings on their own by using a controlled experiment we eliminate the role of adverse selection and unfair annu ity pricing and are able to focus specifically on gender we also explore the role of defaults and framing and whether women react differently to these features we find that women are more likely to choose the annuity and this is only partly explained by differences in risk aversion and financial literacy furthermore biases in a five minute presentation of information signifi cantly affect choices in ways that differ across men and women

do the rich save more a new view based on intergenerational transfers do richer people have higher saving rates the short run and long run consumption functions have different answers to this important question which results in an important consumption puzzle that was a focus of macroeconomic research in the 1950s and 1960s in a recent empirical contribution dynan skinner and zeldes 2004 revive this old question and make this consumption puzzle more intriguing by showing that the average propensity to consume decreases not only with current income but also with lifetime income this paper provides a model that helps resolve this puzzle from an intergenerational perspective

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

responding to customer enquiries in make to order companies problems and solutions make to order companies are in the business of supplying products in response to a customer order in competition with other companies on the basis of price technical expertise delivery time and reliability in meeting due dates dealing properly with enquiries is the major problem that mto companies face a lack of co ordination between sales and production at the customer enquiry stage often leads to confirmed orders being delivered later than promised and or being produced at a loss the treatment of an enquiry is a multi stage decision process the initial decision is whether or not to prepare a bid and if so how much effort to put into the specification and estimation process the mto company has the choice of putting in a lot of effort to prepare a competitive bid or making a quick estimate with a high safety margin to allow for errors and unforeseen problems expecting further later negotiation with the customer consideration has to be given to the likely accuracy of the cost estimates produced the feasibility of being able to produce the order with the current work load at different delivery times needs to be evaluated together with any extra costs incurred an input output planning approach based on the control of a hierarchy of backlogs of work is proposed to produce a dynamic capacity planning model to determine the capacity to provide at each work centre in future time periods allocating overtime transferring operators process as split batches etc in setting the price and lead time to quote to the customer the probability of winning the order plays an important role a model based on a chi squared analysis of data on past enquiries is proposed to divide the market into sectors of similar orders it is extended to produce a strike rate matrix for each sector giving the probability if winning orders in that sector as a function of the price and lead time quoted a general model for the whole enquiry process is presented together with a decision support expert system this indicates where the qualitative judgmental rules typically used by companies could be used to advantage

managing capacity in tightly constrained systems abstract many make to order firms face total expected demand in excess of available capacity this is particularly true in the short range for capital intensive firms such as those in the flow process industry firms making short life cycle products such as those in high fashion apparel industry and printing shops in such situations the manager is left with the difficult task of allocating the available capacity between competing classes of products and or customers at the same time the manager is faced with the challenge of achieving delivery dependability and speed in order to stay competitive in this paper i describe the problem contrast it with a class of problems known as perishable asset revenue management problems review recent literature that presents alternative approaches for managing capacity such as capacity rationing improved coordination mechanisms and subcontracting and discuss fruitful avenues for future research

the family inheritance and the intergenerational transmission of inequality unequal inheritance of material wealth is commonly considered a major cause of inequality in consumption however theoretical models of the intergenerational transmission of inequality by becker blinder and ishikawa imply that unequal inheritance may either increase or reduce consumption inequality differences in inherited wealth resulting from unequal parental incomes increase inequality in recipients consumption however unequal bequests caused by differences among families in the endowed ability of children or the costs of producing human capital are equalizing empirical results confirm these predictions the inheritance received by children is inversely related to both children s income and parental education thus bequests are compensatory in that ceteris paribus low income children inherit more than their advantaged contemporaries

better late than nothing some comments on deaton 2009 and heckman and urzua 2009 two recent papers deaton 2009 and heckman and urzua 2009 argue against what they see as an excessive and inappropriate use of experimental and quasi experimental methods in empirical work in economics in the last decade they specifically question the increased use of instrumental variables and natural experiments in labor economics and of randomized experiments in development economics in these comments i will make the case that this move towards shoring up the internal validity of estimates and towards clarifying the description of the population these estimates are relevant for has been important and beneficial in increasing the credibility of empirical work in economics i also address some other concerns raised by the deaton and heckman urzua papers

the impact of choice architecture on sustainable consumer behavior the role of guilt companies often encourage consumers to engage in sustainable behaviors using their services in a more environmentally friendly or green way such as reusing the towels in a hotel or replacing paper bank statements by electronic statements sometimes the option of green service is implied as the default and consumers can opt out while in other cases consumers need to explicitly ask opt in for switching to a green service this research examines the effectiveness of choice architecture and particularly the different default policies i e the alternative the consumer receives if he she does not explicitly request otherwise in engaging consumer green behavior in four experiments we show that the opt out default policy is more effective than the opt in because it increases anticipated guilt this effect is stronger for consumers who are less conscious for the environment study 1 we also show that a forced choice policy in which the consumer is not automatically assigned to any condition and is forced to choose between the green and the non green service option is more effective than the opt in policy and not significantly more effective than the opt out policy study 2 finally we show that the role of defaults is weakened enhanced if a negotiated reciprocal cooperation strategy is used study 3 the article contributes to the literature of defaults and provides managerial and public policy implications for the design of green services

yes but this other one looks better works better how do consumers respond to trade offs between sustainability and other valued attributes consumers are increasingly facing product evaluation and choice situations that include information about product sustainability i e information about a product s relative environmental and social impact in many cases consumers have to make decisions that involve a trade off between product sustainability and other valued product attributes similarly product and marketing managers need to make decisions that reflect how consumers will respond to different trade off scenarios in the current research we study consumer responses across two different possible trade off scenarios one in which consumers face a trade off between product sustainability and hedonic value and another in which they must trade off between product sustainability and utilitarian value our results suggest that overall consumers are more likely to trade off hedonic value e g esthetics for sustainability than to trade off utilitarian value e g functional performance for sustainability in studies 1a and 1b we presented participants with a product choice task and also measured their anticipatory emotions as they contemplated their options the results suggest that given a trade off consumers are more likely to choose a sustainable product when they have to trade off hedonic value than when they have to trade off utilitarian value further these studies provide some insight into the emotions underlying this effect in study 2 we use a different consumer response measure relative purchase likelihood and investigate the effect of trade off type across categories that vary in the degree to which hedonic and utilitarian attributes are perceived to be important referred to as product type our results suggest that the effect of trade off type still holds yet is moderated by product type such that consumers greater willingness to trade off hedonic value vs utilitarian value for sustainability is attenuated as the relative importance of hedonic vs utilitarian attributes increases in addition to building on our theoretical understanding of decision making given trade offs with moral attributes this research is also intended to support managers as they define and choose among various strategic product development and marketing promotion options

optimal defaults and active decisions defaults often have a large influence on consumer decisions we identify an overlooked but practical alternative to defaults requiring individuals to make an explicit choice for themselves we study such active decisions in the context of 401 k saving we find that compelling new hires to make active decisions about 401 k enrollment raises the initial fraction that enroll by 28 percentage points relative to a standard opt in enrollment procedure producing a savings distribution three months after hire that would take 30 months to achieve under standard enrollment we also present a model of 401 k enrollment and derive conditions under which the optimal enrollment regime is automatic enrollment i e default enrollment standard enrollment i e default non enrollment or active decisions i e no default and compulsory choice active decisions are optimal when consumers have a strong propensity to procrastinate and savings preferences are highly heterogeneous financial illiteracy however favors default enrollment over active decision enrollment

bequests taxation and the distribution of wealth in a general equilibrium model this paper examines the role of bequests and of taxation on bequests for the distribution of wealth we investigate a model with overlapping generations and heterogenous households where parents derive utility directly from their bequests we obtain all results analytically using the coefficient of variation as the measure of inequality bequests per se diminish the inequality of wealth since they raise private savings and hence average wealth holdings more than the variance of wealth from a policy perspective taxing bequests and redistributing government revenue lump sum among the young generation further decreases wealth inequality

what does it take to sell environmental policy an empirical analysis of referendum data we analyze the factors that influence the support for environmental policy proposals swiss referendum data show that proposals obtain more yes votes if they do not restrict consumption possibilities directly if they are endorsed by the largest business association if environmental preferences are strong and economic conditions are favorable at the time of the referendum also there are more pro environmental votes in cantons with higher population density on the other hand yes votes do not seem to depend on whether a proposal involves a tax or not

uncertain lifetime consumption and dissaving in retirement this paper asks whether the continued accumulation or mild dissaving observed among the retired can be explained by uncertain lifetime in the absence of annuities after an initial period influenced by borrowing constraints under constant relative risk aversion uncertain lifetime depresses consumption by a proportion increasing with age if the elasticity of intertemporal substitution in consumption is small illustrative computations based on actual income and survival data show that plausible elasticities are sufficiently small to give this effect the reduction in consumption is large enough to explain much of the lack of decumulation by the elderly

tying odysseus to the mast evidence from a commitment savings product in the philippines we designed a commitment savings product for a philippine bank and implemented it using a randomized control methodology the savings product was intended for individuals who want to commit now to restrict access to their savings and who were sophisticated enough to engage in such a mechanism we conducted a baseline survey on 1777 existing or former clients of a bank one month later we offered the commitment product to a randomly chosen subset of 710 clients 202 28 4 percent accepted the offer and opened the account in the baseline survey we asked hypothetical time discounting questions women who exhibited a lower discount rate for future relative to current trade offs and hence potentially have a preference for commitment were indeed significantly more likely to open the commitment savings account after twelve months average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group we conclude that the savings response represents a lasting change in savings and not merely a short term response to a new product

persuasion in politics we present a model of the creation of social networks such as political parties trade unions religious coalitions or political action committees through discussion and mutual persuasion among their members the key idea is that people are influenced by those inside their network but not by those outside once created networks can be rented out to politicians who seek votes and support for their initiatives and ideas which may have little to do with network members core beliefs in this framework political competition does not lead to convergence of party platforms to the views of the median voter rather parties separate their messages and try to isolate their members to prevent personal influence from those in the opposition this abstract was borrowed from another version of this item

energy conservation nudges and environmentalist ideology evidence from a randomized residential electricity field experiment nudges are being widely promoted to encourage energy conservation we show that while the electricity conservation nudge of providing feedback to households on own and peers home electricity usage works with liberals it can backfire with conservatives our regression estimates predict that a democratic household that pays for electricity from renewable sources that donates to environmental groups and that lives in a liberal neighborhood reduces its consumption by 3 percent in response to this nudge a republican household that does not pay for electricity from renewable sources and that does not donate to environmental groups increases its consumption by 1 percent

pricing and lead time decisions for make to order firms with contingent orders abstract make to order mto firms have few standard products and volatile difficult to predict demand a production order usually stems from a successful bid which presents the mto firm s terms including price and lead time to satisfy a prospective customer s stated requirements the customer may decide to accept reject or modify these terms until the customer decides the tendered bid is a contingent demand on the mto firm s future production capacity in the short run this capacity may be relatively fixed and if the customer awards the contract to another bidder it may simply go to waste to hedge against this possibility the mto firm can bid on other projects that require the same capacity however this strategy introduces a new source of lead time uncertainty if two or more booked orders must contend for the same resources some work will inevitably be bumped to later time periods thus a hedging strategy carries the risk of penalties for late deliveries in this paper we model this little discussed source of lead time uncertainty and introduce a technique that simultaneously optimizes pricing and lead time decisions for mto firms with contingent orders we illustrate the procedure with a simple numerical example

do voters affect or elect policies evidence from the u s house there are two fundamentally different views of the role of elections in policy formation in one view voters can affect candidates policy choices competition for votes induces politicians to move toward the center in this view elections have the effect of bringing about some degree of policy compromise in the alternative view voters merely elect policies politicians cannot make credible promises to moderate their policies and elections are merely a means to decide which one of two opposing policy views will be implemented we assess which of these contrasting perspectives is more empirically relevant for the u s house focusing on elections decided by a narrow margin allows us to generate quasi experimental estimates of the impact of a randomized change in electoral strength on subsequent representatives roll call voting records we find that voters merely elect policies the degree of electoral strength has no effect on a legislator s voting behavior for example a large exogenous increase in electoral strength for the democratic party in a district does not result in shifting both parties nominees to the left politicians inability to credibly commit to a compromise appears to dominate any competition induced convergence in policy

consumer demand for time of use electricity tariffs a systematized review of the empirical evidence abstract time of use tou tariffs if widely adopted could help make electricity more secure clean and affordable however quite little is known about whether consumers will switch to a tou tariff or what might increase uptake if switching rates are lower than required this paper presents the results of a systematized review and meta analysis combining the results of 66 measures of uptake to a variety of tou tariffs across 27 studies conducted in six countries it provides the first robust estimate of consumer demand and correlates of demand for tou tariffs that is not based on the results from just a single study or tariff four main conclusions emerge first if consumers are left to opt in to tou tariffs uptake could be as low as 1 unless efforts are made to close the intention action gap otherwise enrolment could reach 43 second if enrolment is opt out uptake could approach 100 third whilst national surveys indicate the potential appetite for tou tariffs in a population they are insufficient for predicting future tou tariff adoption rates the median proportion of domestic energy bill payers who say they would be willing to switch to a tou tariff in national surveys is five times higher than the median enrolment rate to tou tariffs offered by utilities fourth real time pricing tariffs in which the price of electricity varies freely throughout the day are less popular than static tou tariffs which have fixed peak and off peak rates this paper discusses the limitations of opt out enrolment for tou tariffs and presents results suggesting that small upfront payments bill protection and automation are promising alternative methods of increasing opt in enrolment policymakers and researchers should now consider how recruitment will be performed weighing up the benefits to society as a whole against the distributional impacts for individuals and groups

do extrinsic incentives undermine social norms evidence from a field experiment in energy conservation policymakers use both extrinsic and intrinsic incentives to induce consumers to change behavior this paper investigates whether the use of extrinsic financial incentives is complementary to intrinsic incentives or whether financial incentives undermine the effect of intrinsic incentives we conduct a randomized controlled trial that uses information interventions to residential electricity customers to test this question we find that adding economic incentives to normative messages not only does not strengthen the effect of the latter but may reduce it these results are consistent with recent theoretical work that suggests a tension between intrinsic motivation and extrinsic incentives

are experienced people affected by a pre set default option results from a field experiment the objective of the present paper is to investigate the robustness of the well known result that pre set default options determine people s choices we do so by conducting a field experiment among environmental economists attending a large international conference on environmental economics the participants were at the time of registration randomly allocated to different treatments related to carbon offsetting what differs from earlier default studies is that our subjects have good knowledge about the good at hand we investigate whether the choices of these experienced individuals are affected by a pre set default option and we also study the effect of a treatment with no pre set default option our results together with previous findings indicate that the effect of a default option attenuates with experience

powering sustainable consumption the roles of green consumption values and power distance belief as human consumption is one of the key contributors to environmental problems it is increasingly urgent to promote sustainable consumption drawing on the agentic communal model of power this research explores how the psychological feeling of power influences consumers preference for green products we show that low power increases consumers preference for green vs conventional products compared to high power studies 1a and 1b importantly we identify two factors moderating the main effect of power on green consumption specifically we find that the effect of power on green consumption is more salient among those with high green consumption values study 2 in addition the effects of power are dynamic as a function of power distance belief pdb such that low power vs high power promotes green consumption in the low pdb context while high power vs low power promotes green consumption in the high pdb context study 3 taken together these findings provide novel insights into understanding green consumption from the perspectives of social power green values and pdb besides contributing to the literature the findings have significant implications for marketers and policy makers in promoting green campaigns bridging the attitude behavior gap and building a more sustainable society