History repeats itself: The failure of rational choice models in corporate governance

Marnet, Oliver, 'History repeats itself: The failure of rational choice models in corporate governance', Critical Perspectives on Accounting (2005) 18(2) pp.191-210 RAE2008

The brain-sex theory of occupational choice: a counterexample

The brain-sex theory of occupational choice suggests that males and females in male-typical careers show a male pattern of cognitive ability in terms of better spatial than verbal performance on cognitive tests with the reverse pattern for females and males in female-typical careers, These differences are thought to result from patterns of cerebral functional lateralisation. This study Sought Such occupationally related effects using synonym generation (verbal ability) and mental rotation (spatial ability) tasks used previously. It also used entrants to these careers as participants to examine whether patterns of cognitive abilities might predate explicit training and practice. Using a population of entrants to sex-differentiated University Courses, a moderate occupational effect on the synonym generation task was found, along with a weak (p<.10) sex effect on the mental rotation task. Highest performance on the mental rotation task was by female Students in fashion design, a female-dominated occupation which makes substantial visuospatial demands and attracts many students with literacy problems such as dyslexia. This group then appears to be a counterexample to the brain-sex theory. However, methodological issues Surrounding previous Studies are highlighted: the simple synonym task appears to show limited discrimination of the sexes, leading to questions concerning the legitimacy of inferences about lateralisation based on scores from that test. Moreover, the human figure-based mental rotation task appears to tap the wrong aspect of visuospatial skill, likely to be needed for male-typical courses such as engineering, Since the fashion-clesign career is also one that attracts disproportionately many male students whose sexual orientation is homosexual, data were examined for evidence of female-typical patterns of cognitive performance among that subgroup. This was not found. This study therefore provides Do evidence for the claim that female-pattern cerebral functional lateralisation is likely in gay males.

A theory of rational spatial agglomerations

We model the behavior of rational forward-looking agents in a spatial economy. The economic geography structure is built on Fujita et al. (1999)'s racetrack economy. Workers choose optimally what to consume at each period, as well as which spatial itinerary to follow in the geographical space. The spatial extent of the resulting agglomerations increases with the taste for variety and the expenditure share on manufactured goods, and decreases with transport costs. Because forward-looking agents anticipate the future formation of agglomerations, they are more responsive to spatial utility differentials than myopic agents. As a consequence, the emerging agglomerations are larger under perfect foresight spatial adjustments than under myopic ones.

Generating Dutiful Members in Communities of 'Rational Choice'

The study 'Youth Welfare as Prevention - The reconfiguration of support and control in advanced liberalism' is part of the Graduate program 'Youth Welfare in Transition' funded by the 'German Research Association'. In empirical terms it is based on both interviews with professionals, reconstructive discourse analysis based on documents and programs as well as a secondary analysis of a range of existing studies.

Domain Closedness Conditions and Rational Choice

The rationalizability of a choice function on an arbitrary domain under various coherence properties has received a considerable amount of attention both in the long-established and in the recent literature. Because domain closedness conditions play an important role in much of rational choice theory, we examine the consequences of these requirements on the logical relationships among different versions of rationalizability. It turns out that closedness under intersection does not lead to any results differing from those obtained on arbitrary domains. In contrast, closedness under union allows us to prove an additional implication.

Social Norms and Rationality of Choice

Ever since Sen (1993) criticized the notion of internal consistency of choice, there exists a wide spread perception that the standard rationalizability approach to the theory of choice has difficulties coping with the existence of external social norms. This paper introduces a concept of norm-conditional rationalizability and shows that external social norms can be accommodated so as to be compatible with norm-conditional rationalizability by means of suitably modified revealed preference axioms in the theory of rational choice on general domains à la Richter (1966;1971) and Hansson (1968)

Rational choice, social identity, and beliefs about oneself

Social identity poses one of the most important challenges to rational choice theory, but rational choice theorists do not hold a common position regarding identity. On one hand, externalist rational choice ignores the concept of identity or reduces it to revealed preferences. On the other hand, internalist rational choice considers identity as a key concept in explaining social action because it permits expressive motivations to be included in the models. However, internalist theorists tend to reduce identity to desire—the desire of a person to express his or her social being. From an internalist point of view, that is, from a viewpoint in which not only desires but also beliefs play a key role in social explanations as mental entities, this article rejects externalist reductionism and proposes a redefinition of social identity as a net of beliefs about oneself, beliefs that are indexical, robust, and socially shaped.

Rationality, External Norms and the Epistemic Value of Menus

Ever since Sen’s (1993; 1997) criticism on the notion of internal consistency or menu independence of choice, there exists a widespread perception that the standard revealed preference approach to the theory of rational choice has difficulties in coping with the existence of external norms, or the information a menu of choice might convey to a decision-maker, viz., the epistemic value of a menu. This paper provides a brief survey of possible responses to these criticisms of traditional rational choice theory. It is shown that a novel concept of norm-conditional rationalizability can neatly accommodate external norms within the standard framework of rationalizability theory. Furthermore, we illustrate that there are several ways of incorporating considerations regarding the epistemic value of opportunity sets into a generalized model of rational choice theory.

Revealed Preference and Choice under Uncertainty

We employ the theory of rational choice to examine whether observable choices from feasible sets of prospects can be generated by the optimization of some underlying decision criterion under uncertainty. Rather than focusing on a specific theory of choice, our objective is to formulate a general approach that is designed to cover the various decision criteria that have been proposed in the literature. We use a mild dominance property to define a class of suitable choice criteria. In addition to rationalizability per se, we characterize transitive and Suzumura consistent rationalizability in the presence of dominance.

Does uncertainty cause inertia in decision making? An experimental study of the role of regret aversion and indecisiveness

Previous research has shown that often there is clear inertia in individual decision making---that is, a tendency for decision makers to choose a status quo option. I conduct a laboratory experiment to investigate two potential determinants of inertia in uncertain environments: (i) regret aversion and (ii) ambiguity-driven indecisiveness. I use a between-subjects design with varying conditions to identify the effects of these two mechanisms on choice behavior. In each condition, participants choose between two simple real gambles, one of which is the status quo option. I find that inertia is quite large and that both mechanisms are equally important.

Institutions, Behavior and Evolution

The three articles constituting this thesis are for reasons of content or method related to the following three fields in economics: Behavioral Economics, Evolutionary Game Theory and Formal Institutional Economics. A core element of these fields is the concept of individual preferences. Preferences are of central importance for the conceptional framework to analyze human behavior. They form the foundation for the theory of rational choice which is defined by the determination of the choice set and the selection of the most preferred alternative according to some consistency requirements. The theory of rational choice is based on a very simplified description of the problem of choice (object function and constraints). However, that choices depend on many more factors is for instance propagated by psychological theories and is supported by many empirical and experimental studies. This thesis adds to a better understanding of individual behavior to the extent that the evolution of certain characteristics of preferences and their consequences on human behavior forms the overarching theme of the dissertation. The long-term effect of evolutionary forces on a particular characteristic of importance in the theoretical, empirical and experimental economic literature, the concept of inequality aversion, is subject of the article “The evolution of inequality aversion in a simplified game of life” (Chapter 4). The contribution of the article is the overcoming of a restriction of former approaches to analyze the evolution of preferences in very simple environments. By classifying human interaction into three central economic games, the article provides a first step towards a simplified and sufficiently complete description of the interaction environment. Within such an environment the article characterizes the evolutionary stable preference distribution. One result shows, that the interaction of the aforementioned three classes can stabilize a preference of inequality aversion in the subpopulation which is favored in the problem of redistribution. The two remaining articles are concerned with social norms, which dissemination is determined by medium-run forces of cultural evolution. The article “The impact of market innovations on the evolution of social norms: the sustainability case.“ (Chapter 2) studies the interrelation between product innovations which are relevant from a sustainability perspective and an according social norm in consumption. This relation is based on a conformity bias in consumption and the attempt to avoid cognitive dissonances resulting from non-compliant consumption. Among others, it is shown that a conformity bias on the consumption side can lead to multiple equilibria on the side of norm adoption. The article “Evolution of cooperation in social dilemmas: signaling internalized norms.” (Chapter 3) studies the emergence of cooperation in social dilemmas based on the signaling of social norms. The article provides a potential explanation of cooperative behavior, which does not rely on the assumption of structured populations or on the unmotivated ability of social norms to restrict individual actions or strategy spaces. A comprehensive result of the single articles is the explanation of the phenomenon of partial norm adaption or dissemination of preferences. The plurality of the applied approaches with respect to the proximity to the rational choice approach and regarding the underlying evolutionary mechanics is a particular strength of the thesis. It shows the equality of these approaches in their potential to explain the phenomenon of cooperation in environments that provide material incentives for defective behavior. This also points to the need of a unified framework considering the biological and cultural coevolution of preference patterns.

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.

O processo de criação do programa Universidade para Todos - PROUNI

From the end of the 80s, the Brazilian higher education experience strong growth, coming from the private sector, which would intensify further in the late 90th Higher education has become a lucrative business. With a drop in the number of students entering and strong competition, the number of idle places in private institutions of higher education reached 49.5% in 2004. That same year, by Measure, was the University for All Program (PROUNI) program, to include high school students from public higher education, offering scholarships to those students in private HEIs. In exchange, the IES gain tax exemption. The objective of this research is to investigate the game of interest occurred in the formulation of this program and identify the model and the political game and has led to the creation of PROUNI, analyzing the process occurred since the wording of a bill, the issue of Measure Law and that the legitimacy PROUNI, with the most important changes made initial model. Since the first draft of the Law to the final Act, the PROUNI was disfigured in its main points, as the percentage of stock for paying students, the process of selection of stock and bond of the IES program. Throughout the process of creating the program, it is quite clear the performance of the institutions representing the private higher education. As reference for the analysis was based on Rational Choice Theory of Political Science. The basic argument of the methods based on rational choice is the maximization of the benefit will be the main motivation of individuals, but they can give that your goals can be achieved more effectively through institutional action and thereby discover that their conduct is shaped by institutions. Thus, individuals rationally choose to get to a certain extent constrained to join in certain institutions, whether voluntarily or not. The PROUNI was submitted by government and public policy covered by the mystical aura of the discourse of social justice and economic development, as in higher education includes a stratum of people who would not have access to the university, due to restrictions in the supply network public higher education. However, the greatest benefit from the program are the private HEIs, which through a difficult time in a scenario marked by high competition and idleness of nearly half of the vacancies offered. The PROUNI became a program that prioritizes access and not the residence of the student to higher education. More serious than a supporting program for students Fellows is a program supporting the institutions of private education

Geburtenentwicklung und gesellschaftliche Struktur

Declining birthrates are causing problems on different levels of societal structure. The much discussed necessity to restructure pension-systems is only one part of a much bigger problem our society faces. There are numerous scientific theories and studies on the causes and resulting problems of declining birthrates. The results of these are not easily comparable and relatively unconnected. The aim of this dissertation is to discuss them within a new frame. Starting with Hartmut Esser´s Theory of Rational Choice and using other modifications of rational decision making theory (i.e. microeconomic modelling, game theory etc.) a new theoretical position as well as an integrated model of fertility behaviour is developed. In this frame the probable causes of declining birth rates are discussed with respect to situational factors (logic of situation) as well as decision-immanent factors (logic of selection). The model is completed by an extensive discussion of the resulting societal changes (logic of aggregation).

O processo de criação do programa Universidade para Todos - PROUNI

From the end of the 80s, the Brazilian higher education experience strong growth, coming from the private sector, which would intensify further in the late 90th Higher education has become a lucrative business. With a drop in the number of students entering and strong competition, the number of idle places in private institutions of higher education reached 49.5% in 2004. That same year, by Measure, was the University for All Program (PROUNI) program, to include high school students from public higher education, offering scholarships to those students in private HEIs. In exchange, the IES gain tax exemption. The objective of this research is to investigate the game of interest occurred in the formulation of this program and identify the model and the political game and has led to the creation of PROUNI, analyzing the process occurred since the wording of a bill, the issue of Measure Law and that the legitimacy PROUNI, with the most important changes made initial model. Since the first draft of the Law to the final Act, the PROUNI was disfigured in its main points, as the percentage of stock for paying students, the process of selection of stock and bond of the IES program. Throughout the process of creating the program, it is quite clear the performance of the institutions representing the private higher education. As reference for the analysis was based on Rational Choice Theory of Political Science. The basic argument of the methods based on rational choice is the maximization of the benefit will be the main motivation of individuals, but they can give that your goals can be achieved more effectively through institutional action and thereby discover that their conduct is shaped by institutions. Thus, individuals rationally choose to get to a certain extent constrained to join in certain institutions, whether voluntarily or not. The PROUNI was submitted by government and public policy covered by the mystical aura of the discourse of social justice and economic development, as in higher education includes a stratum of people who would not have access to the university, due to restrictions in the supply network public higher education. However, the greatest benefit from the program are the private HEIs, which through a difficult time in a scenario marked by high competition and idleness of nearly half of the vacancies offered. The PROUNI became a program that prioritizes access and not the residence of the student to higher education. More serious than a supporting program for students Fellows is a program supporting the institutions of private education