Unbiased Analysis of Today's Healthcare Issues
The August 1st edition of JAMA has an interesting article which examines how exposure to war crimes affects individuals view about peaceful negotiations (“…War Crimes…“). The study takes place in the Acholi, Lango, and Teso subregions in northern Uganda. Since the late 1980s, many people in this area of Uganda experienced the bitter fighting between…
“We want the protection the government provides, and we want freedom. Put those together, and what we really want is for our government, and the whole public sector, from firefighters to voluntary organizations, to be both responsible and responsive.” I recently finished reading the book The Fox in the Henhouse: How Privatization Threatens Democracy by…
The N.Y. Times Sunday Magazine has a very interesting article (“Getting Iraq wrong“) which talks about how academics and politicians make decisions. “The philosopher Isaiah Berlin once said that the trouble with academics and commentators is that they care more about whether ideas are interesting than whether they are true. Politicians live by ideas just…
If you are living in Puerto Rico, you may have reason to worry. The BBC reports (“PR seizes fake docs“) that “arrest warrants were issued for at least 88 doctors whom officials allege gained their credentials through fraud or bribery…The arrests are linked to allegations that members of Puerto Rico’s medical licensing board took bribes…
There remains little doubt that health club membership is a luxury good. More evidence to support this comes from China. NPR’s Marketplace reports (“…Sport towards China“): “…the average Chinese citizen now has much more disposable income than he or she ever had before. And a big thing they’re doing with that income . . .…
This week we have been looking at Expected Utility Theory (EUT) and its alternatives. Many people have challenged the empirical and theoretical basis for EUT. For instance, Matthew Rabin (Econometrica 2000) claims that EUT has implausible implications. For instance, if an individual would prefer $0 to playing a lottery with a 50% chance of losing…
I am honored to host the 31st edition of the world-renowned Cavalcade of Risk. In a departure from some prior carnivals, I have tried to make this a more concise edition, highlighting the truly best articles of the past two weeks. Using this method, I intended to eliminate minimize the risk that you will choose…
Yesterday, I talked about expected utility theory (EUT). Today I will write about one on the major departures from EUT: Prospect Theory. This theory was developed by Nobel laureate Daniel Kahneman and Amos Tversky (Econometrica 1979). The four key characteristics of prospect theory are: Individuals use decision weights, π(p), rather than probabilities, p, when making…
If you want to participate in this week’s edition of the Cavalcade of Risk, please submit your post to me today (Monday, July 30th). Here are instructions.
How do economists understand individuals preferences when there is risk? Without risk, economists generally believe that individuals have a utility function which can convert ordinal preferences into a real-valued function. This real valued function is the utility function. When risk enters into the picture, the expected utility theory (EUT) is used. This theory was developed…