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Behavioral Economics Commons

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Behavioral economics

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Full-Text Articles in Behavioral Economics

Behavioral Impediments To Valuing Annuities: Complexity And Choice Bracketing, Jeffrey R. Brown, Arie Kapteyn, Erzo F. P. Luttmer, Olivia S. Mitchell, Anya Samek Oct 2019

Behavioral Impediments To Valuing Annuities: Complexity And Choice Bracketing, Jeffrey R. Brown, Arie Kapteyn, Erzo F. P. Luttmer, Olivia S. Mitchell, Anya Samek

Wharton Pension Research Council Working Papers

This paper examines two behavioral factors that diminish people’s ability to value a lifetime income stream or annuity, drawing on a survey of about 4,000 adults in a U.S. nationally representative sample. By experimentally varying the degree of complexity, we provide the first causal evidence that increasing the complexity of the annuity choice reduces respondents’ ability to value the annuity, measured by the difference between the sell and buy values people assign to the annuity. We also find that people’s ability to value an annuity increases when we experimentally induce them to think jointly about the ...


Competition And Cooperation In Polygynous & Monogamous Households: Experimental Evidence From Sierra Leone, Bethany Gerdemann May 2019

Competition And Cooperation In Polygynous & Monogamous Households: Experimental Evidence From Sierra Leone, Bethany Gerdemann

Master's Theses

Competition and cooperation in polygynous households have both been widely documented across various disciplines. There is contradictory evidence as to whether these interpersonal dynamics produce better or worse outcomes for the household. This study uses a competitiveness game and a series of dictator games to measure competition and cooperation within households and between marriage types. Results show that there are key differences between monogamy and polygyny. Monogamous women compete less with their husbands than stranger and less in comparison to polygynous women. Monogamous spouses are more likely to forgo economic opportunities than polygynous spouses and have a greater preference for ...


How Deep Is Your Love? Loss Aversion In Dating Markets, Genevieve B. Gregorich May 2019

How Deep Is Your Love? Loss Aversion In Dating Markets, Genevieve B. Gregorich

Undergraduate Economic Review

This study uses experimental evidence to examine the existence of loss aversion in the dating market. Applying a valuation gap experiment, this study finds that people are loss averse when it comes to dating opportunities, meaning people weigh the loss of a dating opportunity more heavily than an equivalent gain. The results also support the hypothesis that people experience more loss aversion when they have fewer dating opportunities available. This finding provides preliminary evidence that the existence and growing prevalence of online dating, which dramatically increases peoples’ access to dating opportunities, reduces loss aversion, therefore increasing turnover in the market.


Time-Shifted Rationality And The Law Of Law's Leverage: Behavioral Economics Meets Behavioral Biology, Owen D. Jones Apr 2019

Time-Shifted Rationality And The Law Of Law's Leverage: Behavioral Economics Meets Behavioral Biology, Owen D. Jones

Owen Jones

A flood of recent scholarship explores legal implications of seemingly irrational behaviors by invoking cognitive psychology and notions of bounded rationality. In this article, I argue that advances in behavioral biology have largely overtaken existing notions of bounded rationality, revealing them to be misleadingly imprecise - and rooted in outdated assumptions that are not only demonstrably wrong, but also wrong in ways that have material implications for subsequent legal conclusions. This can be remedied. Specifically, I argue that behavioral biology offers three things of immediate use. First, behavioral biology can lay a foundation for both revising bounded rationality and fashioning a ...


Endowment Effects In Chimpanzees, Owen D. Jones, Sarah F. Brosnan, Susan P. Lambeth, Mary Catherine Mareno, Amanda S. Richardson, Steven Schapiro Apr 2019

Endowment Effects In Chimpanzees, Owen D. Jones, Sarah F. Brosnan, Susan P. Lambeth, Mary Catherine Mareno, Amanda S. Richardson, Steven Schapiro

Owen Jones

Human behavior is not always consistent with standard rational choice predictions. The much-investigated variety of apparent deviations from rational choice predictions provides a promising arena for the merger of economics and biology. Although little is known about the extent to which other species also exhibit these seemingly irrational patterns of human decision-making and choice behavior, similarities across species would suggest a common evolutionary root to the phenomena.

The present study investigated whether chimpanzees exhibit an endowment effect, a seemingly paradoxical behavior in which humans tend to value a good they have just come to possess more than they would have ...


Law And Behavioral Biology, Owen D. Jones, Timothy H. Goldsmith Apr 2019

Law And Behavioral Biology, Owen D. Jones, Timothy H. Goldsmith

Owen Jones

Society uses law to encourage people to behave differently than they would behave in the absence of law. This fundamental purpose makes law highly dependent on sound understandings of the multiple causes of human behavior. The better those understandings, the better law can achieve social goals with legal tools. In this Article, Professors Jones and Goldsmith argue that many long held understandings about where behavior comes from are rapidly obsolescing as a consequence of developments in the various fields constituting behavioral biology. By helping to refine law's understandings of behavior's causes, they argue, behavioral biology can help to ...


Development Of A Translational Model Of Co-Use Of Alcohol And Nicotine For Testing Potential Pharmacotherapies, Sarah Elizabeth Maggio Jan 2019

Development Of A Translational Model Of Co-Use Of Alcohol And Nicotine For Testing Potential Pharmacotherapies, Sarah Elizabeth Maggio

Theses and Dissertations--Psychology

Co-users of alcohol and nicotine are the largest group of polysubstance users worldwide. Although pharmacotherapies are available for alcohol (EtOH) or tobacco use disorders individually, it may be possible to develop a single pharmacotherapy to treat heavy drinking tobacco smokers through capitalizing on the commonalities in their mechanisms of action. Towards this goal, several models of concurrent access to EtOH and nicotine were explored as potential preclinical models of co-use using female alcohol-preferring (P) rats. Additionally, potential pharmacotherapeutics for the treatment of EtOH and nicotine co-use disorder were tested using different variations of our model. Treatments tested included (1) varenicline ...


Don’T Worry Be Happy: Analysis Of Happiness As An Economic Measurement, Kofi Boadu May 2018

Don’T Worry Be Happy: Analysis Of Happiness As An Economic Measurement, Kofi Boadu

Master's Theses

Everyone wants to be happy. Happiness however never seems to be a national goal. A possible answer is that happiness is subjective and on its own may not be reflective of the economic status of a country. Therefore, should people’s happiness should be treated equally with other traditional economic measurements? This cross-country level study looks at the relationship between happiness and traditional economic measurements; mainly GDP per capita. Questions concerning whether GDP per capita indeed captures the overall well-being of a citizen and happiness’ eligibility as an economic measurement are addressed. Findings confirm that happiness and GDP per capita ...


Efficacy Of Technology-Based And In-Person Health Education For Behavior Change In College-Aged Women, Madeline Bremel May 2018

Efficacy Of Technology-Based And In-Person Health Education For Behavior Change In College-Aged Women, Madeline Bremel

All College Thesis Program, 2016-present

Purpose: The purpose of this study was to determine whether an in-person or technology based bone health intervention improved bone health knowledge and behaviors in college-aged women. Methods: 30 college-aged women were randomly divided into three groups: personal intervention (n = 10), technological intervention (n = 10), and control (n = 10). Both intervention groups received identical information regarding the importance of bone health and the appropriate behaviors for maintaining strong bones including weight-bearing exercise, calcium consumption, and vitamin D consumption. The technology group received the information via an online video, and the personal group via a one-on-one health intervention. Changes in bone ...


Time Delay And Investment Decisions: Evidence From An Experiment In Tanzania, Plamen Nikolov Jan 2018

Time Delay And Investment Decisions: Evidence From An Experiment In Tanzania, Plamen Nikolov

Economics Faculty Scholarship

Attitudes toward risk underlie virtually every important economic decision an individual makes. In this experimental study, I examine how introducing a time delay into the execution of an investment plan influences individuals’ risk preferences. The field experiment proceeded in three stages: a decision stage, an execution stage and a payout stage. At the outset, in the Decision Stage (Stage 1), each subject was asked to make an investment plan by splitting a monetary investment amount between a risky asset and a safe asset. Subjects were informed that the investment plans they made in the Decision Stage are binding and will ...


Sacrifice, Benefit, And Reciprocity: Evidence From A Trust Game, Mirco Dinelli Jan 2018

Sacrifice, Benefit, And Reciprocity: Evidence From A Trust Game, Mirco Dinelli

Honors Theses

Social preferences have generated much interest in recent economic literature. While reciprocity has been closely examined by several economists using gift exchange and other games, much of their focus is on the effect of intentions and motivations. Instead, I focus on two strictly outcome-based factors in the context of a trust game: sacrifice made by the giver and benefit received by the recipient. I attempt to isolate these influences by varying the multiplier across variations of the trust game to create comparison groups that differ in one of these factors, but not both. Unable to control for all expected sources ...


Cooperation And Reciprocity In Anonymous Interactions: Other-Regarding Preferences And Quasi-Magical Thinking, Gregory Klevans Sep 2017

Cooperation And Reciprocity In Anonymous Interactions: Other-Regarding Preferences And Quasi-Magical Thinking, Gregory Klevans

School of Arts & Sciences Theses

In economic experiments, players often demonstrate concerns for the relative payoffs between themselves and other subjects, in addition to their own payoffs. In addition, they appear to do their parts to achieve efficient outcomes, particularly when they are ignorant of the opponent's decision. I present a parsimonious model of other-regarding preferences and quasi-magical thinking that explains such behavior, and I apply it to four games: the prisoner's dilemma, the traveler's dilemma, the ultimatum game, and the trust game.


The Power Of Peer Pressure: Incorporating Social Comparison Into Traditional Anti-Food Waste Campaigns And Its Potential Effects On College Campuses, Grace E. Venit May 2017

The Power Of Peer Pressure: Incorporating Social Comparison Into Traditional Anti-Food Waste Campaigns And Its Potential Effects On College Campuses, Grace E. Venit

Honors Theses (PPE)

Food waste is a major contributor to climate change, one of the most pressing environmental challenges of our time. Addressing this problem would not only protect the environment, but it would also save trillions of dollars and help to reduce the staggering number of people in the world today who are chronically malnourished. This paper focuses on the potential of using behavioral economic theory, particularly the concept of “nudging” in addressing the problem of food waste. Existing literature on nudges and food waste mainly focuses on how feedback and manipulating plate size can reduce food waste. Another proven approach to ...


In Defense Of The Self-Help Book, Owen Barrott Apr 2017

In Defense Of The Self-Help Book, Owen Barrott

Marriott Student Review

"In Defense of the Self-Help Book" explores the relationship between behavioral economics and the effects that self-help and management books have. It explores loss aversion and the optimism bias paradox and applies it to those who use success literature to improve their own abilities.


Do Financial Incentives Reduce Intrinsic Motivation For Weight Loss? Evidence From Two Tests Of Crowding Out, Aditi P Sen, David Huffman, George Loewenstein, David A. Asch, Jeffrey T. Kullgren, Kevin G. Volpp Jan 2017

Do Financial Incentives Reduce Intrinsic Motivation For Weight Loss? Evidence From Two Tests Of Crowding Out, Aditi P Sen, David Huffman, George Loewenstein, David A. Asch, Jeffrey T. Kullgren, Kevin G. Volpp

Health Care Management Papers

Financial incentives have been used successfully to promote health behaviors, however they may be counterproductive if they "crowd out" pre-existing intrinsic motivation and lead to a decrease in performance once incentives are removed to a level lower than they had never been introduced. We provide new evidence that incentives do not crowd out intrinsic motivation in the case of weight loss. We measure motivation via a survey administered before and after the introduction of financial incentives in two weight loss field experiments and find no evidence that intrinsic motivation fell among participants receiving incentives compared to control participants who do ...


Self-Image Motives And Risk Preferences In Charitable Behavior, Jeffrey Yang Jan 2017

Self-Image Motives And Risk Preferences In Charitable Behavior, Jeffrey Yang

Summer Program for Undergraduate Research (SPUR)

Self image and self-signaling motives have long been proposed as a driver of pro-social behavior in psychology, and has recently been introduced in economic models. We develop a self-signaling model to rationalize the behavioral finding that individuals prefer risky outcomes to certain outcomes in the domain of charitable giving. We then propose a novel experimental framework to discriminate models prosocial behavior within this choice domain.


Nudging Towards Social Change: The Application Of Psychology And Behavioral Economics In Promoting Responsible Consumption, Larissa Chern Jan 2017

Nudging Towards Social Change: The Application Of Psychology And Behavioral Economics In Promoting Responsible Consumption, Larissa Chern

CMC Senior Theses

With workplace disasters in developing countries increasingly in the news, a major question is how to encourage consumers to use corporate social responsibility as a criterion in purchasing. Distinct from environmental concerns, social responsibility is defined here with respect to the humanitarian aspects of corporate practice, including fair wages and working conditions, equitable treatment of the disadvantaged, and restriction of child labor. Although the idea of socially responsible consumption (SRC) was first identified over forty years ago, most recent research on changing consumption habits focuses specifically on environmentally responsible consumption (ERC). Combining the psychological concept of social norms with economic ...


How Should We Motivate Effort, Shamima Khan Dec 2016

How Should We Motivate Effort, Shamima Khan

School of Arts & Sciences Theses

This research uses an experimental design to study if the pattern and positioning of rewards influence the amount of effort participants put in. The three key hypotheses tested here are: 1) are people more likely to complete a task if the incentives are given in more regular intervals, 2) do uncertainty of reward timing hurt or help in maintaining motivation, 3) is intrinsic motivation more influential than the patterns in which incentives are structured? The treatments in this experiment are created by varying the reward structure of candies and pens in exchange of a simple math test completion. Among the ...


A Nudge Towards Excellence: The Application Of Behavioral Economics In Education Policy, Jack Dimatteo Nov 2016

A Nudge Towards Excellence: The Application Of Behavioral Economics In Education Policy, Jack Dimatteo

HON499 projects

The purpose of this paper is to analyze the potential for the application of behavioral economics to the field of education policy through “nudges.” Given the difficulty of passing effective comprehensive education reform legislation, the application of nudges represents a low-cost, high-impact approaching to improve student outcomes. This paper offers definitions of several key concepts in the fields of behavioral economics and education: education reform, behavioral economics, choice architecture, nudges, and why behavioral economics is particularly relevant to education reform. Also, the paper describes past education reform attempts, including two that incorporated behavioral economics and two that did not, and ...


Anchoring In Financial Decision-Making: Evidence From The Field, Michael Jetter, Jay K. Walker Aug 2016

Anchoring In Financial Decision-Making: Evidence From The Field, Michael Jetter, Jay K. Walker

Economics Faculty Publications

This paper analyzes 12,596 wagering decisions of 6,064 contestants in the US game show Jeopardy!, focusing on the anchoring phenomenon in financial decision-making. We find that contestants anchor heavily on the initial dollar value of a clue in their wagering decision, even though there exists no rational reason to do so. More than half of all wagers occur within $500 of the initial dollar value, although the maximum possible wagering value averages $5,914. This anchoring phenomenon remains statistically significant on the one percent level, even after controlling for scores, clue category, time trends, and player-fixed effects.When ...


Leveraging The Effects Of Loss Framing To Nudge Low-Income, High-Achieving Students In Chicago Towards Higher Education, Benjamin Feis May 2016

Leveraging The Effects Of Loss Framing To Nudge Low-Income, High-Achieving Students In Chicago Towards Higher Education, Benjamin Feis

Honors Theses (PPE)

The vast majority of low-income, high-achieving high school students in the U.S. either do not apply to college or undermatch by attending less selective institutions than those they are qualified to attend. Previous research has demonstrated that behavioral “nudges” can be an effective and low-cost method of influencing students’ application behavior and encouraging them to enroll in selective institutions. This study contributes to this existing body of literature by examining whether framing college earnings premium information as a loss causes low-income high school students in Chicago to report greater likelihood of applying to college than when the same information ...


From Promise To Form: How Contracting Online Changes Consumers, David A. Hoffman Jan 2016

From Promise To Form: How Contracting Online Changes Consumers, David A. Hoffman

Faculty Scholarship at Penn Law

I hypothesize that different experiences with online contracting have led some consumers to see contracts—both online and offline—in distinctive ways. Experimenting on a large, nationally representative sample, this paper provides evidence of age-based and experience-based differences in views of consumer contract formation and breach. I show that younger subjects who have entered into more online contracts are likelier than older ones to think that contracts can be formed online, that digital contracts are legitimate while oral contracts are not, and that contract law is unforgiving of breach.

I argue that such individual differences in views of contract formation ...


Mandatory Process, Matthew J.B. Lawrence Oct 2015

Mandatory Process, Matthew J.B. Lawrence

Indiana Law Journal

This Article suggests that people tend to undervalue their procedural rights—their proverbial “day in court”—until they are actually involved in a dispute. The Article argues that the inherent, outcome-independent value of participating in a dispute resolution process comes largely from its power to soothe a person’s grievance— their perception of unfairness and accompanying negative emotional reaction—win or lose. But a tendency to assume unchanging emotional states, known in behavioral economics as projection bias, can prevent people from anticipating that they might become aggrieved and from appreciating the grievance-soothing power of process. When this happens, people will ...


Allowing Patients To Waive The Right To Sue For Medical Malpractice: A Response To Thaler And Sunstein, Tom Baker, Timothy D. Lytton Jun 2015

Allowing Patients To Waive The Right To Sue For Medical Malpractice: A Response To Thaler And Sunstein, Tom Baker, Timothy D. Lytton

Timothy D. Lytton

This essay critically evaluates Richard Thaler and Cass Sunstein’s proposal to allow patients to prospectively waive their rights to bring a malpractice claim, presented in their recent, much acclaimed book, Nudge: Improving Decisions about Health, Wealth and Happiness. We show that the behavioral insights that undergird Nudge do not support the waiver proposal. In addition, we demonstrate that Thaler and Sunstein have not provided a persuasive cost-benefit justification for the proposal. Finally, we argue that their liberty-based defense of waivers rests on misleading analogies and polemical rhetoric that ignore the liberty and other interests served by patients’ tort law ...


Three Essays On Gender Differences On Risk Preferences And Credit Market Constraints, Jyoti Rai Dec 2014

Three Essays On Gender Differences On Risk Preferences And Credit Market Constraints, Jyoti Rai

Dissertations

The disadvantages that women face in the financial market hamper their social and economic well-being. These disadvantages may arise from their own risk preferences or from financial market. The aim of this dissertation is to examine different aspects of the disadvantages that women face in the U.S Financial Market. In that light, I present three essays that analyze gender differences in risk preferences and credit market constraints. I use the Survey of Consumer Finances (SCF) data for all my empirical analysis.

In the first essay, I examine whether women exhibit greater financial risk aversion than men using attitudinal and ...


The Business Of Coupons-Do Coupons Lead To Repeat Purchases?, Margaret P. Ross Jun 2014

The Business Of Coupons-Do Coupons Lead To Repeat Purchases?, Margaret P. Ross

Pursuit - The Journal of Undergraduate Research at the University of Tennessee

In recent years, couponing has emerged as a pop culture phenomenon. Businesses of all types are taking advantage of this resource by revamping their out-dated programs and turning them into something fresh to excite customers. Many questions remain unanswered concerning the viability, profitability, and usefulness of coupons. This study is an analysis of the effectiveness of coupons in enticing return purchases in the soft-drink category and the effectiveness of price discriminating at this grocery store chain. The dataset is comprised of household level grocery store transactions compiled by dunnhumby USA for 2,500 households over a period of two years ...


Imperfect Memory And Choice Under Risk, Daniel A. Gottlieb May 2014

Imperfect Memory And Choice Under Risk, Daniel A. Gottlieb

Business Economics and Public Policy Papers

This paper presents a model of choice based on imperfect memory and self-deception. I assume that people have preferences over their own attributes (e.g., skill, knowledge, or competence) and can manipulate their memories. The model provides a prior-dependent theory of regret aversion and allows for prior-dependent information attitudes. It implies that behavior will converge to the one predicted by expected utility theory after a choice has been faced a sufficiently large number of times.


A Psychological Account Of Consent To Fine Print, Tess Wilkinson-Ryan May 2014

A Psychological Account Of Consent To Fine Print, Tess Wilkinson-Ryan

Faculty Scholarship at Penn Law

The moral and social norms that bear on contracts of adhesion suggest a deep ambivalence. Contracts are perceived as serious moral obligations, and yet they must be taken lightly or everyday commerce would be impossible. Most people see consent to boilerplate as less meaningful than consent to negotiated terms, but they nonetheless would hold consumers strictly liable for both. This Essay aims to unpack the beliefs, preferences, assumptions, and biases that constitute our assessments of assent to boilerplate. Research suggests that misgivings about procedural defects in consumer contracting weigh heavily on judgments of contract formation, but play almost no role ...


Demand For Breach, Tess Wilkinson-Ryan Apr 2014

Demand For Breach, Tess Wilkinson-Ryan

Faculty Scholarship at Penn Law

These studies elicit behavioral evidence for how people weigh monetary and non-monetary incentives in efficient breach. Study 1 is an experimental game designed to capture the salient features of the efficient breach decision. Subjects in a behavioral lab were offered different amounts of money to break the deal they had made with a partner. 18.6% of participants indicated willingness to break a deal for any amount of profit, 27.9% were unwilling to breach for the highest payout, and the remaining subjects identified a break-point in between. Study 2 is an online questionnaire asking subjects to take the perspectives ...


Consumer Credit: Too Much Or Too Little (Or Just Right)?, Jonathan Zinman Feb 2014

Consumer Credit: Too Much Or Too Little (Or Just Right)?, Jonathan Zinman

Open Dartmouth: Faculty Open Access Scholarship

The intersection of research and policy on consumer credit often has a Goldilocks feel. Some researchers and policy makers posit that consumer credit markets produce too much credit. Other researchers and policy makers posit that markets produce too little credit. I review theories and evidence on inefficient consumer credit supply. For each of eight classes of theories I sketch some of the leading models and summarize any convincing empirical tests of those models. I also discuss more circumstantial evidence that does not map tightly onto a particular model but has the potential to shed light on, or obscure, answers to ...