Skip to main content

About this book

Contemporary economists, when analyzing economic behavior of people, need to use the diversity of research methods and modern ways of discovering knowledge. The increasing popularity of using economic experiments requires the use of IT tools and quantitative methods that facilitate the analysis of the research material obtained as a result of the experiments and the formulation of correct conclusions. This proceedings volume presents problems in contemporary economics and provides innovative solutions using a range of quantitative and experimental tools. Featuring selected contributions presented at the 2018 Computational Methods in Experimental Economics Conference (CMEE 2018), this book provides a modern economic perspective on such important issues as: sustainable development, consumption, production, national wealth, the silver economy, behavioral finance, economic and non-economic factors determining the behavior of household members, consumer preferences, social campaigns, and neuromarketing. International case studies are also offered.

Table of Contents


Theoretical Aspects of Contemporary Economics


Chapter 1. Some Remarks on Methodological Foundations of Unified Growth Theory

The purpose of this chapter is to present and evaluate methodological foundations of unified growth theory. In a context of the modern theory of economic growth, Oded Galor, the protoplast of unified growth theory, provides a fresh theoretical and methodological approach in comparison with Keynesian and neoclassical economics. From the methodological perspective, he emphasizes an importance a context of the economic history of growth and development process observed in market type economies. This chapter shows some links with ideas coming from Ferdinand Braudel, institutional economics, and convergence theory. An interdisciplinary approach is the main achievement in unified growth theory.
Jerzy Boehlke

Chapter 2. Innovative Technologies in the Process of Development of the Silver Economy

This chapter discusses the issue of the role of innovative technology in the process of development of the silver economy. It is recognized here that the new paradigm of development constitutes a response to the global processes of population ageing, and that computer science in management is an indispensable element in this process, allowing for the development of issues in the field of information technology and management sciences, as it provides a perfect combination of technological knowledge from the scope of IT and business skills. The chapter indicates that we should incorporate the values associated with the silver economy into our thinking about the development of advanced technologies, and that we should treat it as an opportunity for technological progress, development of business and the implementation of important social values associated with the goal of providing a good life to an ageing population. The author refers to extensive scientific research and the application of these studies to the socio-economic practice within the adopted paradigm of the silver economy. It is also pointed out that the new paradigm of development does not focus exclusively on the silver economy as a new economic sector, but develops the thinking about the older generation, which we are obliged to respect and to provide with a dignified life. These two points of view are mutually integrated, and the purpose of the article is to present the assumptions of the silver economy and the main achievements of innovative technology supporting the independent functioning of seniors and improving the quality of their lives. The contents contained in the chapter fall within the category of economic and social analyses, utilize the achievements of sociological and economic studies and were based both on existing sources and the results of own research. The methods of desk research and descriptive analysis were used in the presentation of the studied issues. In conclusion, the chapter emphasizes the need to overcome cultural, ethical and mental barriers, so that the successful implementation of advanced technologies to the silver economy translates into general economic and social success.
Grażyna Krzyminiewska

Chapter 3. Possibilities of Measuring Sustainable Development—Selected Aspects

A developed system of indicators and measurement methods, both quantitative and qualitative, has fundamental importance for the possibilities of observation and implementation of a concept and pursuing its objectives and principles. The same applies in the case of sustainable development. An assessment of processes involving sustainable development is usually carried out with the use of indicators as well as qualitative and quantitative methods. This paper focuses on theoretical aspects and a general presentation of issues concerning the measurement of sustainable development. The aim of the paper is to show the diversity and complexity of measuring sustainable development (indicators, quantitative and qualitative methods) and to indicate difficulties associated with measuring it. The paper’s layout is dictated by the implementation of this aim. The paper presents the theoretical basis of measuring sustainable development, after which various possibilities of measuring sustainable development are characterized and the difficulties associated with measuring thereof are pointed out. Quantitative and qualitative methods for the assessment of the course of sustainable development are pointed out.
Ewa Mazur-Wierzbicka

Chapter 4. Designing Public Policy According to Achievements of Behavioural Economics

The assumptions of behavioural economics, about cognitive biases, heuristics, and observations that sometimes individuals are not the best judges of their own well-being, are now being used in the paternalist libertarian approach. It is the basis for creating a behavioural public policy. Previous experience in its implementation has allowed the development of strategies for policy and regulatory design. Applying this approach should lead to increasing the efficiency of the public policy, often thanks to quite small, simple and not too expensive interventions. The aim of the study is to analyse the existing possibilities of using the achievements of behavioural economics in the public policy with reference to the strategy of creating and conducting behavioural public interventions. This aim was achieved thanks to the application of critical literature analysis and desk research.
Danuta Miłaszewicz

Chapter 5. Application of Behavioral Economics Insights to Increase Effectiveness of Public Awareness Campaigns

The traditional (neoclassical) economics assumes that every individual is egoistically oriented toward achieving their main goal (their own interest), which is to maximize utility. However, in many studies referring to various aspects of human behavior, behavioral economics proves that human choices vary depending on the circumstances, place, time, norms and social influences, emotional judgments, cognitive distortions and biases, simplifying reasoning principles applied (heuristics), and at the same time on how and in what circumstances the choice is made (the choice architecture). The objective of the article is to define the concepts of behavioral economics which are the most interesting from the point of view of increasing the effectiveness of public awareness campaigns. In order to determine which concepts of behavioral economics are the most interesting from the point of view of increasing the effectiveness of social campaigns, an analysis of the results of the systematic publication search in the Google Scholar database has been carried out. Literature overview has shown that the effectiveness of social campaigns can be increased by using the knowledge provided by behavioral economics on the subject of reflexive, unreflective, unwise, and fast cognitive processes carried out by individuals.
Anna Borawska

Chapter 6. Experimental Methods in Behavioural Economic Sciences

The aim of the chapter is to present, basing on neo-evolutionary paradigm, the types of experimental methods used in behavioural economic sciences supported by research examples. Neo-evolutionary paradigm legitimates incorporation into behavioural economic sciences not only behavioural economics, behavioural finance and behavioural accounting but also neuroeconomics, neurofinance and neuroaccounting. The adoption of the aforementioned approach enables extending the methodological perspective by methods used in natural sciences, including experiment. The research methodology is based on a comprehensive review of the world’s literature on behavioural economics, neuroscience and neo-evolutionism.
Dominika Korzeniowska, Łukasz Sułkowski

Chapter 7. An Attempt of Knowledge Handling for Experimental Economics Domain

As experimental economics proved to be promising and dynamically growing research field, a lot of methodological and practical issues are raised in scientific literature. However, practical possibility of knowledge handling in whole experimental economics domain is limited. On the other hand, a development of knowledge management mechanisms, especially focusing on knowledge engineering and ontologies, provides auspicious means to handle knowledge. As the result of the mentioned above, in this chapter, an attempt of ontology as a form of knowledge engineering for handling knowledge in experimental economics is proposed. To confirm the applicability of the proposed approach, several case studies referring to selected problems of experimental economics are provided.
Agnieszka Konys

Application of Quantitative and Experimental Methods and Tools in Contemporary Economics

Chapter 8. Quantitative Methods in Real Estate Mass Appraisal

Proposed introduction of the ad valorem tax on the real estate market makes it necessary to perform mass appraisal of the real estates. The goal of the chapter was verification of usefulness of econometric and statistical methods in the mass appraisal process. Exponential econometric model and partial τB Kendall correlation coefficients were applied to identify the impact of attributes and location on unit real estate price. The so-called Szczecin algorithm of real estate mass appraisal was the basis in both econometric and statistical approach. Accuracy of both approaches was checked by means of percentage error (PE) and mean absolute percentage error (MAPE) distributions. Real database containing information about 113 transactions with undeveloped land for housing purposes in Szczecin was used. The research results suggest that both methods can be used for real estate mass appraisal; however, the econometric approach gave slightly better results.
Mariusz Doszyń, Krzysztof Dmytrów

Chapter 9. Application of the Survival Analysis Methods in Contemporary Economics on the Example of Unemployment

Contemporary economics uses newer and newer methods of data analysis. Survival analysis is one of such methods. It originated in the demography and reliability analysis. Duration of a phenomenon is observed until the moment of occurrence of specific event. It can be the duration of life, increase or decrease of share prices, debt payment, business life, unemployment. If the occurrence of the event does not take place in specific period, such observation is considered as censored. Survival function is the basic and primary one. It describes the probability of nonexistence of the event until the moment t. The second function is the hazard function that describes the intensity of occurrence of the event in the moment t. In the chapter, selected methods of the survival analysis will be applied for the analysis of duration of the registered unemployment with respect to the unemployed persons’ features. Among the other things, models of risk of the competing events will be analyzed. They allow to estimate the probability and intensity of accepting the job, removal from the register and de-registration due to other causes.
Beata Bieszk-Stolorz

Chapter 10. Could the Volatility Be a Measure of Investors’ Optimism?

The optimism is rather the psychological term describing belief of someone in success or hopefulness and confidence in the decision-making process. After Kahneman and Tversky’s “prospect theory” (Kahneman and Tversky in Econometrica 47:263–291, 1979 [9]) the perception of the role of psychology in economic activities of investors was totally changed. The works of these two authors revolutionized the academic attempt to human judgement. The using of terms “heuristic and biases” caused that errors of theoretical models became to be explained as the result of the influence of human nature (Gilovich and others in Heuristic and biases: the psychology of intuitive judgement. Cambridge University Press, UK, 2002 [5]). The trading volume on stock exchanges always confirms market trends and signals from technical analysis. It is possible to assume that during the growing trend, increase in trading volume describes a belief of investors in the bull market and during decreasing trend in bear market. Both situations could be treated as symptoms of optimism and pessimism of investors. The main goal of the article is to examine that the volatility could be an indicator of investors’ optimism. So, the main hypothesis is that trading volume could be modelled by the market risk (standard deviation of rates of return) using econometric models. Such hypothesis is supported by additional—the sign of the rate of return is a significant binary variable for econometrical describing of trading volume. Different methods of estimation of the volatility parameter will be used in the research—from classical statistics to ARCH-type models. Different length of the time window of the standard deviation calculating was taken into account and the 180 trading days window was chosen for the analysis according to similar works from the past (Majewska in Przeg. Stat. 1–2, 161–170, 2000 [12]). The data used for verification of raised hypothesis was taken from the Warsaw Stock Exchange, and it concerns the group of chosen stock exchange indexes listed on the Warsaw Stock Exchange.
Sebastian Majewski

Chapter 11. Factor Analysis of the Green Management in the Context of Poland Regions Sustainable Development

The green management is one of many propositions of the actions required for adopting the new more sustainable and durable models of the economy which lead to the green economy. This kind of management can be observed on the different levels of economy, national and regional. Its assessment can be based on secondary data collected from the companies and presented by the national statistical offices. The chapter presents the idea of green management in the regional development context. This chapter aims to examine the role of green management in the context of sustainable development and use quantitative tools to solve contemporary problems of green management from the perspective of modern economics. In the first part of this chapter, green management as an element of the green economy is discussed. Next, to the quantitative, a qualitative—descriptive method was used. Therefore, this paper attempts to provide a basic overview of the concept of green management at the introductory level, which contributes to green job creation.
Adam Sulich, Malgorzata Rutkowska

Chapter 12. ESG Risk Perception in Sustainable Financial Decisions. Quantitative Methods Perspective

The role of ESG risk in both decisions of financial institutions and enterprises is systematically growing. The financial sector is particularly predisposed to the exposure of ESG risk, which is an increasingly important element taken into account in the credit risk management process. Therefore, sustainable financial decisions are those that take into account the ESG risk in the decision-making process. The paper discusses the quantitative methods used in the ESG risk analysis. The critical literature review, induction, and deduction methods were implemented to diagnose the significance of qualitative methods in ESG assessment process. Within the methods enabling the analysis on the financial market, the mathematical, statistical, and econometric methods are of particular use. The results of the study confirmed that usage of quantitative tools in the study of ESG factors is beneficial for the analysis of economic and financial conditions of entities.
Magdalena Ziolo, Iwona Bak, Ria Sinha, Manipadma Datta

Chapter 13. Purchase Decision Support with Internet of Things-Based Systems

While current studies in the field of Internet of Things (IoT) tend to focus on the technical aspects, such as programming, hardware and software, publications on the behavioural aspects of IoT remain few. Therefore, the primary objective of this chapter is to contribute to the discussion by providing a conceptual framework for an IoT-based system supporting customer purchase decisions. The system operates on several levels. The major level of operation is customer behaviour and purchase decision support. The second level concerns generating information regarding the shelf content status and reporting on the dynamics of stock-level changes, in order to shape an appropriate marketing strategy and develop effective stocking management processes. The third foundation of the system encompasses the technology and the essential elements ensuring efficient operation of the system. The capabilities of IoT are constantly progressing and expanding, thus leading to the development of software and hardware tools compatible with particular phases of service and customer support process. The presented study employs two research methods: self-observation and the literature study. The proposed solution requires that the system is equipped with necessary software and sensors connected in a wireless data transmission network of Internet of Things.
Monika Kulisz, Jerzy Lipski, Agnieszka Bojanowska

Chapter 14. Application of EEG Metrics in the Decision-Making Process

The decision-making process is a complex task uses the multi-criteria methods in the formalized decision support. Decisions are direct reflection of decision maker preferences. Multi-criteria methods use different methodological approaches (algorithms) to determine the final assessment of decision variants (e.g., ranking). Decision maker must do many actions (partial evaluations) in some of these methods. Issues of the decision maker’s engagement in the assessment process arise which can be identified using measurements by EEG. It is possible to identify various internal processes occurring with the decision maker during individual stages of the calculation procedure. Various types of EEG metrics are used for this, such as the index of frontal asymmetry, engagement, distraction, etc.
Mateusz Piwowarski, Uma Shankar Singh, Kesra Nermend

Chapter 15. Examining the Degree of Engagement of a Participant in Economic Games Using Cognitive Neuroscience Techniques

The popularity of economic games is used mainly for learning. It causes a need for methods allowing to evaluate their content in terms of player’s satisfaction already at the pre-production stage. There are already methods to determine a player’s interest in a game, but they do not always allow for objective and unambiguous determination of a player’s involvement. Cognitive neuroscience methods can give such an assessment. The aim of the research presented in this chapter is to develop a concept of a procedure for investigating a player’s involvement in a game using cognitive neuroscience methods. The chapter presents the concept of the research procedure, the survey, the prototype of the game and the review of the engagement indexes. On the basis of the analysis of the results of the survey, it was stated, among others, that the respondents do not like to take a big risk related to money. Therefore, in the designed economy game, the player should be accustomed to taking risks in order not to be discouraged from the game. In addition, through the use of cognitive neuroscience, we are able to have knowledge of the level of engagement of the player in each part of the game. Then, game developers will be able to improve them in order to get the greatest satisfaction from the player. In the case of economic games, this will translate into a longer time spent by the player on the game, and thus his skills acquired during the game will be greater.
Konrad Biercewicz, Mariusz Borawski

Chapter 16. Simulation Modeling to Verify the Efficiency of Information Transfer

Research problem discussed in this chapter refers to simulation model for verification communication effectiveness. Communication and knowledge management processes usually suffer from susceptibilities or malfunctions. These result in delays, communicate distortion and reduced efficiency of knowledge-to-use transformation. Thereupon, organizational goals’ achievement, staff engagement and overall management efficiency are lowered. Hence, there is a need for comprehensive, ready-to-use model for application of communication and knowledge management processes. Model that allows to determine assumptions. Boundaries and simulating behavior of real communication and knowledge management processes. In this chapter, only graph modeling part derived from general ATENA model will be discussed.
Katarzyna Rostek, Radosław Zając

Chapter 17. Hybrid System Dynamics—Agent-Based Simulation for Research in Economics and Business

In a rapidly evolving business environment, the question of searching of effective methods and tools for researching and analyzing economic entities becomes more and more important. One of the ways of studying this world of growing dynamic complexity and supporting the process of decision-making is the use of computer simulation. According to the reference literature, there are three most commonly used methods of computer simulation for research in management: system dynamics, discrete event, and agent-based simulation. However, the complex, multifaceted nature of modern-day economic and business systems can pose considerable challenges for single-methodology simulation approach. In such cases, it may be that (should be removed) an alternative simulation approach, using either another modeling paradigm or a hybrid approach, could provide a simpler, more natural, or more efficient solution. Hybrid simulation, defined as a combination of two or more computer simulation methods, has become an increasingly common approach to modeling complex systems in the past two decades. The study concentrates on one particular hybrid—that involving agent-based simulation (ABS) and system dynamics (SD). It aims to discuss the issue of combining system dynamics and agent-based simulation approaches for research in economics and business. First, the two methods will be briefly characterized with the indication of their differences and similarities. Then, the possible ways of combining them in a single model will be described. Finally, examples of hybrid SD-ABS model applications in economics and business will be presented.
Małgorzata Łatuszyńska

Practical Issues—Case Studies


Chapter 18. Measuring Neurophysiological Signals, Fixations and Self-report Data for Product Placement Effectiveness Assessment in Music Videos

Product placement is a marketing technique that, by inserting products into a narrative structure, constitutes a likely effective tool to increase the visibility and notoriety of a brand. For years, the opportunities for product placement in music videos were limited. Recently, there has been a growth of interest for this tool/advertising modality since the digital community allowed the possibility to move videos from television to the Internet. The scope of the present study is to investigate the effectiveness of the product placement in music videos. An electroencephalographic (EEG) index called mental effort (ME) has been analyzed, in addition to the emotional index (EI), calculated by the combination of galvanic skin response (GSR) and heart rate (HR) signals. Self-report responses have also been collected through an online questionnaire and interviews, since one experimental question was to investigate whether viewing a video containing a commercial product could influence the declared recall of the product inserted in it and the spontaneous recall of the video itself. Furthermore, fixations related to the product inserted in videos have been obtained by the eye-tracking technique (ET). Higher values of the ME (p = 0.016) and EI (p = 0.033) have been found for videos with product placement in comparison to videos without it. In addition, results show that the number of fixations affects the recall of the showed products (p < 0.001). These findings highlight that using product placement in famous singers’ music videos is an effective technique for prompting product recall and how it helps to focus the visual attention on them.
Ana C. Martinez-Levy, Giulia Cartocci, Enrica Modica, Dario Rossi, Marco Mancini, Arianna Trettel, Fabio Babiloni, Patrizia Cherubino

Chapter 19. Objective and Subjective Perception of Real Estate Features in the Light of an Experimental Study

Issues related to the objectification of the assessment of real estate as a subject of market turnover or valuation constitutes one of the basic problems of real estate management. The problems described are not limited only to the real estate market. It is universal in relation to various types of consumer and capital goods, especially in the case of the assessment of qualitative characteristics of these goods. The research problem concerns the issue of objectification of the assessment of the quality characteristics of real estate using standardized methods for measurement. For this purpose, an experimental study was carried out on the perception of the characteristics of real estate and the assessments made by real estate appraisers, using the modified method of semantic differential. The obtained results confirmed that the use of this standardized measurement tool leads to an increase in the objectivity of measurement. In the following stages, the results obtained should be generalized for the entire population of real estate appraisers, ensuring that the research is representative.
Iwona Foryś, Radosław Gaca

Chapter 20. Optimization of Location Attractiveness Zones for the Purpose of Property Mass Appraisal

Mass land appraisal is a specific type of appraisal. A suitable algorithm used for mass appraisal constitutes one of the main determinants of the quality of achieved results. Many of the algorithms cluster real estate in accordance with specific criteria, such as a real estate type, its characteristics or location. Assuming a “real estate location” as a clustering basis, we use terms such as a taxation zone (which originates from a basic application of mass appraisal, which involves ad valorem real estate taxation), along with an elementary terrain (which originates from the nomenclature used in spatial planning). The main goal of this chapter is to find the solution to the designation of such zones, or real estate clusters for the purpose of mass land appraisal conducted with the use of Szczecin Algorithm of Real estate Mass Appraisal (SAREMA). Each mass appraisal algorithm has its own specificity, and consequently, it may pose various requirements to designated zones or real estate clusters (here referred to as location attractiveness zones—LAZ’s). The chapter presents the methods of LAZ’s designation formed on the basis of the existing cadastral districts, real estate market analysis, and hierarchical clustering. The chapter is additionally focused on the manner of determining LAZ optimal number and consequently the number of properties that will be included in an automated mass appraisal process in a given zone. The uniformity of isolated LAZ’s was subject to verification with the use of an entropy ratio, especially constructed for that purpose. The study was conducted on the land plots located in the city of Szczecin.
Sebastian Kokot, Sebastian Gnat

Chapter 21. Market Timing Models for Equity Funds Operating on the Polish Market in the Years 2003–2017

The use of a proper investment policy by fund managers has a huge impact on the results achieved. Asset selection for the portfolio is of key importance, in line with the investment policy declared by the fund, and the appropriate timing of changes in the assets in the portfolio. This research aims to assess whether managers in the Polish market have the ability to select assets with a sense of market timing and selectivity. The research concerns domestic equity funds operating in between 2003 and 2017, from which 15 were selected. The entire research period was divided into three five-year sub-periods, to some extent coinciding with changing market conditions, and seven two-year periods, covering the years 2003–2016. It was assumed that the results for the entire period describe long-term strategies of funds, five-year and two-year periods, being respectively the medium and short term. The basis for calculations was the monthly rates of return on participation units. The research was carried out using the Treynor–Mazuy, Henriksson–Merton, and Busse models. WIBOR 1M was accepted as a risk-free rate, and the WIG index was the market factor. The summary of the research is a comparison of the results regarding the selectivity of asset selection, market timing, and the ability of managers of open investment fund portfolios to respond to the market situation. The final conclusions are not very favorable for the managers, and the clients require active involvement in the selection of funds.
Dorota Żebrowska-Suchodolska, Andrzej Karpio

Chapter 22. Identification of EU Countries Due to the Quality of Data on Intra-Community Supplies of Goods Shipped from Poland in the Years 2005–2017

Public statistics data regarding trade in goods between European Union Member States are collected and disseminated by Eurostat. They are aggregated data collected from national statistical offices from all Member States. In Poland, as in all other countries within EU, Intrastat system was introduced. Its main goal is collecting data from declarations submitted by businesses shipping and acquiring goods from partners in other EU Member States. Data from Intrastat (intra-Community trade) as well as Extrastat (foreign trade with third parties, i.e. partners residing outside of EU) serve as a base in research of foreign trade or economic development as well as establishing many macroeconomic measures. In the survey presented, data from Eurostat’s COMEXT database was used. We utilised individual as well as aggregated indices of mirror data divergence. The aim of the paper was to analyse intra-Community supplies from Poland to the whole of EU as well as to individual countries over the period 2005–2017. Then, a ranking of Poland’s trade-partner countries was created for every year under consideration. Those rankings had been compiled together and further conclusions about dynamics were drawn, particularly we show changes in data quality of Poland’s intra-Community supplies.
Iwona Markowicz, Paweł Baran

Chapter 23. Measuring the Provision of Access to Sustainable Energy in the EU as a New Task of Modern Economics in Line with Agenda 2030

The purpose of the chapter is to measure and assess the level of sustainable energy provision in EU countries in the context of Goal 7 of the Agenda 2030. Ensuring access to sustainable energy for people and increasing energy efficiency in all sectors of the economy is one of the most important goals both in the European Union (EU) and globally. It was recognized that access to modern energy services at affordable prices is necessary to achieve the goals of the concept of sustainable development, Agenda 2030, Europe 2020 strategy, and the European energy policy. Precise evaluation of achievements in this area (using modern quantitative methods) is a relatively new issue, both in economic practice and in modern economics; therefore, there is a need to develop ways to measure access to sustainable energy, other than simply analyzing the time series of data in individual years on which the previous research was based. Hence, an attempt was made to use the taxonomic measure of development, to assess the achievements of individual EU countries, and to organize them according to the degree of sustainable energy provision, which is a novelty in this respect and includes the article to the research trend oriented toward the operationalization of the concept of sustainable development. The research used eight core indicators for Sustainable Development Goals (SDGs), seven reported by Eurostat and set by the UN. The research period is 2010 and 2016. The conducted research allowed to formulate conclusions on the current achievements of the member states and the EU as a whole with respect to the achievement of Goal 7 of the Agenda 2030, as well as formulating recommendations for necessary actions.
KRYK Barbara

Chapter 24. Pilot Study as a Case of Applying an Experimental Approach to the Implementation of Tasks in the Public Sector

Experiments in the public sector are not widely used. However, as the practice shows, they are used to determine the expected utility of the proposed solutions or implemented changes, and the dominant method is pilotage. The study presents the theoretical approach to the experiment using pilotage, so as to show that the experiment gives the opportunity to indicate a “better” solution and provide justification for such a selection. In the chapter, the authors analysed the adopted assumptions of selected pilot implementations in the PSUs, the aim of which was to test and evaluate the solution to be used in practice as an expression of public participation. The analysis indicated that the visible use of piloting in the behaviour modelling of individuals included in the society is a good tool to maximise the usefulness of public tasks designed by LGUs.
Beata Zofia Filipiak, Marek Dylewski

Chapter 25. What Really Helps Us Make a Choice? An Experimental Evaluation of AHP

In this study, we used a laboratory experiment to test how well AHP is coping with identifying our preferences and what persuades us to accept the AHP outcomes: the result itself or perhaps a “scientific” way of obtaining it. Participants were asked to give rankings at three stages of the experiment: one at the beginning, one after filling in the AHP matrices, and the final one after learning the AHP ranking. Half of the participants were presented with the actual and half with the manipulated AHP ranking. Using nonparametric statistical tests, we found evidence that among the participants of the experiment, the process of filling in the AHP matrices itself had an impact on the final decision. However, the reformulation of the final decisions under the influence of the AHP ranking took place only among the participants who were presented with manipulated results. In addition, the experiment showed that the AHP ranking was more distant from the final ranking than the two previous rankings given by the participants.
Jacek Cypryjański, Aleksandra Grzesiuk, Kamil Bortko

Chapter 26. Declared Preference Method—Research Experiment Concerning Air Quality

Externalities take place when an economic operator does not experience all costs (in case of negative externalities) or benefits (in case of positive externalities) involved in his activities, which are passed on to other economic operators. Specific challenge to economists is posed by negative technological externalities, which have also triggered experimental research studies using the declared (stated) preference method. The aim of the experiment was to find the most preferred solution geared towards the elimination of the source of air pollution in a village and to learn about respondents’ willingness to pay (WTP) for the public good supplied as a result of such elimination. Out of the five proposed options, one of the most preferred by respondents was a voluntary fundraising initiative to collect money for the construction of the neighbour’s connection that would go on until they collect PLN 10 k but not longer than for a year. By using the WTP method, we arrived at an unambiguous valuation of the good expressed in terms of money. The most preferred tax rate revealed as a result of the survey suggests that the valuation of the public good was underestimated. As a result, the situation described in the case study cannot be resolved successfully.
Małgorzata Burchard-Dziubińska, Elżbieta Antczak, Agnieszka Rzeńca
Additional information

Premium Partner

    Image Credits