scholarly journals Corrections to “Positively responsive collective choice rules and majority rule: a generalization of May's theorem to many alternatives” ( International Economic Review 60 (2019), 1489–1504)

2020 ◽  
Vol 61 (3) ◽  
pp. 1383-1383
Keyword(s):  
International Economic ◽  
Majority Rule ◽  
Collective Choice ◽  
International Economic Review

Unit-root tests for explosive behavior

2021 ◽  
Vol 21 (4) ◽  
pp. 999-1020
Author(s):  
Christopher F. Baum ◽  
Jesús Otero
Keyword(s):  
International Economic ◽  
Unit Root ◽  
American Statistical Association ◽  
Unit Root Tests ◽  
Statistical Association ◽  
International Economic Review ◽  
Augmented Dickey Fuller ◽  
Using Data ◽  
The Right ◽  
Rolling Windows

We present a new command, radf, that tests for explosive behavior in time series. The command computes the right-tail augmented Dickey and Fuller (1979, Journal of the American Statistical Association 74: 427–431) unitroot test and its further developments based on supremum statistics derived from augmented Dickey–Fuller-type regressions estimated using recursive windows (Phillips, Wu, and Yu, 2011, International Economic Review 52: 201–226) and recursive flexible windows (Phillips, Shi, and Yu, 2015, International Economic Review 56: 1043–1078). It allows for the lag length in the test regression and the width of rolling windows to be either specified by the user or determined using data-dependent procedures, and it performs the date-stamping procedures advocated by Phillips, Wu, and Yu (2011) and Phillips, Shi, and Yu (2015) to identify episodes of explosive behavior. It also implements the wild bootstrap proposed by Phillips and Shi (2020, Handbook of Statistics: Financial, Macro and Micro Econometrics Using R, Vol. 42, 61–80) to lessen the potential effects of unconditional heteroskedasticity and account for the multiplicity issue in recursive testing. The use of radf is illustrated with an empirical example.

scholarly journals Stochastic Revealed Preferences with Measurement Error

2020 ◽  
Author(s):  
Victor H Aguiar ◽  
Nail Kashaev
Keyword(s):  
International Economic ◽  
Measurement Error ◽  
Panel Data ◽  
Revealed Preference ◽  
Revealed Preferences ◽  
Data Sets ◽  
Single Individual ◽  
Data Set ◽  
International Economic Review ◽  
New Evidence

Abstract A long-standing question about consumer behaviour is whether individuals’ observed purchase decisions satisfy the revealed preference (RP) axioms of the utility maximization theory (UMT). Researchers using survey or experimental panel data sets on prices and consumption to answer this question face the well-known problem of measurement error. We show that ignoring measurement error in the RP approach may lead to overrejection of the UMT. To solve this problem, we propose a new statistical RP framework for consumption panel data sets that allows for testing the UMT in the presence of measurement error. Our test is applicable to all consumer models that can be characterized by their first-order conditions. Our approach is non-parametric, allows for unrestricted heterogeneity in preferences and requires only a centring condition on measurement error. We develop two applications that provide new evidence about the UMT. First, we find support in a survey data set for the dynamic and time-consistent UMT in single-individual households, in the presence of nonclassical measurement error in consumption. In the second application, we cannot reject the static UMT in a widely used experimental data set in which measurement error in prices is assumed to be the result of price misperception due to the experimental design. The first finding stands in contrast to the conclusions drawn from the deterministic RP test of Browning (1989, International Economic Review, 979–992). The second finding reverses the conclusions drawn from the deterministic RP test of Afriat (1967, International Economic Review, 8, 6–77) and Varian (1982, Econometrica, 945–973).

Collective decisions divert regret and responsibility away from the individual

2019 ◽  
Author(s):  
Marwa El Zein ◽  
Bahador Bahrami
Keyword(s):  
Majority Rule ◽  
Negative Emotions ◽  
Protective Role ◽  
Collective Choice ◽  
Group Decisions ◽  
Negative Consequences ◽  
Collective Decisions ◽  
Protective Shield ◽  
The Individual

It has recently been proposed that a key motivation for joining group decisions is to be protected from negative consequences of these decisions. To test this claim we investigated how experienced outcomes that trigger loss and regret impacted people’s tendency to make decisions alone or in a group, and how these decisions differed when voluntarily made alone vs in group. Replicated across two experiments, participants (N=125 and N=451) first selected whether to play alone or in a group with majority rule. Next, they chose between two lotteries with different probabilities and magnitudes of winning and losing. Experienced outcomes affected participants’ propensity to join a group: the higher the negative outcome, the more participants switched from deciding alone to with others. When choosing the lottery collectively (vs alone), choices were less driven by anticipation of loss and regret. Moreover, negative outcomes led to worse subsequent choices but only when outcome was experienced alone. Together, these results confirm the protective role of group decisions against blame and responsibility and reveal an alarming consequence of group decisions: when collective choice leads to unpalatable outcomes, the protective shield of the collective reduces the influence of negative emotions that could have helped individuals re-evaluate their past choice and possibly avoid repeating their mistakes.

POSITIVELY RESPONSIVE COLLECTIVE CHOICE RULES AND MAJORITY RULE: A GENERALIZATION OF MAY'S THEOREM TO MANY ALTERNATIVES

2019 ◽  
Vol 60 (4) ◽  
pp. 1489-1504 ◽  
Author(s):  
Sean Horan ◽  
Martin J. Osborne ◽  
M. Remzi Sanver
Keyword(s):  
Majority Rule ◽  
Collective Choice
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