Pub Date : 2021-03-09DOI: 10.1177/1043463121999658
Ashley Harrell
People commonly possess multiple, differentially-valued resources they can use to benefit those in need: contributing money, volunteering time, donating unwanted possessions, posting on social media to raise awareness, and more. But the majority of experimental work on generosity and helping behavior has studied giving when only a single valuable resource is available to give. This project considers: when people have multiple, differentially-valued resources to use to benefit a dependent other, which resources will they use to help, and how much? Results from an experiment show, first, that generosity is higher with lower-value resources. More importantly, when multiple, differentially-valued resources are available to use to benefit others, helping is higher than when a single resource is available, all else being equal. This is because when multiple resources are available, people are especially willing to give away their relatively lower-value resources. Put differently, when people can benefit others using multiple resources, they are more likely to consider how they should help, rather than whether they should.
{"title":"How can I help you? Multiple resource availability promotes generosity with low-value (but not high-value) resources","authors":"Ashley Harrell","doi":"10.1177/1043463121999658","DOIUrl":"https://doi.org/10.1177/1043463121999658","url":null,"abstract":"People commonly possess multiple, differentially-valued resources they can use to benefit those in need: contributing money, volunteering time, donating unwanted possessions, posting on social media to raise awareness, and more. But the majority of experimental work on generosity and helping behavior has studied giving when only a single valuable resource is available to give. This project considers: when people have multiple, differentially-valued resources to use to benefit a dependent other, which resources will they use to help, and how much? Results from an experiment show, first, that generosity is higher with lower-value resources. More importantly, when multiple, differentially-valued resources are available to use to benefit others, helping is higher than when a single resource is available, all else being equal. This is because when multiple resources are available, people are especially willing to give away their relatively lower-value resources. Put differently, when people can benefit others using multiple resources, they are more likely to consider how they should help, rather than whether they should.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"341 - 362"},"PeriodicalIF":1.0,"publicationDate":"2021-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463121999658","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44430626","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-03-01DOI: 10.1177/1043463121995969
F. Facchini, L. Jaeck
This article proposes a general model of partisan political dealignment based on the theory of expressive voting. It is based on the Riker and Odershook equation. Voters cast a ballot for a political party if the utility associated with expressing their support for it is more than their expressive costs. Expressive utility is modeled here as a certain utility model. Then, the model is applied to the rise of voting support in favor of French right-wing populists, the National Front (FN). We show that the fall of justification costs of FN ideology along with the decline in stigmatization costs of voting in favor of the extreme right has fostered the popularity of this party. Political dealignment here is only a particular case of a general process of political norms transgression inherited by each voter.
{"title":"Populism and the rational choice model: The case of the French National Front","authors":"F. Facchini, L. Jaeck","doi":"10.1177/1043463121995969","DOIUrl":"https://doi.org/10.1177/1043463121995969","url":null,"abstract":"This article proposes a general model of partisan political dealignment based on the theory of expressive voting. It is based on the Riker and Odershook equation. Voters cast a ballot for a political party if the utility associated with expressing their support for it is more than their expressive costs. Expressive utility is modeled here as a certain utility model. Then, the model is applied to the rise of voting support in favor of French right-wing populists, the National Front (FN). We show that the fall of justification costs of FN ideology along with the decline in stigmatization costs of voting in favor of the extreme right has fostered the popularity of this party. Political dealignment here is only a particular case of a general process of political norms transgression inherited by each voter.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"196 - 228"},"PeriodicalIF":1.0,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463121995969","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45768746","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-02-20DOI: 10.1177/1043463121994087
C. Barone, K. Barg, M. Ichou
This work examines the validity of the two main assumptions of relative risk-aversion models of educational inequality. We compare the Breen-Goldthorpe (BG) and the Breen-Yaish (BY) models in terms of their assumptions about status maintenance motives and beliefs about the occupational risks associated with educational decisions. Concerning the first assumption, our contribution is threefold. First, we criticise the assumption of the BG model that families aim only at avoiding downward mobility and are insensitive to the prospects of upward mobility. We argue that the loss-aversion assumption proposed by BY is a more realistic formulation of status-maintenance motives. Second, we propose and implement a novel empirical approach to assess the validity of the loss-aversion assumption. Third, we present empirical results based on a sample of families of lower secondary school leavers indicating that families are sensitive to the prospects of both upward and downward mobility, and that the loss-aversion hypothesis of BY is empirically supported. As regards the risky choice assumption, we argue that families may not believe that more ambitious educational options entail occupational risks relative to less ambitious ones. We present empirical evidence indicating that, in France, the academic path is not perceived as a risky option. We conclude that, if the restrictive assumptions of the BG model are removed, relative-risk aversion needs not drive educational inequalities.
{"title":"Relative risk aversion models: How plausible are their assumptions?","authors":"C. Barone, K. Barg, M. Ichou","doi":"10.1177/1043463121994087","DOIUrl":"https://doi.org/10.1177/1043463121994087","url":null,"abstract":"This work examines the validity of the two main assumptions of relative risk-aversion models of educational inequality. We compare the Breen-Goldthorpe (BG) and the Breen-Yaish (BY) models in terms of their assumptions about status maintenance motives and beliefs about the occupational risks associated with educational decisions. Concerning the first assumption, our contribution is threefold. First, we criticise the assumption of the BG model that families aim only at avoiding downward mobility and are insensitive to the prospects of upward mobility. We argue that the loss-aversion assumption proposed by BY is a more realistic formulation of status-maintenance motives. Second, we propose and implement a novel empirical approach to assess the validity of the loss-aversion assumption. Third, we present empirical results based on a sample of families of lower secondary school leavers indicating that families are sensitive to the prospects of both upward and downward mobility, and that the loss-aversion hypothesis of BY is empirically supported. As regards the risky choice assumption, we argue that families may not believe that more ambitious educational options entail occupational risks relative to less ambitious ones. We present empirical evidence indicating that, in France, the academic path is not perceived as a risky option. We conclude that, if the restrictive assumptions of the BG model are removed, relative-risk aversion needs not drive educational inequalities.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"143 - 175"},"PeriodicalIF":1.0,"publicationDate":"2021-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463121994087","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45462064","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-02-01DOI: 10.1177/1043463120985322
Daniel Corstange
How do people keep order in weak states? Formal institutions provide law and order in rich societies, but are feeble and capricious in much of the developing world. Instead, people turn to informal, group-based order that operates through reputation and contingent cooperation. Such order requires people to police social boundaries and contributions, looking for costly signals of membership and commitment to weed out mimics and shirkers. Data from Yemen show that people rely on tribes for security and dispute resolution under customary law. Yemenis use a prominent symbol of tribalism, the iconic tribal dagger, to communicate their affiliations and commitments to their customary responsibilities. Yet people vary in how well they understand the semiotic system, and the accuracy of the link between dagger-wearing and tribalism improves with sophistication. While the most knowledgeable Yemenis reveal their tribal types with the dagger, the least knowledgeable communicate nothing at all.
{"title":"Non-state order and strategic communication via symbolic dress in Yemen","authors":"Daniel Corstange","doi":"10.1177/1043463120985322","DOIUrl":"https://doi.org/10.1177/1043463120985322","url":null,"abstract":"How do people keep order in weak states? Formal institutions provide law and order in rich societies, but are feeble and capricious in much of the developing world. Instead, people turn to informal, group-based order that operates through reputation and contingent cooperation. Such order requires people to police social boundaries and contributions, looking for costly signals of membership and commitment to weed out mimics and shirkers. Data from Yemen show that people rely on tribes for security and dispute resolution under customary law. Yemenis use a prominent symbol of tribalism, the iconic tribal dagger, to communicate their affiliations and commitments to their customary responsibilities. Yet people vary in how well they understand the semiotic system, and the accuracy of the link between dagger-wearing and tribalism improves with sophistication. While the most knowledgeable Yemenis reveal their tribal types with the dagger, the least knowledgeable communicate nothing at all.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"3 - 51"},"PeriodicalIF":1.0,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463120985322","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45441805","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-31DOI: 10.1177/1043463121990015
T. Sadigov
While death-related household overspending is increasingly an international phenomenon with far-reaching implications, the government responses to it vary greatly throughout the world. This article offers a model of death-related overspending, including both population and governments. The analysis of data from 118 countries empirically supports the main research argument—the decline of traditional hierarchies and simultaneous ascendance of newly-affluent urbanite class, to the backdrop of collectivist society pervaded by superstitions, increase household incentives to spend on death beyond their means. State policy response depends on both the government’s ability to control vested interests and the financial cost of an average funeral.
{"title":"Death beyond the means: Funeral overspending and its government regulation around the world","authors":"T. Sadigov","doi":"10.1177/1043463121990015","DOIUrl":"https://doi.org/10.1177/1043463121990015","url":null,"abstract":"While death-related household overspending is increasingly an international phenomenon with far-reaching implications, the government responses to it vary greatly throughout the world. This article offers a model of death-related overspending, including both population and governments. The analysis of data from 118 countries empirically supports the main research argument—the decline of traditional hierarchies and simultaneous ascendance of newly-affluent urbanite class, to the backdrop of collectivist society pervaded by superstitions, increase household incentives to spend on death beyond their means. State policy response depends on both the government’s ability to control vested interests and the financial cost of an average funeral.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"363 - 398"},"PeriodicalIF":1.0,"publicationDate":"2021-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463121990015","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43694784","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-06DOI: 10.1177/1043463120985310
Fabio D’Orlando, Sharon Ricciotti
Escalation is a key characteristic of many consumption behaviors that has not received theoretical attention. This paper aims to propose both a definition and a theoretical treatment of escalation in consumption. We define escalation as a subject’s attempt to obtain “more” or engage in consumption behaviors that are “more intense” on a measurable, quantitative or qualitative, objective or subjective, scale (more difficult ski slopes, stronger drugs, harder sex, better restaurants etc.), even if the subject preferred less intense consumption behaviors in the past. Further, this evolution in behavior also occurs if the budget constraint does not change. We will find endogenous and exogenous theoretical microfoundations for escalation in models of hedonic adaptation, desire for novelty, acquisition of consumption skills, rising aspirations, positional effects, and envy. However, we will also discuss the possibility that the tendency to escalate is a specific innate behavior inherent to human nature. Finally, we will propose a preliminary theoretical formalization of such behavior and indicate the possible implications of taking escalation into adequate consideration. JEL codes: B52, D11, D90, D91, I31
{"title":"The economics of escalation","authors":"Fabio D’Orlando, Sharon Ricciotti","doi":"10.1177/1043463120985310","DOIUrl":"https://doi.org/10.1177/1043463120985310","url":null,"abstract":"Escalation is a key characteristic of many consumption behaviors that has not received theoretical attention. This paper aims to propose both a definition and a theoretical treatment of escalation in consumption. We define escalation as a subject’s attempt to obtain “more” or engage in consumption behaviors that are “more intense” on a measurable, quantitative or qualitative, objective or subjective, scale (more difficult ski slopes, stronger drugs, harder sex, better restaurants etc.), even if the subject preferred less intense consumption behaviors in the past. Further, this evolution in behavior also occurs if the budget constraint does not change. We will find endogenous and exogenous theoretical microfoundations for escalation in models of hedonic adaptation, desire for novelty, acquisition of consumption skills, rising aspirations, positional effects, and envy. However, we will also discuss the possibility that the tendency to escalate is a specific innate behavior inherent to human nature. Finally, we will propose a preliminary theoretical formalization of such behavior and indicate the possible implications of taking escalation into adequate consideration. JEL codes: B52, D11, D90, D91, I31","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"106 - 140"},"PeriodicalIF":1.0,"publicationDate":"2021-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463120985310","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45949725","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-12-29DOI: 10.1177/1043463120968288
J. Bertolai, L. G. Scorzafave
Governance rules are efficient mechanisms in the sense that they increase people’s welfare. They emerge even when the state is unable or refuses to create and enforce them. We study a situation in which this demand for governance manifests itself through the emergence of property rights in illicit drug markets: a privately-provided governance. Specifically, we propose a model for property rights emergence in illicit drug markets as predicted by the theory on governance provided by prison gangs. It is studied a situation in which an agreement among criminals, resembling property rights enforceability on its allocative effect, can emerge in illicit drug markets. Our Mechanism Design approach shows that a change inside the prison system, from a competitive environment to the hegemony of a group of criminals, implies the equilibrium in illicit markets to shift from warfare to peace: the hegemonic group is shown to desire to promote the collusive agreement when it is able to do so. This contrasts with the equilibrium under no hegemony, in which the possibility to conquer consumers/territories drives violence up to a positive level. The novel empirical perspective implied by the model is explored using data from Brazil, a context for which the theory of governance provided by prison gangs has been pointed as a key explanation.
{"title":"Property rights’ emergence in illicit drug markets","authors":"J. Bertolai, L. G. Scorzafave","doi":"10.1177/1043463120968288","DOIUrl":"https://doi.org/10.1177/1043463120968288","url":null,"abstract":"Governance rules are efficient mechanisms in the sense that they increase people’s welfare. They emerge even when the state is unable or refuses to create and enforce them. We study a situation in which this demand for governance manifests itself through the emergence of property rights in illicit drug markets: a privately-provided governance. Specifically, we propose a model for property rights emergence in illicit drug markets as predicted by the theory on governance provided by prison gangs. It is studied a situation in which an agreement among criminals, resembling property rights enforceability on its allocative effect, can emerge in illicit drug markets. Our Mechanism Design approach shows that a change inside the prison system, from a competitive environment to the hegemony of a group of criminals, implies the equilibrium in illicit markets to shift from warfare to peace: the hegemonic group is shown to desire to promote the collusive agreement when it is able to do so. This contrasts with the equilibrium under no hegemony, in which the possibility to conquer consumers/territories drives violence up to a positive level. The novel empirical perspective implied by the model is explored using data from Brazil, a context for which the theory of governance provided by prison gangs has been pointed as a key explanation.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"52 - 105"},"PeriodicalIF":1.0,"publicationDate":"2020-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463120968288","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48205873","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-01DOI: 10.1177/1043463120966989
J. Schulhofer-Wohl
On-side fighting – outright violence between armed groups aligned on the same side of a civil war’s master cleavage – represents a devastating breakdown in cooperation. Its humanitarian consequences are also grave. But it has been under-recognized empirically and therefore under-theorized by scholars to date. This article remedies the omission. Existing research can be extrapolated to produce candidate explanations, but these overlook spatial and temporal variation in on-side fighting within a war. I provide a theory that accounts for this ebb and flow. On-side fighting hinges on belligerents’ trade-offs between short-term survival and long-term political objectives. Enemy threats to survival underpin on-side cooperation; in their absence, belligerents can pursue political gains against on-side competitors. I evaluate this threat-absence theory using evidence from the ongoing Syrian Civil War’s first years. Fine-grained fatalities data capture fluctuating enemy threats to on-side groups’ survival and situate on-side fighting and its absence. Findings support threat-absence theory and contribute to research on warfighting and political competition in civil wars and to the study of coalition dynamics in other settings, including elections and legislatures.
{"title":"On-Side fighting in civil war: The logic of mortal alignment in Syria","authors":"J. Schulhofer-Wohl","doi":"10.1177/1043463120966989","DOIUrl":"https://doi.org/10.1177/1043463120966989","url":null,"abstract":"On-side fighting – outright violence between armed groups aligned on the same side of a civil war’s master cleavage – represents a devastating breakdown in cooperation. Its humanitarian consequences are also grave. But it has been under-recognized empirically and therefore under-theorized by scholars to date. This article remedies the omission. Existing research can be extrapolated to produce candidate explanations, but these overlook spatial and temporal variation in on-side fighting within a war. I provide a theory that accounts for this ebb and flow. On-side fighting hinges on belligerents’ trade-offs between short-term survival and long-term political objectives. Enemy threats to survival underpin on-side cooperation; in their absence, belligerents can pursue political gains against on-side competitors. I evaluate this threat-absence theory using evidence from the ongoing Syrian Civil War’s first years. Fine-grained fatalities data capture fluctuating enemy threats to on-side groups’ survival and situate on-side fighting and its absence. Findings support threat-absence theory and contribute to research on warfighting and political competition in civil wars and to the study of coalition dynamics in other settings, including elections and legislatures.","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"32 1","pages":"402 - 460"},"PeriodicalIF":1.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463120966989","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48948968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-10-29DOI: 10.1177/1043463120964604
B. Crettez, Régis Deloche
In both the United States of America and the European Union, Member States are encouraged to prevent young people from starting to smoke by forbidding selling tobacco products to people under a certain age. By contrast, there are in general no legal minimum age requirements for consuming those products. Our aim is to address such discrepancy from a theoretical viewpoint by focusing on the case where people have time-inconsistent preferences. Specifically, we build a three-period (youth, adulthood, old age) model of smoking decision in which individual intertemporal preferences are present-biased. Then, using this model, we show that when agents are naive, that is when they are unaware that their intertemporal preferences are time-inconsistent, it may be worthwhile, from the individual viewpoint, to legally prevent young people from smoking. This conclusion does not always hold, because what is good for an agent in youth can be disputable in adult age (and conversely). When individuals are sophisticated, that is, not naive, a legal smoking age (either for buying, consuming or selling tobacco products) is pointless. This conclusion is also reached if one follows the continuing person approach advocated by Sugden. JEL Classification Numbers : I12, I18, K32, D15
{"title":"Time-inconsistent preferences and the minimum legal tobacco consuming age","authors":"B. Crettez, Régis Deloche","doi":"10.1177/1043463120964604","DOIUrl":"https://doi.org/10.1177/1043463120964604","url":null,"abstract":"In both the United States of America and the European Union, Member States are encouraged to prevent young people from starting to smoke by forbidding selling tobacco products to people under a certain age. By contrast, there are in general no legal minimum age requirements for consuming those products. Our aim is to address such discrepancy from a theoretical viewpoint by focusing on the case where people have time-inconsistent preferences. Specifically, we build a three-period (youth, adulthood, old age) model of smoking decision in which individual intertemporal preferences are present-biased. Then, using this model, we show that when agents are naive, that is when they are unaware that their intertemporal preferences are time-inconsistent, it may be worthwhile, from the individual viewpoint, to legally prevent young people from smoking. This conclusion does not always hold, because what is good for an agent in youth can be disputable in adult age (and conversely). When individuals are sophisticated, that is, not naive, a legal smoking age (either for buying, consuming or selling tobacco products) is pointless. This conclusion is also reached if one follows the continuing person approach advocated by Sugden. JEL Classification Numbers : I12, I18, K32, D15","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"33 1","pages":"176 - 195"},"PeriodicalIF":1.0,"publicationDate":"2020-10-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463120964604","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45125060","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-10-16DOI: 10.1177/1043463120963403
Antoine Dubus
We consider a principal-agent model with moral-hazard and asymmetric awareness and show how the heterogeneity of agents on their aversion to effort affects contract design. We discuss the optimal contract adopted when a principal is aware of all the impacts of an agent’s action, while agents ignore some of them. When a principal faces two types of agents, where one type is more effort-averse than the other, the equilibrium contract is shaped by agent proportions: it pools the agents, separates them, or excludes the more effort-averse agents from the contract. When efforts are observable, all the agents remain unaware, while when efforts are hidden, a principal increases the awareness of the agents to a level commensurate with the nature of the contract. JEL Codes – D82; D83; D86
{"title":"Asymmetric awareness and heterogeneous agents","authors":"Antoine Dubus","doi":"10.1177/1043463120963403","DOIUrl":"https://doi.org/10.1177/1043463120963403","url":null,"abstract":"We consider a principal-agent model with moral-hazard and asymmetric awareness and show how the heterogeneity of agents on their aversion to effort affects contract design. We discuss the optimal contract adopted when a principal is aware of all the impacts of an agent’s action, while agents ignore some of them. When a principal faces two types of agents, where one type is more effort-averse than the other, the equilibrium contract is shaped by agent proportions: it pools the agents, separates them, or excludes the more effort-averse agents from the contract. When efforts are observable, all the agents remain unaware, while when efforts are hidden, a principal increases the awareness of the agents to a level commensurate with the nature of the contract. JEL Codes – D82; D83; D86","PeriodicalId":47079,"journal":{"name":"Rationality and Society","volume":"32 1","pages":"461 - 484"},"PeriodicalIF":1.0,"publicationDate":"2020-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1177/1043463120963403","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47613892","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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