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Abstract: Scientific research on the banking crisis 2007–08 has answered many important questions according to generally accepted methodological standards. However, there remains at least one outstanding question that has not been answered with methodological accuracy: What caused the severe USA banking crisis 2007–08? To address this question the paper uses a counterfactual definition of ‘cause,’ distinguishes between separable and non-separable causes, and employs a well-posed methodology for the causation analysis of singular events. In addition, first causes and preponderant causes are distinguished. The main result of this paper is that the preponderant causes of the banking crisis 2007–08 were securitization and ignorance. [Copyright &y& Elsevier]

Abstract: This paper shows that the positional bias underscored by is an experimental artifact. Quoted authors highlighted the importance of positional concerns by finding that people prefer to earn a fewer absolute amount of income but to earn a higher income than others. Why do people prefer to earn more than others? The proposed explanation is that people have a preference for status. This conclusion might be wrong due to their particular design. We conjecture that subjects, by indicating to prefer a state of the world in which they earn more than others, in reality signal a preference for equality. We replicated the same design as in and added a new option so as to disentangle positional concerns from egalitarian ones. We observe that most subjects express egalitarian preferences rather than positional ones. [Copyright &y& Elsevier]

Abstract: Many researchers in economics as well as sociology have stressed the important role of business networks for cooperation, trust, and performance. This claim is based on solid theoretical arguments as well as empirical findings. However, neither theory nor the selective empirical results support the view that networks are always beneficial for economic transactions. This paper begins with an observation that for the purchase of IT products, network embeddedness leads to even more problems for the customer. In order to explain this effect, possible reasons for this phenomenon are discussed using theory as well as empirics. The most promising explanation for this special case is the effect of uncertainty and incomplete information ex post. In order to reduce this uncertainty, the buyer forms beliefs on the basis of the opinions existing in a shared network or group. However, if the network members have the same problem of uncertainty, suppliers have an incentive to reduce their performance because such behavior will not be detected and sanctioned. An analysis of the customer''s tolerance to a supplier''s behavior in business transactions yields support for this argument. Even if problems in a transaction are kept constant, customers give suppliers more reputational credit if they share a common network. [Copyright &y& Elsevier]

Abstract: Economic theory that assumes personal income maximization predicts that a wife will under invest in her husband''s human capital. However, casual observation of real life marriages and experimental evidences show that outcomes are more efficient than the theoretical prediction. This paper argues that the gap between the theoretical prediction and experimental evidences is due to inappropriate assumptions in the theory. That is, the bias in the theoretical prediction is caused by the neglect of the non-material factors that play crucial roles in marriage and the neglect of the fact that individuals may behave altruistically in marital decisions. [Copyright &y& Elsevier]

Abstract: The purpose of this paper is to explain why low-wage workers with identical qualifications to higher-wage workers are more exposed to unemployment. Each worker is considered to belong to a social group (defined according to his/her gender, age, and nationality). We assume that workers experience both productive interdependencies and social interactions within the firm. Also inter- and intra-group interactions determine worker productivity, and frictions on the labor market limit the hiring of the most productive workers. Consequently, externalities acting both within the firm and in the labor market can lead to a higher rate of unemployment for low-wage workers. [Copyright &y& Elsevier]

Abstract: This paper examines the relationship between various political mechanisms and the variation in unemployment compensation programs (i.e., compulsory, voluntary, and assistance programs). I argue that the choice of a specific unemployment compensation program over others depends on the level of franchise extension. Using a multinomial logit analysis of 13 European countries from 1880 to 1945, I find that among other political mechanisms, franchise extension had the greatest impact on the likelihood of instituting unemployment compensation, controlling socio-economic factors. Greater enfranchisement is associated with a higher probability of choosing a compulsory program, but not a voluntary one. [Copyright &y& Elsevier]

Abstract: There is substantial evidence in the psychology and sociology literature that social relationships promote happiness for the individual. Yet the size of their impacts remains largely unknown. This paper explores the use of shadow pricing method to estimate the monetary values of the satisfaction with life gained by an increase in the frequency of interaction with friends, relatives, and neighbours. Using the British Household Panel Survey, I find that an increase in the level of social involvements is worth up to an extra £85,000 a year in terms of life satisfaction. Actual changes in income, on the other hand, buy very little happiness. [Copyright &y& Elsevier]

Abstract: Measuring sustainable well-being is an important task in determining whether people''s lives are improving or becoming worse over time. A new index, the Genuine Progress Indicator (GPI), has been developed in order to measure sustainable well-being. The GPI is comprised of a large number of individual cost and benefit items that account for various social, environmental and economic impacts associated with a growing economy. Various policy implications flow from the result of applying this new well-being metric. This paper briefly reviews an application of the GPI to the state of Victoria, Australia for the period 1986–2003, before discussing the policy implications of this application. [Copyright &y& Elsevier]

Abstract: The concerns expressed and issues raised by Zialik and McCloskey concerning the use of tests of statistical inference have also been raised in sociology and psychology. This paper examines the similarities and differences between the way that the significance test controversy has been discussed in the wider social sciences and Zialik and McCloskey''s discussion of the implications for economics. The issues are similar in that different effects of over-reliance on the rejection of the null hypothesis are identified. These include mistakes and errors in statistical inference, the lack of the use of diagnostic statistics to qualify and guide statistical inference, and the broader impact on the field of accumulation of type II errors and lack of innovation in the field. There is considerable agreement on these points between sociologists, psychologists and economists who are concerned about these issues. However, there are also important differences that are discussed in this response. In particular, in the other social sciences the significance test controversy has broadened out and has been linked firstly to more discussions of the limitations of experimental and correlational designs and to a broader critique of positivism and scientism in the social sciences. Without this broader context the significance of the significance test controversy is understood in a more restricted way as a technical problem with widespread effects whereas in the social sciences it has been understood as symptomatic of broader disciplinary commitments in theory and purpose. [Copyright &y& Elsevier]