Birgitte Sloth

The financial crisis and the systemic failure of academic economics

The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the professions focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.

The effect of a high-MUFA, low-glycaemic index diet and a low-fat diet on appetite and glucose metabolism during a 6-month weight maintenance period

We aimed to test the effects of three different weight maintenance diets on appetite, glucose and fat metabolism following an initial low-energy diet (LED) induced body weight loss. Following an 8-week LED and a 2-3-week refeeding period, 131 subjects were randomized to three diets for 6 months: MUFA, moderate-fat (35-45 energy percentage (E%) fat), high in MUFA with low glycaemic index; LF, low fat (20-30 E% fat) or CTR, control (35 E% fat). A meal test study was performed in a subgroup, before and after the 6-month dietary intervention, with forty-two subjects completing both meal tests. No difference in body weight, energy intake or appetite ratings were observed between diets. Both the LF and MUFA diets compared to CTR diet reduced postprandial glycaemia and insulinaemia and lowered fasting insulin from month 0 to month 6. Following the 8-week LED period lower levels of the appetite regulating peptides, pancreatic polypeptide, peptide YY, glucagon-like peptide-1 and glucagon-like peptide-2, along with increased appetite scores were seen in comparison to measurements performed after the 6-month dietary intervention. In conclusion, the two competing diets, MUFA and LF, were equally good with respect to glucose metabolism, whereas the CTR diet resembling the typical Western diet, high in SFA, sugar and high glycaemic carbohydrates, indicated associations to lowering of insulin sensitivity. Lower levels of appetite regulatory peptides along with increased appetite scores following an 8-week LED and 2-3-week refeeding period, suggest that strategies for physiological appetite control following a LED period are needed, in order to prevent weight regain.

The Product of Capacities and Belief Functions

Capacities (monotone, non-additive set functions) have been suggested to describe situations of uncertainty. We examine the question of how to define the product of two independent capacities. In particular, for the product of two belief functions (totally monotone capacities), there is a unique minimal product belief function. This is characterized in several ways.

A Low Glycemic Index Diet Does Not Affect Postprandial Energy Metabolism but Decreases Postprandial Insulinemia and Increases Fullness Ratings in Healthy Women

At present, it is difficult to determine whether glycemic index (GI) is an important tool in the prevention of lifestyle diseases, and long-term studies investigating GI with diets matched in macronutrient composition, fiber content, energy content, and energy density are still scarce. We investigated the effects of 2 high-carbohydrate (55%) diets with low GI (LGI; 79) or high GI (HGI; 103) on postprandial blood profile, subjective appetite sensations, energy expenditure (EE), substrate oxidation rates, and ad libitum energy intake (EI) from a corresponding test meal (LGI or HGI) after consuming the diets ad libitum for 10 wk. Two groups of a total of 29 healthy, overweight women (age: 30.5 ± 6.6 y; BMI: 27.6 ± 1.5 kg/m(2)) participated in the 10-wk intervention and a subsequent 4-h meal test. The breakfast test meals differed in GI but were equal in total energy, macronutrient composition, fiber content, and energy density. The LGI meal resulted in lower plasma glucose, serum insulin, and plasma glucagon-like peptide (GLP)-1 and higher plasma glucose-dependent insulinotropic polypeptide concentrations than the HGI meal (P ≤ 0.05). Ratings of fullness were slightly higher and the desire to eat something fatty was lower after the test meal in the LGI group (P < 0.05). Postprandial plasma GLP-2, plasma glucagon, serum leptin, plasma ghrelin, EE, substrate oxidation rates, and ad libitum EI at lunch did not differ between groups. In conclusion, postprandial glycemia, insulinemia, and subjective appetite ratings after a test meal were better after 10-wk ad libitum intake of a LGI compared to a HGI diet. EE and substrate oxidation rates were, however, not affected. These findings give some support to recommendations to consume a LGI diet.

Expected utility with lower probabilities

An uncertain and not just risky situation may be modeled using so-called belief functions assigning lower probabilities to subsets of outcomes. In this article we extend the von Neumann-Morgenstern expected utility theory from probability measures to belief functions. We use this theory to characterize uncertainty neutrality and different degrees of uncertainty aversion.

Decentralized trade with bargaining and voluntary matching

Rubinstein and Wolinsky (1990) study a market with one seller, two buyers, and voluntary matching. Both the competitive outcomepc and the bilateral bargaining outcomepb are possible in subgame perfect equilibrium. We consider two variations. First, if there is a cost larger thanpc−pc to the seller of changing partner,pc is the unique outcome, otherwise no restriction expires. In the second variation the seller makes anε-binding preannouncement of whether he will change buyer after disagreement. Ifε is small there are equilibrium prices close topc. But for anyε, if the discount factor is close to 1, the unique equilibrium price ispc.

Bargaining Sets with Small Coalitions

We study two alternative definitions of the bargaining set in large (atomless) economies; the local bargaining by MasColell (1989) and the global bargaining set by Vind (1992). We alter these definitions to limit the size of the permitted size of the involved coalitions. It turns out that the local bargaining set becomes very large, whereas the global bargaining set is unaltered.

Testing the Intransitivity Explanation of the Allais Paradox

This paper uses a two-dimensional version of a standard common consequence experiment to test the intransitivity explanation of Allais-paradox-type violations of expected utility theory. We compare the common consequence effect of two choice problems differing only with respect to whether alternatives are statistically correlated or independent. We framed the experiment so that intransitive preferences could explain violating behavior when alternatives are independent, but not when they are correlated. We found the same pattern of violation in the two cases. This is evidence against intransitivity as an explanation of the Allais Paradox. The question whether violations of expected utility are mainly due to intransitivity or to violation of independence is important since it is exactly on this issue the main new decision theories differ.

Glycemic and insulinemic responses as determinants of appetite in humans

Many studies have confirmed NT-proBNP as a sensitive marker for left ventricular (LV) hypertrophy and/or asymptomatic left ventricular dysfunction and it is particularly reliable because of its high negative predictive value To our knowledge, recent findings on the relation between NT-proBNP and morphologic and dynamic cardiac abnormalities in obesity are still inconsistent and controversial. We measured NT-proBNP concentrations in 27 severely obese women with no complications and 15 normal-weight patients. All subjects were young with normal renal function, pre-menopausal, normotensive, normoglycemic, not dyspneic, drug-free women; thus excluding the possibility that high NTproBNP concentrations may be associated with hypertension and diabetes. All patients and controls underwent echocardiography. Visceral adipose tissue (VAT) and subcutaneous adipose tissue (SAT) areas in the obese group were assessed by computed tomography. Serum NT-proBNP concentrations were measured using the proBNP (Roche) assay on an Elecsys 2010 analyzer (Roche). Obese women had higher mean NT-proBNP concentrations than controls (P<0.001). NT-proBNP concentrations were correlated with the VAT area (r=0.60, P<0.0001), VAT/SAT (r=0.38, P<0.001) but not with SAT (P= -0.61). Fifteen obese patients with a greater amount of visceral fat (VAT >130 cm) had higher mean NT-proBNP concentrations than those with VAT less than 130 cm (n= 12) (P<0.02). The most novel finding in our study is the significant correlation between NT-proBNP and echocardiographic parameters in an homogeneous population, even after correction for increased VAT (P<0.05). This may indicate that NT-proBNP itself could serve as an indicator of LV morpho-functional changes. T3:PO.02

On the structural difference between the evolutionary approach of Young and that of Kandori, Mailath and Rob

We provide robust examples of symmetric two-player coordination games in normal form that reveal that equilibrium selection by the evolutionary model of Young (1993) is essentially different from equilibrium selection by the evolutionary model of Kandori, Mailath and Rob (1993).