In permit trading systems, free initial allocation is common practice. A recent example is the European Union Greenhouse Gas Emission Trading Scheme (EU-ETS). We investigate effects of different free allocation schemes on incentives and identify significant perverse effects on abatement and output employing a simple multi-period model. Firms have incentives for strategic action if allocation in one period depends on their actions in previous ones and thus can be influenced by them. These findings play a major role where trading schemes become increasingly popular as environmental or resource use policy instruments. This is of particular relevance in the EU-ETS where the current period is a trial-period before the first commitment period of the Kyoto protocol. Finally, this paper fills a gap in the literature by establishing a consistent terminology for initial allocation.
This article uses basic facts from the psychology of attention to show how the limited attention of consumers affects economic competition. The article determines endogenously whether an economy is information rich or information poor. A conventional economic equilibrium results if subjects have spare attention capacity. At the positive level, the respective impacts of advances in information technology, international integration and the media on equilibrium diversity and level of attention-seeking activities are shown. At the normative level, the issues of welfare, efficiency and optimal policy interventions are addressed.
In considering the contribution of cognitive neuropsychology to the understanding of persecutory delusions, we shall proceed in this chapter as follows: First, we shall consider the contribution of the more conventional clinical neuropsychological approach to the study of delusions. After all, cognitive neuropsychology developed as a hybrid of clinical neuropsychology (the psychological study of brain-injured people) and cognitive psychology (the study of the mental information-processing procedures that people use to perform such activities as speaking and understanding speech, and recognizing objects). Second, we shall outline the cognitive neuropsychological approach with brief reference to its history. Third, we shall describe how this approach has been applied to the study of delusions with reference
to our two-deficit cognitive neuropsychological model of monothematic delusions. Finally we shall evaluate the applicability of this model to the explanation of other delusions that are not so obviously neuropsychological; here we shall focus on persecutory delusions.
Autism is associated with an inability to identify and distinguish one’s own feelings. We assessed this inability using alexithymia and empathy questionnaires, and used fMRI to investigate brain activity while introspecting on emotion. Individuals with high functioning autism/Asperger
syndrome (HFA/AS) were compared with matched controls. Participants rated stimuli from the International Affective Picture System twice, once according to the degree of un/pleasantness that the pictures induced, and once according to their color balance. The groups differed significantly on both alexithymia and empathy questionnaires. Alexithymia and lack of empathy were correlated, indicating a link between understanding one’s own and others’ emotions. For both groups a strong
relationship between questionnaire scores and brain activity was found in the anterior insula (AI), when participants were required to assess their feelings to unpleasant pictures. Regardless of selfreported degree of emotional awareness, individuals with HFA/AS differed from controls when required to introspect on their feelings by showing reduced activation in self-reflection/mentalizing
regions. Thus, we conclude that difficulties in emotional awareness are related to hypoactivity in AI in both individuals with HFA/AS and controls, and that the particular difficulties in emotional awareness in individuals with HFA/AS are not related to their impairments in selfreflection/mentalizing.
In a laboratory experiment we show that minimum wages have significant and lasting effects on subjects’ reservation wages. The temporary introduction of a minimum wage leads to
a rise in subjects’ reservation wages which persists even after the minimum wage has been removed. Firms are therefore forced to pay higher wages after the removal of the minimum wage than before its introduction. As a consequence, the employment effects of removing the
minimum wage are significantly smaller than are the effects of its introduction. The impact of minimum wages on reservation wages may also explain the anomalously low utilization of subminimum wages if employers are given the opportunity of paying less than a minimum wage previously introduced. It may further explain why employers often increase workers' wages after an increase in the minimum wage by an amount exceeding that necessary for compliance with the higher minimum. At a more general level, our results suggest that economic policy may affect people’s behavior by shaping the perception of what is a fair transaction and by creating entitlement effects.
Understanding the link between neurobiology and cognition requires that neuroscience moves beyond mere structure-function correlations. An explicit systems perspective is needed in which putative mechanisms of how brain function is
constrained by brain structure are mathematically formalized and made accessible for experimental investigation. Such a systems approach critically rests on a better understanding of brain connectivity in its various forms. Since 2002, frontier topics of connectivity and neural system analysis have been discussed in a multidisciplinary annual meeting, the Brain Connectivity Workshop (BCW), bringing together experimentalists and theorists from various fields. This article summarizes some of the main discussions at the two most recent workshops, 2006 at Sendai, Japan, and 2007 at Barcelona, Spain: (i) investigation of cortical micro- & macrocircuits, (ii)
models of neural dynamics at multiple scales, (iii) analysis of "resting state" networks, and (iv) linking anatomical to functional connectivity. Finally, we outline some central challenges and research trajectories in computational systems neuroscience for the next years.
Models of effective connectivity characterize the influence that neuronal populations exert over each other. Additionally, some approaches, for example Dynamic Causal Modelling (DCM) and variants of Structural Equation Modelling, describe how effective connectivity is modulated by experimental manipulations. Mathematically, both are based on bilinear equations, where the bilinear term models
the effect of experimental manipulations on neuronal interactions. The bilinear framework, however, precludes an important aspect of neuronal interactions that has been established with invasive electrophysiological recording studies; i.e., how the connection between two neuronal units is enabled or gated by activity in other units. These gating processes are critical for controlling the gain of
neuronal populations and are mediated through interactions between synaptic inputs (e.g. by means of voltage-sensitive ion channels). They represent a key mechanism for various neurobiological processes, including top-down (e.g. attentional) modulation, learning and neuromodulation.
This paper presents a nonlinear extension of DCM that models such processes (to second order) at the
neuronal population level. In this way, the modulation of network interactions can be assigned to an explicit neuronal population. We present simulations and empirical results that demonstrate the validity and usefulness of this model. Analyses of synthetic data showed that nonlinear and bilinear mechanisms can be distinguished by our extended DCM. When applying the model to empirical fMRI
data from a blocked attention to motion paradigm, we found that attention-induced increases in V5 responses could be best explained as a gating of the V1→V5 connection by activity in posterior parietal cortex. Furthermore, we analysed fMRI data from an event-related binocular rivalry paradigm and found that interactions amongst percept-selective visual areas were modulated by activity in the
middle frontal gyrus. In both practical examples, Bayesian model selection favoured the nonlinear models over corresponding bilinear ones.
The ability to share the other’s feelings, known as empathy, has recently become the focus of social neuroscience studies. We review converging evidence that empathy with, for example, the pain of another person, activates part of the neural pain network of the empathizer, without first hand pain stimulation to the empathizer’s body. The amplitude of empathic brain responses is modulated by the intensity of the displayed emotion, the appraisal of the situation, characteristics of the suffering person such as perceived fairness, and features of the empathizer such as gender or previous experience with pain-inflicting situations. Future studies in the field should address inter-individual differences in empathy, development and plasticity of the empathic brain over the life span and the link between empathy, compassionate motivation and prosocial behavior.
Economic growth theory and theoretical ecology represent independent traditions of modeling aggregate consumer-resource systems. Both focus on different but equally important forces underlying the dynamics of human societies. Though the two traditions have unknowingly converged in some ways, they each have curious conventions from the perspective of the other. These conventions are reviewed, and two separate modeling frameworks that integrate the two traditions in a simple and straightforward fashion are developed and analyzed. The resulting models represent a consumer species (e.g. humans) that both produces and consumes its resources and then
reproduces biologically according to the consumption of its resources. Depending on the balance between production, consumption, and reproduction, the models can exhibit
stagnant behavior, like some predator-prey models, or growth, like many mutualism and economic growth models. When growth occurs, in the long term it takes one of two
forms. Either resources per capita grow and the human population size converges to a constant, which may be zero, or resources per capita converge to a constant and the
human population grows. The difference depends on initial conditions and the particular mix of biological conditions and human technology.
Conformity is a type of social learning that has received considerable attention among social psychologists and human evolutionary ecologists, but existing empirical research does not identify conformity cleanly. Conformity is more than just a tendency to follow the majority; it involves an exaggerated tendency to follow the majority. The “exaggerated” part of this definition ensures that conformists do not show just any bias toward the majority, but a bias sufficiently strong to increase the size of the majority through time. This definition of conformity is compelling because it is the only form of frequency-dependent social influence that produces behaviorally
homogeneous social groups. We conducted an experiment to see if players were conformists by separating individual and social learners. Players chose between two technologies repeatedly. Payoffs were random, but one technology had a higher expected payoff. Individual learners knew their realized payoffs after each choice, while social learners only knew the distribution of choices among individual learners. A subset of social learners behaved according to a classic model of conformity. The remaining social learners did not respond to frequency information. They were
neither conformists nor non-conformists, but mavericks. Given this heterogeneity in learning strategies, a tendency to conform increased earnings dramatically.
