Open Access. Powered by Scholars. Published by Universities.®

Behavioral Economics Commons

Open Access. Powered by Scholars. Published by Universities.®

Decision making

Discipline
Institution
Publication Year
Publication
Publication Type

Articles 1 - 17 of 17

Full-Text Articles in Behavioral Economics

Causes And Consequences Of Risk Aversion In Middle Adulthood, Nataliya Rubinchik May 2016

Causes And Consequences Of Risk Aversion In Middle Adulthood, Nataliya Rubinchik

School of Arts & Sciences Theses

I analyze how risk aversion may affect decision-making over time, what effects risk aversion may have on decisions, and whether one’s level of risk aversion varies over time. I find that risk preferences correlate with certain maternal factors, income, depression, and ethnicity. Risk aversion correlates with financial and health decisions.


Overcoming Algorithm Aversion: People Will Use Imperfect Algorithms If They Can (Even Slightly) Modify Them, Berkeley J. Dietvorst, Joseph P. Simmons, Cade Massey Jan 2016

Overcoming Algorithm Aversion: People Will Use Imperfect Algorithms If They Can (Even Slightly) Modify Them, Berkeley J. Dietvorst, Joseph P. Simmons, Cade Massey

Marketing Papers

Although evidence-based algorithms consistently outperform human forecasters, people often fail to use them after learning that they are imperfect, a phenomenon known as algorithm aversion. In this paper, we present three studies investigating how to reduce algorithm aversion. In incentivized forecasting tasks, participants chose between using their own forecasts or those of an algorithm that was built by experts. Participants were considerably more likely to choose to use an imperfect algorithm when they could modify its forecasts, and they performed better as a result. Notably, the preference for modifiable algorithms held even when participants were severely restricted in the modifications ...


Aggregating Moral Preferences, Matthew D. Adler Jan 2016

Aggregating Moral Preferences, Matthew D. Adler

Faculty Scholarship

Preference-aggregation problems arise in various contexts. One such context, little explored by social choice theorists, is metaethical. “Ideal-advisor” accounts, which have played a major role in metaethics, propose that moral facts are constituted by the idealized preferences of a community of advisors. Such accounts give rise to a preference-aggregation problem: namely, aggregating the advisors’ moral preferences. Do we have reason to believe that the advisors, albeit idealized, can still diverge in their rankings of a given set of alternatives? If so, what are the moral facts (in particular, the comparative moral goodness of the alternatives) when the advisors do diverge ...


Nashbots: How Political Scientists Have Underestimated Human Rationality, And How To Fix It, Daniel Enemark, Mathew D. Mccubbins, Mark Turner Jan 2016

Nashbots: How Political Scientists Have Underestimated Human Rationality, And How To Fix It, Daniel Enemark, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

Political scientists use experiments to test the predictions of game-theoretic models. In a typical experiment, each subject makes choices that determine her own earnings and the earnings of other subjects, with payments corresponding to the utility payoffs of a theoretical game. But social preferences distort the correspondence between a subject’s cash earnings and her subjective utility, and since social preferences vary, anonymously matched subjects cannot know their opponents’ preferences between outcomes, turning many laboratory tasks into games of incomplete information. We reduce the distortion of social preferences by pitting subjects against algorithmic agents (“Nashbots”). Across 11 experimental tasks, subjects ...


Against Game Theory, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner Jan 2015

Against Game Theory, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

People make choices. Often, the outcome depends on choices other people make. What mental steps do people go through when making such choices? Game theory, the most influential model of choice in economics and the social sciences, offers an answer, one based on games of strategy such as chess and checkers: the chooser considers the choices that others will make and makes a choice that will lead to a better outcome for the chooser, given all those choices by other people. It is universally established in the social sciences that classical game theory (even when heavily modified) is bad at ...


Risk Preferences And Prenatal Exposure To Sex Hormones For Ladinos, Diego Aycinena, Rimvydas Baltaduonis, Lucas Rentschler Aug 2014

Risk Preferences And Prenatal Exposure To Sex Hormones For Ladinos, Diego Aycinena, Rimvydas Baltaduonis, Lucas Rentschler

Economics Faculty Publications

Risk preferences drive much of human decision making including investment, career and health choices and many more. Thus, understanding the determinants of risk preferences refines our understanding of choice in a broad array of environments. We assess the relationship between risk preferences, prenatal exposure to sex hormones and gender for a sample of Ladinos, which is an ethnic group comprising 62.86% of the population of Guatemala. Prenatal exposure to sex hormones has organizational effects on brain development, and has been shown to partially explain risk preferences for Caucasians. We measure prenatal exposure to sex hormones using the ratio of ...


Are Individuals Fickle-Minded?, Mathew D. Mccubbins, Mark Turner Jan 2014

Are Individuals Fickle-Minded?, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

Game theory has been used to model large-scale social events — such as constitutional law, democratic stability, standard setting, gender roles, social movements, communication, markets, the selection of officials by means of elections, coalition formation, resource allocation, distribution of goods, and war — as the aggregate result of individual choices in interdependent decision-making. Game theory in this way assumes methodological individualism. The widespread observation that game theory predictions do not in general match observation has led to many attempts to repair game theory by creating behavioral game theory, which adds corrective terms to the game theoretic predictions in the hope of making ...


Extended Preferences And Interpersonal Comparisons: A New Account, Matthew D. Adler Jan 2014

Extended Preferences And Interpersonal Comparisons: A New Account, Matthew D. Adler

Faculty Scholarship

No abstract provided.


Putting The Trial Penalty On Trial, David S. Abrams Jul 2013

Putting The Trial Penalty On Trial, David S. Abrams

Faculty Scholarship at Penn Law

The "trial penalty" is a concept widely accepted by all the major actors in the criminal justice system: defendants, prosecutors, defense attorneys, court employees, and judges. The notion is that defendants receive longer sentences at trial than they would have through plea bargain, often substantially longer. The concept is intuitive: longer sentences are necessary in order to induce settlements and without a high settlement rate it would be impossible for courts as currently structured to sustain their immense caseload. While intuitively appealing, this view of the trial penalty is completely at odds with economic prediction. Since both prosecutors and defendants ...


How Tradeoffs Shrink Attribute Hierarchy, Aner Sela, Jonah A. Berger, Gia Nardini Jan 2013

How Tradeoffs Shrink Attribute Hierarchy, Aner Sela, Jonah A. Berger, Gia Nardini

Marketing Papers

Why do people sometimes struggle with decisions that once seemed relatively simple? This research suggests that comparing options leads people to lose sight of which decision attributes are important. Although the difference between important and unimportant attributes is often clear in the abstract, the act of making tradeoffs highlights what people must forgo on one attribute in exchange for a gain on another, which increases the perceived importance of trivial attributes in particular. This causes the variance in perceived importance across attributes to shrink, blurring the distinction between important and unimportant attributes. Four experiments demonstrate this phenomenon, explore the underlying ...


Can We Build Behavioral Game Theory?, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner Jan 2013

Can We Build Behavioral Game Theory?, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

The way economists and other social scientists model how people make interdependent decisions is through the theory of games. Psychologists and behavioral economists, however, have established many deviations from the predictions of game theory. In response to these findings, a broad movement has arisen to salvage the core of game theory. Extant models of interdependent decision-making try to improve their explanatory domain by adding some corrective terms or limits. We will make the argument that this approach is misguided. For this approach to work, the deviations would have to be consistent. Drawing in part on our experimental results, we will ...


The Impact Of Personal Experience On Behavior: Evidence From Video-Rental Fines, Michael P. Haselhuhn, Devin G. Pope, Maurice. E. Schweitzer, Peter Fishman Jan 2012

The Impact Of Personal Experience On Behavior: Evidence From Video-Rental Fines, Michael P. Haselhuhn, Devin G. Pope, Maurice. E. Schweitzer, Peter Fishman

Operations, Information and Decisions Papers

Personal experience matters. In a field setting with longitudinal data, we disentangle the effects of learning new information from the effects of personal experience. We demonstrate that experience with a fine, controlling for the effect of learning new information, significantly boosts future compliance. We also show that experience with a large fine boosts compliance more than experience with a small fine, but that the influence of experience with both large and small fines decays sharply over time.


Isenhour, Cindy. On The Politics Of Climate Knowledge: Sir Giddens, Sweden And The Paradox Of Climate (In)Justice. Local Environment:, Cindy Isenhour Dec 2011

Isenhour, Cindy. On The Politics Of Climate Knowledge: Sir Giddens, Sweden And The Paradox Of Climate (In)Justice. Local Environment:, Cindy Isenhour

Cindy Isenhour

No abstract provided.


The Global Warming Alarm: Forecasts From The Structured Analogies Method, Kesten C. Green, J. Scott Armstrong Mar 2011

The Global Warming Alarm: Forecasts From The Structured Analogies Method, Kesten C. Green, J. Scott Armstrong

Marketing Papers

When the beach patrol raises the alarm that a shark has been sighted we know what to do, but how should we respond to an alarm that is based on predictions of what will happen 100 years from now and the person raising the alarm tells us we must make great sacrifices now to avoid the predicted catastrophe? To answer this question, we forecast effects and outcomes of the current global warming alarm using a structured analysis of analogous situations. To do this, we searched the literature and asked experts to identify phenomena that were similar to the alarm currently ...


Put Your Money Where Your Butt Is: A Commitment Contract For Smoking Cessation, Xavier Giné, Dean Karlan, Jonathan Zinman Oct 2010

Put Your Money Where Your Butt Is: A Commitment Contract For Smoking Cessation, Xavier Giné, Dean Karlan, Jonathan Zinman

Open Dartmouth: Faculty Open Access Scholarship

We designed and tested a voluntary commitment product to help smokers quit smoking. The product (CARES) offered smokers a savings account in which they deposit funds for six months, after which they take a urine test for nicotine and cotinine. If they pass, their money is returned; otherwise, their money is forfeited to charity. Of smokers offered CARES, 11 percent took up, and smokers randomly offered CARES were 3 percentage points more likely to pass the 6-month test than the control group. More importantly, this effect persisted in surprise tests at 12 months, indicating that CARES produced lasting smoking cessation ...


If The Large Wta-Wtp Gap For Public Goods Is Real (And There Are Good Reasons To Think So) Conventional Welfare Measures Are Simply Incorrect, Philip E. Graves Jan 2009

If The Large Wta-Wtp Gap For Public Goods Is Real (And There Are Good Reasons To Think So) Conventional Welfare Measures Are Simply Incorrect, Philip E. Graves

PHILIP E GRAVES

A robust finding in economics is that decision-makers often exhibit a much smaller dollar willingness to pay (WTP) for an item than the minimum amount that they claim to be willing to accept (WTA) to part with it. The spread between these two numbers is particularly large for public goods, raising serious public policy concerns regarding which number, if either, is appropriate for valuing such goods. A traditional utility maximizing model is presented here that predicts–as both measures are currently calculated–that WTA will exceed WTP, quite plausibly by a substantial amount for public goods. Moreover, it is shown ...


Czech Voucher Privatization: A Case Of Decision Making Under Uncertainty, Katia Hristova Jan 2002

Czech Voucher Privatization: A Case Of Decision Making Under Uncertainty, Katia Hristova

University Avenue Undergraduate Journal of Economics

In my study, I plan to analyze voucher privatization in the Czech Republic. This process is best characterized as decision making under both risk and uncertainty, where the thousands of individuals who initially received vouchers were operating under near total uncertainty while larger institutional investors who later seized control of the vouchers were operating under conditions of risk. I will analyze the resulting patterns of ownership in comparison to the goals of the process. I will also discuss the role of the International Monetary Fund and World Bank as institutions which affect the conditions under which voucher privatization was conducted ...