Risk, ambiguity, and diversification

Attitudes toward risk influence the decision to diversify among uncertain options. Yet, because in most situations the options are ambiguous, attitudes toward ambiguity may also play an important role. I conduct a laboratory experiment to investigate the effect of ambiguity on the decision to diversify. I find that diversification is more prevalent and more persistent under ambiguity than under risk. Moreover, excess diversification under ambiguity is driven by participants who stick with a status quo gamble when diversification among gambles is not feasible. This behavioral pattern cannot be accommodated by major theories of choice under ambiguity.

Sala de llum i construccions

L???article descriu un projecte d???innovaci?? pedag??gica dirigit a alumnes d???Educaci?? Infantil del CEIP Pere Casasnovas de Ciutadella de Menorca. Es comenta que els nens estan pressionats a cr??ixer i a madurar cada vegada m??s aviat ja que s???anteposen els continguts del curr??culum front a exercicis que desenvolupin l???emotivitat, la relaci?? amb els altres i l???autoestima. La proposta pedag??gica es concreta en la definici?? de quatre espais-ambients diferents en els quals s???agrupen nins de diferents edats. Amb aquestes activitats es pret??n enriquir les relacions entre grups d???alumnes i els seus mestres; desencadenar din??miques de pensament, simbolisme i creaci??; afavorir la motricitat dels nens; adquirir autoconfian??a; fomentar el treball en equip, etc. Els resultats d???aquestes activitats denoten que els nens aprenen a observar, actuar, preveure el resultat de la seva acci??, sentir els l??mits de les seves possibilitats i modificar les accions. Es conclou que, gr??cies a aquest canvi metodol??gic, els nens s???impliquen en el seu paper col??laboratiu; augmenten la concentraci?? en el treball, i sincronitzen l???acci?? motriu i mental. No obstant aix??, es detecta certa aversi?? cap a les propostes m??s obertes i s???evidencien espais que, en un moment determinat, no s??n tan utilitzats com la resta. Aquest fet d??na lloc a una valoraci?? i posterior replantejament de l???activitat.

Tributo a la calidad institucional. Un desafío para la sociología jurídica latinoamericana (Tema Central)

El principal desafío de América Latina consiste en encontrar el modo de afrontar la fragmentación social, el individualismo extremo y las inequidades oprobiosas en el marco del más absoluto respeto a las instituciones. El Estado aún tiene en sus manos dos herramientas formidables: la educación y el sistema tributario. La insistencia en el cumplimiento de las obligaciones tributarias contribuye decisivamente a formar una conciencia ciudadana, fundamento, a su vez, de una mayor calidad institucional. Y, en una suerte de causalidad circular, el correcto funcionamiento de las instituciones legitima el reclamo de cumplimiento de las obligaciones tributarias a un habitante que va, así, tomando creciente conciencia de los deberes y derechos emergentes de su condición de ciudadano. Para comprender el modo en que pueden darse estos procesos en la región, es preciso contar con una nueva disciplina: la sociología de las finanzas públicas.

The Assault on Human Rigths and the Resilience of the Andean Dream: Health Inequities in Ecuador. IV Annual Distinguished Lecture sponsored by the Center for Research on Ethnicity, Culture and Health; School of Public Health; University of Michigan

The point of departure for these reflections is life, since its protection is the central purpose encouraging the defense of human rights and of public health. Life in the Andes has an exceptional diversity. Particularly in Ecuador, my country, this diversity constitutes a characteristic sign that is expressed in two main forms: natural megadiversity and multiculturalism. Indeed, Ecuador’s small territory synthesizes practically all types of lifezones that exist on Earth, having received the gift of high average rates of solar energy and abundant nutritional sources, which have facilitated the natural reproduction of countless species that show their beautiful vitality in the variety of ecosystems that compose the Andean mountain range, the tropical plains, the Amazon humid forests, and the Galapagos Islands. But besides being a highly biodiverse country, it is also a plurinational and multi-cultural society, in which the activity of human beings, organized into social conglomerates of different historical and cultural backgrounds, have formed more than a dozen nations and peoples. Regrettably this natural and human wealth has not been able to bear its best fruits due to the violent operation of a deep social inequity – unfortunately also one of the highest in the Americas—which conspires against life and is reproduced in national and international inequitable relations. This structural inequity has changed its form throughout the centuries and currently has reached its highest and most perverse level of development.

La renuncia a la equidad y la domesticación de la salud pública

Under present historical conditions of extreme social inequity, sustained by structural impoverishment, the destruction of living conditions and deterioration of environmental integrity, under the logic of big business, and precisely when the people’s organizations are working intensely in defending creatively human rights and health, academic public health evidences an exasperating passiveness; university departments, local and federal government agencies and even non-governmental organizations, keep implementing ineffective and innocuous health programs -some of them sustained by an expensive propaganda apparatus- that reproduce the same conventional plans, most of which end up reinforcing the rules of the neoliberal game. The present paper seeks to explain this historical surrender of public health; the institutional incapacity to foresee the structural roots of that flourishing pathology of inequity; and its divorce from the struggle of the most progressive social organizations. To accomplish this critique of hegemonic public health, the author analyzes the historical and epistemological roots of that “blindness” and the ideological fundaments of that political passiveness.

Bt cotton and production risk: Panel data evidence

The farm-level success of Bt-cotton in developing countries is well documented. However, the literature has only recently begun to recognise the importance of accounting for the effects of the technology on production risk, in addition to the mean effect estimated by previous studies. The risk effects of the technology are likely very important to smallholder farmers in the developing world due to their risk-aversion. We advance the emergent literature on Bt-cotton and production risk by using panel data methods to control for possible endogeneity of Bt-adoption. We estimate two models, the first a fixed-effects version of the Just and Pope model with additive individual and time effects, and the second a variation of the model in which inputs and variety choice are allowed to affect the variance of the time effect and its correlation with the idiosyncratic error. The models are applied to panel data on smallholder cotton production in India and South Africa. Our results suggest a risk-reducing effect of Bt-cotton in India, but an inconclusive picture in South Africa.

Prefrontal social cognition network dysfunction underlying face encoding and social anxiety in fragile X syndrome

Individuals with fragile X syndrome (FXS) commonly display characteristics of social anxiety, including gaze aversion, increased time to initiate social interaction, and difficulty forming meaningful peer relationships. While neural correlates of face processing, an important component of social interaction, are altered in FXS, studies have not examined whether social anxiety in this population is related to higher cognitive processes, such as memory. This study aimed to determine whether the neural circuitry involved in face encoding was disrupted in individuals with FXS, and whether brain activity during face encoding was related to levels of social anxiety. A group of 11 individuals with FXS (5 M) and 11 age-and gender-matched control participants underwent fMRI scanning while performing a face encoding task with onlineeye-tracking. Results indicate that compared to the control group, individuals with FXS exhibited decreased activation of prefrontal regions associated with complex social cognition, including the medial and superior frontal cortex, during successful face encoding. Further, the FXS and control groups showed significantly different relationships between measures of social anxiety (including gaze-fixation) and brain activity during face encoding. These data indicate that social anxiety in FXS may be related to the inability to successfully recruit higher level social cognition regions during the initial phases of memory formation. (C) 2008 Elsevier Inc. All rights reserved.

Long-chain n-3 PUFA: intakes in the UK and the potential of a chicken meat prototype to increase them

With the wide acceptance of the long-chain (LC) n-3 PUFA EPA and DHA as important nutrients playing a role in the amelioration of certain diseases, efforts to understand factors affecting intakes of these fatty acids along with potential strategies to increase them are vital. Widespread aversion to oil-rich fish, the richest natural source of EPA and DHA, highlights both the highly suboptimal current intakes in males and females across all age-groups and the critical need for an alternative supply of EPA and DHA. Poultry meat is a popular and versatile food eaten in large quantities relative to other meats and is open to increased LC n-3 PUFA content through manipulation of the chicken's diet to modify fatty acid deposition and therefore lipid composition of the edible tissues. It is therefore seen as a favourable prototype food for increasing human dietary supply of LC n-3 PUFA. Enrichment of chicken breast and leg tissue is well established using fish oil or fishmeal, but concerns about sustainability have led to recent consideration of algal biomass as an alternative source of LC n-3 PUFA. Further advances have also been made in the quality of the resulting meat, including achieving acceptable flavour and storage properties as well as understanding the impact of cooking on the retention of fatty acids. Based on these considerations it may be concluded that EPA- and DHA-enriched poultry meat has a very positive potential future in the food chain.

Optimal hedging with higher moments

This study proposes a utility-based framework for the determination of optimal hedge ratios (OHRs) that can allow for the impact of higher moments on hedging decisions. We examine the entire hyperbolic absolute risk aversion family of utilities which include quadratic, logarithmic, power, and exponential utility functions. We find that for both moderate and large spot (commodity) exposures, the performance of out-of-sample hedges constructed allowing for nonzero higher moments is better than the performance of the simpler OLS hedge ratio. The picture is, however, not uniform throughout our seven spot commodities as there is one instance (cotton) for which the modeling of higher moments decreases welfare out-of-sample relative to the simpler OLS. We support our empirical findings by a theoretical analysis of optimal hedging decisions and we uncover a novel link between OHRs and the minimax hedge ratio, that is the ratio which minimizes the largest loss of the hedged position. © 2011 Wiley Periodicals, Inc. Jrl Fut Mark

Should we be utopophobes about democracy in particular?

In his book Democratic Authority, David Estlund puts forward a case for democracy, which he labels epistemic proceduralism, that relies on democracy's ability to produce good – that is, substantively just – results. Alongside this case for democracy Estlund attacks what he labels ‘utopophobia’, an aversion to idealistic political theory. In this article I make two points. The first is a general point about what the correct level of ‘idealisation’ is in political theory. Various debates are emerging on this question and, to the extent that they are focused on ‘political theory’ as a whole, I argue, they are flawed. This is because there are different kinds of political concept, and they require different kinds of ideal. My second point is about democracy in particular. If we understand democracy as Estlund does, then we should see it as a problem-solving concept – the problem being that we need coercive institutions and rules, but we do not know what justice requires. As democracy is a response to a problem, we should not allow our theories of it, even at the ideal level, to be too idealised – they must be embedded in the nature of the problem they are to solve, and the beings that have it.

Real options and game theoretical approaches to real estate development projects: multiple equilibria and the implications of different tie-breaking rules

This paper contributes to a fast growing literature which introduces game theory in the analysis of real option investments in a competitive setting. Specifically, in this paper we focus on the issue of multiple equilibria and on the implications that different equilibrium selections may have for the pricing of real options and for subsequent strategic decisions. We present some theoretical results of the necessary conditions to have multiple equilibria and we show under which conditions different tie-breaking rules result in different economic decisions. We then present a numerical exercise using the in formation set obtained on a real estate development in South London. We find that risk aversion reduces option value and this reduction decreases marginally as negative externalities decrease.

Control of a Population of Norway Rats Resistant to Anticoagulant Rodenticides

For the first time, it has been unequivocally shown that multiple-feed second-generation anticoagulant rodenticides were ineffective against a population of rats in N.W. Berkshire, UK because of an unusually high prevalence and high degree of resistance. Use of the non-anticoagulant rodenticide calciferol led to a substantial reduction in the population, although primary poisoning of small birds appeared to be greater than with anticoagulant baits. There was strong evidence that many of the surviving rats had developed an aversion towards calciferol-treated bait. A reduction in the degree of anticoagulant resistance in the population was evident after a period of 17 months without anticoagulant use. The long-term strategy to manage the resistant population should integrate non-anticoagulant and anticoagulant rodenticide use to take advantage of possible pleiotropic costs of resistance.

Social networks and occupational choice: the endogenous formation of attitudes and beliefs about tax compliance

The paper analyses the emergence of group-specific attitudes and beliefs about tax compliance when individuals interact in a social network. It develops a model in which taxpayers possess a range of individual characteristics – including attitude to risk, potential for success in self-employment, and the weight attached to the social custom for honesty – and make an occupational choice based on these characteristics. Occupations differ in the possibility for evading tax. The social network determines which taxpayers are linked, and information about auditing and compliance is transmitted at meetings between linked taxpayers. Using agent-based simulations, the analysis demonstrates how attitudes and beliefs endogenously emerge that differ across sub-groups of the population. Compliance behaviour is different across occupational groups, and this is reinforced by the development of group-specific attitudes and beliefs. Taxpayers self-select into occupations according to the degree of risk aversion, the subjective probability of audit is sustained above the objective probability, and the weight attached to the social custom differs across occupations. These factors combine to lead to compliance levels that differ across occupations.

Revenue-neutral tax policy under price uncertainty

The firm's response to revenue-neutral taxation is investigated under price uncertainty. Revenue-neutral policies adjust simultaneously the marginal tax rate and the level of exemptions while keeping expected tax receipts constant. Nonincreasing absolute risk aversion is sufficient to sign the firm's response: a reduction in the marginal rate causes the firm to contract output. Implications are established for the equilibrium level of treasury receipts.

Accounting for the economic risk, caused by variation in disease severity, in fungicide dose decisions: exemplified for Mycosphaerella graminicola on winter wheat

A method is presented to calculate economic optimum fungicide doses accounting for the risk-aversion of growers responding to variability in disease severity between crops. Simple dose-response and disease-yield loss functions are used to estimate net disease-related costs (fungicide cost, plus disease-induced yield loss) as a function of dose and untreated severity. With fairly general assumptions about the shapes of the probability distribution of disease severity and the other functions involved, we show that a choice of fungicide dose which minimises net costs on average across seasons results in occasional large net costs caused by inadequate control in high disease seasons. This may be unacceptable to a grower with limited capital. A risk-averse grower can choose to reduce the size and frequency of such losses by applying a higher dose as insurance. For example, a grower may decide to accept ‘high loss’ years one year in ten or one year in twenty (i.e. specifying a proportion of years in which disease severity and net costs will be above a specified level). Our analysis shows that taking into account disease severity variation and risk-aversion will usually increase the dose applied by an economically rational grower. The analysis is illustrated with data on septoria tritici leaf blotch of wheat caused by Mycosphaerella graminicola. Observations from untreated field plots at sites across England over three years were used to estimate the probability distribution of disease severities at mid-grain filling. In the absence of a fully reliable disease forecasting scheme, reducing the frequency of ‘high loss’ years requires substantially higher doses to be applied to all crops. Disease resistant cultivars reduce both the optimal dose at all levels of risk and the disease-related costs at all doses.