Yael Benjamini’s research while affiliated with Tel Aviv University and other places

Medical technology diffusion and its effect on the modern hospital and on the rising costs of medical care is an issue which receives considerable attention from economists and policy analysts. In this paper a different approach is used to understand this phenomenon. We present the decision of a single hospital, whether or not to adopt an advanced technology system, using the concept of a noncooperative, nonzero sum game. Such presentation provides us with more insight on the conflict in which hospitals find themselves; the “catch” which pushes them to purchase more and more sophisticated and expensive technology in the hope that they will be able to successfully compete with other hospitals. The situation is further complicated by the existence of another “hidden” player—society, whose goals may differ from those of any individual hospital and even from the collective interests of the hospital sector. Possible conflicts that may exist and suggested solutions for each participant are presented and their policy implications are discussed.

This paper explores some important behavioral aspects of tax evasion — subjective probability bias, perception of other people’s behavior, social stigma — by building on work of Tversky & Kahneman (1979, 1981), Sagi & Weinblatt (1982) and Benjamini & Sagi (1983). The conventional expected-utility model of optimal tax evasion is portrayed graphically, then modified to include stigma and fear of apprehension, probability bias and misinformation. A game-theoretic model of tax evasion emphasizes the importance of one’s expectation about other people’s decision to evade or be honest. The next section develops a formula for optimal government policy against evasion, once evasion behavior is known. The final part of the paper describes a game-simulation study of tax evasion that relates underreporting of income to both tax parameters and individual personality.