EXPRESS: The More You Ask, the Less You Get: When Additional Questions Hurt External Validity

Researchers and practitioners in marketing, economics, and public policy often use preference elicitation tasks to forecast real-world behaviors. These tasks typically ask a series of similarly-structured questions. The authors posit that every time a respondent answers an additional elicitation question, two things happen: (1) they provide information about some parameter(s) of interest, such as their time preference or the partworth for a product attribute, and (2) the respondent increasingly adapts to the task—i.e., using task-specific decision processes specialized for this task that may or may not apply to other tasks. Importantly, adaptation comes at the cost of potential mismatch between the task-specific decision process and real-world processes that generate the target behaviors, such that asking more questions can reduce external validity. The authors used mouse- and eye-tracking to trace decision processes in time preference measurement and conjoint choice tasks: Respondents increasingly relied on task-specific decision processes as more questions were asked, leading to reduced external validity for both related tasks and real-world behaviors. Importantly, the external validity of measured preferences peaked after as few as seven questions in both types of tasks. When measuring preferences, less can be more.

A Praxeological Theory of Interest Rates

This paper starts with the observation that the pure time preference theory leads to conflicting views concerning the effect of changes in productivity on the rate of interest. Subsequently, it reviews parts of the interest literature and concludes that the pure time preference theory does not qualify as a praxeological theory. Then, the paper combines Hülsmann’s theory of interest with the subjectivist capital theory of Lachmann and Kirzner and provides a praxeological theory that explains the rate of interest. The key to that theory is that cost reduction through the use of fixed capital must always be understood as relative to the costs of labor which the capital replaces. Since labor is non-specific and the price of labor therefore also constitutes the production costs of fixed-capital goods to a certain extent, the use of fixed capital necessarily entails a business surplus somewhere in the economic system. Since this surplus cannot dis-appear it qualifies as interest income. The size of this income is such that the interest rate corresponds to the marginal rate of substitution between labor and fixed capital as embodied in entrepreneurial actions.

Who Got Vaccinated for COVID-19? Evidence from Japan

Vaccination has been critical to reducing infections and deaths during the coronavirus disease 2019 (COVID-19) pandemic. While previous studies have investigated attitudes toward taking a vaccine, studies on the determinants of COVID-19 vaccination behavior are scant. We examine what characteristics, including socioeconomic and non-economic factors, are associated with vaccination behavior for COVID-19 in Japan. We use a large nationwide online survey with approximately 10,000 participants. As of September 2021, 85% of the respondents said that they had received or would receive a COVID-19 vaccine. Employing logistic regression analysis on vaccination behavior, we found that vaccination rates are higher among those who are older, married, educated, and/or work in a large company. On the other hand, vaccination rates tend to be lower among the self-employed, younger women, and those with poor mental health. Income did not significantly correlate with vaccination. Medical workers were found to have a relatively high rate of vaccination. Although attitude towards risk and time preference were not crucial factors for vaccination, fear of infection, infection prevention behavior, and agreement with government policies on behavioral restrictions in crisis situations positively correlated with vaccination.

Generalisations of Quasi-Hyperbolic Discounting

<p>This paper proposes several time preference specifications that generalise quasi-hyperbolic discounting, while retaining its analytical tractability. We define their discount functions and provide a recursive formulation of the implied lifetime payoffs. A calibration exercise demonstrates that these specifications deliver better approximations to true hyperbolic discounting. We characterise the Markov-perfect equilibrium of a general intra-personal game of agents with various time preferences. When applied to specific economic examples, our proposals yield policies that are close to those of true hyperbolic discounters. Furthermore, these approximations can be used in settings where an exact solution for hyperbolic agents is not available. Finally, we suggest further generalisations which would provide an even better fit.</p>

Generalisations of Quasi-Hyperbolic Discounting

<p>This paper proposes several time preference specifications that generalise quasi-hyperbolic discounting, while retaining its analytical tractability. We define their discount functions and provide a recursive formulation of the implied lifetime payoffs. A calibration exercise demonstrates that these specifications deliver better approximations to true hyperbolic discounting. We characterise the Markov-perfect equilibrium of a general intra-personal game of agents with various time preferences. When applied to specific economic examples, our proposals yield policies that are close to those of true hyperbolic discounters. Furthermore, these approximations can be used in settings where an exact solution for hyperbolic agents is not available. Finally, we suggest further generalisations which would provide an even better fit.</p>

Equilibrium dynamics in a model of growth and spatial agglomeration

We present a multiregional endogenous growth model in which forward-looking agents choose their regions to live in, in addition to consumption and capital accumulation paths. The spatial distribution of economic activity is determined by the interplay between production spillover effects and urban congestion effects. We characterize the global stability of the spatial equilibrium states in terms of economic primitives such as agents’ time preference and intra- and interregional spillovers. We also study how macroeconomic variables at the stable equilibrium state behave according to the structure of the spillover network.