糖心TV

Title: Prerationality in Decision Trees with Menu Consequences

Abstract: This paper extends previous work on consequentialist decision theory to allow timed consequences that accrue at intermediate, non-terminal nodes. This extension implies that each path through a decision tree is mapped to a unique intertemporal consequence stream. Based on results from Hammond (1988b, 2022) concerning consequentialist normal form invariance and prerationality, we consider actual behaviour which, unlike plans or intentions, is dynamically consistent by definition. We prove that actual behaviour is prerational and continuous on Marschak triangles if and only if it maximizes a Bayesian rational base preference relation that is represented by the expected value of a Bernoulli utility index defined on the domain of consequence streams. We also permit any intermediate consequence to include a "menu'' which depends on the set of consequences that are feasible in the continuation subtree whose initial node is the relevant consequence node. Introducing menu consequences allows prerational behaviour to become consistent with a plethora of prima facie 鈥渘on-consequentialist鈥� phenomena. Prominent examples include apparent violations of the ordinality and independence axioms of expected utility theory. Other instances of 鈥渕enu effects鈥� include temptation and regret.

Title: Monetary Communication Rules by Laura G谩ti and Amy Handlan
Abstract: Does the Federal Reserve follow a communication rule? We propose a simple framework to estimate communication rules, which we conceptualize as a systematic mapping between the Fed's expectations of macroeconomic variables and the words they use to talk about the economy. We provide strong evidence supporting the existence of a communication rule: 30-40 percent of the variation in language of FOMC policy statements is accounted for by variation in Fed forecasts and other policy instruments, like the target rate and asset purchases. We document a significant break in the communication rule in late 2008, over-and-above shifts in the regressors' distributions. There is evidence that communication rules are stronger post-2008 and this impacts how financial markets react. Overall, investors respond to both systematic and non-systematic communication and do so more strongly after 2008, indicating they pay greater attention with more systematic communication.