How do we make decisions when confronted with several alternatives (e.g., on a supermarket shelf)? Previous work has shown that accumulator models, such as the drift-diffusion model, can provide accurate descriptions of the psychometric data for binary value-based choices, and that the choice process is guided by visual attention. However, the computational processes used to make choices in more complicated situations involving three or more options are unknown. We propose a model of trinary value-based choice that generalizes what is known about binary choice, and test
it using an eye-tracking experiment. We find that the model
provides a quantitatively accurate description of the relationship between choice, reaction time, and visual fixation data using the same parameters that were estimated in previous work on binary choice. Our findings suggest that the brain uses similar computational processes to make binary and trinary choices.
Although animal researchers established the role of testosterone as a social hormone decades ago, the investigation of its causal influence on human social behaviors has only recently begun. Here, we review and discuss recent studies showing the causal effects of testosterone on social interactions in animals and humans, and outline the basic neurobiological mechanisms that might underlie these effects. Based on these recent findings, we argue that the role of testosterone in human social behavior might be best understood in terms of the search for, and maintenance of, social status.
Sovereign debt crises in emerging markets are usually associated with liquidity and banking
crises. The conventional view is that the domestic financial turmoil is the consequence of foreign retaliation, although there is no clear empirical evidence on "classic" default penalties.
This paper emphasizes instead a direct link between sovereign defaults and liquidity crises,
building on two natural assumptions: (i) government bonds represent a source of liquidity
for the domestic private sector; (ii) the government cannot discriminate between domestic
and foreign creditors in the event of default. In this context, external debt emerges even in
the absence of classic penalties and government default is counter cyclical, triggers a liquidity
crunch, and amplifies output volatility. In addition, a financial reform that involves a substitution of government bonds with privately-sourced liquidity instruments could backfire by restricting government's access to foreign credit.
Social tensions impede social cohesion and public goods provision, and can be a driving force for more serious conflicts such as civil wars. Surprisingly, the emergence of social tensions has been studied only rarely in the literature. In the present contribution a game-theoretic model highlights how reputation concerns and the structure of group cleavages matter for the emergence of social tensions. In particular, the respective effects of ethnic fractionalization, polarization and segregation are analyzed. The differences between ethnicity and class, and the role of social mobility are also studied. The predictions of the model can account for recent empirical evidence.
Individuals sort into and out of economic environments based on their preferences and in response
to relative prices. We demonstrate the importance of such sorting for the measurement of social
preferences, using two laboratory experiments. First, allowing subjects to avoid environments in
which sharing is possible significantly reduces sharing. This reveals the existence of a type of
individual who shares reluctantly, preferring to avoid the opportunity to share. Second, after
subsidizing the sharing environment, the aggregate amount shared increases, but less is shared, on
average, by those who enter. Thus, subsidies intended to induce more sharing have weak effects
since they attract those who share the least.
Using the business cycle accounting framework [Chari V., P. Kehoe and E. McGrattan 2007. Business Cycle Accounting. Econometrica 75, 781-836.], this paper sheds new light on the French Great Depression. Frictions that reduce the efficiency with which factor inputs are used (efficiency wedge) were the primary factor in the economic downturn. The decline in consumption can be attributed to distortions in the Euler equation (investment wedge). In addition, frictions creating a gap between the marginal rate of substitution and the marginal product of labor (labor wedge) contributed to the slowdown of the economy after 1936. This drop in the efficiency wedge might have resulted from financial frictions and tariff policies, whereas the investment wedge might have been caused by financial frictions due to agency costs. A potential explanation for the decline of the labor wedge after 1936 is institutionals changes in the labor market.
This paper is concerned with the analysis of zero-inflated count data when time of exposure varies. It proposes a new zero-inflated count data model that is based on two homogeneous Poisson processes and accounts for exposure time in a theory consistent way. The new model is used in an application to the effect of insurance generosity on the number of absent days.
