Praveen K. Kopalle and Robert Hansen
There has been much interest in pricing strategies and tactics both in the research and practice domains. This chapter examines the recent literature on pricing with a focus on blending an economics approach with that of marketing. It begins with a brief discussion of the fundamental principles of optimal pricing, which serves as the foundation for the more advanced pricing methods. The chapter provides an in-depth discussion in the areas of second degree price discrimination, bundling strategies, revenue management, pricing using conjoint analysis, dynamic pricing, price psychology, personalized pricing, competitive considerations in pricing (Nash and Stackelberg games), dynamic structural models in pricing, and pricing in two-sided markets. The end of the chapter provides brief concluding remarks.
This chapter considers the psychological, methodological, and normative paths taken by behavioral law and economics (“BLE”) and alternative paths that BLE might have taken, and might still take. The counterfactual BLE imagined here focuses on performing behavioral analyses of legal problems rather than promoting the heuristics and bias view of judgment and decision-making to compete with law and economics’ rational actor model. This change in focus would give priority to empirical studies in which particular legal institutions and specific legal tasks are simulated or studied in situ rather than to studies of abstract and general judgment and decision-making problems that may provide more theoretical bang but have less clear applied payoff in specific legal contexts.
Susan Griffin and Karl Claxton
Cost-effectiveness analysis (CEA) is intended to help collective purchasers of health care to determine which interventions to prioritize, by ranking them according to the cost of each unit of “health benefit” they produce. The primary focus of this article is on the social decision-making approach where the decision-maker's objective is assumed to be the maximization of health gains subject to a given budget constraint. This article begins with the rationale for presenting a full characterization and analysis of uncertainty within any CEA. An overview of methods that can be used to conduct a CEA that accounts for uncertainty is provided, including the means to present and interpret the results. The benefits and limitations of the methods for analyzing uncertainty are considered in the context of providing information to decision-makers. The article concludes by discussing the additional questions that arise when the need for further research to support those decisions is considered.
Moses L. Pava
The essence of this article happens to be the art of moral criticism amidst the Jewish tradition. Moral criticism, or as the Torah puts it rebuke (tokhehah), is a necessary activity for social learning and improvement. Moral criticism is part of a give and take among individuals who must necessarily share, at least, a minimal set of core values, including most importantly respect for one another, a common ethical vocabulary, and a basic moral grammar. Each one of us, simply by virtue of being human, inherits a moral tradition. As we grow and mature we slowly become its spokespersons. Rebuke or moral criticism is one of the many moral responsibilities that come with advancing maturity and wisdom. It can take on many different forms. A series of discussions, mostly rhetorical in nature follows. Introspecting questions along such as what are my motives along with substantial analysis concludes this article.
Giorgio d'Agostino, J. Paul Dunne, and Luca Pieroni
The earlier literature regarding the effects of military expenditures on economic growth had initially shown a positive relationship between the two variables. This article examines this topic, taking account of more recent models of growth. The second section considers the alternative general economic theories that inform the development of models to undertake empirical analyses. The third section considers estimation issues. The fourth section considers the alternative formal models that are common in the literature: the Feder–Ram model, the modified Solow model, and the endogenous growth models. The fifth section presents some empirical results to illustrate the issues involved in estimating the models and to compare their performance. The estimation of more sophisticated models indicates, contrary to the early studies, that the effect of military expenditures on growth is negative.
Minglian Li and Justin Tobias
This article is of two-fold interest with the goal of providing an overview of the field and aims at discussing the most recent research in the relevant field. It shows how the computational methods and modelling ideas are being used by Bayesian econometricians. It also discusses linear models and presents a review of the normal linear regression model, deriving marginal, conditional, and predictive posterior densities of interest. This article proceeds further to discuss hierarchical linear models and review approaches to handle endogeneity problems. It presents applications and posterior simulation strategies for nonlinear latent variable models and considers the analysis of treatment effects models and multinomial and multivariate probit models. This article briefly reviews basic Bayesian approaches to the analysis of duration data.
After contrasting behavioral criminal law and economics with the retributivist tradition and with traditional criminal law and economics, the chapter illustrates how various behavioral phenomena can be used to predict the effects of criminal law norms and to design criminal law in a way that serves social goals, in particular deterrence. It explores the effects of uncertainty on deterrence; it examines the effects of prospect theory and the differential effects of future uncertainty (prediction) and past uncertainty (postdiction) on the propensity to commit crime. It also investigates the effects of overoptimism on the propensity to commit crime. Last the chapter discusses the literature on happiness and its relevance to the optimal design of criminal law. It establishes that the literature on happiness can be used to promote retributive justice concerns. The chapter concludes by examining critically the potential contribution of behavioral studies to the optimal design of criminal law norms.
Melvin A. Eisenberg
Classical contract law, Chicago economics, and Chicago law-and-economics all assumed that people rationally maximize their utility. However, just as classical contract law was supplanted by modern contract law, so Chicago-style law-and-economics is being supplanted by a school of law-and-economics based on behavioral psychology or behavioral economics. The shift to behavioral law-and-economics, which is still under way, has arrived in three waves. The first wave showed that actors often make decisions without being fully informed, without adequately processing the available information, and without bringing to consciousness critical assumptions that underlay their decisions. The second wave showed that in certain areas, actors systematically make decisions that are not rational. The third wave shows that in making decisions, contracting actors are often motivated by moral principles as well as by wealth-enhancement.