Integrating Routine, Variety Seeking and Compensatory Choice in a Utility Maximizing Framework

Given the large number of choices that consumers make each day it seems likely that they will generally adopt decision strategies that minimize cognitive effort, particularly with low price products such as most items found in a supermarket. One such strategy may be to simply choose what has been chosen in the past, i.e. to fall into a pattern of routine choices or decisions. In contrast, there may be preferences for variety in markets for low price, highly differentiated goods. We develop a conceptual and empirical model of routine choice, and the factors that result in transitions to two strategies other than routine selection, to wit, utility maximizing choice among available alternatives and a variety seeking strategy. The empirical approach we employ provides a mechanism for the examination of panel data that avoids the state dependence issues present in most applications to these types of data. We apply this framework to the choice of two food products that illustrate the heterogeneity across types of products in decision strategies and routine choice patterns.Choice modeling, routine behavior, variety‐seeking, panel data, Consumer/Household Economics, Demand and Price Analysis, Institutional and Behavioral Economics, D12, D03, C25,

Preserve or retreat? Willingness-to-pay for Coastline Protection in New South Wales

Coastal erosion is a global and pervasive phenomenon that predicates a need for a strategic approach to the future management of coastal values and assets (both built and natural), should we invest in protective structures like seawalls that aim to preserve specific coastal features, or allow natural coastline retreat to preserve sandy beaches and other coastal ecosystems. Determining the most suitable management approach in a specific context requires a better understanding of the full suite of economic values the populations holds for coastal assets, including non-market values. In this study, we characterise New South Wales residents willingness to pay to maintain sandy beaches (width and length). We use an innovative application of a Latent Class Binary Logit model to deal with Yea-sayers and Nay-sayers, as well as revealing the latent heterogeneity among sample members. We find that 65% of the population would be willing to pay some amount of levy, dependent on the policy setting. In most cases, there is no effect of degree of beach deterioration characterised as loss of width and length of sandy beaches of between 5% and 100% on respondents willingness to pay for a management levy. This suggests that respondents who agreed to pay a management levy were motivated to preserve sandy beaches in their current state irrespective of the severity of sand loss likely to occur as a result of coastal erosion. Willingness to pay also varies according to beach type (amongst Iconic, Main, Bay and Surf beaches) a finding that can assist with spatial prioritisation of coastal management. Not recognizing the presence of nay-sayers in the data or recognizing them but eliminating them from the estimation will result in biased WTP results and, consequently, biased policy propositions by coastal managers.Comment: arXiv admin note: substantial text overlap with arXiv:1902.0241

Seasonality Effects on Consumers Preferences Over Quality Attributes of Different Beef Products

Using discrete choice modelling, the study investigates 946 American consumers willingness-to-pay and preferences for diverse beef products. A novel experiment was used to elicit the number of beef products that each consumer would purchase. The range of products explored in this study included ground, diced, roast, and six cuts of steaks (sirloin, tenderloin, flank, flap, New York and cowboy or rib-eye). The outcome of the study suggests that US consumers vary in their preferences for beef products by season. The presence of a USDA certification logo is by far the most important factor affecting consumers willingness to pay for all beef cuts, which is also heavily dependent on season. In relation to packaging, US consumers have mixed preference for different beef products by season. The results from a scaled adjusted ordered logit model showed that after price, safety-related attributes such as certification logos, types of packaging, and antibiotic free and organic products are a stronger influence on American consumers choice. Furthermore, US consumers on average purchase diced and roast products more often in winter slow cooking season, than in summer, whereas New York strip and flank steak are more popular in the summer grilling season. This study provides valuable insights for businesses as well as policymakers to make inform decisions while considering how consumers relatively value among different labelling and product attributes by season and better address any ethical, safety and aesthetic concerns that consumers might have

Travel mode substitution in Sao Paulo : estimates and implications for air pollution control

How would travel demand in Sao Paulo respond to demand management instruments? Could higher gasoline prices or lower metro fares (or changes in travel time) help reduce congestion or pollution? The authors use cross-sectional variation from an urban travel survey to study the substitutability in demand between travel modes. The method assumes that the set of trips is given (that is, origin-destination pairs do not change). Choice of mode was found to be quite insensitive to changes; all elasticities were lower than 0.5 in absolute value, and most were close to zero. While the sensitivity of mode choice to relative travel times (that is, speeds) was somewhat greater than that to costs, the general finding is that mode choice is quite inflexible. So, subsidies to less polluting (less congesting) travel modes would not help much in attracting travelers from more polluting (more congesting) modes. (The same holds for subsidized means of making them run faster.) But there are important limitations in the scope of the study. First, the study does not discuss optimal pricing. It merely examines the likely sign and magnitude of the links between pollution and policy parameters such as prices and travel speeds. Second, aggregate demand by mode could also depend on the city's shape and its travel intensity (the number, direction, and length of trips). For example, if a"city"stretches along a constructed metro line, the study would not capture such a phenomenon, since sensitive trip generation is excluded. These issues are not examined in the study.Roads&Highways,Consumption,Economic Theory&Research,Environmental Economics&Policies,Transport Economics Policy&Planning,Roads&Highways,Economic Theory&Research,Urban Transport,Environmental Economics&Policies,Transport and Environment

CHOICE AND TEMPORAL WELFARE IMPACTS: DYNAMIC GEV DISCRETE CHOICE MODELS

Welfare economics is often employed to measure the impact of economic policies or externalities. When demand is characterized by discrete choices, static models of consumer demand are employed for this type of analysis because of the difficulty in estimating dynamic discrete choice models. In this paper we provide a tractable approach to estimating dynamic discrete choice models of the Generalized Extreme Value (GEV) family that addresses many of the problems identified in the literature and provides a rich set of parameters describing dynamic choice. We apply this model to the case of recreational fishing site choice, comparing dynamic to static versions. In natural resource damage assessment cases, static discrete choice models of recreational site choice are often employed to calculate welfare measures, which will be biased if the underlying preferences are actually dynamic in nature. In our empirical case study we find that the dynamic model provides a richer behavioral model of site choice, and reflects the actual choices very well. We also find significant differences between static and dynamic welfare measures. However, we find that the dynamic model raises several concerns about the specification of the policy impact and the subsequent welfare measurement that are not raised in static cases.Demand and Price Analysis,

In situ consolidation of thermoplastic prepreg tape using automated tape placement technology: Potential and possibilities

The key parameters of the in-situ consolidation of carbon fibre reinforced poly-ether-etherketone (AS4-CF/PEEK) by automated tape placement (ATP) process were investigated by manufacturing of continuous rings and by laying tape onto pre-consolidated laminates. In order to establish and understand correlations between the process parameters and mechanical properties, a number of parametric studies were performed by manufacturing and testing the interlaminar shear strength, single lap shear strength and fracture toughness samples. The main process parameters investigated were the compaction force, tape laying speed and tool temperature. To achieve a uniform heat distribution across the thermoplastic tape, a new nozzle was designed. Baseline samples were also manufactured using the autoclave process to provide a comparison for the ATP composites produced. Optical microscopy was used for investigating the microstructure of composites compared. It was found that increasing the tool temperature reduced the temperature gradient between the incoming tape and substrate, resulting in better lap-shear strength and fracture toughness properties

IFRS 13: exploring decisions to early adopt or refrain from doing so

A research report submitted In partial fulfilment of the Degree: Master of Commerce School of Accountancy 2015Using an exploratory interpretive research approach and IFRS 13 as a case study, this thesis investigates the factors which affect the decision to adopt International Financial Reporting Standards. Detailed interviews with a sample of some of South Africa’s preparers’ of financial information and audit managers are used to gain an understanding of what factors influence companies, other than those in the financial services sector, to adopt early IFRS 13. The research findings are particularly significant as very little interpretive research has been performed on financial reporting from a South African perspective. In addition, the research performed to date has primarily considered the adoption of IFRS as a whole rather than a particular standard within IFRS. In addition, the fact that IFRS 13 has only recently been released offers an invaluable opportunity to study how current international accounting developments are being internalised by South African corporates. Through the interview process it was determined that the majority of the interviewees did not elect to early adopt IFRS 13. As a result, the rationale of the decision to not early adopt IFRS 13 was discussed and explored. It was found that technical constraints - such as the need to provide staff training and the requirement to provide additional accounting disclosure – discouraged the early adoption of the standard. Factors such as the effect of adoption on earnings, decisions made by competitors as well as the relevance of the standard to business operations were also considered as part of this decision. Overall, the interviewees showed a logic of resistance towards the standard and the standard setters which is manifested, not by misapplication of the standard, but by dismissing its ability to provide more useful information to users of financial statements and delaying its adoption

On ordinal utility, cardinal utility, and random utility

Though the Random Utility Model (RUM) was conceived  entirely in terms of ordinal utility, the apparatus throughwhich it is widely practised exhibits properties of  cardinal utility.  The adoption of cardinal utility as a  working operation of ordinal is perfectly valid, provided  interpretations drawn from that operation remain faithful  to ordinal utility.  The paper considers whether the latterrequirement holds true for several measurements commonly  derived from RUM.  In particular it is found that  measurements of consumer surplus change may depart from  ordinal utility, and exploit the cardinality inherent in  the practical apparatus.

Predictive uncertainty in auditory sequence processing

Copyright © 2014 Hansen and Pearce. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms

Individuals' Decisions in the Presence of Multiple Goals

This paper develops new directions on how individuals’ use of multiple goals can be incorporated in econometric model