Finding a suitable job: the effect of the institutional context on self-perceived over-education

The current research compares the perception of over-education in four different European countries, resorting to European Household Panel Data. The results confirm that the type of educational system accounts for some of the cross-national differences in self-perceived over-education. In qualificational spaces, like Denmark, where vocational training receives more importance, self-perceived over-education is not associated as much with educational attainment as in the so-called’ organisational spaces’, like Spain, France and Italy. Yet, the results confirm that, controlling for the system of education, the traits and regulation of the labour market also have an effect on over-education. Thus, in Spain, where temporary employment has soared in recent decades, this type of contract is clearly associated with the perception of over-education, to a much higher extent than in Italy or France. Temporary contracts in Spain may not work as a steppig stone for attaining a job suitable to the training received by the individual, as they may in the case of France or Italy. In sum, not only institutions offering skills and human capital, but labour market regulation as well, have a clear impact on the incidence of over-education.

Self-serving biases: Evidence from a simulated labor relationship

Previous studies have found evidence of a self-serving bias in bargaining and dispute resolution. We use experimental data to test for this effect in a simulated labor relatonship. We finda consistent discrepancy between employer beliefs and employee actions that can only be attributed to self-serving biases. This discrepancy is evident through stated beliefs, revealed satisfaction, and actual actions. We present evidenceand discuss implications.

From severance pay to self-insurance: Effects of severance payments savings accounts in Colombia

In 1990 Colombia replaced its traditional system of severance paymentswith a new system of severance payments savings accounts (SPSAs). Althoughseverance payments often are justified on the grounds that they provideinsurance against earnings loss, they also increase costs for employersand distort employment decisions. The impact of severance payments dependslargely on how much of the costs to employers can be shifted to workers.The theoretical analysis in this paper shows that, in contrast to atraditional system of severance payments, the system of SPSAs facilitatesthe shifting of severance payments costs to workers in the form of lowerwages. Empirical results using the Colombian National Household Surveysindicate that the introduction of SPSAs shifted around 80% of the totalseverance payments contributions to wages and had a positive effect onweekly hours. Results using the 1997 Colombian Living Standards MeasurementSurvey suggest that, although SPSAs in part replaced employer insurancewith self-insurance, SPSAs continue to play a consumption smoothing rolefor the non-employed.

One person in the battlefield is not a warrior: Self-construal, perceived ability to make a difference, and socially responsible behavior

We suggest that cultivating an individual's connectedness to others promotes sociallyresponsible behavior both directly and indirectly through increased perceived abilityto make a difference. Individuals whose interdependent self is more prominent feel theyhave more of an impact on larger scale societal outcomes and, therefore, engage more insocially responsible behaviors than do individuals whose independent self is moreprominent. We test these hypotheses in two experiments in which participants makefinancial contributions or exert an effort for a social cause. In a survey, we find thatperceived effectiveness mediates the effect of self-construal on socially responsibleconsumption.

Are self-regarding subjects more rational?

Through an experiment, we investigate how the level of rationality relatesto concerns for equality and efficiency. Subjects perform dictator games anda guessing game. More rational subjects are not more frequently of the selfregardingtype. When performing a comparison within the same degree of rationality,self-regarding subjects show more strategic sophistication than othersubjects.

Adaptive learning in models with lagged variables

In this work I study the stability of the dynamics generated by adaptivelearning processes in intertemporal economies with lagged variables. Iprove that determinacy of the steady state is a necessary condition for the convergence of the learning dynamics and I show that the reciprocal is not true characterizing the economies where convergence holds. In the case of existence of cycles I show that there is not, in general, a relationship between determinacy and convergence of the learning process to the cycle. I also analyze the expectational stability of these equilibria.

An experimental study of adaptive behavior in an oligopolistic market game

We consider an oligopolistic market game, in which the players are competing firm in the same market of a homogeneous consumption good. The consumer side is represented by a fixed demand function. The firms decide how much to produce of a perishable consumption good, and they decide upon a number of information signals to be sent into the population in order to attract customers. Due to the minimal information provided, the players do not have a well--specified model of their environment. Our main objective is to characterize the adaptive behavior of the players in such a situation.

A simple adaptive procedure leading to correlated equilibrium

We propose a simple adaptive procedure for playing a game. In thisprocedure, players depart from their current play with probabilities thatare proportional to measures of regret for not having used other strategies(these measures are updated every period). It is shown that our adaptiveprocedure guaranties that with probability one, the sample distributionsof play converge to the set of correlated equilibria of the game. Tocompute these regret measures, a player needs to know his payoff functionand the history of play. We also offer a variation where every playerknows only his own realized payoff history (but not his payoff function).

Adaptive approach heuristics for the generalized assignment problem

The Generalized Assignment Problem consists in assigning a setof tasks to a set of agents with minimum cost. Each agent hasa limited amount of a single resource and each task must beassigned to one and only one agent, requiring a certain amountof the resource of the agent. We present new metaheuristics forthe generalized assignment problem based on hybrid approaches.One metaheuristic is a MAX-MIN Ant System (MMAS), an improvedversion of the Ant System, which was recently proposed byStutzle and Hoos to combinatorial optimization problems, and itcan be seen has an adaptive sampling algorithm that takes inconsideration the experience gathered in earlier iterations ofthe algorithm. Moreover, the latter heuristic is combined withlocal search and tabu search heuristics to improve the search.A greedy randomized adaptive search heuristic (GRASP) is alsoproposed. Several neighborhoods are studied, including one basedon ejection chains that produces good moves withoutincreasing the computational effort. We present computationalresults of the comparative performance, followed by concludingremarks and ideas on future research in generalized assignmentrelated problems.

The gain-loss asymmetry and single-self preferences

Kahneman and Tversky asserted a fundamental asymmetry between gains and losses, namely a reflection effect which occurs when an individual prefers a sure gain of $ pz to anuncertain gain of $ z with probability p, while preferring an uncertain loss of $z with probability p to a certain loss of $ pz.We focus on this class of choices (actuarially fair), and explore the extent to which thereflection effect, understood as occurring at a range of wealth levels, is compatible with single-self preferences.We decompose the reflection effect into two components, a probability switch effect,which is compatible with single-self preferences, and a translation effect, which is not. To argue the first point, we analyze two classes of single-self, nonexpected utility preferences, which we label homothetic and weakly homothetic. In both cases, we characterize the switch effect as well as the dependence of risk attitudes on wealth.We also discuss two types of utility functions of a form reminiscent of expected utility but with distorted probabilities. Type I always distorts the probability of the worst outcome downwards, yielding attraction to small risks for all probabilities. Type II distorts low probabilities upwards, and high probabilities downwards, implying risk aversion when the probability of the worst outcome is low. By combining homothetic or weak homothetic preferences with Type I or Type II distortion functions, we present four explicit examples: All four display a switch effect and, hence, a form of reflection effect consistent a single self preferences.

Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model for outpatient and inpatient episodes

This paper analyses whether or not tax subsidies to private medicalinsurance are self-financing by means of a structural approach. Weconstruct a simulation routine based on a microeconometric discretechoice model that allows us to evaluate the impact of premium changeson the utilisation of outpatient and inpatient health care services. Wesimulate the 1999 Spanish tax reform that abolished the tax deductionfor expenditures on private health insurance using a representativesample of the Catalan population. Prior to this reform, foregone taxrevenue arising from deductions after the purchase of private insuranceamounted to 69.2 M. per year. In contrast, the elimination of thesubsidies to private policies is estimated to generate an extra costfor the public sector of about 8.9 M. per year.

Adaptive model selection using empirical complexities

Given $n$ independent replicates of a jointly distributed pair $(X,Y)\in {\cal R}^d \times {\cal R}$, we wish to select from a fixed sequence of model classes ${\cal F}_1, {\cal F}_2, \ldots$ a deterministic prediction rule $f: {\cal R}^d \to {\cal R}$ whose risk is small. We investigate the possibility of empirically assessingthe {\em complexity} of each model class, that is, the actual difficulty of the estimation problem within each class. The estimated complexities are in turn used to define an adaptive model selection procedure, which is based on complexity penalized empirical risk.The available data are divided into two parts. The first is used to form an empirical cover of each model class, and the second is used to select a candidate rule from each cover based on empirical risk. The covering radii are determined empirically to optimize a tight upper bound on the estimation error. An estimate is chosen from the list of candidates in order to minimize the sum of class complexity and empirical risk. A distinguishing feature of the approach is that the complexity of each model class is assessed empirically, based on the size of its empirical cover.Finite sample performance bounds are established for the estimates, and these bounds are applied to several non-parametric estimation problems. The estimates are shown to achieve a favorable tradeoff between approximation and estimation error, and to perform as well as if the distribution-dependent complexities of the model classes were known beforehand. In addition, it is shown that the estimate can be consistent,and even possess near optimal rates of convergence, when each model class has an infinite VC or pseudo dimension.For regression estimation with squared loss we modify our estimate to achieve a faster rate of convergence.

Concentration and self-censorship in commercial media

Within a simple model of non-localized, Hotelling-type competitionamong arbitrary numbers of media outlets we characterize qualityand content of media under different ownership structures. Assumingadvertising-sponsored, profit-maximizing outlets, we show that (i) topicssensitive to advertisers can be underreported (self-censored) by alloutlets in the market, (ii) self-censorship increases with the concentrationof ownership, (iii) adding outlets, while keeping the number ofowners fixed, may even increase self-censorship; the latter result relieson consumers' most preferred outlets being potentially owned by thesame media companies. We argue that externalities resulting fromself-censorship could be empirically large.