In humans, two completely different motives may nevertheless lead to exactly the same behavior. Because we can't directly observe motives, modern economists often completely disregard them. However, Hein et al., using fMRI, show that different human motives can yield observable responses in the brain (see the Perspective by Gluth and Fontanesi). In empathy-based and reciprocity-based altruistic behavior, the direction and the strength of functional connectivity between specific brain regions were different for each motive. Moreover, the connectivity patterns were independent of the behavioral implications of the motives.
Goal-directed human behaviors are driven by motives. Motives are, however, purely mental constructs that are not directly observable. Here, we show that the brain’s functional network architecture captures information that predicts different motives behind the same altruistic act with high accuracy. In contrast, mere activity in these regions contains no information about motives.
Empathy-based altruism is primarily characterized by a positive connectivity from the anterior cingulate cortex (ACC) to the anterior insula (AI), whereas reciprocity-based altruism additionally invokes strong positive connectivity from the AI to the ACC and even stronger positive connectivity from the AI to the ventral striatum. Moreover, predominantly selfish individuals show distinct functional architectures compared to altruists, and they only increase altruistic behavior in response to empathy inductions, but not reciprocity inductions.
An emerging economic literature has found evidence that wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. This paper is the first to analyze age patterns in unmet expectations. Using the German Socio-Economic Panel, a unique data set that contains life satisfaction expectations as well as the same individuals’ subsequent life satisfaction realizations, I match 132,609 life satisfaction expectations to subsequent realizations. I find people to err systematically in predicting their life satisfaction over the life cycle. They expect – incorrectly – increases in young adulthood and decreases during old age. These errors are large, ranging from 9.8% at age 21 to −4.5% at age 68. They are stable over time and observed within cohorts and individuals as well as across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing.
Even before the Great Recession, US employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable employment gains achieved during the 1990s, with a historic contraction in manufacturing employment being a prime contributor to the slump. We estimate that import competition from China, which surged after 2000, was a major force behind both recent reductions in US manufacturing employment and—through input-output linkages and other general equilibrium channels—weak overall US job growth. Our central estimates suggest job losses from rising Chinese import competition over 1999–2011 in the range of 2.0–2.4 million.
Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between “dirty” (internal combustion engine) and “clean” (e.g., electric, hybrid, and hydrogen) patents across 80 countries over several decades. We show that firms tend to innovate more in clean (and less in dirty) technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation (clean/dirty) both from aggregate spillovers and from the firm’s own innovation history. We simulate the increases in carbon taxes needed to allow clean technologies to overtake dirty technologies.
Risk equalization mechanisms mitigate insurers’ incentives to practice risk selection. On the other hand, incentives to limit healthcare spending can be distorted by risk equalization, particularly when risk equalization payments depend on realized costs instead of expected costs. In addition, cost based risk equalization mechanisms may incentivize health insurers to distort the allocation of resources among different services. The incentives to practice risk selection, to limit healthcare spending, and to distort the allocation of resources can be measured by fit, power, and balance, respectively. We apply these three measures to evaluate the risk adjustment mechanism in Switzerland. Our results suggest that it performs very well in terms of power but rather poorly in terms of fit. The latter indicates that risk selection might be a severe problem. We show that re-insurance can reduce this problem while power remains on a high level. In addition, we provide evidence that the Swiss risk equalization mechanism does not lead to imbalances across different services.
From 2004 to 2012, the German social health insurance levied a co-payment for the first doctor visit in a calendar quarter. We develop a new model for estimating the effect of such a co-payment on the individual number of visits per quarter. The model combines a one-time increase in the otherwise constant hazard rate determining the timing of doctor visits with a difference-in-differences strategy to identify the reform effect. An extended version of the model accounts for a mismatch between reporting period and calendar quarter. Using data from the German Socio-Economic Panel, we do not find an effect of the co-payment on demand for doctor visits.
Beim Produkt Yasmin® ist die Risikodeklaration sowohl gegenüber den Patientinnen als auch gegenüber den Ärzten irreführend und in zentralen Punkten unvollständig. Es ist nicht auszuschliessen, dass die Kosten der Nebenwirkungen höher als die erwirtschafteten Gewinne sind. Die Kostenfolgen der Nebenwirkungen muss aber die Allgemeinheit tragen.
Different social contexts have been used when measuring distributional preferences. This could be problematic as contextual variance may inadvertently muddle the measurement process. We use a within-subjects design and measure distributional preferences in resource allocation tasks with role certainty, role uncertainty, decomposed games, and matrix games. Results show that, at the aggregate level, role uncertainty and decomposed games lead to higher degrees of prosociality when compared to role certainty. At the individual level, we observe considerable differences in behavior across the social contexts, indicating that the majority of people are sensitive to these different social settings but respond in different ways.
