A neural marker of costly punishment behavior

Human readiness to incur personal costs to punish norm violators is a key force in the maintenance of social norms. The willingness to punish is, however, characterized by vast individual heterogeneity that is poorly understood. In fact, this heterogeneity has so far defied explanations in terms of individual-level demographic or psychological variables. Here, we use resting electroencephalography, a stable measure of individual differences in cortical activity, to show that a highly specific neural marker--baseline cortical activity in the right prefrontal cortex--predicts individuals' punishment behavior. The analysis of task-independent individual variation in cortical baseline activity provides a new window into the neurobiology of decision making by bringing dispositional neural markers to the forefront of the analysis.

Diminishing reciprocal fairness by disrupting the right prefrontal cortex.

Humans restrain self-interest with moral and social values. They are the only species known to exhibit reciprocal fairness, which implies the punishment of other individuals' unfair behaviors, even if it hurts the punisher's economic self-interest. Reciprocal fairness has been demonstrated in the Ultimatum Game, where players often reject their bargaining partner's unfair offers. Despite progress in recent years, however, little is known about how the human brain limits the impact of selfish motives and implements fair behavior. Here we show that disruption of the right, but not the left, dorsolateral prefrontal cortex (DLPFC) by low-frequency repetitive transcranial magnetic stimulation substantially reduces subjects' willingness to reject their partners' intentionally unfair offers, which suggests that subjects are less able to resist the economic temptation to accept these offers. Importantly, however, subjects still judge such offers as very unfair, which indicates that the right DLPFC plays a key role in the implementation of fairness-related behaviors.

Foreign Direct Investment in Agriculture: Land Grab or Food Security Improvement?

“Large-scale acquisition of land by foreign investors” is the correct term for a process where the verdict of guilt is often quicker than the examination. But is there something really new about land grab except in its extent? In comparison with colonial and post-colonial plantation operations, should foreign investors today behave differently? We generally accept coffee and banana exports as pro-growth and pro-development, just as for cars, beef and insurance. What then is wrong with an investment contract allowing the holder to buy a farm and to export wheat to Saudi Arabia, or soybeans and maize as cattle feed to Korea, or to plant and process sugar cane and palm oil into ethanol for Europe and China? Assuming their land acquisition was legal, should foreigners respect more than investment contracts and national legislation? And why would they not take advantage of the legal protection offered by international investment law and treaties, not to speak of concessional finance, infrastructure and technical cooperation by a development bank, or the tax holidays offered by the host state? Remember Milton Friedman’s often-quoted quip: “The business of business is business!” And why would the governments signing those contracts not know whether and which foreign investment projects are best for their country, and how to attract them? This chapter tries to show that land grab, where it occurs, is not only yet another symptom of regulatory failures at the national level and a lack of corporate social responsibility by certain private actors. National governance is clearly the most important factor. Nonetheless, I submit that there is an international dimension involving investor home states in various capacities. The implication is that land grab is not solely a question whether a particular investment contract is legal or not. This chapter deals with legal issues which seem to have largely escaped the attention of both human rights lawyers and, especially, of investment lawyers. I address this fragmentation between different legal disciplines, rules, and policies, by asking two basic questions: (i) Do governments and parliaments in investor home countries have any responsibility in respect of the behaviour of their investors abroad? (ii) What should they and international regulators do, if anything?

International standards for programmes of training in intensive care medicine in Europe.

PURPOSE To develop internationally harmonised standards for programmes of training in intensive care medicine (ICM). METHODS Standards were developed by using consensus techniques. A nine-member nominal group of European intensive care experts developed a preliminary set of standards. These were revised and refined through a modified Delphi process involving 28 European national coordinators representing national training organisations using a combination of moderated discussion meetings, email, and a Web-based tool for determining the level of agreement with each proposed standard, and whether the standard could be achieved in the respondent's country. RESULTS The nominal group developed an initial set of 52 possible standards which underwent four iterations to achieve maximal consensus. All national coordinators approved a final set of 29 standards in four domains: training centres, training programmes, selection of trainees, and trainers' profiles. Only three standards were considered immediately achievable by all countries, demonstrating a willingness to aspire to quality rather than merely setting a minimum level. Nine proposed standards which did not achieve full consensus were identified as potential candidates for future review. CONCLUSIONS This preliminary set of clearly defined and agreed standards provides a transparent framework for assuring the quality of training programmes, and a foundation for international harmonisation and quality improvement of training in ICM.

Service Brand Relationship Quality: Hot or Cold?

Customers’ long-term brand relations are crucial drivers of a service brand’s sustainable competitive advantage. This research empirically examines the quality of customer-service brand relationships in the context of an airline’s frequent flyer program. The authors show that service brand relationship quality (BRQ) involves both a hot (based on emotions) and a cold (based on objectrelevant beliefs) component. They find that these two components have different implications for a service brand’s performance and are at least partially driven by different antecedents whose relative importance changes over time. Specifically, cold BRQ is important for word-of-mouth behavior and is strongly driven by partner quality (i.e., the generalized assessment of the brand in its role as a relationship counterpart). Hot BRQ, on the other hand, has a stronger impact on willingness to pay a price premium and consideration set size. In early stages of a customer-brand relationship hot BRQ is more strongly driven by self-congruence (i.e., consumer’s perception of the fit between his/her self and the brand’s personality), in later stages partner quality becomes more relevant. The authors discuss the implications of their findings for the development of BRQ and the implementation of alternative growth strategies in a services context.

Disclosing and reporting medical errors: Cross-sectional survey of Swiss anaesthesiologists.

BACKGROUND There is limited research on anaesthesiologists' attitudes and experiences regarding medical error communication, particularly concerning disclosing errors to patients. OBJECTIVE To characterise anaesthesiologists' attitudes and experiences regarding disclosing errors to patients and reporting errors within the hospital, and to examine factors influencing their willingness to disclose or report errors. DESIGN Cross-sectional survey. SETTING Switzerland's five university hospitals' departments of anaesthesia in 2012/2013. PARTICIPANTS Two hundred and eighty-one clinically active anaesthesiologists. MAIN OUTCOME MEASURES Anaesthesiologists' attitudes and experiences regarding medical error communication. RESULTS The overall response rate of the survey was 52% (281/542). Respondents broadly endorsed disclosing harmful errors to patients (100% serious, 77% minor errors, 19% near misses), but also reported factors that might make them less likely to actually disclose such errors. Only 12% of respondents had previously received training on how to disclose errors to patients, although 93% were interested in receiving training. Overall, 97% of respondents agreed that serious errors should be reported, but willingness to report minor errors (74%) and near misses (59%) was lower. Respondents were more likely to strongly agree that serious errors should be reported if they also thought that their hospital would implement systematic changes after errors were reported [(odds ratio, 2.097 (95% confidence interval, 1.16 to 3.81)]. Significant differences in attitudes between departments regarding error disclosure and reporting were noted. CONCLUSION Willingness to disclose or report errors varied widely between hospitals. Thus, heads of department and hospital chiefs need to be aware of the importance of local culture when it comes to error communication. Error disclosure training and improving feedback on how error reports are being used to improve patient safety may also be important steps in increasing anaesthesiologists' communication of errors.

Entwicklung und Validierung einer Skala der Bereitschaft zu verzeihen (SBV)

Verzeihen dient der Bewältigung von Kränkungen und zwischenmenschlichen Konflikten. Es werden Definitionen und Operationalisierungen aus dem englischen Sprachraum vorgestellt. Die Entwicklung eines deutschsprachigen szenarienbasierten Instruments zur Erhebung der Bereitschaft zu verzeihen wird beschrieben. Es wird eine Differenzierung des Konstruktes in zwei Komponenten vorgeschlagen: (a) die Bereitschaft, anderen Menschen zu verzeihen, wenn diese ihre Tat bedauern, (b) die Bereitschaft, anderen Menschen zu verzeihen, wenn diese ihre Tat nicht bedauern. Die Messeigenschaften der neu entwickelten Skala wurden in fünf Studien an insgesamt 1824 Probanden untersucht. Die Ergebnisse zeigen, dass das Instrument gute psychometrische Eigenschaften besitzt. Die theoretische Differenzierung des Konstrukts wird empirisch bestätigt. Hinweise auf die Konstruktvalidität der Skala ergeben sich aus Zusammenhängen mit theoretisch einschlägigen Referenzkonstrukten: der habituellen Ärgerneigung, der Wahrnehmung und Klarheit über eigene und fremde Gefühle, positiver und negativer Affektivität, den fünf Persönlichkeitsfaktoren und sozialer Erwünschtheit. Für die Konstruktvalidität der Skala sprechen ferner konvergente Korrelationen mit anderen Maßen der Bereitschaft zu verzeihen.

Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

The consequences of social intolerance on non-violent protest behavior

This paper scrutinizes the impact of intolerance toward diverse ethnic, religious, and cultural groups on an individuals willingness to actively engage in non-violent protest. Following new insights, we examine the individual as well as the ecological effect of social intolerance on protest behavior. Drawing from insights of social psychology and communication science, we expect that the prevalence of intolerance reinforces the positive effect of individual-level intolerance on protest participation. From a rational choice perspective, however, a negative moderating effect is expected, as the expression of opinions becomes redundant for intolerant individuals in an intolerant society. We base our multilevel analyses on data from the World Values Surveys covering 32 established democracies. Our results reveal that intolerance leads to more non-violent protest participation. This relationship, however, is strongly influenced by the prevalence of intolerance in a country.

The American Myth of Markets in Social Policy: Ideological Roots of Inequality

The American Myth of Markets in Social Policy examines how implementing American tropes in policy design inadvertently frustrates policy goals. It investigates multiple market-oriented designs including funding for private organizations to deliver public services, funding for individuals to buy services, and policies incentivizing or mandating private actors to provide social policy. The author shows that these solutions often not only fail to achieve social goals, but, in fact, actively undermine them, for example saddling the poor with debt or encouraging discrimination. The book carefully details the mechanisms through which this occurs, for example a mismatch between program goals and either contract terms or individual preferences. The author examines several policies in depth, covering universal social insurance programs like healthcare and pensions, as well as smaller interventions like programs for the homeless. The author builds the argument using detailed empirical evidence as well as anecdote, keeping the book accessible and entertaining.

An (un) healthy poster: When environmental cues affect consumers’ food choices at vending machines

Environmental cues can affect food decisions. There is growing evidence that environmental cues influence how much one consumes. This article demonstrates that environmental cues can similarly impact the healthiness of consumers’ food choices. Two field studies examined this effect with consumers of vending machine foods who were exposed to different posters. In field study 1, consumers with a health-evoking nature poster compared to a pleasure-evoking fun fair poster or no poster in their visual sight were more likely to opt for healthy snacks. Consumers were also more likely to buy healthy snacks when primed by an activity poster than when exposed to the fun fair poster. In field study 2, this consumer pattern recurred with a poster of skinny Giacometti sculptures. Overall, the results extend the mainly laboratory-based evidence by demonstrating the health-relevant impact of environmental cues on food decisions in the field. Results are discussed in light of priming literature emphasizing the relevance of preexisting associations, mental concepts and goals.