Production under uncertainty and choice under uncertainty in the emergence of generalized expected utility theory

This paper presents a personal view of the interaction between the analysis of choice under uncertainty and the analysis of production under uncertainty. Interest in the foundations of the theory of choice under uncertainty was stimulated by applications of expected utility theory such as the Sandmo model of production under uncertainty. This interest led to the development of generalized models including rank-dependent expected utility theory. In turn, the development of generalized expected utility models raised the question of whether such models could be used in the analysis of applied problems such as those involving production under uncertainty. Finally, the revival of the state-contingent approach led to the recognition of a fundamental duality between choice problems and production problems.

Stereotypic explanatory bias: Implicit stereotyping as a predictor of discrimination

Two experiments examined whether a measure of implicit stereotyping based on the tendency to explain Black stereotype-incongruent events more often than Black stereotype-congruent events (Stereotypic Explanatory Bias or SEB) is predictive of behavior toward a partner in an interracial interaction. In Experiment I SEB predicted White males' choice to ask stereotypic questions of a Black female (but not a White male or White female) in an interview. In Experiment 2 the type of explanation (internal or external attribution) made for stereotype-inconsistency was examined. Results showed that White participants who made internal attributions for Black stereotype-incongruent behavior were rated more positively and those who made external attributions were rated more negatively by a Black male confederate. These results point to the potential of implicit stereotyping as an important predictor of behavior in an interracial interaction. (C) 2002 Elsevier Science (USA). All rights reserved.

Indirect certainty equivalents for the firm facing price and production uncertainty

Producer decisionmaking under uncertainty is characterized using indirect objective functions. The characterization is for the class of producers with continuous and nondecreasing preferences over stochastic incomes who face both price and production uncertainty. (C) 2002 Elsevier Science B.V. All rights reserved.

Comparing predictions of extinction risk using models and subjective judgement

Models of population dynamics are commonly used to predict risks in ecology, particularly risks of population decline. There is often considerable uncertainty associated with these predictions. However, alternatives to predictions based on population models have not been assessed. We used simulation models of hypothetical species to generate the kinds of data that might typically be available to ecologists and then invited other researchers to predict risks of population declines using these data. The accuracy of the predictions was assessed by comparison with the forecasts of the original model. The researchers used either population models or subjective judgement to make their predictions. Predictions made using models were only slightly more accurate than subjective judgements of risk. However, predictions using models tended to be unbiased, while subjective judgements were biased towards over-estimation. Psychology literature suggests that the bias of subjective judgements is likely to vary somewhat unpredictably among people, depending on their stake in the outcome. This will make subjective predictions more uncertain and less transparent than those based on models. (C) 2004 Elsevier SAS. All rights reserved.

Generic delimitation and phylogenetic uncertainty: An example from a group that has undergone an explosive radiation

Phylogenetic trees can provide a stable basis for a higher-level classification of organisms that reflects evolutionary relationships. However, some lineages have a complex evolutionary history that involves explosive radiation or hybridisation. Such histories have become increasingly apparent with the use of DNA sequence data for phylogeny estimation and explain, in part, past difficulties in producing stable morphology-based classifications for some groups. We illustrate this situation by using the example of tribe Mirbelieae (Fabaceae), whose generic classification has been fraught for decades. In particular, we discuss a recent proposal to combine 19 of the 25 Mirbelieae genera into a single genus, Pultenaea sens. lat., and how we might find stable and consistent ways to squeeze something as complex as life into little boxes for our own convenience. © CSIRO.

Spatial bias and temporal lag in tactile space perception

Constructing a veridical spatial map by touch poses at least two problems for a perceptual system. First, as the hand is moved through space, the locations of features may be displaced if there is an uncorrected lag between the moment the hand encounters a feature and the time that feature is encoded on a spatial map. Second, due to the sequential nature of the process, some form of memory, which itself may be subject to spatial distortions, is required for integration of spatial samples. We investigated these issues using a task involving active haptic exploration with a stylus swept back and forth in the horizontal plane at the wrist. Remembered locations of tactile targets were shifted towards the medial axis of the forearm, suggesting a central tendency in haptic spatial memory, while evidence for a displacement of perceived locations in the direction of sweep motion was consistent with processing delays.

Strategic trade policy under uncertainty: Sufficient conditions for the optimality of ad valorem, specific and quadratic trade taxes

In most previous work on strategic trade policy the form of government intervention has been prescribed in advance. In this paper, we apply a solution concept discussed by Klemperer and Meyer for games in which the strategy space consists of the class of all (non state-contingent) price quantity schedules. We examine a series of specific assumptions on demand and supply conditions and derive the associated equilibrium trade policies. We derive welfare implications for all cases examined.

Sensitivity and uncertainty analyses for burden of disease and risk factor estimates

Epidemiological studies report confidence or uncertainty intervals around their estimates. Estimates of the burden of diseases and risk factors are subject to a broader range of uncertainty because of the combination of multiple data sources and value choices. Sensitivity analysis can be used to examine the effects of social values that have been incorporated into the design of the disability–adjusted life year (DALY). Age weight, where a year of healthy life lived at one age is valued differently from at another age, is the most controversial value built into the DALY. The discount rate, which addresses the difference in value of current versus future health benefits, also has been criticized. The distribution of the global disease burden and rankings of various conditions are largely insensitive to alternate assumptions about the discount rate and age weighting. The major effects of discounting and age weighting are to enhance the importance of neuropsychiatric conditions and sexually transmitted infections. The Global Burden of Disease study also has been criticized for estimating mortality and disease burden for regions using incomplete and uncertain data. Including uncertain results, with uncertainty quantified to the extent possible, is preferable, however, to leaving blank cells in tables intended to provide policy makers with an overall assessment of burden of disease. No estimate is generally interpreted as no problem. Greater investment in getting the descriptive epidemiology of diseases and injuries correct in poor countries will do vastly more to reduce uncertainty in disease burden assessments than a philosophical debate about the appropriateness of social value

Commercialisation of agriculture in Kenya: Case study of urban bias on food availability in farm households

This study investigates the effect of cash cropping on food availability and examines the determinants of the proportion of income allocated for food expenditures in the Nyeri district in Kenya. Using a Tobit model, the results suggest that in general food expenditure allocations suffer due to cash cropping in Kenya as the lump-sum income flows from this may be used for purchases other than food. Food expenditure also suffers when remittances are irregular. On the other hand, earnings from outside employment for married women living with husbands are positively associated with food expenditure allocations. Amounts of non-cash food output as well as ownership of livestock are negatively associated with food expenditure allocations. These findings indicate that lump sum income may not lead to improved welfare of women and children. Thus, there may be social reasons for increasing non-cash food production especially by women, instead of over emphasizing cash cropping as now seems to be so in public policy.

Modelling basin level allocation of water in the Murray-Darling Basin in a world of uncertainty, Murray-Darling Program Working Papers WPM05-1, Risk and Sustainable Management Group, 8 February 2005

Abstract: The Murray-Darling Basin comprises over 1 million km2; it lies within four states and one territory; and over 12, 800 GL of irrigation water is used to produce over 40% of the nation's gross value of agricultural production. This production is used by a diverse collection of some-times mutually exclusive commodities (e.g. pasture; stone fruit; grapes; cotton and field crops). The supply of water for irrigation is subject to climatic and policy uncertainty. Variable inflows mean that water property rights do not provide a guaranteed supply. With increasing public scrutiny and environmental issues facing irrigators, greater pressure is being placed on this finite resource. The uncertainty of the water supply, water quality (salinity), combined with where water is utilised, while attempting to maximising return for investment makes for an interesting research field. The utilisation and comparison of a GAMS and Excel based modelling approach has been used to ask: where should we allocate water?; amongst what commodities?; and how does this affect both the quantity of water and the quality of water along the Murray-Darling river system?