Economics Insights @ CBS

We investigate the stability of discrete-event systems modeled as generalized semi-Markov processes with event epochs that satisfy (max, +) recursions. We obtain three types of results, under conditions: We show that there exists for each event a cycle time, which is the long-run average time between event occurrences; we characterize the rate of convergence to this limit, bounding the error for finite horizons; and we give conditions for delays (i.e., differences between event epochs) to converge to a stationary regime.

A unique dataset collected from the personnel records of a large company is used to study the relationship between on-the-job training and worker productivity. The analysis shows how information contained in a company database is useful for eliminating heterogeneity bias in the estimation of training's impact on wages and job performance.

The question of whether lay attributors are biased in their discounting of 1 cause given an alternative cause has not been resolved by decades of research, largely due to the lack of a clear standard for the rational amount of discounting. The authors propose a normative model in which the attributor's causal schemas and discounting inferences are represented in terms of subjective probability.