This article aims to reestablish the long-standing conjecture that conformity is high at the middle and low at either end of a status order. On a theoretical level, the article clarifies the basis for expecting such an inverted U-shaped curve, taking care to specify key scope conditions on the social-psychological orientations of the actors, the characteristics of the status structure, and the nature of the relevant actions. It also validates the conjecture in two settings that both meet such conditions and allow for the elimination of confounding effects: the Silicon Valley legal services market and the market for investment advice. These results inform our understanding of how an actor’s status interacts with her role incumbency to produce differential conformity in settings that meet the specified scope conditions.

Since the last decades have been characterized by a strong disillusionment with the performances of the state, especially in countries of SubSaharan Africa, and since market imperfections are a pervasive feature of the rural economy in developing regions, it is perhaps not surprising that many professional and academic economists have looked increasingly to rural communities as a providential escape out of the state-market dilemma. In this way, they have got nearer to their colleagues from other social sciences for whom personalized relationships sealed by various forms of reciprocal exchanges in rural communities allow villagers to effectively solve important problems and to increase their welfare. New strategies based on the idea of decentralized or participatory development have gained increasing currency among international organizations (including the World Bank and the European Community) and bilateral aid institutions. If the idea is anything but new (it has been implemented for a long time by Non-Governmental Organizations, especially in Asia and Latin

The paper analyses the causes of the current crisis of the global financial system, with particular emphasis on the systemic elements that turned the crisis of subprime mortgage-backed securities in the United States, a small part of the overall system, into a worldwide crisis. The first half of the paper explains the role of mortgage securitization as a mechanism for allocating risks from real estate investments and discusses what has gone wrong and why in the implementation of this mechanism in the United States. The second half of the paper discusses the incidence of systemic risk in the crisis. Two elements of systemic risk are identified. First, there was excessive maturity transformation through conduits and structured-investment vehicles (SIVs); when this broke down in August 2007, the overhang of asset-backed securities that had been held by these vehicles put significant additional downward pressure on securities prices. Second, as the financial system adjusted to the recognition of delinquencies and defaults in US mortgages and to the breakdown of maturity transformation of conduits and SIVs, the interplay of market malfunctioning or even breakdown, fair value accounting and the insufficiency of equity capital at financial institutions, and, finally, systemic effects of prudential regulation created a detrimental downward spiral in the overall financial system. The paper argues that these developments have not only been

Ashoka Mody, The World BankThis paper was initiated while Kinoshita was a consultant at the World Bank. The data for this paper were obtained through a special survey designed by Susmita Dasgupta, Ashoka Mody, and Sarbajit Sinha. Osamu Kawaguchi assisted in the preparation of the survey design and its Using a specially-designed survey of Japanese firms planning investments in Asia, this paper highlights the importance of privately-held information in making foreign investment decisions. Information from direct experience on operating conditions in a country is likely to be the most credible, but for investors entering a new country information signalled by others investing in that country proves of great value, leading possibly to cascading investments in countries. Publicly available information is also important, and largely complementary to private information. Perceptions of FDI policy are also complementary to private information, but policy is of little value to those who already invest in or perceive rivals to be active in a country. "...either he should discover the truth about them for himself or learn it from some one else; or if this is impossible, he should take the best and most irrefragable of human theories and make it the raft on which he sails through life. " Plato.

This paper investigates between-voter interactions in a social network model of turnout. It shows that if 1) there is a small probability that voters imitate the behavior of one of their acquaintances, and 2) individuals are closely connected to others in a population (the “smallworld” effect), then a single voting decision may affect dozens of other voters in a “turnout cascade. ” If people tend to be ideologically similar to other people they are connected to, then these turnout cascades will produce net favorable results for their favorite candidate. By changing more than one vote with one’s own turnout decision, the turnout incentive is thus substantially larger than previously thought. We analyze conditions that are favorable to turnout cascades and show that the effect is consistent with real social network data from Huckfeldt and Sprague’s South Bend and Indianapolis-St. Louis election surveys. We also suggest that turnout cascades may help explain over-reporting of turnout and the ubiquitous belief in a duty to vote. I thank Robert Bates, Lars-Erik Cederman, Eric Dickson, Paul E. Johnson, Orit Kedar, Gary King, Ferran Martinez I Coma, and Ken Shepsle for valuable feedback on earlier drafts. How does the turnout decision of a single person affect an election? Decision-theoretic models of voting show that the probability of one vote being “pivotal ” in a large electorate is extremely small (Tullock

this paper, is to create a common design space for the service providers that is well linked to the user model in such a way as to allow sharing the experience of designers in their service creation process. We are considering the use of three orthogonal dimensions, service scenarios, interaction elements, and application elements as a combination of permutations in the design space that will help describe the exploratory research and design. These three dimensions have been identified within WWRF WG1 work as essential research directions and they are, for the purpose of this paper, sufficiently explained in WWRF Book of Visions 2001. The idea of threedimensional orthogonal design space had been derived from CIM-OSA reference model for computer-integrated manufacturing and business process re-engineering fields

We have been asked to write a commentary on the articles on market reform appearing in this volume. Since we are economists, we concentrate on the articles by Evans and Rice, which directly address the application of economics to health policy. The Evans article attacks marketoriented reforms of health care systems. There are four elements to his argument: (1) A redistributive “rent-seeking ” agenda lies behind support for market-oriented policies; (2) markets are not optimal for the production and distribution of health care; (3) government is; and (4) economic analysis is not applicable to health care, hence it is not useful and is actually harmful. Rice’s article contains two intertwined but distinct themes. The first of these is an attack upon the application of a textbook model of perfect competition to the health care sector. The second is an attack upon several of the tools used by economists to study markets in general and health care markets in particular. The articles by Evans and Rice, while different in many ways, do share some important factors. The main themes in both articles are that market-oriented health systems do not work well, that government-run health systems are superior to market systems, and thus economic analysis is not applicable to health care and thus its application can be misleading or harmful. In what follows we comment on the arguments presented in support of these claims. The logical and factual flaws in the articles are too many to enumerate individually here. Instead, we concentrate on what we view as the

As the U.S. experience in Vietnam and Iraq attests, occupation by a foreign power can generate counterproductive conflict dynamics. Winning hearts and minds is the key to the long-term success of occupations, and both occupation forces and resistance movements employ a mix of coercive and non-coercive strategies (punishments and rewards) to shape support within the occupied public. The resulting cross-cutting pressures and the problem of preference falsification can lead to fragile social orders vulnerable to tipping, complicating the short-term evaluation and long-term success of occupation/resistance strategies. This paper presents a preliminary implementation of the Occupation Dynamics (OD) model which uses social agent simulation to explore the complex interaction of occupation and resistance strategies on the making of social order.

This paper investigates the interrelations between social control mechanisms, social networks and collective action. We introduce a game theoretical model that explains how and under what conditions social networks rationalize participation in collective action and how can collective action reshape network relations in single encounters. The key mobilizing forces in collective action are interpersonal ties, as they transmit different forms of social control such as behavioral confirmation and social selective incentives. The paper shows that stronger social control by and large fosters participation, but eventually it decreases the chance of mass mobilization. We demonstrate that the impact of network structure is conditional to which social control mechanisms operate. In case selective incentives are strong, the minimum degree of the network is a crucial determinant of collective action. In case of strong confirmation incentives, we find a negative effect of network segregation on mass mobilization. Furthermore, the paper goes beyond the static analysis of network effects in collective action and incorporates the opportunity of forming and of severing ties in the model. We introduce an equilibrium refinement that embraces the concepts of Nash equilibrium and network stability. We show that when abandoning and forming relations are inexpensive, only networks in which contributors and defectors are highly segregated can be in this equilibrium.

Qaeda to enable them to launch a sequence of successful terrorist attacks on the United States and to threaten similar attacks on other advanced Western nations. Yet, the vast majority of citizens of all civilized, advanced nations despise al Qaeda as the epitome of evil, indeed as the Godless perpetrators of torture, pillage, enslavement of women and mass murder and mutilation. 216 1. The heterogeneous nature of terrorist groups Terrorist groups manifest themselves in a wide variety of shapes and sizes. Some groups, like the Irish Republican Army, La Cosa Nostra, Fa t ah, Hamas and Hezbollah, Baader-Meinhof and The Shining Path, are geographically concentrated and culturally and politically homogeneous. Other groups, like al Qaeda are geographically dispersed and culturally and politically diverse. More rarely, terrorists take the form of lone individuals, like the Unabomber, who respond violently perhaps to mental illness, perhaps to perceived personal failure to perform satisfact