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ABSTRACTWe study fairness ideals in distribution systems where inventory is allocated to multiple retailers and there is supply–demand mismatch. In particular, we focus on (a) what is considered fair inventory allocation by retailers (e.g., equal profit, same fill rate, equal share of supply–demand mismatch?) and (b) how the supply chain context affects fairness perceptions. We consider an integrated supply chain setting where total inventory is allocated at the retail level and retailers may face either shortage or surplus, and a disintegrated supply chain where retailers may face supply scarcity when total demand exceeds available inventory. Our experimental data suggest that subjects, taking on the role of retailers in the same supply chain, are often motivated by fairness considerations: they claim for themselves inventory that is not exactly equal to their needs in more than one‐third of the instances. Across settings, "fair" allocations depend on retail demands rather than on profit comparisons, even when these are facilitated by a decision support tool. However, in cases of surplus, the most prevalent fairness ideal is that of equal split of inventory–demand mismatch, while in cases of shortage, the most prevalent fairness ideal is that of equal fill rates. Follow‐up experiments suggest that retailers under both cases of shortage and surplus are more likely to evaluate an allocation as fair when it is based on realized demands, and this is independent of whether it was determined by a rule or a human decision maker.

This paper investigates the relationship between educational attainment in compulsory schooling and truancy. Using data from the Youth Cohort Study (YCS) of England and Wales and the Longitudinal Study of Young People in England (LSYPE), we estimate the impact of truancy on indicators of educational performance. The YCS measures both truancy and attainment as ordered responses. Our bivariate ordered probit model with mixed effects deals with both the ordered nature of the data and the potential endogeneity of truancy. In addition, it allows us to estimate the distribution of the truancy effect on educational attainment.

AbstractWe experimentally study a class of pie-sharing games with alternating roles from a decision-making perspective. For this, we consider a variant of a two-stage alternating-offer game which introduces an imbalance in the protagonists' bargaining powers. This game class enables us to investigate how exposure to risk and strategic ambiguity affects one's bargaining behaviour. Two structural econometric models of behaviour, a naïve and a sophisticated one, capture remarkably well the observed deviations from the game-theoretic benchmark. Our findings indicate, in particular, that a higher exposure to strategic ambiguity leads to a behaviour that is less responsive to the game's parameters and to distorted, yet consistent, beliefs about other's behaviour. We also find evidence of a backward-reasoning whereby first-stage decisions relate to the second-stage ones but which do not call for the counterfactual reasoning that characterises rationality in such settings.

There is a large volume of research showing that emotions have relevant effects on decision‐making. We contribute to this literature by experimentally investigating the impact of four specific emotional states—joviality, sadness, fear and anger—on risk attitudes. In order to do so, we fit two models of behaviour under risk: the expected utility model and the rank dependent expected utility model, assuming several functional forms of the weighting function. Our results indicate that all emotional states mitigate risk aversion. Furthermore, we show that there are some differences across gender and participants' experience in laboratory experiments.

"This paper is concerned with estimating preference functionals for choice under risk from the choice behaviour of individuals. We note that there is heterogeneity in behaviour between individuals and within individuals. By 'heterogeneity between individuals' we mean that people are different, in terms of both their preference functionals and their parameters for these functionals. By 'heterogeneity within individuals' we mean that behaviour may be different even by the same individual for the same choice problem. We propose methods of taking into account all forms of heterogeneity, concentrating particularly on using a Mixture Model to capture the heterogeneity of preference functionals." [author's abstract]

AbstractThis paper builds on the data from a published paper on behaviour under ambiguity (Conte & Hey, 2013)—henceforth C&H—to explore the determinants of decision time. C&H categorized individual subjects as being of one of four types (of decision-maker)—Expected Utility, Smooth Ambiguity, Rank Dependent and Alpha Expected Utility—by using the decisions of the subjects, but did not look at the decision times of the different types. We take as given the categorization identified by C&H, and explore whether the classification can explain the decision times of the subjects. We investigate whether and why different types take a different amount of time to decide. We explore the effects of various features related to (mainly psychological) theories of the process of decision-making—i.e., experience with the task, complexity, closeness to indifference and similarity of the options. Our results show that different types take a similar time to make their decisions on average, but decision times of different types are explained by different features of the decision task. This paper is the first investigating the heterogeneity of decision times based on a classification of subjects into different types in an ambiguous (rather than risky) decision context.

Abstract
We use data from 298 showings of the television program "Affari Tuoi," which involves contestants making decisions between risky prospects with possible prizes of up to half a million euros, to estimate three models of decision-making under risk: Expected Utility, Rank-Dependent Expected Utility and Regret-Rejoice. We find that Regret-Rejoice does not significantly improve upon Expected Utility, while Rank-Dependent outperforms it. Interestingly, we find that the CARA specification fits significantly better than the conventionally-adopted CRRA specification. Crucially, we find a significant role for unobserved heterogeneity, implying that our estimates provide more superior estimates of risk attitude and of probability weighting than other studies.