Four Essays of Environmental Risk-Mitigation

Expected damages of environmental risks depend both on their intensities and probabilities. There is very little control over probabilities of climate related disasters such as hurricanes. Therefore, researchers of social science are interested identifying preparation and mitigation measures that build human resilience to disasters and avoid serious loss. Conversely, environmental degradation, which is a process through which the natural environment is compromised in some way, has been accelerated by human activities. As scientists are finding effective ways on how to prevent and reduce pollution, the society often fails to adopt these effective preventive methods. Researchers of psychological and contextual characterization offer specific lessons for policy interventions that encourage human efforts to reduce pollution. This dissertation addresses four discussions of effective policy regimes encouraging pro-environmental preference in consumption and production, and promoting risk mitigation behavior in the face of natural hazards. The first essay describes how the speed of adoption of environment friendly technologies is driven largely by consumers’ preferences and their learning dynamics rather than producers’ choice. The second essay is an empirical analysis of a choice experiment to understand preferences for energy efficient investments. The empirical analysis suggests that subjects tend to increase energy efficient investment when they pay a pollution tax proportional to the total expenditure on energy consumption. However, investments in energy efficiency seem to be crowded out when subjects have the option to buy health insurance to cover pollution related health risks. In context of hurricane risk mitigation and in evidence of recently adopted My Safe Florida Home (MSFH) program by the State of Florida, the third essay shows that households with home insurance, prior experience with damages, and with a higher sense of vulnerability to be affected by hurricanes are more likely to allow home inspection to seek mitigation information. The fourth essay evaluates the impact of utility disruption on household well being based on the responses of a household-level phone survey in the wake of hurricane Wilma. Findings highlight the need for significant investment to enhance the capacity of rapid utility restoration after a hurricane event in the context of South Florida.

Preference intensities and risk aversion in school choice: a laboratory experiment

We experimentally investigate in the laboratory two prominent mechanisms that are employed in school choice programs to assign students to public schools. We study how individual behavior is influenced by preference intensities and risk aversion. Our main results show that (a) the Gale-Shapley mechanism is more robust to changes in cardinal preferences than the Boston mechanism independently of whether individuals can submit a complete or only a restricted ranking of the schools and (b) subjects with a higher degree of risk aversion are more likely to play "safer" strategies under the Gale-Shapley but not under the Boston mechanism. Both results have important implications for the efficiency and the stability of the mechanisms.

Health Information and the Choice of Fish Species: An Experiment Measuring the Impact of Risk and Benefit Information, April 2006

An experiment was conducted in France to evaluate the impact of health information on consumers’ choice between two different types of fish. Successive messages revealing risks (methylmercury) and benefits (omega-3s) of consuming the fish, along with consumption recommendations, were delivered. Results show a significant difference of reaction according to the order and type of information. The information about risks had a larger marginal impact on change in willingness to pay (WTP) than did the information about benefits. While the results show that detailed messages on risks/benefits, including recommendations for nutrition behavior, matter in the modification of WTP, 40% of respondents did not change their initial choices after the revelation of health information.

Paradox of choice: The influence of assortment size on customer satisfaction

Recently researchers showed that more choice is not always better. Choosing from large assortments can be overwhelming, raising expectations and decreasing overall level of consumer satisfaction. Author contributes to existing overchoice studies by using real assortment of online stores to find influence of assortment size on customer satisfaction. 90 students participated in the main experiment, where they chose a smartphone case for their friend. Results of the study show that large assortment size leads to higher expectations, higher choice difficulty and higher level of satisfaction. This research does not show overchoice presence and author suggests future studies could focus more on assortment variety and more personal characteristics of consumers, like preference uncertainty.

Retribution in a cheap-talk experiment

We use a two-person 3-stage game to investigate whether people choose to punish or reward another player by sacrificing money to increase or decrease the other person’s payoff. One player sends a message indicating an intended play, which is either favorable or unfavorable to the other player in the game. After the message, the sender and the receiver play a simultaneous 2x2 game. A deceptive message may be made, in an effort to induce the receiver to make a play favorable to the sender. Our focus is on whether receivers’ rates of monetary sacrifice depend on the process and the perceived sender’s intention, as is suggested by the literature on deception and procedural satisfaction. Models such as Rabin (1993), Sen (1997), and Charness and Rabin (1999) also permit rates of sacrifice to be sensitive to the sender’s perceived intention, while outcome-based models such as Fehr and Schmidt (1999) and Bolton and Ockenfels (1997) predict otherwise. We find that deception substantially increases the punishment rate as a response to an action that is unfavorable to the receiver. We also find that a small but significant percentage of subjects choose to reward a favorable action choice made by the sender.

Optimal Contracts, Adverse Selection, and Social Preferences: An Experiment

It has long been standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. However, this assumption is clearly refuted by numerous experiments, and we feel that it may be useful to consider nonpecuniary utility in mechanism design and contract theory. Accordingly, we devise an experiment to explore optimal contracts in an adverse-selection context. A principal proposes one of three contract menus, each of which offers a choice of two incentive-compatible contracts, to two agents whose types are unknown to the principal. The agents know the set of possible menus, and choose to either accept one of the two contracts offered in the proposed menu or to reject the menu altogether; a rejection by either agent leads to lower (and equal) reservation payoffs for all parties. While all three possible menus favor the principal, they do so to varying degrees. We observe numerous rejections of the more lopsided menus, and approach an equilibrium where one of the more equitable contract menus (which one depends on the reservation payoffs) is proposed and agents accept a contract, selecting actions according to their types. Behavior is largely consistent with all recent models of social preferences, strongly suggesting there is value in considering nonpecuniary utility in agency theory.

Optimal contracts, adverse selection and social preferences: An experiment

It has long been standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. However, this assumption is clearly refuted by numerous experiments, and we feel that it may be useful to consider nonpecuniary utility in mechanism design and contract theory. Accordingly, we devise an experiment to explore optimal contracts in an adverse-selection context. A principal proposes one of three contract menus, each of which offers a choice of two incentive-compatible contracts, to two agents whose types are unknown to the principal. The agents know the set of possible menus, and choose to either accept one of the two contracts offered in the proposed menu or to reject the menu altogether; a rejection by either agent leads to lower (and equal) reservation payoffs for all parties. While all three possible menus favor the principal, they do so to varying degrees. We observe numerous rejections of the more lopsided menus, and approach an equilibrium where one of the more equitable contract menus (which one depends on the reservation payoffs) is proposed and agents accept a contract, selecting actions according to their types. Behavior is largely consistent with all recent models of social preferences, strongly suggesting there is value in considering nonpecuniary utility in agency theory.

Delayed-Choice Experiments and the Metaphysics of Entanglement

Delayed-choice experiments in quantum mechanics are often taken to undermine a realistic interpretation of the quantum state. More specifically, Healey has recently argued that the phenomenon of delayed-choice entanglement swapping is incompatible with the view that entanglement is a physical relation between quantum systems. This paper argues against these claims. It first reviews two paradigmatic delayed-choice experiments and analyzes their metaphysical implications. It then applies the results of this analysis to the case of entanglement swapping, showing that such experiments pose no threat to realism about entanglement.

Retribution in a cheap-talk experiment

We use a two-person 3-stage game to investigate whether people chooseto punish or reward another player by sacrificing money to increase or decrease the other person's payoff. One player sends a message indicating an intended play, which is either favorable or unfavorable to the other player in the game. After the message, the sender and the receiver play a simultaneous 2x2 game. A deceptive message may be made, in an effort to induce the receiver to make a play favorable to the sender. Our focus is on whether receivers' rates of monetary sacrifice depend on the process and the perceived sender's intention,as is suggested by the literature on deception and proceduralsatisfaction. Models such as Rabin (1993), Sen (1997), and Charnessand Rabin (1999) also permit rates of sacrifice to be sensitive to the sender's perceived intention, while outcome-based models such as Fehr and Schmidt (1999) and Bolton and Ockenfels (1997) predict otherwise. We find that deception substantially increases the punishment rate as a response to an action that is unfavorable to the receiver. We also find that a small but significant percentage of subjects choose to reward a favorable action choice made by the sender.

Ectoparasite affects choice and use of roost sites in the great tit, Parus major

Many diurnal bird species roost at night in holes. As a regular visitor of a hole they are therefore a welcome host for several species of ectoparasites. The interactions of ectoparasites with the behaviour, life-history traits and population demography of their hosts are largely unknown. In the present study the effects of the haematophagous hen flea, Ceratophyllus gallinae , on the great tit's choice of winter roost site were investigated experimentally. Three experiments tested (1) whether great tits prefer a clean nestbox to one containing an old, but parasite-free nest, (2) whether they prefer a parasite-free nestbox to one infested with the haematophagous hen flea, and (3) whether they prefer not to use a nestbox when there is only an infested box available in their territory. In the first experiment there was no discrimination and both kinds of boxes were used equally often. In the second experiment the great tits clearly preferred to roost in the box without ectoparasites. In the third experiment a significantly higher proportion of the infested nestboxes were not used for roosting compared with the parasite-free boxes. Recently the validity of the conclusions drawn from nestbox studies where the naturally occurring detrimental ectoparasites are eliminated by the routine removal of old nests between breeding seasons has been questioned. This study shows that ectoparasites affect host behaviour and therefore lends support to that criticism.

Effect of age on female choice in the field cricket, Gryllus interger

Female choice is an important element of sexual selection that may vary among females of the same species. Few researchers have investigated the causes of variation in selectivity with respect to potential mates and overall level of motivation toward a stimulus source representative of a mate. This study demonstrates that female age may be one cause of variation in female choice. Females of different ages may have different mate preferences. As females age, they have less time left to reproduce, and their residual reproductive value decreases. This should correspond to a higher reproductive effort which may be represented as increased motivation and/or decreased selectivity. The effect of age on mate choice in Gryllus integer was investigated by using a non-compensating treadmill, called the Kugel, to measure female phonotaxis. Artificially generated male calling songs of varying pulse rates were broadcast in either a singlestimulus or a three-stimulus experimental design. The pulse rates used in the calling song stimuli were 70, 64, 76, 55 and 85 pulses per second. These corresponded to the documented mean pulse rate for the species at the experimental temperature, one standard deviation below and above the mean, and 2.5 standard deviations below and above the mean, respectively. Test females were either 11-14 days or 25-28 days post-ecdysis. Trials usually were conducted two to seven hours into the scotophase. In the single-stimulus experiment, females were presented with stimuli with only one pulse rate. Older females achieved higher vector scores than younger females, indicating that older females are more motivated to mate. Both groups showed little phonotactic response towards 55 or 85 pIs, both of which lie outside the natural range of G. integer calling song at the experimental temperature. Neither group discriminated among the three pulse rates that fell within the natural range of calling song. In the three-stimulus experiment, females were presented with stimuli with one of three pulse rates, 64, 70 or 76 pIs, In alternation. Both age groups had reduced responsiveness in this experiment, perhaps due to an increase in perceived male density. Additionally, younger females responded significantly more to 64 and 70 pIs than to the higher pulse rate, indicating that they are selective with respect to mate choice. Older females did not discriminate among the three pulse rates. Therefore, it was concluded that selectivity decreases with age. A further study was conducted to determine that these effects were due to age and not due to the differing periods without a mating between the two age groups. Again, stimuli were presented in a three-stimulus experimental design. Age was held constant at 28 days and time since last mating varied from 11 to 25 days. Females varyIng in time since last mating did not differ in their responses to the calling song pulse rates. This indicated that the increased motivation and decreased selectivity exhibited In the initial experiments were due to age and not to time without a mating. Neither time of trial nor female weight had an effect upon female phonotaxis. Data are discussed in terms of mate choice, residual reproductive value, and costs of choice.

Toward a rational-choice foundation of non-additive theories

A classical argument of de Finetti holds that Rationality implies Subjective Expected Utility (SEU). In contrast, the Knightian distinction between Risk and Ambiguity suggests that a rational decision maker would obey the SEU paradigm when the information available is in some sense good, and would depart from it when the information available is not good. Unlike de Finetti's, however, this view does not rely on a formal argument. In this paper, we study the set of all information structures that might be availabe to a decision maker, and show that they are of two types: those compatible with SEU theory and those for which SEU theory must fail. We also show that the former correspond to "good" information, while the latter correspond to information that is not good. Thus, our results provide a formalization of the distinction between Risk and Ambiguity. As a consequence of our main theorem (Theorem 2, Section 8), behavior not-conforming to SEU theory is bound to emerge in the presence of Ambiguity. We give two examples of situations of Ambiguity. One concerns the uncertainty on the class of measure zero events, the other is a variation on Ellberg's three-color urn experiment. We also briefly link our results to two other strands of literature: the study of ambiguous events and the problem of unforeseen contingencies. We conclude the paper by re-considering de Finetti's argument in light of our findings.

A dynamic sequential route choice model for micro-simulation

Dans les études sur le transport, les modèles de choix de route décrivent la sélection par un utilisateur d’un chemin, depuis son origine jusqu’à sa destination. Plus précisément, il s’agit de trouver dans un réseau composé d’arcs et de sommets la suite d’arcs reliant deux sommets, suivant des critères donnés. Nous considérons dans le présent travail l’application de la programmation dynamique pour représenter le processus de choix, en considérant le choix d’un chemin comme une séquence de choix d’arcs. De plus, nous mettons en œuvre les techniques d’approximation en programmation dynamique afin de représenter la connaissance imparfaite de l’état réseau, en particulier pour les arcs éloignés du point actuel. Plus précisément, à chaque fois qu’un utilisateur atteint une intersection, il considère l’utilité d’un certain nombre d’arcs futurs, puis une estimation est faite pour le restant du chemin jusqu’à la destination. Le modèle de choix de route est implanté dans le cadre d’un modèle de simulation de trafic par événements discrets. Le modèle ainsi construit est testé sur un modèle de réseau routier réel afin d’étudier sa performance.

Bayesian inference and model comparison for random choice structures

We complete the development of a testing ground for axioms of discrete stochastic choice. Our contribution here is to develop new posterior simulation methods for Bayesian inference, suitable for a class of prior distributions introduced by McCausland and Marley (2013). These prior distributions are joint distributions over various choice distributions over choice sets of di fferent sizes. Since choice distributions over di fferent choice sets can be mutually dependent, previous methods relying on conjugate prior distributions do not apply. We demonstrate by analyzing data from a previously reported experiment and report evidence for and against various axioms.

Transfer effects in implicit memory and consumer choice

Two experiments investigated transfer effects in implicit memory and consumer choice, using a preference judgement task. Experiment 1 examined whether it is possible to obtain priming for unfamiliar food labels. Additionally, it investigated whether the experience of seeing a brand name with a particular product type would benefit subsequent processing of the brand name when linked with a different product type. Experiment 2 examined whether changes in modality between study and test would affect priming for unfamiliar brand names. Both questions are theoretically important, as well as pertaining to practical concerns in the consumer choice literature. Experiment 1 demonstrated significant priming for unfamiliar food labels, and established that priming was unaffected by changing the product type with which the brand name was associated. In Experiment 2, priming on both auditory and visual versions of the preference judgement task was reduced by changes in modality. The results and implications are discussed in relation to consumer choice and current theories of implicit memory.