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Conservation practices used on agricultural cropland can provide important ecosystem services. The United States relies largely on voluntary programs to incentivize adoption of conservation practices, but the success of these efforts relies on good program design. We use a choice experiment to evaluate farmers' willingness to adopt more intensive in‐field conservation practices (continuous no‐till, conservation crop rotation, cover crops, and variable rate application of inputs) using a nonlinear extended expected utility framework that incorporates risk under a conservation contract. We contribute to the literature by providing insights regarding producers' preference for incentive payment mechanism (federal program or carbon market) and the incentive payment needed to induce additionality and practice continuity. We find that although an additional payment might be needed to promote practice continuity among farmers who have previously adopted cover crops, in the case of continuous no‐till, adopters might be willing to forgo additional payment to continue benefiting from the use of this practice. Our results also revealed producers prefer conservation contracts accruing higher off‐farm environmental benefits and federally administered over carbon market programs. This is an important result given an increased public interest in climate change and new proposed carbon mitigation policies and private carbon market initiatives. [ABSTRACT FROM AUTHOR]

Understanding what factors play a role in people's decisions to travel during a pandemic is important to public health officials and to stakeholders in the travel and tourism industry in the United States (US) and worldwide. This study examines factors influencing people's decisions to cancel/postpone recreational travel within the US amidst the COVID-19 pandemic. Our conceptual framework extends the Expected Utility model, commonly used in economics to model decisions under risk and uncertainty, to incorporate subjective norms and perceived behavioral control from the Theory of Planned Behavior. Our results suggest that risk perceptions, subjective norms, and concerns over transmitting COVID-19 to others play a significant role in the decision to cancel and postpone recreational travel. Results also suggest that perceived behavioral control may be less relevant to travel decisions when traveling involves elevated health risks. [ABSTRACT FROM AUTHOR]

We use an expected utility model to examine how living standards, or welfare, vary across the United States and how each state's welfare has evolved over time, accounting for cross‐state variations in mortality, consumption, education, leisure, and inequality. We find considerable cross‐state heterogeneity in welfare levels. This is robust to allowing for endogenous interstate migration and to computing welfare conditional on education, gender, and race. Although states experienced heterogeneous welfare growth rates between 1999 and 2015 (1.68–3.73% per year), there is no evidence of convergence in welfare levels, including during the subperiods preceding and following the Great Recession. [ABSTRACT FROM AUTHOR]

In an increasingly competitive environment, defense organizations are met with more difficult decisions than in years past. This problem is especially apparent in security cooperation, that is, defense diplomacy, conducted by the United States. Both the United States and its competitors offer military assistance to third-party nations who, in turn, select an offer based on their own self-interest. Unfortunately, current security cooperation planning practices adopt an ad hoc approach to such problems. Therefore, we set forth herein a decision-analytic-planning framework by (1) provisioning a generic utility model for security cooperation planning applicable to myriad stakeholders and (2) developing a Bayesian solution that allows the stakeholder to select an action that maximizes their expected utility. This combination of value-focused thinking and adversarial risk analysis improves upon standard U.S. defense practices; it tractably encodes planning assumptions and more comprehensively considers the relevant uncertainties. The efficacy of this planning approach is illustrated on a notional U.S. Air Force case study in which a host nation must choose between security assistance from the United States or a competing nation. Funding: This work was supported by the National Science Foundation [Grant DMS-1638521] and Air Force Office of Scientific Research [Grant 21RT0867]. [ABSTRACT FROM AUTHOR]

Problem gambling is becoming a growing concern in the United States because of the proliferation of, and state support for, gambling opportunities. The economic cost along with the physical and mental health problems associated with problem gambling make it necessary to study how problem gambling can be reduced. Our study examines whether financial literacy could be a means to reducing gambling frequency in the United States. We use data from the Preference Parameter Study of Osaka University, Japan, and apply instrumental variable probit regression models. The results show that, generally, financial literacy does not have a relationship with gambling frequency, but the relationship is significant in the states where electronic gambling machines (EGMs) are available. The results imply that gamblers are irrational and fail to assess the risks of gambling as well as the probabilities that maximize expected payoffs. It appears that gamblers' psychological gain from gambling outweighs the negative expected utility when there is easy access to gambling. Thus, rationality with regard to gambling decisions does not work unless the easy access to EGMs is controlled. Our results further show that males, older people, people with higher household income, and people who have easy access to gambling are likely to be frequent gamblers. [ABSTRACT FROM AUTHOR]

In the United States, exchange-traded funds can defer capital gains taxes of their investors by taking advantage of a legal loophole. To quantify the impact of this tax loophole on investor portfolios, we study a rank-dependent expected utility model. We develop an approximation formula for the sensitivity of the optimal investment strategy with respect to changes in the expected asset returns. By applying this approximation formula, we are able to quantitatively estimate how much investor portfolios may change depending on the investment horizon if the tax loophole is closed. [ABSTRACT FROM AUTHOR]

In a chloride-containing environment, steel bridges that use carbon steel can become corroded and require periodical inspection, repainting, and replacement to maintain an acceptable level of safety and serviceability during their service life. In recent years, several new bridges in the United States have adopted corrosion-resistant steels (i.e., ASTM A1010). Although corrosion-resistant steel can result in a substantial reduction in maintenance costs, its production cost is much higher than carbon steel. From a life-cycle cost perspective, the circumstances under which corrosion-resistant steel is economically advantageous remain unclear. The life-cycle costs that account for the uncertainties associated with traffic loads, including resistance, corrosion propagation, and maintenance activities further complicate this problem. The objective of this paper is to investigate the acceptance of corrosion-resistant steel in the design of steel girder bridges based on expected utility theory (EUT). The methodology developed will be exemplified on a steel girder bridge. Two types of utility functions will be used to characterize the preference of decision makers under uncertain conditions. The analysis results indicate that A1010 is the preferred solution for bridges in aggressive environments, or with severe failure consequences, or both, when the discount rate is low. [ABSTRACT FROM AUTHOR]

The article describes a mechanism for implementing monetary policy. Assuming a closed economy and an activist monetary policy, the author derives two equations for the expected utility of the monetary authority. The instrument variables for these equations are money supply and nominal interest rate, respectively. Despite making admittedly simplifying assumptions, the author's analysis defines the primary monetary task as a two-step process--first decide what the optimum instrument variable is, then optimize it.

We examine the consequences of prosecuting people who are human immunodeficiency virus (HIV) positive and expose others to the infection. We show that the effect of such prosecutions on the spread of HIV is a priori ambiguous. The prosecutions deter unsafe sex. However, they also create incentives for having sex with partners who are more promiscuous, which consequently increases the spread of HIV. We test these predictions and find that such prosecutions are associated with a reduction in the number of partners, an increase in safe sex, and an increase in sex with prostitutes. We estimate that doubling the prosecution rate could decrease the total number of new HIV infections by one-third over a 10-year period. [ABSTRACT FROM AUTHOR]

The article presents a study concerning the problems in the selection and specification of satellite payloads to maximize the total expected utility of a constellation in the U.S. It states that heuristic solutions were formulated from problems in small and moderately-sized satellite constellations. It mentions that the payload selection and specification problem was introduced by Justin Comstock.

Abstract: The expected utility (EU) model is widely used for predicting and describing choices under uncertainty. Its usefulness, however, is limited because of its widely acknowledged inconsistencies and paradoxes. This paper describes how important EU model paradoxes can be resolved by accounting for the influences of socio-emotional goods (SEGs) embedded in word and other symbolic frames. [Copyright &y& Elsevier]

Whether people perceive and respond to low-probability natural hazards is a research question of considerable policy relevance. We obtain evidence by considering the response of housing choice to tornado risk for manufactured homes. The vulnerability of manufactured housing, combined with its growing share of the U.S. housing market, has led to proposed mandates for community shelters in mobile home parks. Expected utility theory, however, predicts that households should account for tornado risk in their housing choice. We test for an effect of tornado risk on manufactured housing demand using cross-sectional state data, as well as counties in three tornado prone states. We find that people do respond to tornado risk; our estimates indicate that each expected annual state tornado death per million residents reduces demand for manufactured homes by about 3%. The estimated quantity effect is consistent with the market studies of the price elasticity of manufactured homes. [ABSTRACT FROM AUTHOR]

This investigation applies an expected utility (EU) analysis to assess the impact of the 2003 U.S. intervention in Iraq on the security perceptions of states in the Persian Gulf region, and to determine how shifts in the distribution of preferences among self-interested actors might influence the formation of coalitions in the Middle East. The outcome suggests that concerns for an incumbent leader's political survival may create a set of values that prevents states from forming coalitions in response to a commonly perceived threat. Of particular interest is the finding that while challengers such as Iran may not forge an anti-U.S. coalition, by maintaining its current position Tehran could foreclose bargaining opportunities that would result in an outcome more favorable to the U.S. [ABSTRACT FROM AUTHOR]

Minimum-variance hedging of a contingent claim in discrete time is suboptimal when the contingent claim is hedged for multiple periods and the objective is to maximize the expected utility of cumulative hedging errors. This is because the hedging errors are not independent. The difference between a minimum-variance hedge and the optimal multiperiod hedge is called the hedging demand and depends on the hedger's preferences, the characteristics of the contingent claim, the trading frequency and horizon, and most importantly the joint distribution of the contingent claim and the underlying security prices. Since modeling this joint distribution is empirically controversial, I examine nonparametrically the economic importance of hedging demands in the case of hedging Standard & Poor's 500 index options. [ABSTRACT FROM AUTHOR]

Why do people purchase health insurance? Many economists would answer that it permits purchasers to avoid risk of financial loss. This note suggests that health insurance is also demanded because it represents a mechanism for gaining access to health care that would otherwise be unaffordable. For example, although a US$300,000 procedure is unaffordable to a person with US$50,000 in net worth, access is possible through insurance because the annual premium is only a fraction of the procedure's cost. The value of insurance for coverage of unaffordable care is derived from the value of the medical care that insurance makes accessible. [ABSTRACT FROM AUTHOR]

During the past decade, the experimental economics method increasingly has been used to study the Impact of tax policy on taxpayer behavior. Experimental economics in taxation typically tests tax applications of expected utility and psychological theory by creating a real microeconomy in the laboratory. A key requirement is strict control over the parameters of the experimental setting and subject preferences. One generally accepted procedure to achieve experimental control Is to avoid references to real-world phenomena in Instructions to subjects. The reasoning underlying this procedure is that if subjects associate the experiment with real-world phenomena, they may make decisions based on values associated with the real-world context instead of the rewards and penalties of the microeconomy. Despite this, several recent tax-reporting experiments that otherwise conform to the experimental economics method have used explicit tax terminology. In discussing the results of these experiments, the authors and commentators stated that the results probably were not affected by the tax context. We conducted an experiment to further examine whether the results of a tax- reporting experiment were affected by context. We found that subjects reported significantly more Income when the context of the experiment was tax than when the context was nontax. This effect differed, however, depending on the age of the subjects. While subjects 25 years of age and older reported approximately twice as much Income in the tax context as they did In the nontax context, subjects under 25 reported only slightly more in the tax context than in the nontax context. These results provide evidence that role playing based on individual subject characteristics occurred when contextual cues were provided. [ABSTRACT FROM AUTHOR]

A subjective expected utility model is developed to explain the gambling behaviour of bettors on Major League Baseball games in the United States. Betting activity was examined over 15 seasons, for the period 1978 - 1992. The observed overbetting of favourite teams by baseball bettors can be reconciled without abandoning the traditional assumption of risk aversion. Additionally, there is some evidence to suggest that positive skewness has a discernible influence in the decision-making process for higher odds contests. [ABSTRACT FROM AUTHOR]

Violations contradict any utility theory satisfying transivity, outcome monotonicity, coalescing, and comonotonic independence. Because rank-and sign-dependent utility theories, including cumulative prospect theory (CPT), satisfy these properties, they cannot explain these results. However, the configural weight model of Bimbaum and McIntosh (1996) predicted the observed violations of stochastic dominance, cumulative independence, and branch independence. This model assumes the utility of a gamble is a weighted average of outcomes' utilities, where each configural weight is a function of the rank order of the outcome's value among distinct values and that outcome's probability. The configural weight, TAX model with the same number of parameters as CPT fit the data of most individuals better than the model of CPT, [ABSTRACT FROM AUTHOR]

It is argued that in order to accommodate experimentally-observed choice patterns, it is not enough to model the utility function as being dependent on changes from a reference wealth point. Instead, individuals should be modeled as treating decisions as part of an identifiable sequence of decisions, and utility should be a function of reference wealth. income so far from the sequence, and payoffs from the current decision, The three-argument utility function allows for risk aversion over gains and risk seeking over losses for the first choice in the sequence, and for the house money and break-even effects in later decisions. [ABSTRACT FROM AUTHOR]

We test a standard expected utility model and alternative models about how people evaluate risky prospects using data about individuals' preferences among health insurance plans. A model that assumes people evaluate gains and losses relative to a reference rather than final outcomes, treat gains and losses asymmetrically, and process certain and uncertain outcomes separately provides a better fit than the standard utility model. These findings suggest inertia in health insurance plan choice and that individuals are more responsive to decreases than to increases in the price of insurance. [ABSTRACT FROM AUTHOR]

In this study, respondents from the P.R.C., U.S.A., Germany, and Poland were found to differ in risk preference, as measured by buying prices for risky financial options. Chinese respondents were significantly less risk-averse in their pricing than Americans when risk preference was assessed in the traditional expected-utility framework. However, these apparent differences in risk preference were associated primarily with cultural differences in the perception of the risk of the financial options: rather than with cultural differences in attitude towards perceived risk. In all cultures, an equal proportion (the majority) of respondents was willing to pay more for options perceived as less risky, i.e., were perceived-risk averse. These results are most naturally explained within a risk-return conceptualization of risky choice. They have practical implications for cross-cultural negotiation and commerce by suggesting the locus of cultural differences in risky choice that may allow for the creation of joint gains. [ABSTRACT FROM AUTHOR]

This paper considers the explicit, real time dynamic processes in which cooperation emerges in a class of binary decision mechanisms, each of which determines funding for a public project. This class includes the Voluntary Contribution and the Majority Voting mechanisms. The population is subject to "turnover" so that new individuals enter society with possibly different beliefs about the future evolution of societal behavior than their predecessors. Individuals in this society maximize their discounted expected utilities. Due to the frequent turnover, however, these expectations may not be mutually consistent. Nevertheless, we find, for each mechanism, the nonempty set of the parameters for which the behavior pattern starting from states with nonprovision is absorbed into states with full provision with probability one. Moreover, for a sufficiently large population, outcomes with full provision are absorbing states if and only if certain types of voting mechanisms are used. [ABSTRACT FROM AUTHOR]

We provide necessary and sufficient conditions for weak (semi)continuity of the expected utility. Such conditions are also given for the weak compactness of the domain of the expected utility. Our results have useful applications in cooperative solution concepts in economies and games with differential information, in noncooperative games with differential information and in principal-agent problems. [ABSTRACT FROM AUTHOR]

The fundamentals of the METRI approach to model-building are discussed. This approach may have applicability where the system to be modelled involves very large numbers of variables, ignorance, uncertainty, and hierarchical relationships, and where the decisions to be made involve enormous amounts of detail. Since the approach was developed in the context of the "allowance list" problem, the application of the approach to that problem is discussed in detail. The problem of "validation" is also discussed, since, as in some other cases, the payoff measure defined by the model has no close parallel in terms of independently available data. The paper is basically an account of certain aspects of a U.S. Navy project. [ABSTRACT FROM AUTHOR]

Focuses on the emergence of a new kind of terrorism in the U.S. after the September 11, 2001 terrorist attacks. Reasons behind the development of new terrorism; Background on the use of an expected utility approach in understanding the choice of terrorist groups; Factors that could affect the decision making of terrorists regarding the use of violence.

The article offers the authors' insights regarding an additional special characteristic of corporations rooted in economic theory. They discuss the nature of money and personal expenditure showing a balance between current consumption and investment that maximizes expected utility. They talk on the U.S. Supreme Court's decision in the Citizens United v. U.S. Federal Election Commission FEC case which they believed overlooked distinction between for-profit corporations and individuals.