Influence of Race in 2014 Senator Elections

Influence of Race in 2014 Senator Elections Introduction: Most people who have been disadvantaged because of racial issues are the blacks. For example, in the 18th and 19th century, they were not allowed to vote or engage in any political activity. This is mostly contributed to the perception that the whites had regarding the black people during the slave age. During the period of slavery, black people were viewed as properties, and they did not have any legal and political rights[1]. By 1869, following the end of the civil war, there were numerous debates concerning the rights of slaves, in the American political process[2]. This led to the enactment of the Fifteenth Amendment, which was ratified in 1870. This amendment made it illegal for the state or federal government to prevent anybody from voting or participating in the political process, based on their color, race, or condition of servitude[3]. By carefully analyzing this law, it is possible to denote that the intention of the congress was to promote equal political participation, amongst the various communities, residing in United States. The greatest breakthrough, in preventing racism in political process came with the enactment of the 1965 Voting Rights Act[4]. This act prohibited the state or federal government from preventing an individual from participating in the political process, based on their race, gender, or even religion. Furthermore, it created institutions that could oversee elections, in areas where there is discrimination, and it banned the language screening tests that candidates had to pass, before being allowed to participate in the political process[5]. This paper seeks to analyze whether race played a crucial factor, in determining the results of the senatorial elections of 2014. York. In this election, John Liu an Asian ran against Tony Avella, a Caucasian. The two were both democrats; however, Avella was part of the Independent Democratic Conference Party. This paper takes a stand that the elections that pitted John Liu and Tony Avella were not influenced by race. Background Information: John Chun Liu was born in the year 1967, in Taiwan. At the age of five years, John Chun Liu, together with his parents migrated to United States, and they lived in the city of New York. He was enrolled in the public schools governed and managed by the State Government. John Chun Liu attended his primary education at Queens School, and secondary education at Bronx High School[6]. This was in the year 1985. Mr. Liu attended Binghamton University, and he did a course in mathematical physics. He was also a student’s activists, believing in the advancement of students rights. This included the right to getting quality education, and fair fees[7]. This made him rise to the position of the vice president for the school’s student association[8]. Mr. John Chun Liu worked as a manager, for the auditing firm, PricewaterhouseCoopers, and he was also the President of North Flushing Civic Association[9]. This is before he was elected to the city council of New York. Liu managed to se rve the New York City Council, and he represented district 20. He was elected to the council in the year 2001, to represent the region of Northeast Queens. He was subsequently re-elected, in the elections of 2003, and that of 2005. Between the periods of January 2010, to December 2013, John Chun Liu served as the comptroller of the city of New York. He also unsuccessfully viewed for the position of the mayor of New York, in the elections of 2013[10]. In 2014, Mr. Liu contested for a senatorial position against Tony Avella. Tony Avella was born in the year 1951, and he is currently a Democratic State Senator. He comes from the 11th Senate district of New York. Tony Avella served as a member of the city council of New York, between the periods of 2002, to the periods of 2009. He managed to represents the 19th council district, which served the districts of Whitestone, Floral Park, Douglaston, Little Neck, College Point, etc. At the city council of New York, Avella served at six subcommittees, and this includes committee on building and housing, higher education, veterans, land use, fire and criminal justice, and zoning and franchises. He is an Italian-American, and he is the founder of the Italian-American Caucus. For purposes of contesting for the mayoral elections of 2009, Mr. Avella did not defend his municipal seat in 2009. His campaigning platform was on animal rights, and against over-development. However, he was not successful in these mayoral elections, and he was defeated by Bill Thompson. Avell a is a graduate of the Hunter College, and a resident of the Queens region. He first contested for the state senate in 2010, defeating Frank Padavan. In 2014, Tony Avella and John Liu contested for a democratic nomination for the state senatorial seat of State Senate District II. There were no republicans seeking this seat[11]. Methodology: The 2014 New York Senatorial elections in the District II were tightly contested by John Liu and Tony Avella. This election was very tight, and there were a variety of issues that affected the outcome of the elections. It is important to explain that these two people were both democrats, and hence the competition was a primary, in which the Democratic Party was seeking a candidate to sponsor for this senatorial seat. Furthermore, there wasn’t any republican challenger. This means that the bearer of the democratic flag, as the representative of the party, was sure to win the elections. It is based on this fact, that the race was tightly contested between Mr. Liu and Mr. Avella. During the primary campaigns, Mr. Avella leveled a series of accusations against Mr. Liu. Some of these accusations touched on his activities, when he served as the Comptroller of the City of New York[12]. For example, one of the criticisms, leveled against Mr. Liu, was based on the fact that he owed the city of New York, some 500,000 dollars in fines. This is in respect to hanging campaign posters, during the time when he was running for the seat of the New York City Comptroller. These campaign posters were illegally placed. Furthermore, two of the campaign workers of Mr. John Liu were convicted in 2013, for purposes of illegally funneling campaign money, through straw donors. Investigations into the financial activities of Mr. Liu began in August of 2013, when he was accused of illegally raising campaign funds. These investigations were able to find some irregularities on the sources of funding, for Mr. Liu, and this included undisclosed funding, and straw donors. These revelations concerning the fundraising activities of Mr. Liu began in October 2011, when the media began publishing articles, which revealed several inconsistencies, regarding the campaign funds, after interviewing approximately 100 households that were identified as having donated to the campaign funds, for Mr. Liu’s candidacy. Furthermore, 24 irregulariti es were found, and this includes donations from people who claimed that they did not donate. However, their employers claimed that they donated this money on behalf of their employees. Most of the irregularities found in the campaign money donated to Mr. Liu were connected to the business people of Asian origin. On a specific note, the money was connected to the Chinese business personalities. Political scandals are one of the major issues that politicians normally use to discrete the candidacy of their rivals[13]. By highlighting the political scandals facing their rivals, politicians normally hope that voters will no longer favor their rivals, and hence they would vote for them. Under this senatorial election, Mr. Avella hoped that by identifying the political scandals and Mr. Liu had, then voters would reject his candidacy[14]. However, Mr. Liu was able to capitalize on the fact that Avella was collaborating with the Republicans, for purposes of frustrating the democrats in the senate house. This means that Mr. Tony Avella was the sitting senator, and his position was assured, if he could not collaborate with the Republicans. In politics, collaboration with rival parties is an indication that an individual is not faithful, and loyal to the party[15]. Mr. John Liu capitalized on this weakness, and continuously identified it to the voters. However, in his defense, Mr. Avella denoted that through his collaboration, he managed to raise over 300,000 dollars, for funding the North Flushing Center[16]. This is an institution responsible for providing academic training to the students who are in New York. Mr. Avella was therefore saying that through his collaboration with the Republicans, he was able to improve the educational industry in New York. This is a key factor for the economic growth of the state of New York. This is because the institution would play a role in training medical practitioners, economists, bankers, etc[17]. Through this defense, Tony Avella was justifying his decision to work with the Republicans, despite being aligned to the Democrats. This means that Avella was separating himself from the support of the Queens Democrat, which was crucial for him to gain the nomination of the Democratic Party. Furthermore, Mr. Jo hn Lui was able to gain the support of Joseph Crowley. He was the chairman of the Queens Democratic supporters, who rallied behind him, for purposes of dethroning Mr. Tony Avella[18]. This was a crucial support base that Mr. Lui relied on, for purposes of getting support to dethrone Tony Avella. This group comprised of all races that is African Americans, Caucasians, and Asian Americans. Mr. Crowley played a crucial role in coming up with an anti-Avella campaign mechanism that was aimed at defeating Avella, and installing Mr. Liu as the new Democratic Senator of District II, of New York. However, it is important to explain that Mr. Liu was not motivated by any ideological issue, in campaigning against Mr. Avella. This was the candidate whom he supported during the last senatorial elections of the state of New York. However, his argument was that he was not loyal enough, to the ideals and principles of the Democratic Party. Furthermore, for purposes of winning the elections, there was a need of choosing an experienced and capable politician to contest against Avella in the democratic primaries. Based on this fact, race was not an issue in the choice of Mr. John Liu , by chairman Crowley. Furthermore, Mr. Liu was able to garner the support of the major trade unions in New York City, against Tony Avella. Trade Unions are very powerful political actors, and they play a significant role in ensuring the success or defeat of a candidate[19]. For example, DC 37, the largest Union of Employees in New York was able to endorse the candidacy of John Liu. The major reason for this endorsement was on the belief and attitudes of John Liu, regarding families, and issues that affect the public service employees. The executive director of the Union believed that John Liu was a strong supporter, and a true friend of working families, because he supported policies aimed at making workers to be comfortable. This means that in making their decision, DC 37 was not motivated by race, but by the issues and values that John Liu stood for[20]. He was an active supporter of the rights of workers, and working families, and this is the reason the labor union was able to endorse his candidacy. It is important to understand that DC 37 has huge members, with approximately 121,000 active members, and over 50,000 retirees. This is a huge number of voters that can affect the outcome of an election. Despite the support of the trade Unions and the Que ens Group of Democrats, Mr. Liu was still unable to win the Democratic primaries[21]. This is because Mr. Avella was still popular amongst the people of District II. This is mainly because of the social issues that the senator was advancing. These social issues touched on education, health care, employment, etc. Furthermore, the main support base of Mr. Avella was in the 26th assembly district. This included the neighborhoods of Bayside, Little Neck, Whitestone, Bay Terrace, etc. Under this region, Mr. Avella was able to lead Mr. Liu by over 1000 votes. This is a huge number of votes, considering the fact that Mr. Avella won the elections by a margin of approximately 568 votes. Furthermore, this was a district that was represented by Ed Braunstein, a congressman who was a firm supporter of Mr. Liu. This is an indication that on the ground, Mr. Avella was very popular, and the democratic leaders were unable to influence their voters, to vote for Mr. Liu. Furthermore, by looking at the ethnicity of the people who voted for Mr. Liu and Mr. Avella, it is important to deno te that race did not play a role in determining the results of the election. Majority of votes, garnered by Mr. Avella came from District 27 and 26[22]. These are districts that form a portion of the majority of the former area that Avella came from. This is an indication that Avella managed to garner votes from his loyal supporters, who were with him even when he served in the council[23]. It is important to understand that votes from these two districts comprised of 46% of the total votes, during this primaries. On the other hand, Mr. Liu won all the Districts that he represented, and the ones which neither of them represented. This also includes District 25 and 40. Through this analysis, it is important to explain that Mr. Avella main support base was district 26 and 27, of which he had represented, while serving at the council[24]. These two districts formed the largest portion of voters, and hence they contributed to the victory of Mr. Avella. Race was therefore not a factor in this election. Furthermore, it is important to understand that this was a close race, that Tony Avella won by a margin of 52.2%, against Mr. Liu who won by a margin of 47.8%[25]. Potential Contacts: For further information, on this campaign, there is a need of contacting Mr. Liu and Mr. Avella for purposes of finding their own views regarding this election. The contact address of Mr. Liu is, [emailprotected]. On the other hand, the contact address of Mr. Avella is, [emailprotected]. Conclusion: In conclusion, this election was not determined by race, but by issues that affected the community. This is because by looking at the votes cast, it was possible to denote that the candidates gained majority of votes in areas that they represented, while serving at the council. Furthermore, most of the supporters of Mr. Liu were white men, who were loyal to the Democratic Party. While Mr. Avella relied on his home support base, Mr. Liu was able to garner votes from all areas, that he represented, and other areas that neither of them represented while serving at the municipal council. The only major issue that the Queens Way democratic supporters had against Mr. Avella was based on his decision to work with the Republicans. This means that he was working against the interests of thee democrats in the house of senate. The solution was therefore to oust him, and place a Democrat who would be loyal to the party. This further is proved in the concession speech of Mr. Liu, who did not comp lain against racism in this primary election. Instead, Mr. Liu denotes that there is a need of electing true democrats, in the senatorial seats, to advance the interests of the party. By these allegations, Mr. Liu was denoting that Mr. Avella was not a true democrat, and he would not represent the interests of the party. Works Cited: Bredderman, Will. Avella Declares Victory as Liu Refuses to Concede. New York Observer. Web. 11 Dec. 2014. http://observer.com/2014/09/avella-declares-victory-as-liu- refuses-to-concede/>. Top of Form Bottom of Form Chan, Melissa, and Lisa Colangelo. John Liu Has Yet to Concede to State Sen. Tony Avella in Queens Democratic Primary Battle. NY Daily News. Web. 11 Dec. 2014. http://www.nydailynews.com/new-york/queens/john-liu-concede-state-sen-tony- avella-queens-democratic-primary-battle-article-1.1935360>. Top of Form Bottom of Form Cheney, Brendan, and Josefa Velasquez. Mapping a Victory Pattern in the Avella District | Capital New York. Mapping a Victory Pattern in the Avella District | Capital New York. Web. 11 Dec. 2014. http://www.capitalnewyork.com/article/albany/2014/09/8552365/mapping-victory- pattern-avella-district>. Top of Form Bottom of Form Lovett, Kenneth. Queens Pol Joins Albany Rebel Democrats. NY Daily News. Web. 11 Dec. 2014. http://www.nydailynews.com/news/politics/queens-pol-joins-albany-rebel- democrats-article-1.1701930>. Top of Form Bottom of Form Meriwether, Kristen. John Liu Scandal: John Liu May Lose $3 Million Over Campaign Fraud. The Epoch Times John Liu Campaign May Lose 3 Million Over Fraud Comments. Web. 11 Dec. 2014. http://www.theepochtimes.com/n3/38598-john-liu-may-lose-3-million- over-campaign-fraud/>. Top of Form Bottom of Form Remy, Richard C., and Inc Quarterly. United States Government: Democracy in Action. New York: Glencoe/McGraw-Hill, 2003. Print. Top of Form Bottom of Form Rhoades, Liz. John Liu Concedes to Incumbent Tony Avella in Queens State Senate Race. Queens Chronicle. Web. 11 Dec. 2014. http://www.qchron.com/editions/north/john- liu-concedes-to-incumbent-tony-avella-in-queens-state/article_e84c1462-3dae-11e4- 9648-1fc3fc84de5f.html>. Top of Form Bottom of Form Robinson, Alex. Avella Declared Winner of Tight Senate Race but Liu Won’t Concede. TimesLedger. Web. 11 Dec. 2014. http://www.timesledger.com/stories/2014/37/avella_web_2014_09_12_q.html>. Sutherland, Adam. Political Leaders. New York: PowerKids, 2012. Print. Top of Form Bottom of Form Tilly, Charles. Democracy. Cambridge [England: Cambridge UP, 2007. Print. [1] Sutherland, 7 [2] Remy, 4 [3] Sutherland, 21 [4] Sutherland, 33 [5] Remy, 9 [6] [7] Rhoades, 5 [8] Meriwether, 1 [9] Meriwether, 3 [10] Meriwether, 4 [11] Lovett, 6 [12] Chan and Lisa, 3 [13] Chan and Lisa, 4 [14] Lovett, 7 [15] Lovett, 9 [16] Meriwether, 6 [17] Bredderman, 5 [18] Bredderman, 6 [19] Tilly, 11 [20] Bredderman, 6 [21] Robinson, 4 [22] Cheney and Josefa, 5 [23] Cheney and Josefa, 6 [24] Cheney and Josefa, 6 [25] Cheney and Josefa, 7

Republican Foundations

This national bank would take the nation out of debt from the war. The bank would additionally provide loans for businessmen and to provide a place to deposit federal funds. He believed that the government should foster business and contribute to the growth of capitalistic enterprise. Hamilton additionally believed that the United States should have a protective tariff to aid manufactures. Jefferson on the other hand, opposed Hamilton's idea of creating a national bank. He additionally didn't believe that the United States should have a protective tariff to aid anufactures.He preferred a society with some industrial alternative to agriculture. Jefferson believed that all of the national debt should be paid off quickly because it will be harmful to society. Socially, Hamilton believed that the wealthy people should run the society. A variety of taxes, like the taxes on whiskey harmed the lower and middle class the most. However, Hamilton supported the upper class. Hamilton believed th at only the wealthy should be qualified to vote because they were smarter than the lower and middle classes.Merchants, bankers, manufactures, and wealthy farmers were considered Hamiltonians. Jefferson once more, opposed Hamilton's suggestions. Jefferson supported the lower and middle classes. He believed that the â€Å"common† people (lower and middle classes) were capable of running the government. He believed that the lower and middle classes were qualified to vote too. Artisans, shopkeepers, frontier settlers, and owners of small towns were considered Jeffersonian. Politically, Hamilton believed that the British aristocracy should be a model for theAmerican Government. He clearly believed in a strong central government. He wanted a broad interpretation of the constitution to strengthen the central government at the expenses of the state rights. Hamiltonians favored restrictions of speech and the press. They believed that America should closely associate itself with Britai n and break the bonds with France. Jefferson believed in a more democratic government compared to Britain's. He wanted to reduce the number of federal office holders and he favored freedom of the press and speech.Jefferson also had a broad interpretation of the constitution but many times, it was only to favor himself or the situation. He was suspicious of the central government because of probable tyrannical overpowering like England and wanted to increase state rights. Revolutionary War period of the United States. The opposing views point of the Hamilton and Thomas Jefferson. Economically, Hamilton believed in creating a national bank to pay off the nations debt, while Jefferson believed that the debt would be harmful to the society and should be paid off quickly.Socially, Hamilton believed the upper class should run things and only be able to vote, but Jefferson believed that the common people should be able to have a say in the government and also be able to vote. Politically, Hamilton believed that the government should be similar to Britain's government while Jefferson didn't believe in a strong central government, but a more democratic one. The opposing ideas of Hamilton and Jefferson is what has created variety of ideas to contribute to the improvements of the United States.

Appraising model of rational consumerism in the Market - Free Essay Example

Sample details Pages: 11 Words: 3198 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Where decisions take place in world of certainty, consumers know for sure the utility they will receive given a choice of goods, but when this certainty is removed and a series of different outcomes may occur, then individuals will react differently, given their attitudes towards risk. Firms know for sure the profit they will receive from a chosen set of inputs, this does not describe the real world, technological uncertainty, market uncertainty, and many other issues cannot be addressed without considering uncertainty, e.g. stock market, insurance, futures markets. Don’t waste time! Our writers will create an original "Appraising model of rational consumerism in the Market" essay for you Create order When people have to make decisions in the presence of uncertainty rational decision making still exists. The standard tools for analyzing rational choice can be modified to accommodate uncertainty. A person in an uncertain environment chooses among contingent commodities, whose value depends on the eventual outcome or state of the world. As with ordinary commodities, people have preferences for contingent commodities that can be represented by an indifference map. The slope of the budget constraint between two contingent commodities depends on the payoff associated with each state of the world. The curvature of the indifference curve depends on whether the individual is risk averse, risk loving or risk neutral. A risk-averse person will not accept an actuarially fair bet. Risk-averse people purchase insurance in order to spread consumption more evenly across states of the world. When risk-averse people are allowed to purchase fair insurance, they will insure themselves fully in th e sense that their consumption is the same in every state of the world. The amount of insurance demanded depends on the premium and on the probability that the insurable event will occur. People with von Neumann-Morgenstern (1944) utility functions, in which the probability of each state of the world is multiplied by the utility associates with that state of the world, seek to maximise the expected value of their utility. The assumption of expected utility maximisation, together with decision trees, can be used to break up complicated decisions into simple components that can be readily solved. By comparing the expected utility of each option, the individual can determine their optimal strategy. An individuals attitude towards risk, previously described as being either risk loving, risk hating or risk neutral, and the extent to which they fit into these categories will vary, as some people will be more risk loving than others, which could also be described as their risk aversion preference. The Arrow-Pratt coefficient for risk aversion for a utility function is given by r(w)=u'(w)/u(w). This is a measure of the curvature of the utility function and measures the marginal willingness to pay for a mall change in the absolute risk. The measurement can be understood in relation to the concept of an acceptance set, A(w), which is the set of all gambles than an individual will accept given their current wealth, w. There are implications of changing absolute and relative risk aversion, with the most straightforward implications of increasing or decreasing absolute or relative risk aversion, and the ones that motivate a focus on these concepts, occurring in the context of forming a portfolio with one risky asset and one risk-free asset, Arrow (1971), Pratt (1964). If the person experiences an increase in wealth, they will choose to increase, keep unchanged, or decrease, the number of dollars of the risky asset held in the portfolio if absolute risk aversion is de creasing, constant, or increasing. Economists, generally, avoid using utility functions, because of the unrealistic behavioural implication. Also, if the person experiences an increase in wealth, they will choose to increase, or keep unchanged, or decrease, the fraction of the portfolio held in the risky asset, depending on their relative risk aversion. As a theory of individual behaviour, the expected utility model shares many of the underlying assumptions of standard consumer theory, yet, the expected utility theory comes under criticism by Rabin Thaler (2001). They argue that expected utility theory is inadequate to explain risk aversion and hence should be discarded as a theory of choice under risk and uncertainty. Watt (2002) addresses this argument stating that all the exercises in Rabin Thaler (2001) demonstrate only that an unrealistically high degree of risk aversion produces preposterous results. For a person with a high level of wealth to turn down a bet for moderate stakes that has a positive expected value will require either an unreasonably high level of risk aversion, or some other unusual peculiarity in the utility function. Under standard models of risk aversion, their large-scale bets will not be rejected and neither will their moderate-scale bets. Expected utility theory certainly faces problems in explaining certain empirical evidence, as do other competing theories. But in this case, it reveals a useful truth, that risk-averse, wealth-loving people should be willing to accept certain moderate bets with positive expected value, even though at first glance, the bets may not appear attractive to them. Expected utility theory is normative as some people believe that the empirical evidence does not remove the expected utility hypothesis from being a normative theory. It reflects how people ought to behave in order to maximise their well-being under uncertainty. Indeed, many people correct their decisions once their error is pointed out to them. Others think that the theory is just plain wrong. Each axiom is open to scrutiny in this regard, such as the independence axiom, which is not always believed to be intuitive. Considering the lottery as a whole, rather than assume independence between the components, may be a solution to this. People try and avoid disappointment in making their decisions, and so a prospect with a small probability of receiving  £0 might be enough to deter someone. There are two different issues that are often discussed of the expected utility theory, firstly, the technical, and secondly, the normative. The technical issue is that this theory is analytically convenient, in the sense that it is pervasive in economics. Whereas the normative issue that is discussed by many economists is that expected utility may provide a valuable guide to action, as people often find it hard to think systematically about risky alternatives. Also there is the issue of the Allais Paradox (1953), which is an example of choice behaviour that can be explained under anticipated utility theory. In the paradox, an individual is asked to choose between two gambles. Gamble A, where an individual has a 100% chance of receiving 1 million or Gamble B, where the same person has a 10% chance of 5million, an 89% chance of 1 million, and a 1% chance of nothing. An individual must pick one of these gambles, and then consider the following two gambles. Gamble C, with an 11% chance of 1million, and an 89% chance of nothing. Gamble D, with a 10% chance of 5million, and a 90% chance of nothing. Again, the individual must pick one of these two preferred gambles. Many people prefer A to B and D to C. However, these choices violate the expected utility axioms. The evidence can be interpreted in light of the understanding of the expected utility theory as being positive or normative. If normative, it is evidence of irrational behaviour. If positive, it is a damning indictment of the theory. Various argumen ts have been posited defending the theory, firstly, that it is a normative theory, so if mistakes are highlighted, people will adapt their choices, also the theory is an approximation, which is a useful predictive tool. Expected utility is a theory of aggregate behaviour and the Allais paradox is an optical illusion. It has also been argued that experiments do not reflect real choices made by individuals. Machina (1982) has also developed a theory of choice under risk that allows for violations of the independence axiom. Machina (1982) proves that the basic results of expected utility theory do not depend on the independence axiom, but may be derived from the much weaker assumption of smoothness of preferences over alternative probability distributions. Unlike anticipated utility theory, Machinas (1982) theory does not employ a utility function that maps outcomes into the real line. The theory has no separation between outcomes and probabilities in the evaluation function. The re are alternative theories, such as Kahneman Tverskys (1979) prospect-theory, who formulate that uncertain outcomes are defined relative to a reference point, which is typically current wealth. Outcomes are interpreted as gains and losses. Risky outcomes are referred to as prospects and the decision maker is assumed to choose among alternative prospects by choosing the one with the highest value. The value of a prospect is expressed in terms of two scales, first, a decision weight function, ÃÆ' Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬, which associates with each probability, p, giving ÃÆ' Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬(p) reflecting the impact of p. ÃÆ' Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬(p) is not a probability p in evaluating a prospect. The value function assigns to each outcome x a number v(x), which encodes the decision makers subjective value of outcome. Kahneman Tverskys (1979) formulation focuses on simple prospects which have at most two non-zero outcomes. The theory can be extended to more complicated prospects, b ut this poses certain difficulties as it can violate dominance, and hence transitivity, among prospects with more than two outcomes. Potential violations may occur due to the fact that the decision weights in prospect theory are derived by applying the decisiotrn weighting function to individual probabilities rather than to the entire probability density of outcome (Quiggan, 1982). For example, in the market for insurance, assuming the probability of the insured risk is 1%, the potential loss is  £1,000 and the premium is  £15. In order to apply prospect theory, it is first necessary to set a reference point, such as current wealth. Setting the frame to the current wealth, the decision would be to either pay  £15, which gives the prospect theory-utility of u(-15), or a lottery with outcomes  £0, with a probability of 99% or a 1% chance of ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢Ã‚ £1,000, which yields the prospect-theory utility of w(0.01)x u(-1000) + w(0.99)x v(0). These e xpressions can be computed numerically. For typical value and weighting functions, the former expression could be larger due to the convexity of v in losses, and hence the insurance looks unattractive. Setting the frame to ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢Ã‚ £1,000, both alternatives are set in gains. The concavity of the value function in gains can then lead to a preference for buying the insurance. In this example a strong overweighting of small probabilities can also undo the effect of the convexity of v in losses, the potential outcome of losing  £1,000 is over-weighted. The interplay of overweighting of small probabilities and concavity-convexity of the value function leads to the so-called fourfold pattern of risk attitudes, such that risk-averse behaviour in gains involving moderate probabilities and of small probability losses; risk-seeking behaviour in losses involving moderate probabilities and of small probability gains. In the case of subjective probability theory, Savage (1954), argues that even if states of the world are not associated with recognisable, objective probabilities, consistency, such as restrictions on preferences among gambles still imply that decision makers behave as if utilities were assigned to outcomes, probabilities were attached to states of nature, and decisions were made by taking expected utilities. This rationalisation of the decision makers behaviour with an expected utility function can be seen uniquely, up to a positive linear transformation for the utility function. Ththeory is basically an extension and generalisation of the expected utility theory. The Ellsberg (1961) paradox concerns subjective probability theory. You are told that an urn contains 300 balls. One hundred of the balls are red and 200 are either blue or green. In gamble A, receive  £1,000 if the ball is red. In gamble B, receive  £1,000 if the ball is blue. An individual chooses which of these gambles they prefer, and then must con sider the following two gambles. Firstly gamble C, where an individual will receive  £1,000 if the ball is not red or gamble D, where the individual will receive  £1,000 if the ball is not blue. It is common for people to strictly prefer A to B and C to D. But these preferences violate standard subjective probability theory. To see why, let R be the event that the ball is red, and  ¬R be the event that the ball is not red, and define B and B accordingly. By ordinary rules of probability, p(R)=1-p( ¬R) p(B)=1-p( ¬B) Normalize u(0)=0 for convenience. Then if A is preferred to B, we must have p(R)u(1000)p(B)u(1000), from which it follows that p(R)p(B). If C is preferred to D, we must have p( ¬R)u(1000) p( ¬B)u(1000) from which it follows that p( ¬R) p( ¬B) However, it is clear that the above expressions are inconsistent. The Ellsberg (1961) paradox seems to be due to the fact that people think that betting for or agai nst R is safer than betting for or against blue. Opinions differ about the importance of the Allais (1953) paradox and the Ellsberg (1961) paradox. Some economists think that these anomalies require new models to describe peoples behaviour. Others think that these paradoxes are akin to optical illusions. Another theory of interest in choice under uncertainty is the state dependent theory. This theory discusses the idea that when there are only monetary outcomes from lotteries then a complete description of the outcome of a pound gamble should include not only the amount of money available in each outcome but also the prevailing prices in each outcome. State dependent utility could also be described as being the preferences among the goods under consideration depending on the state of nature under which they become available. An example from Varian (1992), of state dependent utility function, looks at health insurance, where the value of a unit of currency may depend on ones healt h. Varian (1992, p.190) asked the question how much would a million dollars be worth to you if you were in a coma?, and stated utility as a function of health and of money. Quiggans (1982) anticipated utility theory maintains properties of dominance and transitivity but employs a weakened version of the independence axiom. The model is consistent with a considerable range of choice behaviour that violates von Neumann-Morgenstern expected utility theory (1944). It also is free of the violations of dominance that can occur under prospect theory. Risk attitude under anticipated utility theory, discussed in Hilton (1988), follow Pratt (1964) and Arrows (1971) analysis of risk attitude under von Neumann-Morgenstern (1944) expected utility theory and characterize a decision makers attitude toward the risk inherent in a prospect by the decision makers risk premium for the prospect. Hilton (1988) also tests risk attitude under prospect theory, but slightly modifies the perspective on pro spect theory from the theorys original statement by Kahneman Tversky (1979), required by two features of prospect theory. First there is the problem of dominance violations, which Kahneman Tversky (1979) state that stochastically dominated alternatives are eliminated in the editing phase of the theory, acknowledging that such a procedure raises the problem of intransitivity. Bell (1982), Fishburn (1982) and Loomes Sugdens (1983) regret theory generalizes Savages (1954) mini-max regret approach. Choice is modelled as the minimising of a function of the regret vector, defined as the difference between the outcome yielded by a given choice and the best outcome that could have been achieved in that state of nature. A decision makers preference function is defined over pairs of prospects. It is possible that prospect A is preferred to B, B preferred to C, C preferred to A. Regret theory is another aspect of the rational consumer and the choice under uncertainty. The important compa rison is between what is, or the prize you win, and what might have been, or what you could have won. In the Allais (1953) paradox, in the first instance choosing A and receiving  £0, when the alternative was  £1000 with certainty, would generate considerable regret in some people, in fact there is regret with probability 1. However, winning  £0 in option C when there was only a 0.11 probability of winning something in option D, means that there is only an 11% chance of regret in choosing option C. This could rationalise the choice of B over A and then C over D. Regret theory is quite complicated as it implies that what is chosen is judged in relation to what is not chosen. Unlike other mental relationships such as fear and disappointment, which emerge from the comparison of components of a particular prospect, regret is defined across prospects. Hargreaves et al. (1994) explain that preferences need not be transitive, and this could lead to preference reversals. An example of this would be when choosing between X and Y, where X involves the chance of 1/3 of large regret if a green ball is pulled from the urn. If one chooses Y there is a 2/3 chance of regret, but it is less intense. This can lead to intransitive cycles in pair-wise comparisons, such that Y preferred to X, Z preferred to Y and X preferred to Z. So, this can be considered to be quite problematic. In conclusion, it is difficult to determine an accurate view of an individuals choice under uncertainty, due to the variety of different theories that have been proposed and the limitation of some of the assumptions made by these theories. Although some of the theories discussed are merely an extension of other theories, also discussed, they do allow for some of the assumptions to be ignored. It can also be argued that this is not entirely an issue for economics, but that psychology also plays a role in a persons decision making, as well as the value of the potential gain or loss, either in a m onetary or non-monetary sense, in establishing a realistic outlook on an individuals behaviour. References Biblography Allais, M., (1953) Le comportement de lhomme rationnel devant le risque: critique des postulats et axiomes de là ©cole Amà ©ricaine, Econometrica 21, 503-546. Arrow, K.J., (1971) The theory of risk aversion, in Aspects of the Theory of Risk Bearing, Essays in the Theory of Risk Bearing, Markham Publ. Co., Chicago, 1971, 90-109. Bell, D. E. (1982). Regret in Decision Making under Uncertainty, Operations Research 30: 961-981. Ellsberg, D. (1961). Risk, Ambiguity, and the Savage Axioms Quarterly Journal of Economics 75 (4): 643-669. Fishburn, P. C. (1982). Nontransitive measurable utility, Journal of Mathematical Psychology 26: 31-67. Fishburn, P. C. (1984). SSB utility theory: An economic perspective, Mathematical Social Science 8: 63-94. Gravelle H. and Rees R., Microeconomics, Longman, (3rd Edition), Ch 17, 19. Hargreaves, et al. (1994). The Theory of Choice: A critical guide. Blackwell. Hilton, R. W. (1988) Risk attitude under two alternative the ories of choice under uncertainty Journal of Economic Behaviour and Organization 9 (1988) 119436. North-Holland. Kahneman, D. Tversky, A. (1979). Prospect theory: An analysis of decisions under risk. Econometrica 47: 313-327. Loomes, G. and Sugden, R. (1982). Regret theory: An alternative theory of rational choice under uncertainty. Economic Journal 92: 805-825. Machina, M. J. (1982) Choice Under Uncertainty: Problems Solved and Unsolved The Journal of Economic Perspectives, Pratt, J.W (1964) Risk Aversion in the Small and in the Large, Econometrica, Vol. 32, p.122- 36. Quiggan, J. (1982) A theory of anticipated utility, Journal of Economic Behavior Organization, Elsevier, vol. 3(4), pages 323-343, December. Rabin Thaler (2001). Anomalies: Risk Aversion. Journal of Economic Perspectives. 15(1). Savage, L. J. (1954). Events, Utility and Subjective Probability, The Foundations of Statistics. New York, Wiley. Varian, H R. (1992) Microeconomic Anal ysis, Chapter 11, Norton. von-Neumann, J. Morgenstern, O. (1944) Theory of Games and Economic Behavior, Princeton, NJ, Princeton University Press, 1944. Watt, R. (2002). Defending expected utility theory Journal of Economic Perspectives. 16, pp227-229.

The Realpolitik Foreign Policy Of Otto Von Bismarck

The realpolitik foreign policy of Otto Von Bismarck contained many similarities as well as differences when compared and contrasted to the weltpolitik foreign policy of his successor Kaiser Wilhelm II. In 1890, Wilhelm II forced Bismarck’s resignation and ascended the German throne, leading Germany into a militaristic path, failing to maintain Germany’s allies, and plunging it into one of the most famous wars of history, World War I. Bismarck was originally an expansionist who aimed to make Prussia a powerful part of Germany, however, by 1870, he gave up his expansionist ideas and became content with the land that Germany already had power over. Bismarck’s cautious foreign policy favored peace over war, creating treaties and maintaining Germany’s land rather than expanding Germany by embarking in war. He sought to maintain good relations with France and Russia and kept France isolated. Furthermore, his policy secured peace within the five major powers of Europe by creating alliances. The Bismarckian system created allies between the other powers of Europe, secured Germany’s land, and avoided conflicts with France and Russia. Although a few similarities can be found between Wilhelm and Bismarck’s foreign policies, the policies had major differences in their approaches and styles of execution. Wilhelm’s policy posed more of an aggressive approach and made Germany a threat to other countries as well as involved it into conflicts. He wanted to increase Germany’s prestige as aShow MoreRelatedOtto von Bismarcks Influence on the Unification of Germany Essay examples1502 Words   |  7 Pages The Unification of Germany in 1871 into a politically and an administratively integrated nation state, is highly regarded as a direct result from a Prussian statesman named Otto von Bismarck and his political strategies. 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