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The authors discuss the econometric underpinnings of Barro (2006)'s defense of the rare disaster model as a way to bring back an asset pricing model “into the right ballpark for explaining the equity-premium and related asset-market puzzles.” Arbitrarily low-probability economic disasters can restore the validity of model-implied moment conditions only if the amplitude of disasters may be arbitrary large in due proportion. The authors prove an impossibility theorem that in case of potentially unbounded disasters, there is no such thing as a population empirical likelihood (EL)-based model-implied probability distribution. That is, one cannot identify some belief distortions for which the EL-based implied probabilities in sample, as computed by Julliard and Ghosh (2012), could be a consistent estimator. This may lead to consider alternative statistical discrepancy measures to avoid the problem with EL. Indeed, the authors prove that, under sufficient integrability conditions, power divergence Cressie-Read measures with positive power coefficients properly define a unique population model-implied probability measure. However, when this computation is useful because the reference asset pricing model is misspecified, each power divergence will deliver different model-implied beliefs distortion. One way to provide economic underpinnings to the choice of a particular belief distortion is to see it as the endogenous result of investor's choice when optimizing a recursive multiple-priors utility a la Chen and Epstein (2002). Jeong et al. (2015)'s econometric study confirms that this way of accommodating ambiguity aversion may help to address the Equity Premium puzzle.

I survey applications of Markov switching models to the asset pricing and portfolio choice literatures. In particular, I discuss the potential that Markov switching models have to fit financial time series and at the same time provide powerful tools to test hypotheses formulated in the light of financial theories, and to generate positive economic value, as measured by risk-adjusted performances, in dynamic asset allocation applications. The chapter also reviews the role of Markov switching dynamics in modern asset pricing models in which the no-arbitrage principle is used to characterize the properties of the fundamental pricing measure in the presence of regimes.

This article develops an analysis of the conventional formation of expectations by means of introducing an overlooked factor in the analysis: the role of inference. Individual inferences and changes in evidential weight of beliefs and in the state of confidence are integrated with an analysis of the conventional character of expectations in a manner that is consistent with evidence provided by research in social psychology. This approach provides the link between the “agency” approach and the “structure” approach in Keynesian analysis that has been stressed as an important development. It also improves our understanding of the mechanisms underlying economic behavior under uncertainty such as liquidity‐preference in different social and cultural settings.

This paper aims to reply to Dequech's comment in the International Journal of Social Economics on the analysis of the formation of conventional expectations under strong uncertainty, which was proposed in the present author's 2004 article in the International Journal of Social Economics.

The scope of this reply is to evaluate through a theoretical examination the validity of Dequech's claim contained in his comment that his initial analytical scheme of the state of expectations presented in his 1999 article was general enough to accommodate the psychological considerations, which were raised in the present author's 2004 article and which were associated with Keynes's analysis as well as with developments in the field of social psychology.

The paper demonstrates that both Dequech's initial article of the state of expectations and his subsequent comment on the present author's contribution on the conventional formation of expectations under strong uncertainty in the International Journal of Social Economics overlooked the psychological nature of the process of inferences, a fundamental factor in Keynes's discussion of the formation of conventional expectations. However, when social psychology considerations are introduced in the analysis (as it was the case with the present author's approach) and when the remarkable theoretical and empirical progress in the field of social psychology is taken into account, Dequech's claim of the generality of his framework is not justifiable because both the specific nature and the substantive impact of the social psychology issues associated with the role of inferences are overlooked across his analysis. It is proposed that a theoretical scheme that uses the wealth of evidence of contemporary social psychology is more promising for a rigorous development of a theory of expectations under strong uncertainty.

The paper sheds further light on expectancy theory.

For the 3.8 per cent of people with intellectual disabilities (IDs) who have offended sexually, the main form of treatment is the group-based, cognitive-behavioural, adapted sex offender treatment programme (ASOTP) that focusses on challenging cognitive distortions condoning sex offending. The purpose of this paper is to provide an evaluation of how effective the ASOTP is at reducing ID sex offenders’ cognitive distortions.

Three databases were searched systematically: PsycINFO, MEDLINE and Web of Science. Six studies met the inclusion criteria, yielding 118 participants. Using a random-effects model, effect sizes were calculated using pre- and post-treatment scores on a measure of cognitive distortions. The standardised mean difference (SMD) was 1.77 (95 per cent CI: 1.06, 2.46), which was statistically significant (p<0.001) and “large”. Sensitivity analysis demonstrated that this SMD was robust, and a check for publication bias revealed that it was unlikely that the “file drawer problem” confounded the meta-analysis.

These results indicated that the ASOTP can significantly reduce ID sex offenders’ cognitive distortions, regardless of treatment length, IQ level, language abilities, or offence type. Consistent with earlier reports, longer treatment resulted in the greatest reductions: the optimum treatment length was 24 months.

The ASOTP’s current evidence is comprised wholly of case and quasi-experimental studies, none of which employed control groups. This paper highlights how there is a dire need for high-quality experimental evaluation of the ASOTP.

Clinicians are advised to continue using the ASOTP as the main treatment for ID sex offenders until the effectiveness of the ASOTP is further examined using randomised controlled trials.

This is the first meta-analytic review of the effectiveness of the ASOTP.

The current study is an exploratory study examining the relationship between the abuse histories of 89 sexual offenders and the constructs of locus of control, sexual attitudes, general empathy, and denial. Of the 89 offenders, 14.6% were sexually abused, 13.5% physically abused, and 9% both sexually and physically abused, with 61.5% having no abuse history. Analyses indicated that motivation to change was higher for abused versus non‐abused offenders, and that those who were sexually abused had significantly more cognitive distortions about children than those who experienced physical abuse. Although no differences emerged in locus of control scores, our findings indicated that physically abused offenders were more able to take on the perspective of others than those who have not experienced physical abuse. The findings provide several avenues to pursue in examining the longstanding effects of abuse in the thinking and cognitions of sexual offenders.

The purpose of this study is to analyze the problem of optimal product line design in marketing channels where consumers are heterogeneous in both horizontal and vertical dimensions.

This paper develops a model to evaluate when it is preferable for a firm to extend the product line in a vertical or horizontal direction. Consumers are modeled as being vertically heterogeneous with respect to their valuation of quality and horizontally heterogeneous with respect to their preference on the esthetic component of the product. These model characteristics allow us to consider a broader set of product line extension strategies. By considering both a vertically integrated channel and a decentralized channel, this study investigates how channel structure influences optimal product line design. The problem with supplemental numerical analyses is mathematically analyzed.

The analysis shows that a horizontal product line extension strategy that offers the customized product can be used as an alternative to a vertical product line extension strategy. If the fixed cost is not too high, offering the customized product with low quality may be preferred to the quality-based segmentation strategy. Furthermore, the analysis shows that the channel structure is influential as the preference for the horizontal product line extension strategy is more pronounced in the decentralized channel than in the centralized channel.

The analysis presented in this paper is limited by the consideration of full market coverage. Further research is needed to see how the results can be generalized to the case with partial market coverage.

The analysis suggests that a firm may consider product customization as part of its product line strategy. Information regarding market characteristics and channel structure is important when deciding on the optimal product line design.

The model reflects a more realistic marketing strategy and channel structure than previous studies that typically consider product line extension in only one direction and focus on the centralized distribution channel. Combining the standard product line extension and customization strategies also represents an important contribution to the literature. These extensions produce interesting new results and insights into a firm’s optimal product line design strategy.

The paper aims to expand on the works well documented by Joy Boulamwini and Ruha Benjamin by expanding their critique to the African continent. The research aims to assess if algorithmic biases are prevalent in DALL-E 2 and Starry AI. The aim is to help inform better artificial intelligence (AI) systems for future use.

The paper utilised a desktop study for literature and gathered data from Open AI’s DALL-E 2 text-to-image generator and StarryAI text-to-image generator.

The DALL-E 2 significantly underperformed when it was tasked with generating images of “An African Family” as opposed to images of a “Family”. The pictures lacked any conceivable detail as compared to the latter of this comparison. The StarryAI significantly outperformed the DALL-E 2 and rendered visible faces. However, the accuracy of the culture portrayed was poor.

Because of the chosen research approach, the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed propositions further. The implications, however, are that more inclusion is warranted to help address the issue of cultural inaccuracies noted in a few of the paper’s experiments.

The paper is useful for advocates who advocate for algorithmic equality and fairness by highlighting evidence of the implications of systemic-induced algorithmic bias.

The reduction in offensive racism and more socially appropriate AI can be a better product for commercialisation and general use. If AI is trained on diversity, it can lead to better applications in contemporary society.

The paper’s use of DALL-E 2 and Starry AI is an under-researched area, and future studies on this matter are welcome.

We present a conceptual model of ethical behavior in groups and the role of group cohesion in enabling unethical behavior. We make the distinction between unethical actions that benefit an individual's work group, and actions that benefit the individual to develop a typology of unethical actions. We propose that cohesion influences unethical actions of group members through three mechanisms – giving group members social support, enabling group members to diffuse responsibility for their actions throughout the group, and providing a rationale upon which group members can justify their actions to themselves. We hypothesize that group cohesion increases the likelihood of unethical actions that benefit the group, as well as the individual, while not affecting the group. In contrast, we expect cohesion to reduce the likelihood of unethical actions that harm the group. We also present boundary conditions by specifying how group norms and the status of the individual within the group affect the relationships that we propose. In a preliminary test of the hypotheses using scenarios, we found support for some parts of the model. We discuss the implications of our findings for ethical behavior in groups and organizations.