Economics Insights @ CBS

Two studies examined the impact of self-reported use of promotion- and prevention-related strategies when making “risky” or “conservative” decisions about economic reform. Chronic strength of prevention focus (Study 1) or experimentally induced prevention focus (Study 2) was associated with using strategic vigilance in decision making, whereas chronic strength of promotion focus (Study 1) or experimentally induced promotion focus (Study 2) was associated with using strategic eagerness (when economic conditions were perceived as not so good).

Previous investigators argued that increasing 5-year survival for cancer patients should not be taken as evidence of improved prevention, screening, or therapy, because they found little correlation between the change in 5-year survival for a specific tumor and the change in tumor-related mortality. However, they did not control for the change in incidence, which influences mortality and is correlated with 5-year survival. The purpose of this study was to reexamine the question of whether increasing 5-year survival rates constitute evidence of success against cancer.

The paper explores the conditions that determine the effect of rule enforcement policies that imply an attempt to punish all the visible violations of the rule. We start with a simple game theoretic analysis that highlights the value of gentle COntinuous Punishment (Gentle COP) policies. If the subjects of the rule are rational, Gentle COP can eliminate violations even when the rule enforcer has limited resources. The second part of the paper uses simulations to examine the robustness of Gentle COP policies when the subjects of the rule are adaptive learners.

Trade reform conditions are common in IMF supported programs. Of the 99 countries that had IMF programs during 1993–2003, 77 had trade reform conditions in their programs. Since the WTO has not been found especially effective in promoting trade openness for most developing countries, it is of great interest to see if the IMF has been more effective as it combines carrots and sticks not available to the WTO. Yet, the effectiveness of these trade conditions has not been systematically studied. Using a unique dataset, this paper provides such an assessment.

Background: It has been shown that fairness perceptions have a strong impact on health, especially under conditions of great work stress. The aim of this study was to extend previous research in studying whether working in high justice workplace would protect from health effects following environmental stressors outside work.