revisiting the role of education for agricultural productivity while the majority of micro studies finds that rural education increases agricultural productivity various recent cross country regressions analysing the determinants of agricultural productivity were only able to detect insignificant or even surprising negative effects of schooling in this paper we argue and show that this failure to find a positive impact of education in the international context is rather a data problem related to the use of enrolment and literacy indicators using a panel of 95 developing and middle income countries from 1961 to 2002 together with the newest version of the barro lee educational attainment dataset we show that education indeed has a highly significant positive effect on agricultural productivity which is robust to changes in the control variables and in the econometric methods applied distinguishing between different levels of education further reveals that only primary and secondary schooling have significant positive impacts while tertiary education remains insignificant finally the effect of education is estimated separately for countries with different income levels results indicate that the coefficient of the education variable remains insignificant for countries from the poorest three income quintiles while it is positive and highly significant for the richest two quintiles this finding can be interpreted as support for the prominent argument claiming that education leads to higher agricultural productivity only in the presence of rapid technical change where education will help farmers to adjust more readily to the new opportunities

compulsory versus voluntary voting an experimental study abstract we report on an experiment comparing compulsory and voluntary voting institutions in a voting game with common preferences rational choice theory predicts sharp differences in voter behavior between these two institutions if voting is compulsory then voters may find it rational to vote insincerely i e against their private information if voting is voluntary so that abstention is allowed then sincere voting in accordance with a voter s private information is always rational while participation may become strategic we find strong support for these theoretical predictions in our experimental data moreover voters adapt their decisions to the voting institution in place in such a way as to make the group decision accuracy differences between the two voting institutions negligible the latter finding may serve to rationalize the co existence of compulsory and voluntary voting institutions in nature

boundedly rational nash equilibrium a probabilistic choice approach we propose an equilibrium for n person finite games based on bounded rationality using the legit model of discrete choice theory at equilibrium each player uses appropriate choice probabilities given those used by the others rationality is parameterized on a continuum from complete rationality to uniform random choice results on the existence of equilibrium and on convergence to nash as rationality becomes perfect are similar to results due to mckelvey and palfrey we identify conditions such that for a given rationality parameter range the path of choices over time when the players use fictitious play converges to equilibrium c 1997 academic press

a theoretical analysis of altruism and decision error in public goods games abstract we formalize an equilibrium model in which altruism and decision error parameters determine the distribution of contributions for linear and quadratic public goods games the equilibrium density is exponential for linear games and normal for quadratic games our model implies i contributions increase with the marginal value of the public good ii total contributions increase with the number of participants iii mean contributions lie between the nash prediction and half the endowment these predictions which are not implied by a nash analysis are consistent with laboratory data maximum likelihood estimates of altruism and error parameters are significant and plausible

rent seeking with bounded rationality an analysis of the all pay auction the winner take all nature of all pay auctions makes the outcome sensitive to decision errors which we introduce with a logit formulation the equilibrium bid distribution is a fixed point the belief distributions that determine expected payoffs equal the choice distributions determined by expected payoffs we prove existence uniqueness and symmetry properties in contrast to the nash equilibrium the comparative statics of the logit equilibrium are intuitive rent dissipation increases with the number of players and the bid cost overdissipation of rents is impossible under full rationality but is observed in laboratory experiments our model predicts this property

buyer behaviour in a regional thoroughbred yearling market this paper reports the results of an hedonic pricing analysis of a regional thoroughbred auction market adding to a literature which has been built mainly on data from elite auction markets the main contribution of the paper is the finding that the role of the dam in affecting yearling price elusive in the existing literature is shown to depend primarily on information about progeny performance rather than dam performance additional results confirm existing knowledge about the roles of the sire yearling sex and yearling age and support suspicions that race horses are consumer rather than investment goods

information aggregation and turnout in proportional representation a laboratory experiment abstract this paper documents a laboratory experiment that analyzes voter participation in common interest proportional representation pr elections comparing this with majority rule consistent with theoretical predictions poorly informed voters in either system abstain from voting thereby shifting weight to those who are better informed a dilution problem makes mistakes especially costly under pr so abstention is higher in pr in contrast with private interest environments and welfare is lower deviations from nash equilibrium predictions can be accommodated by a logit version of quantal response equilibrium qre which allows for voter mistakes

shipping the good horses out this paper formalizes the alchian allen 1964 theorem within a vertically differentiated goods general equilibrium model in contrast to the existing literature equilibrium prices depends on the transportation cost it shows that the eect of a xed transportation cost regardless of quality tilts the importing region s demand towards the consumption of higher quality goods the model extends the alchian allen theorem by showing that the strength of this eect depends on the importing region s endowment specically if the importing region is endowed with the imported goods of similar quality mix the eect is even stronger we also show that the importing region s market size and preferences matter to the strength of the eect using auction data of australian thoroughbred yearlings we conrm that better horses are shipped out further furthermore consistent with the model s prediction the strength of the alchian allen eect depends on the endowment of the importing regions

information aggregation rationality and the condorcet jury theorem the condorcet jury theorem states that majorities are more likely than any single individual to select the better of two alternatives when there exists uncertainty about which of the two alternatives is in fact preferred most extant proofs of this theorem implicitly make the behavioral assumption that individuals vote sincerely in the collective decision making a seemingly innocuous assumption given that individuals are taken to possess a common preference for selecting the better alternative however in the model analyzed here we find that sincere behavior by all individuals is not rational even when individuals have such a common preference in particular sincere voting does not constitute a nash equilibrium a satisfactory rational choice foundation for the claim that majorities invariably do better than individuals therefore has yet to be derived

evidence on the political economy of the urbanization process urbanization and economic development go hand in hand as a country moves from a rural agricultural base to an urban industrial base this paper argues that urbanization per se occurs in response to the basic sector shift out of agriculture and government policies such as price controls and trade protection of industry affect the process only indirectly through their effect on sector composition however urban concentration the extent to which a country s urban resources are concentrated in one or two large cities as opposed to more evenly spread is much more directly affected by policies and politics the paper finds specifically that investments in inter regional infrastructure facilitates urban deconcentration away from primate to hinterland cities as does increasing democratization or increasing fiscal decentralization the findings move beyond establishing basic correlations in the data to trying to quantify causal effects in a panel framework with instrumental variables estimation

strategic interaction and the statistical analysis of international conflict although strategic interaction is at the heart of most international relations theory it has largely been missing from much empirical analysis in the field typical applications of logit and probit to theories of international conflict generally do not capture the structure of the strategic interdependence implied by those theories i demonstrate how to derive statistical discrete choice models of international conflict that directly incorporate the theorized strategic interaction i show this for a simple crisis interaction model and then use monte carlo analysis to show that logit provides estimates with incorrect substantive interpretations as well as fitted values that can be far from the true values finally i reanalyze a well known game theoretic model of war bueno de mesquita and lalman s 1992 international interaction game my results indicate that there is at best modest empirical support for their model

what determines the price of a racing horse this article uses the data of 10 auctions from the two largest australian auction houses to study how a racing horse is priced we ask whether bloodline is indeed a determining factor we find that the track record of its parents and siblings are important factors in determining the price of a yearling moreover more mature horses and those purchased by foreign buyers are generally more expensive we also show that racing horses sold in the flagship auctions are associated with a significant premium

in defense of unanimous jury verdicts mistrials communication and strategic voting the requirement of unanimous jury verdicts in criminal trials is widely believed to reduce the likelihood of convicting the innocent this belief depends largely upon the assumption that jurors will vote nonstrategically based on their impression of the trial evidence recent literature however has questioned this assumption and feddersen and pesendorfer propose a model in which it is never a nash equilibrium for jurors to vote nonstrategically under unanimity rule and equilibrium behavior produces higher probabilities of both convicting the innocent and acquitting the guilty under unanimity rule than under numerous alternatives i extend this work by incorporating two additional features of actual jury procedure the possibility of mistrial and communication among jurors under each circumstance i demonstrate that nonstrategic voting is a nash equilibrium under fairly general conditions and that unanimity performs better than any alternative rule in minimizing probability of trial error and maximizing expected utility

a payoff uncertainty explanation of results in experimental centipede games abstract this paper investigates how well a simple two sided incomplete information game with a full support prior can be used to explain non nash equilibrium outcomes observed in the centipede game experiments i estimate the variance of the uncertainty about preferences in several versions of the model select two models and compare these models to the estimation results of the altruism model and the quantal response models it is shown that the two selected models have a better fit than the one parameter altruism and quantal response models and that the estimated variance can explain all qualitative features of these experimental results journal of economic literature classification numbers c72 c19 c 44 c91

the relative impact of macroeconomic and yearling specific variables in determining thoroughbred yearling price the present study is the first to examine the relative importance of macroeconomic and yearling specific variables on the price of thoroughbred yearlings regression results indicated that it is the yearling specific variables that are more influential in explaining yearling price yet both types of variables are important the main explanatory variables are the stud fee of the yearlingan s sire and the annual gross total dollar purchases of thoroughbred yearlings by foreign investors

schooling data technological diffusion and the neoclassical model this research was supported by the spanish ministry of science and technology through cicyt grants sec99 1189 and sec99 0820 and by the spanish ministry of finance and fundacion caixa galicia

information aggregation and strategic abstention in large laboratory elections this paper compares strategic abstention in ad hoc committees versus standing committees ad hoc committees meet only once and then dissolve while standing committees the central finding from this study is that most of the predictions of swing voter curse theory hold up in large elections conducted under controlled laboratory conditions there is significant abstention and significant balancing of partisans by uniformed voters and vote balancing increases with the partisan imbalance elections with no partisan imbalance successfully aggregate information and lead to efficient outcomes consistent with swing voter curse theory this efficiency falls off as partisan imbalance increases but to a significantly greater extent than is predicted in equilibrium it is instructive to compare these findings in large elections with results from the elections reported in battaglini et al 2007 all of the qualitative results are the same concerning the comparative statics balancing and abstention one slight difference is that there was less irrational voting for in the small elections than in the large elections except for the 5 9 m 0 treatment where we observed 20 voting for in the small elections compared with 10 voting for in the large elections these differences were reflected in slightly different efficiency results between small and large elections with the comparisons mirroring the differences in voting for more irrational voting results in lower e ciency we conclude that this scaled up study successfully replicates the initial swing voter s curse experiment reported in battaglini et al 2007 obtaining very similar findings in laboratory committees that are three times the size of those in the original study the one caveat is that we found evidence of a slight increase in irrational nonequilibrium behavior voting for in the larger elections whether this trend would continue as election size is further scaled up is an open question a swing voter s curse environment

breeding incentive programmes and demand for california thoroughbred racing is there a quality quantity tradeoff both quantity of horses and quality stimulate demand for horse race gambling this paper addresses the potential for a quantity quality tradeoff due to breeding incentives for california thoroughbreds econometric analysis is used to assess the demand for quality and quantity of horses and results suggest the likely net benefit of breeding incentives on the industry at large

education democracy and growth abstract this note presents a model of endogenous growth where redistribution determined by a political equilibrium is in the form of public education it is shown that there need not be a negative relationship between growth and redistribution as public education increases the level of human capital in the conomy and at the same time tends to produce a more even income distribution

economic integration and political disintegration in a world of trade restrictions large countries enjoy economic benefits because political boundaries determine the size of the market under free trade and global markets even relatively small cultural linguistic or ethnic groups can benefit from forming small homogeneous political jurisdictions this paper provides a formal model of the relationship between openness and the equilibrium number and size of countries and successfully tests two implications of the model firstly the economic benefits of country size are mediated by the degree of openness to trade secondly the history of nation state creations and secessions is influenced by the trade regime

urban influences on rural schooling in india abstract many believe that low levels of schooling in rural areas of developing economies are a consequence of the low rate of return to schooling in agriculture this belies the possibility that rural schooling decisions are undertaken in response to the possibility of employment in urban areas this paper tests this hypothesis using three cross sections of household data for rural india it finds that urban rates of return do influence rural schooling particularly amongst households who are most likely to seek urban employment such as the landless the results suggest that low levels of rural schooling may reflect not just conditions in the local village economy but also the functioning and size of the relevant labor market

anomalous behavior in a traveler s dilemma the notion of a nash equilibrium has joined supply and demand as one of the two or three techniques that economists instinctively try to use first in the analysis of economic interactions moreover the nash equilibrium and closely related game theoretic concepts are being widely applied in other social sciences and even in biology where evolutionary stability often selects a subset of the nash equilibria many people are uneasy about the stark predictions of the nash equilibrium in some contexts where the extreme rationality assumptions seem implausible kaushik basu s 1994 traveler s dilemma is a particularly convincing example of a case where the unrelenting logic of game theory is at odds with intuitive notions about human behavior the story associated with the dilemma is that two travelers purchase identical antiques while on a tropical vacation their luggage is lost on the return trip and the airline asks them to make independent claims for compensation in anticipation of excessive claims the airline representative announces

efficiency equity and timing of voting mechanisms we compare the behavior of voters under simultaneous and sequential voting rules when voting is costly and information is incomplete in many political institutions ranging from small committees to mass elections voting is sequential which allows some voters to know the choices of earlier voters for a stylized model we generate a variety of predictions about the relative efficiency and participation equity of these two systems which we test using controlled laboratory experiments most of the qualitative predictions are supported by the data but there are significant departures from the predicted equilibrium strategies in both the sequential and the simultaneous voting games we find a tradeoff between information aggregation efficiency and equity in sequential voting a sequential voting rule aggregates information better than simultaneous voting and is more efficient in some information environments but sequential voting is inequitable because early voters bear more participation costs

committee design with endogenous information this paper is concerned with the arrangements for collective decision making in a world where agents must be motivated to acquire information the analysis identifies some basic forces shaping the design of panels of decision makers referees managers jurors etc in situations where decision makers are useful only in so far as they expend some effort to gain information about the alternatives at hand these situations are common one being the refereeing process where an editor requires the opinions of a number of experts who must read the paper acquire information in order to give an opinion as to publication analogously in committees which screen applicants to a programme the committee members must gain information about the applicant s qualifications and likelihood of success in order to evaluate whether to admit him her finally in trial juries it is important that jurors pay attention to the evidence in order to make an informed judgement 1 we focus on environments where information is a public good in the sense that the social benefits of one decision maker acquiring information exceed the private benefits a good mechanism in this environment must not only aggregate information efficiently but also induce the decision makers to acquire information we analyse the design of voting mechanisms our problem is to choose two parameters which determine both the incentive to acquire information and the efficiency with which information is aggregated the first parameter is the size of the decision making unit the number of committee members the second is the plurality required to overturn the status quo the voting rule our main result is this a voting rule that requires a large plurality in the extreme unanimity to upset the status quo can be optimal only if the information available to each committee member is sufficiently accurate when individual information is noisy the drawback

determinants of democracy a panel study of over 100 countries from 1960 to 1995 finds that improvements in the standard of living predict increase in democracy as measured by a subjective indicator of electoral rights the propensity for democracy rises with per capita gdp primary schooling and a smaller gap between male and female primary attainment for a given standard of living democaracy tends to fall with urbnization and with a greater reliance on natrual resources democracy has little relation to country size but rises with the middle class share of income the apparently strong relation of democracy to colonial heritage mostly disappears when the economic variables are held constant similarly the allowance for these economic variables weakens the interplay between democracy and religious affiliation however negative effects from muslim and non religious affiliations remain intact

the effects of payoff magnitude and heterogeneity on behavior in 2 2 games with unique mixed strategy equilibria the logit version of quantal response equilibrium predicts that equilibrium behavior in games will vary systematically with payoff magnitudes if all other factors are held constant including the nash equilibria of the game we explore this in the context of a set of asymmetric 2x2 games with unique totally mixed strategy equilibria the data provide little support for the payoff magnitude predictions of the logit equilibrium model we extend the theoretical quantal response equilibrium model to allow for heterogeneity and find that the data fit the heterogeneous version of the theory significantly better

an explanation of anomalous behavior in models of political participation this paper characterizes behavior with noisy decision making for models of political interaction characterized by simultaneous binary decisions applications include voting participation games candidate entry the volunteer s dilemma and collective action problems with a contribution threshold a simple graphical device is used to derive comparative statics and other theoretical properties of a quantal response equilibrium and the resulting predictions are compared with nash equilibria that arise in the limiting case of no noise many anomalous data patterns in laboratory experiments based on these games can be explained in this manner

a new database on human capital stock in developing and industrial countries sources methodology and results abstract the paper describes the techniques and data adopted for the construction of a new series of estimates of the stock of education in 85 countries over 28 years 1960 1987 the series are built from enrollment data using the perpetual inventory method adjusted for mortality estimates are corrected for grade repetition among school goers and country specific drop out rates for primary and secondary students enrollment data series used start as far back as 1930 for most countries and even earlier for others this reduces the need for backward extrapolation of enrollments to provide the initial estimates of the investment inventory

get out the costly vote institutional design for greater participation institutions designed to increase turnout appeal to democratic sentiments but are highly debated as they entail two potentially countervailing eects while generating more pieces of information they may decrease the average voter s information quality we examine two commonly discussed institutions inducing participation abstention penalties used in 32 countries around the world and lotteries providing a prize to one randomly chosen participant as proposed on the 2006 arizona ballot we analyze a benchmark rational choice model in which voters vary in their information quality and participation is costly we illustrate that both institutions can improve collective outcomes though lotteries are a more eective instrument asymptotically in an array of lab experiments we empirically assess institutional performance we nd strong evidence for selective participation lab voters participate more when better informed or when institutionally induced however because subjects vote more often than the equilibrium predictions these institutions entail less welfare benets than theory prescribes lotteries do fare better than nes suggesting that they may be a useful alternative to commonly used compulsory

an experimental study of jury decision rules we present experimental results on groups facing a decision problem analogous to that faced by a jury we consider three treatment variables group size three or six number of votes needed for conviction majority or unanimity and pre vote deliberation we find evidence of strategic voting under the unanimity rule a large fraction of our subjects vote for a decision analogous to conviction even when their private information indicates a state analogous to innocence this is roughly consistent with the game theoretic predictions of feddersen and pesendorfer although individual behavior is explained well by the game theoretic model there are discrepancies at the level of the group decision contrary to feddersen and pesendorfer in our experiments there are fewer outcomes analogous to incorrect convictions under unanimity rule than under majority rule in the case of no deliberation we simultaneously account for the individual and group data using quantal response equilibrium

on the intersectoral migration of agricultural labor labor is the single most important factor in determining national income as economies grow agricultural labor declines as a share of total labor and converges to a level of 2 or 3 percent off farm migration facilitates the development of nonagriculture but historically the process spans decades the authors argue that the pace of the process is a fundamental outcome of a dynamic equilibrium based on expectations of lifetime earnings and the cost of migration the authors present an empirical model of the determinants of intersectoral migration one fundamental determinant is income differences across sectors as such migration should stop when income differences reach a certain level the authors provide a method of measuring the level at which intersectoral migration will cease while there are credible reasons for a permanent difference to exist between sectoral incomes the authors find no empirical evidence of a permanent wedge

rational choice and the condorcet jury theorem abstract in a recent paper austen smith and banks 1996 amer polit sci rev 90 34 45 criticize the current literature on the condorcet jury theorem as neglecting the behavioral underpinnings of decision making they leave open the question whether allowing mixed strategies would sustain the conclusions of the condorcet jury theorem in this paper it is shown that these conclusions can hold in equilibrium in other words a rational choice foundation for the claim that majorities invariably do better than individuals is derived journal of economic literatureclassification number d72

the marginal voter s curse an intuitive explanation for voter abstention is that a voter is uncertain which policy or candidate to vote for and so defers to the rest of the electorate to make the decision in majoritarian elections this has been formally modelled as a strategic response to the swing voter s curse which arises because the rare event of a pivotal vote conveys substantial information in electoral systems other than majority rule however the standard pivotal voting calculus may not apply this paper analyzes one such system namely proportional representation where additional votes continue to push the policy outcome in one direction or the other a new strategic incentive for abstention arises in that case to avoid the marginal voter s curse of pushing the policy outcome in the wrong direction intuitively conditioning on the rare event of a pivotal vote might seem to have a greater impact on behavior but the marginal voter s curse actually presents a larger disincentive for voting than the swing voter s curse this and other predictions of the model are con rmed empirically by a series of laboratory experiments

common value elections with private information and informative priors theory and experiments abstract we study efficiency and information aggregation in common value elections with contin uous private signals and informative priors we show that small elections are not generally efficient and that there are equilibria where some voters vote against their private signal even if it provides useful information and abstention is allowed this is not the case in large elections where the fraction of voters who vote against their private signal tends to zero in an experiment we then study how informativeness of priors and private signals impact efficiency and information aggregation in small elections we find that there is a substantial amount of voting against the private signal moreover while most experimental elections are efficient we find that it is not generally the case that better private information leads to better decisions

colonial legacies and economic growth much of the work on colonialism has been theoretical or anecdotal in this paper i close the gap between the literature on development and new growth theory by testing the effect of colonization on subsequent growth and development in a sample of 63 ex colonial states from 1961 1990 i find that colonies that were held for longer periods of time than other countries tend to perform better on average after independence finally i show that the level of education at the time of independence can help to explain much of the development gap between the former british and french colonies in africa

on the empirical content of quantal response equilibrium the quantal response equilibrium qre notion of mckelvey and palfrey 1995 has recently attracted considerable attention due largely to its widely documented ability to rationalize observed behavior in games played by experimental subjects we show that this ability to t the data as typically measured in this literature is uninformative without ap riori distributional assumptions a qre can match any distribution of behavior by each player in any normal form game we discuss approaches that might be taken to provide valid empirical evaluation of the qre and discuss its potential value as an approximating empirical structure

reputation in an internet auction market i introduction without transmission of credible information asymmetries may lead to underproduction of goods or even market failure reputation mitigates inefficiencies associated with information asymmetries by providing an informative signal of quality 1 the difficulty in quantifying reputation means that few studies can analyze empirically the role of reputation in markets our analysis of a quantified market observed measure of reputation provides direct evidence of the effect of a seller s reputation on the terms of a onetime real world transaction thereby contributing empirical support to a fundamental economic principle this study empirically examines person to person transactions within the internet market known as ebay in this virtual market of unseen participants and products buyers and sellers face the risks of repudiation as the counter party may deny the agreement after the fact buyers assume risks associated with lack of seller integrity and asymmetric information about the particular product as the buyer is typically required to send payment before the seller ships the product in addition for many ebay transactions the cost of enforcing a contract is high relative to the transaction s value resulting in a practical absence of legal enforcement 2 by providing a history of trade execution information ebay benefits market participants by reducing information asymmetries while achieving substantial transaction cost economies market participants relate personal experiences which ebay uses to calculate a numerical reputation measure for each user market participants in turn can use this reputation measure to assess counter party risk and adjust bidding behavior accordingly in a sample of 460 auctions held between january 1998 and july 1998 we find a positive relation between prices and ebay s reputation measure higher reputation sellers experience higher auction prices ceteris paribus our findings suggest that repeat players are rewarded for building reputation consistent with the belief that the high reputation seller s value of future transactions outweighs the value of taking advantage of the buyer in the current transaction buyers are willing to pay more to a higher reputation seller this article contributes to the literature not only by providing quantitative support of long accepted reputation theories but also by illustrating the use of nontraditional markets as a natural laboratory for experiments this article is an example of how a newly formed electronic market can provide the elements necessary for analytical research we find that ebay transactions for this item exhibit characteristics similar to transactions in more conventional markets namely 1 prices are higher when there is less quantity supplied when fewer of the items are available the same day 2 prices are lower during periods of lower demand times less likely to have high traffic 3 sellers with higher shipping and handling costs receive lower prices and 4 sellers failing to provide information about shipping and handling fees i e larger information asymmetries receive fewer bids dramatic innovations in online market structure and increasing availability of online market data should enable researchers to examine directly other traditionally non quantifiable economic ideas this article is organized as follows section ii describes how reputation can be used to facilitate transactions in the presence of asymmetric information section iii describes the ebay market summarizes the listing and bidding processes and discusses the reputation mechanism for this market section iv presents the price and reputation descriptive statistics associated with a consistently auctioned item and reports the empirical findings of how this item s highest bid price varies with the level of the seller s reputation we conclude in section v with a discussion of ebay s continued attempts to add value to the market through recent structural changes

international comparisons of rural urban educational attainment data and determinants we study cross country differences in rural and urban educational attainment by using a data set comprising 56 countries we focus on the determinants of rural urban educational inequality which is measured by the ratio of rural to urban average years of schooling within each country we find that riskier human capital investment less credit availability a colonial heritage a legal system of french origin and landlockedness of nations are all associated with relatively lower rural educational levels and greater rural urban educational inequality conversely larger formal labor markets better infrastructure and a legal system of british origin are associated with relatively higher rural educational levels and lower rural urban educational inequality we also identify an interaction effect between economic development level and some of these factors in particular we find that as development level increases the negative positive relationship between french british legal systems and rural urban educational inequality is reversed and becomes positive negative

ignorance and bias in collective decisions we study theoretically and experimentally a committee with common interests committee members do not know which of two alternatives is the best but each member can acquire privately a costly signal before casting a vote under either majority or unanimity rule in the experiment as predicted by bayesian equilibrium voters are more likely to acquire information under majority rule and attempt to counter the bias in favor of one alternative under unanimity rule as opposed to bayesian equilibrium predictions however many committee members vote when uninformed moreover uninformed voting is strongly associated with a lower propensity to acquire information we show that an equilibrium model of subjective prior beliefs can account for both these phenomena and provides a good overall fit to the observed patterns of behavior both in terms of rational ignorance and biases

the quality of schooling quantity alone is misleading although much research discusses the quantity of schooling as an effective impact on productivity and earnings most such research leaves out the idea of the quality of schooling which may cause biases in the estimated returns to schooling this paper consequently attempts to extend the standard mincerian approach to incorporate school quality as well as quantity it demonstrates how exclusion of quality in the standard procedure may cause biases in the estimated returns to years of schooling probably in the upward direction the paper explores the implications of this extension of the standard model for the case of young brazilian males it shows that the estimate of the private return to years of schooling using the preferred quality inclusive specification is only one half the estimate using the standard procedure indicating substantial upward bias in the standard estimates it further outlines a method for estimating a social return to quality and finds that it exceeds substantially the social return to quantity the paper then shows why this in turn suggests there may be an equity productivity trade off in schooling investments