Past Choices Research Articles

Differentiating Emissions Targets for Individual Developed Countries: Economics and Equity

A key challenge for a future climate change agreement is allocating emissions targets for individual developed countries that are perceived as equitable given differing national circumstances. Many economics-based frameworks for evaluating future targets use as a key criterion for individual country targets the notion that mitigation measures should result in similar costs (specifically, that the required mitigation actions relative to baseline emissions result in a similar percentage reduction of individual countries' GDP in the target year or period). Such an economic criterion provides a transparent and objective basis for comparison, but it does not necessarily mean that comparable targets for individual countries are also equitable. A set of thought experiments demonstrates that such an approach indeed does not reflect equity between countries. This is because future business-as-usual emissions, against which the costs of mitigation are assessed, depend on past policy choices and mitigation pathways. An approach that sets future emissions targets at a specific date based on comparable costs, without regard to past policy choices and commitments, would penalise countries that have taken early action and provides a disincentive for taking strong domestic mitigation actions in future. This analysis suggests that the choice of 'business-as-usual' emissions against which the future costs of mitigation are assessed needs to receive more attention if economic comparability is intended to also reflect equity of emissions targets over time.

Is Reputation Good or Bad? An Experiment

We investigate the impact of reputation in a laboratory experiment. We do so by varying whether the past choices of a long-run player are observable by the short-run players. Our framework allows for reputation to have either a beneficial or a harmful effect on the long-run player. We find that reputation is seldom harmful and its beneficial effects are not as strong as theory suggests. When reputational concerns are at odds with other-regarding preferences, we find the latter overwhelm the former. (JEL C91, D12, D82, D83, Z13)

Statistics of the Kolkata Paise Restaurant problem

We study the dynamics of a few stochastic learning strategies for the ‘Kolkata Paise Restaurant’ problem, where N agents choose among N equally priced but differently ranked restaurants every evening, such that each agent tries to get dinner in the best restaurant (with each restaurant serving only one customer and the rest of the customers arriving there going without dinner that evening). We consider the learning strategies to be similar for all the agents, and assume that each follows the same probabilistic or stochastic strategy dependent on information about past successes in the game. We show that some ‘naive’ strategies lead to much better utilization of services than some relatively ‘smarter’ strategies. We also show that a service utilization fraction as high as 0.80 can result for a stochastic strategy, where each agent sticks to his past choice (independent of success achieved or not, with probability decreasing inversely in the past crowd size). The numerical results for the utilization fraction of the services in some limiting cases are analytically examined.

Inertia versus mimicry in location choices by Chinese multinationals

PurposeThe purpose of this paper is to examine the determinants of foreign direct investment location – specifically whether firms enter a particular market or not. Drawing from the ecology and institutional theories, the paper identifies firms' own past (behavioral inertia) and rivals' past choices (behavioral mimicry) as key determinants of location selection. The paper identifies the differences between developing country multinationals (MNCs) and developed country MNCs and their (differences)' implications for the relative influence of mimetic versus inertial forces.Design/methodology/approachA unique and comprehensive database about the location choices of 204 Chinese firms between 1992 and 2005 was constructed and conditional logistic regressions were deployed to assess the direct effects of behavioral inertia/mimicry, and the moderating effect of host country environment, on the location choices of the sampled firms.FindingsThe paper finds that behavioral inertia has a stronger impact on the location decisions of Chinese MNCs than behavioral mimicry. It also finds that the host country's institutions, openness, and policy stability moderate the relationship between behavioral mimicry and inertia, on one hand, and location choice, on the other hand, possibly because of these factors' influence on the level of perceived uncertainty.Originality/valueThis is the first paper modeling the simultaneous effects of behavioral inertia and mimicry on location choice and the moderating effect of host country environment on these relationships. The strong empirical support for all the predictions lends credence to the conceptual foundations of the hypothesized relationships. The focus on developing country MNCs, which possess several distinctive characteristics, and the unique dataset, should also enhance the paper's appeal.

Distinct Roles of Rodent Orbitofrontal and Medial Prefrontal Cortex in Decision Making

We investigated how different subregions of rodent prefrontal cortex contribute to value-based decision making, by comparing neural signals related to animal's choice, its outcome, and action value in orbitofrontal cortex (OFC) and medial prefrontal cortex (mPFC) of rats performing a dynamic two-armed bandit task. Neural signals for upcoming action selection arose in the mPFC, including the anterior cingulate cortex, only immediately before the behavioral manifestation of animal's choice, suggesting that rodent prefrontal cortex is not involved in advanced action planning. Both OFC and mPFC conveyed signals related to the animal's past choices and their outcomes over multiple trials, but neural signals for chosen value and reward prediction error were more prevalent in the OFC. Our results suggest that rodent OFC and mPFC serve distinct roles in value-based decision making and that the OFC plays a prominent role in updating the values of outcomes expected from chosen actions.

The past Matters: Eliminating the Pro-Labour Bias in British Opinion Polls

Opinion polls in Britain display a persistent tendency to overestimate Labour's share of the vote in the ballot box. This appears to arise from failure to secure a politically representative sample and to estimate accurately who will actually vote. We argue that, despite some potential pitfalls, polls based on fresh cross-section samples have to engage in weighting by recalled past vote choice and recalled past turnout in order to overcome these problems.

Choosing a Hospital for Surgery: The Importance of Information on Quality of Care

To assess whether patients use information on quality of care when choosing a hospital for surgery compared with more general hospital information. In this cross-sectional study in 3 Dutch hospitals, questionnaires were sent to 2122 patients who underwent 1 of 6 elective surgical procedures in 2005-2006 (aorta reconstruction [for treatment of aneurysm], cholecystectomy, colon resection, inguinal hernia repair, esophageal resection, thyroid surgery). Patients were asked which information they had used to choose this hospital and which information they intended to use if they would need similar surgical treatment in the future. In total, 1329 questionnaires were available for analysis (response rate 62.6%). Most patients indicated having used the hospital's good reputation (69.1%) and friendly hospital atmosphere (63.3%) to choose a hospital. For future choices, most patients intended to use the fact that they were already treated in that hospital (79.3%) and the hospital's good reputation (74.1%). Regarding quality-of-care information, patients preferred a summary measure (% patients with ''textbook outcome'') over separate more detailed measures (52.1% v. 38.0%, χ2 = 291, P < 0.01). For future choices, patients intend to use more information items than in 2005-2006, both in absolute terms (9 v. 4 items, t = 38.3, P < 0.01) as relative to the total number of available items (41.3% [40.1%-42.5%] v. 29.2% [28.1%-30.2%]). Patients intended to use more information for future choices than they used for past choices. For future choices, most patients prefer a summary measure on quality of care over more detailed measures but seem to value that they were already treated in that hospital or a hospital's good reputation even more.

Using Real-Time Output Gaps to Examine Past and Future Policy Choices

Alternative measures of the UK output gap are considered for 1984–2007. The real-time series is strongly affected by the rolling-time estimation of the trend, and produces a picture of the business cycle which is not consistent with contemporary perceptions of the large fluctuations of the late 1980s and early 1990s. A new, ‘nearly-real’, measure developed here may be better for estimating historical reaction functions. In the context of the current recession, none of these mechanically derived measures of the output gap are useful. Policymakers should make careful estimates of the likely fall in potential output on the basis of other information.

The Organization of Regional Clusters

We introduce a model of interorganizational governance within regional clusters. Drawing on the “new institutional economics” literature, we show how firms' governance designs are shaped by the relationship between transaction-level characteristics and the cluster macroculture. We then consider how subsequent transaction-level governance designs are affected by path dependencies from past governance choices. Finally, we suggest that intertransactional path dependencies exhibit directional asymmetries, and we draw implications for the literature on clusters, on transaction costs, and on interorganizational relationships.

THE ORGANIZATION OF REGIONAL CLUSTERS.

We introduce a model of interorganizational governance within regional clusters. Drawing on the “new institutional economics” literature, we show how firms' governance designs are shaped by the relationship between transaction-level characteristics and the cluster macroculture. We then consider how subsequent transaction-level governance designs are affected by path dependencies from past governance choices. Finally, we suggest that intertransactional path dependencies exhibit directional asymmetries, and we draw implications for the literature on clusters, on transaction costs, and on interorganizational relationships.

Operant Matching as a Nash Equilibrium of an Intertemporal Game

Over the past several decades, economists, psychologists, and neuroscientists have conducted experiments in which a subject, human or animal, repeatedly chooses between alternative actions and is rewarded based on choice history. While individual choices are unpredictable, aggregate behavior typically follows Herrnstein's matching law: the average reward per choice is equal for all chosen alternatives. In general, matching behavior does not maximize the overall reward delivered to the subject, and therefore matching appears inconsistent with the principle of utility maximization. Here we show that matching can be made consistent with maximization by regarding the choices of a single subject as being made by a sequence of multiple selves-one for each instant of time. If each self is blind to the state of the world and discounts future rewards completely, then the resulting game has at least one Nash equilibrium that satisfies both Herrnstein's matching law and the unpredictability of individual choices. This equilibrium is, in general, Pareto suboptimal, and can be understood as a mutual defection of the multiple selves in an intertemporal prisoner's dilemma. The mathematical assumptions about the multiple selves should not be interpreted literally as psychological assumptions. Human and animals do remember past choices and care about future rewards. However, they may be unable to comprehend or take into account the relationship between past and future. This can be made more explicit when a mechanism that converges on the equilibrium, such as reinforcement learning, is considered. Using specific examples, we show that there exist behaviors that satisfy the matching law but are not Nash equilibria. We expect that these behaviors will not be observed experimentally in animals and humans. If this is the case, the Nash equilibrium formulation can be regarded as a refinement of Herrnstein's matching law.

Mushroom Bodies Regulate Habit Formation in Drosophila

To make good decisions, we evaluate past choices to guide later decisions. In most situations, we have the opportunity to simultaneously learn about both the consequences of our choice (i.e., operantly) and the stimuli associated with correct or incorrect choices (i.e., classically). Interestingly, in many species, including humans, these learning processes occasionally lead to irrational decisions. An extreme case is the habitual drug user consistently administering the drug despite the negative consequences, but we all have experience with our own, less severe habits. The standard animal model employs a combination of operant and classical learning components to bring about habit formation in rodents. After extended training, these animals will press a lever even if the outcome associated with lever-pressing is no longer desired. In this study, experiments with wild-type and transgenic flies revealed that a prominent insect neuropil, the mushroom bodies (MBs), regulates habit formation in flies by inhibiting the operant learning system when a predictive stimulus is present. This inhibition enables generalization of the classical memory and prevents premature habit formation. Extended training in wild-type flies produced a phenocopy of MB-impaired flies, such that generalization was abolished and goal-directed actions were transformed into habitual responses.

An Artificial Intelligence Approach for Modeling Molecular Self-assembly: Agent-based Simulations of Rigid Molecules

Agent-based simulations are rule-based models traditionally used for the simulations of complex systems. In this paper, an algorithm based on the concept of agent-based simulations is developed to predict the lowest energy packing of a set of identical rigid molecules. The agents are identified with rigid portions of the system under investigation, and they evolve following a set of rules designed to drive the system toward the lowest energy minimum. The algorithm is compared with a conventional Metropolis Monte Carlo algorithm, and it is applied on a large set of representative models of molecules. For all the systems studied, the agent-based method consistently finds a significantly lower energy minima than the Monte Carlo algorithm because the system evolution includes elements of adaptation (new configurations induce new types of moves) and learning (past successful choices are repeated).

On temporal determinants of European Union enlargement: The case of Turkey's accession

This paper aims at contributing to theoretical debates over why the European Union (EU) enlarges. Whereas existing theoretical approaches take a snapshot view of EU enlargement and focus on its synchronic determinants, this paper explores its temporal determinants. Developing a historical-institutionalist approach to EU enlargement, the paper claims that the enlargement process operates under the constraining weights of past policy choices. The paper examines and illustrates the relative merits of the existing approaches and the historical-institutionalist approach to EU enlargement through analysis of the Turkey–EU relations.

Can Sanctions Induce Pessimism? An Experiment

We run an experiment in which two subjects play a two-round minimum eort game in the presence of a third player (principal) who is the only one informed about past eort choices and benefits from a higher minimum eort of the others. Sanctions introduced in the second round by the experimenter lead to more optimistic beliefs and higher eorts.

“Green Is the New Black”: Celebrity Chic and the “Green” Commodity Fetish

In the April 2006 “Green” issue of Vanity Fair, the editor, Graydon Carter, declared “Green Is the New Black.” Fashion designers, such as Giorgio Armani, Oscar de la Renta, Stella McCartney, Betsey Johnson, and Todd Oldman are creating ecofashions for the runways, boutiques, mass markets, and especially for celebrities. Current eco-conscious designers create ecofashions far different than the stereotypical images of “eco-dress,” such as rope sandals, tie-dye T-shirt, and hemp cargo pants established in the 1960s and often associated with the Hippie subculture that represented anti-fashion and empowered the wearer visual cues of his/her sociopolitical ideals and values associated with animal and human rights, and environmental issues. As a result, stereotypical eco-dress functioned as a “green” commodity fetish imbued with “magical” value that reflected the eco-conscious lifestyle.The introduction of current ecofashions challenges these understood stereotypical images and identities, especially among celebrities. Eco-conscious celebrities actively seek out ecofashions that are consistent with their “green” lifestyles while non-verbally communicating their cultivated tastes and styles. Although sharing many of the same eco-conscious ideals, these new ecofashions do not share the same non-verbal communications as those garments worn in previous decades. By donning these “green” or ecofashions celebrities have depoliticized highly charged sociopolitical issues, and as a result, ecofashion communicates only the aesthetic of the wearer. This article unpacks past eco-dress choices by deconstructing how the stereotypical eco-dress functioned as a commodity fetish within Western industrial capitalist society. It also analyzes the changing “magical” meanings and values of the commodity fetishism associated with current ecofashions, giving particular attention to the new non-verbal communications and identities associated with ecofashions.

When Does Reward Maximization Lead to Matching Law?

What kind of strategies subjects follow in various behavioral circumstances has been a central issue in decision making. In particular, which behavioral strategy, maximizing or matching, is more fundamental to animal's decision behavior has been a matter of debate. Here, we prove that any algorithm to achieve the stationary condition for maximizing the average reward should lead to matching when it ignores the dependence of the expected outcome on subject's past choices. We may term this strategy of partial reward maximization “matching strategy”. Then, this strategy is applied to the case where the subject's decision system updates the information for making a decision. Such information includes subject's past actions or sensory stimuli, and the internal storage of this information is often called “state variables”. We demonstrate that the matching strategy provides an easy way to maximize reward when combined with the exploration of the state variables that correctly represent the crucial information for reward maximization. Our results reveal for the first time how a strategy to achieve matching behavior is beneficial to reward maximization, achieving a novel insight into the relationship between maximizing and matching.

Periodic stopping games

Stopping games (without simultaneous stopping) are sequential games in which at every stage one of the players is chosen, who decides whether to continue the interaction or stop it, whereby a terminal payoff vector is obtained. Periodic stopping games are stopping games in which both of the processes that define it, the payoff process as well as the process by which players are chosen, are periodic and do not depend on the past choices. We prove that every periodic stopping game without simultaneous stopping, has either periodic subgame perfect ϵ-equilibrium or a subgame perfect 0-equilibrium in pure strategies.

Introduction: Eco-historicism

Climate has long been the third rail of professional historiography. Climatic determinism, with its roots in Hippocratic theory, figures among the great embarrassments of the early modern of ideas: an intellectual adjunct to European imperialism and institutionalized racism. Enlightenment writers such as Montesquieu offered climatic rationalizations for the putative laziness and inferiority of African, Asian, and Pacific cultures, legitimating their subjection and conceiving, in the process, the embryo of biological race theory in the nineteenth and twentieth centuries. Until very recently, to suggest climate as an influence on human culture and has been to raise the unwelcome specter of disgraced ideology.Now, however, all is changed utterly. With tropical warmth threatening to become global phenomenon, ushering in an era of chronic drought and desertification, acidifying oceans, coastal inundation, and global food shortages, the necessity of integrating climate and environment into the work of has become increasingly urgent. Crude climatic determinism remains anathema, but historical materialism without ecological awareness now appears vulnerable to dangerous determinism of another kind: grand narrative of class, government, empire, and trade whose anthropocentric terms are no less product of imperialism and the Enlightenment than the current ecological crisis itself. Climate, long background constant, is back in the spotlight as key variable shaping the human story.Across variety of academic fields, climate and human are no longer estranged. In the sciences, the once marginal field of historical climatology, pioneered by Hubert Lamb, now spawns institutes. Given that standardized statistical data for temperature and rainfall are only available for the mid-nineteenth century on, historical climatologists have mined multitude of proxy sources-from ice cores, tree rings, and fossilized pollens to ships' logs and weather diaries-to fill out the climate record (albeit incompletely) across breathtakingly broad temporal range: from single famine year in, say, eighteenth-century Europe, to the beginnings of sedentary human culture ten thousand years ago (the Holocene Period), and back through the dim, paleo-climatological eras of human evolution. In each case, the propensity of the world climate system to dramatic temperature fluctuation has been major and consistent finding. The journal Climatic Change, which debuted in 1977, is just one example of high-profile forum for range of and scientists-climatologists, geographers, economists-to publish not only projections of the future impacts of warming, but accounts of past climate change, both natural and those subject to anthropogenic forcing.In traditional fields within the humanities, too, an historicized ecological consciousness has become the new norm. In the last three decades, environmental has evolved from its exclusively American focus to key interdisciplinary element in both regional studies and world history: the work of Alfred Crosby and John Richards has proved especially relevant to early modern studies. The thriving field of environmental currently boasts two major journals, professional society, as well as conferences, specialists, and-the ultimate test of viability-faculty lines. Similarly, anthropologists have recognized the untenability of their traditional intradisciplinary divide between physical anthropologists-who take seriously the climatic adaptation of pre-historical human communities-and cultural anthropologists who have long been, in the words of Carole Crumley, deeply suspicious . . . of the determinisms: racial, environmental, social (3), and who therefore den[y] environment meaningful role in human history (2). Crumley's landmark 1995 volume, Historical Ecology, proposed new interdisciplinary formation for anthropology, one that would integrate history, geography, and the environmental sciences to create a laboratory of past human choice and response in which the effects of environmental change can be palpably understood (7). …

The role of information asymmetry in escalation phenomena: Empirical evidence

Economic rationality dictates that only incremental costs and benefits should affect decisions. Observed behavior often seems to violate this principle, resulting in unwarranted commitment to past choices and their escalation. In this paper, we present experimental results that show that information asymmetry plays a key role in determining when such escalation behavior occurs. This finding opens new avenues for mitigating escalation behavior since information asymmetry is an environmental feature that can be modified by organization design and explicit economic rewards.