Across the social sciences researchers have debated the impact income inequality has on people's perceptions, specifically on attribution and social trust. Causal identification of such effects, however, has been difficult for a variety of reasons. In this paper we use a combination of surveys and behavioral lab experiments to identify a causal impact of inequality on attribution and social trust. Using positional primes we find that higher relative position has a positive impact on belief in meritocracy and social trust, which we causally identify both using a novel incentivized lab task as well as standard survey measures. These results are in line with correlational associations we find using larger general surveys. They speak to why inequality can be so socially and economically corrosive while at the same time remaining largely unaddressed.
{"title":"The Causal Effect of Income Inequality on Attribution and Social Trust","authors":"Andrea Albertazzi, Patrick L. Lown, F. Mengel","doi":"10.2139/ssrn.3789067","DOIUrl":"https://doi.org/10.2139/ssrn.3789067","url":null,"abstract":"Across the social sciences researchers have debated the impact income inequality has on people's perceptions, specifically on attribution and social trust. Causal identification of such effects, however, has been difficult for a variety of reasons. In this paper we use a combination of surveys and behavioral lab experiments to identify a causal impact of inequality on attribution and social trust. Using positional primes we find that higher relative position has a positive impact on belief in meritocracy and social trust, which we causally identify both using a novel incentivized lab task as well as standard survey measures. These results are in line with correlational associations we find using larger general surveys. They speak to why inequality can be so socially and economically corrosive while at the same time remaining largely unaddressed.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121959858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
French Abstract: Plusieurs voix s’élèvent pour réclamer une réforme en profondeur du capitalisme dans la foulée de la crise financière de 2008-2010, de l’augmentation des inégalités de revenu et de richesse des quatre dernières décennies et de l’urgence climatique dans un monde planétaire local. Il y a un réel danger que les gouvernements se mettent, sous la pression de groupes mal informés, à vouloir jouer à l’apprenti sorcier de Goethe : trop souvent, les bonnes intentions sont un chemin pavé vers l’enfer. J’analyse dans ce cahier divers projets de réformes, je discute des notions d’éthique et d’équité (environnement, eau, vie, rémunération, inégalités, ESG) et je propose des réformes en profondeur du capitalisme et de la social-démocratie.
English Abstract: Several voices are rising to demand an in-depth reform of capitalism in the wake of the financial crisis of 2007-2010, the increase in income and wealth inequalities of the last four decades, the climate urgency in a local global world. There is a real danger that governments will be put under pressure from poorly-informed groups and will want to play Goethe’s sorcerer's apprentice: too often, these good intentions are but a paved road to hell. In this document, I analyze various reform projects, I discuss the concepts of ethics and equity (environment, water, life, remuneration, inequalities, ESG) and I propose to add a project for in-depth reforms of capitalism and social-democracy.
{"title":"Au-delà de l’ESG : Réformer le capitalisme et la social-démocratie (Beyond ESG: Reforming Capitalism and Social-Democracy)","authors":"M. Boyer","doi":"10.2139/ssrn.3786964","DOIUrl":"https://doi.org/10.2139/ssrn.3786964","url":null,"abstract":"The English version of this article is available at: <a href=\"https://ssrn.com/abstract=3786967\">https://ssrn.com/abstract=3786967</a>. <br><br><b>French Abstract:</b> Plusieurs voix s’élèvent pour réclamer une réforme en profondeur du capitalisme dans la foulée de la crise financière de 2008-2010, de l’augmentation des inégalités de revenu et de richesse des quatre dernières décennies et de l’urgence climatique dans un monde planétaire local. Il y a un réel danger que les gouvernements se mettent, sous la pression de groupes mal informés, à vouloir jouer à l’apprenti sorcier de Goethe : trop souvent, les bonnes intentions sont un chemin pavé vers l’enfer. J’analyse dans ce cahier divers projets de réformes, je discute des notions d’éthique et d’équité (environnement, eau, vie, rémunération, inégalités, ESG) et je propose des réformes en profondeur du capitalisme et de la social-démocratie.<br><br><b>English Abstract:</b> Several voices are rising to demand an in-depth reform of capitalism in the wake of the financial crisis of 2007-2010, the increase in income and wealth inequalities of the last four decades, the climate urgency in a local global world. There is a real danger that governments will be put under pressure from poorly-informed groups and will want to play Goethe’s sorcerer's apprentice: too often, these good intentions are but a paved road to hell. In this document, I analyze various reform projects, I discuss the concepts of ethics and equity (environment, water, life, remuneration, inequalities, ESG) and I propose to add a project for in-depth reforms of capitalism and social-democracy.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"67 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121644948","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Artificial Intelligence (AI) can systematically treat unfavorably a group of individuals sharing a protected attribute (e.g. gender, age, race). In credit scoring applications, this lack of fairness can severely distort access to credit and expose AI-enabled financial institutions to legal and reputational risks. In this paper, we develop a unified framework assessing the fairness of AI algorithms used in credit markets. First, we propose an inference procedure to test various fairness metrics. Second, we present an interpretability technique, called Fairness Partial Dependence Plot, to identify the source(s) of the lack of fairness and mitigate fairness concerns. We illustrate the efficiency of our framework using a dataset of consumer loans and a series of machine-learning algorithms.
{"title":"The Fairness of Credit Scoring Models","authors":"Christophe Hurlin, C. Pérignon, Sébastien Saurin","doi":"10.2139/ssrn.3785882","DOIUrl":"https://doi.org/10.2139/ssrn.3785882","url":null,"abstract":"Artificial Intelligence (AI) can systematically treat unfavorably a group of individuals sharing a protected attribute (e.g. gender, age, race). In credit scoring applications, this lack of fairness can severely distort access to credit and expose AI-enabled financial institutions to legal and reputational risks. In this paper, we develop a unified framework assessing the fairness of AI algorithms used in credit markets. First, we propose an inference procedure to test various fairness metrics. Second, we present an interpretability technique, called Fairness Partial Dependence Plot, to identify the source(s) of the lack of fairness and mitigate fairness concerns. We illustrate the efficiency of our framework using a dataset of consumer loans and a series of machine-learning algorithms.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116994393","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bart Dierynck, Jesse van der Geest, Victor van Pelt
To improve the quality of performance evaluation and compensation decisions, managers can undertake costly searches for additional information about employees’ individual contributions to performance. Prior accounting research documents that managers are willing to undertake these costly information searches because they have social preferences (i.e., distributional fairness and reciprocity). However, our experimental results show that managers are significantly less willing to undertake costly information searches when the situation allows them to make fewer negative inferences when acting selfishly. Our findings are consistent with predictions rooted in behavioral economics and social psychology that even self-interested people exhibit prosocial behavior in some situations because they have concerns about appearing selfish toward themselves and others. We conclude that creating working conditions that increase managers’ concerns about their self-image may prompt them to make informed performance evaluation and compensation decisions.
{"title":"In Search of Informed Discretion (Revisited): Are Managers Concerned about Appearing Selfish?","authors":"Bart Dierynck, Jesse van der Geest, Victor van Pelt","doi":"10.2139/ssrn.3736930","DOIUrl":"https://doi.org/10.2139/ssrn.3736930","url":null,"abstract":"To improve the quality of performance evaluation and compensation decisions, managers can undertake costly searches for additional information about employees’ individual contributions to performance. Prior accounting research documents that managers are willing to undertake these costly information searches because they have social preferences (i.e., distributional fairness and reciprocity). However, our experimental results show that managers are significantly less willing to undertake costly information searches when the situation allows them to make fewer negative inferences when acting selfishly. Our findings are consistent with predictions rooted in behavioral economics and social psychology that even self-interested people exhibit prosocial behavior in some situations because they have concerns about appearing selfish toward themselves and others. We conclude that creating working conditions that increase managers’ concerns about their self-image may prompt them to make informed performance evaluation and compensation decisions.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129132958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study how social evaluation affects conformity and anticonformity in theory and in an experiment. In theory, we show that negative social evaluation, i.e., potential punishment, creates incentives for conformity. Positive social evaluation, i.e., potential reward, creates incentives for anticonformity. In a laboratory experiment, we investigate the effect of these incentives in three domains: judgments in the knowledge domain, subjective arts preferences, and decisions in a creativity-related task. We rely on a new design in which we compare choices under social influence with predictions based on choices without social influence using transitivity. The experimental results confirm the theoretical predictions.
{"title":"Incentives for Conformity and Anticonformity","authors":"Fabian Dvorak, U. Fischbacher, Katrin Schmelz","doi":"10.2139/ssrn.3754595","DOIUrl":"https://doi.org/10.2139/ssrn.3754595","url":null,"abstract":"We study how social evaluation affects conformity and anticonformity in theory and in an experiment. In theory, we show that negative social evaluation, i.e., potential punishment, creates incentives for conformity. Positive social evaluation, i.e., potential reward, creates incentives for anticonformity. In a laboratory experiment, we investigate the effect of these incentives in three domains: judgments in the knowledge domain, subjective arts preferences, and decisions in a creativity-related task. We rely on a new design in which we compare choices under social influence with predictions based on choices without social influence using transitivity. The experimental results confirm the theoretical predictions.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121275248","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies whether saving behavior may reveal socially relevant intertemporal preferences. I decompose the present generation's preference for the next into its dynastic and cross-dynastic counterparts. Welfare weights on other dynasties can be motivated by a concern for sustainability or if descendants may move or marry. With such cross-dynastic intergenerational altruism, saving for one's descendants benefits present members of other dynasties, giving rise to preference externalities. I find that socially relevant intertemporal preferences may not be inferred from saving behavior if there is cross-dynastic intergenerational altruism. I also show that the external effect of present saving decreases over time.
{"title":"Cross-Dynastic Intergenerational Altruism","authors":"Frikk Nesje","doi":"10.2139/ssrn.3549197","DOIUrl":"https://doi.org/10.2139/ssrn.3549197","url":null,"abstract":"This paper studies whether saving behavior may reveal socially relevant intertemporal preferences. I decompose the present generation's preference for the next into its dynastic and cross-dynastic counterparts. Welfare weights on other dynasties can be motivated by a concern for sustainability or if descendants may move or marry. With such cross-dynastic intergenerational altruism, saving for one's descendants benefits present members of other dynasties, giving rise to preference externalities. I find that socially relevant intertemporal preferences may not be inferred from saving behavior if there is cross-dynastic intergenerational altruism. I also show that the external effect of present saving decreases over time.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"2012 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133509881","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this study is to test whether CSR engagement provides insurance like effect even after the firm has faced an integrity questioning event. The impact of this integrity based negative event is measured as the media sentiment while reporting the event. Accordingly, we test whether prior CSR engagement prompts media to give the firm the benefit of doubt when it is accused of ‘grand corruption’. The study employs techniques of textual analysis combining various dictionaries and multiple media sources to estimate the sentiment score. Accordingly, we analyse 45,710 media reports, covering firms allegedly involved in ‘grand corruption’. The hypothesis are tested following standard panel data analysis techniques. The study finds no evidence of CSR providing an insurance like effect, particularly in the context of integrity-based negative events. Rather, the results suggest that the media may have viewed the CSR activity of sample firms as a public relations exercise and penalized them for being involved in grand corruption.
{"title":"The Nonmarket Insurance like Effect of CSR on Media Sentiment","authors":"Abhilash Sreekumar Nair, Suresh Kalagnanam","doi":"10.2139/ssrn.3779113","DOIUrl":"https://doi.org/10.2139/ssrn.3779113","url":null,"abstract":"The purpose of this study is to test whether CSR engagement provides insurance like effect even after the firm has faced an integrity questioning event. The impact of this integrity based negative event is measured as the media sentiment while reporting the event. Accordingly, we test whether prior CSR engagement prompts media to give the firm the benefit of doubt when it is accused of ‘grand corruption’. The study employs techniques of textual analysis combining various dictionaries and multiple media sources to estimate the sentiment score. Accordingly, we analyse 45,710 media reports, covering firms allegedly involved in ‘grand corruption’. The hypothesis are tested following standard panel data analysis techniques. The study finds no evidence of CSR providing an insurance like effect, particularly in the context of integrity-based negative events. Rather, the results suggest that the media may have viewed the CSR activity of sample firms as a public relations exercise and penalized them for being involved in grand corruption.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"247 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133287560","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The promise of greater material prosperity and economic convergence has underpinned the process of European economic integration. Its consequences for income inequalities within countries, however, have so far been little discussed. This paper seeks to contribute to the literature by investigating the effects of European economic integration on intra-country income inequality using the synthetic control method. We find that EMU, out of our sample of eight euro countries, has significant effects on inequality in Germany and Spain. From the several theories outlined in the literature, our results lend most support to the growth regime mechanism.
{"title":"European Monetary Union and Inequality: A Synthetic Control Approach","authors":"F. Kerschbaumer, Andreas Maschke","doi":"10.2139/ssrn.3737168","DOIUrl":"https://doi.org/10.2139/ssrn.3737168","url":null,"abstract":"The promise of greater material prosperity and economic convergence has underpinned the process of European economic integration. Its consequences for income inequalities within countries, however, have so far been little discussed. This paper seeks to contribute to the literature by investigating the effects of European economic integration on intra-country income inequality using the synthetic control method. We find that EMU, out of our sample of eight euro countries, has significant effects on inequality in Germany and Spain. From the several theories outlined in the literature, our results lend most support to the growth regime mechanism.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132541365","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I make a key point that social welfare functions that only rely on individual utility still may reflect what people typically think of as a non-welfarist approach by critiquing Kaplow and Shavell (Journal of Political Economy, 2001) who propose and “prove” a proposition asserting that “Any non-welfarist method of policy assessment violates the Pareto principle.” The fundamental mistake made by Kaplow and Shavell is that their definition of welfarism equates welfarist methods and social welfare functions that only rely on individual utility. As a result, their definition of (non-)welfarism does not always coincide with common interpretations of (non-)welfarist methods.
我通过批评Kaplow和Shavell (Journal of Political economics, 2001)提出并“证明”了一个主张“任何非福利主义的政策评估方法都违反了帕累托原则”的主张，提出了一个关键的观点，即只依赖于个人效用的社会福利函数仍然可能反映出人们通常认为的非福利主义方法。Kaplow和Shavell所犯的根本错误是，他们对福利主义的定义等同于福利主义方法和只依赖于个人效用的社会福利函数。因此，他们对(非)福利主义的定义并不总是与对(非)福利主义方法的一般解释一致。
{"title":"Any Non-welfarist Method of Policy Assessment Violates the Pareto Principle: A Counter Example","authors":"Zhiyong An","doi":"10.2139/ssrn.3900131","DOIUrl":"https://doi.org/10.2139/ssrn.3900131","url":null,"abstract":"I make a key point that social welfare functions that only rely on individual utility still may reflect what people typically think of as a non-welfarist approach by critiquing Kaplow and Shavell (Journal of Political Economy, 2001) who propose and “prove” a proposition asserting that “Any non-welfarist method of policy assessment violates the Pareto principle.” The fundamental mistake made by Kaplow and Shavell is that their definition of welfarism equates welfarist methods and social welfare functions that only rely on individual utility. As a result, their definition of (non-)welfarism does not always coincide with common interpretations of (non-)welfarist methods.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"208 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131797164","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Concentration in the digital economy in the United States has sparked loud criticism and spurred calls for wide-ranging reforms. These reforms include everything from increased enforcement of existing antitrust laws, such as challenging more mergers and breaking up firms, to an abandonment of the consumer welfare standard. Critics cite corruption and more systemic public choice problems, while others invoke the populist origins of antitrust to slay the digital Goliaths. On the other side, there is skepticism regarding these arguments. This chapter continues much of that skepticism.
{"title":"Is the Digital Economy Too Concentrated?","authors":"Jonathan Klick","doi":"10.2139/ssrn.3733695","DOIUrl":"https://doi.org/10.2139/ssrn.3733695","url":null,"abstract":"Concentration in the digital economy in the United States has sparked loud criticism and spurred calls for wide-ranging reforms. These reforms include everything from increased enforcement of existing antitrust laws, such as challenging more mergers and breaking up firms, to an abandonment of the consumer welfare standard. Critics cite corruption and more systemic public choice problems, while others invoke the populist origins of antitrust to slay the digital Goliaths. On the other side, there is skepticism regarding these arguments. This chapter continues much of that skepticism.","PeriodicalId":129815,"journal":{"name":"Microeconomics: Welfare Economics & Collective Decision-Making eJournal","volume":"121 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133990872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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