This article reports a study that tests whether the internal consistency of the standard gamble can be improved upon by incorporating loss weighting and probability transformation parameters in the standard gamble valuation procedure. Five alternatives to the standard EU formulation are...

In a world where rational individuals may hold different prior beliefs, a sender can influence the behavior of a receiver by controlling the informativeness of a signal. We characterize the set of distributions of posterior beliefs that can be induced by a signal, and provide necessary and...

Dual system and dual process views of the human mind have contrasted automatic, fast, and non-conscious with controlled, slow, and conscious thinking. This paper integrates duality models from the perspective of consumer psychology by identifying three relevant theoretical strands: Persuasion...

This paper presents a game theoretic analysis of the generalized second-price auction that the company Overture operated in 2004 to sell sponsored search listings on search engines. We construct a model that embodies few prior assumptions about parameters, and we present results that indicate...

Per capita incomes across European regions are not equal and do not stay constant; regional income distributions uctuate over time. Such a process could have many possible limiting outcomes: complete equal- ity (convergence), stratication, and continually increasing inequality are but three...

This paper uses a model of growth and imperfect capital mobility across multiple economies to characterize the dynamics of (cross-country) in- come distributions. This allows convenient study of the convergence hypothesis, and reveals, where appropriate, polarization and clumping within...

This paper investigates the efficiency wage hypothesis and derives a tractable expression for the profit loss incurred by deviations from the efficiency wage. The extent of the wage deviation can be inferred from production function parameters. The resulting profit loss shown to depend upon the...

This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed both numerically for a model with a rich mix...

Disadvantaged groups tend also to constitute population minorities. One consequence of this is that the policies implemented by electorally accountable governments often fail to reflect minority interests. A policy solution is to enhance the political power of minority groups as a vehicle for...

Convergence concerns the poor catching up with the rich|if not instan- taneously, then at least having a tendency to do so. When poor and rich here refer to entire economies, then whether convergence occurs is traditionally viewed as just a side consequence of a more central ques- tion, namely...