Questions tagged [behavioral-economics]
A branch of economics that incorporates insights from psychology by allowing for systematic deviations from idealised rational behaviour.
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Dominated lotteries in CPE
I have been looking into expectation-based loss aversion following Kőszegi-Rabin (2005, 2007). In particular, I find their choice-acclimating personal equilibrium (CPE) interesting, but it has a ...
1
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0answers
12 views
Calculate power for multiple rounds of public goods experiment
I would like to calculate/simulate the a-priori necessary sample size for a repeated public goods experiment.
$N$ Participants play $R$ rounds of a public goods game (linear, voluntary contribution ...
0
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1answer
36 views
Sunk cost fallacy- is it a bug or a feature?
I was having a conversation with a colleague regarding sunk costs, and discussion came up that the appeal of falling for the sunk cost fallacy might be a feature rather than a flaw, as it is behavior ...
9
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1answer
105 views
Kőszegi - Rabin (2006) model problem
First of all, that's a homework question, and I will try to make it as useful to future readers as possible.
Problem
So, I was given a problem about the model described by Botond Kőszegi and ...
2
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0answers
21 views
Are there any experiments about financial games with just one player?
I was wondering if there are any experiments of financial games (laboratory games under controlled circumstances like Plott and Sunder's Rational Expectations and the Aggregation of Diverse ...
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1answer
42 views
Beta delta Agent - Consumption decision
I’m struggling with a problem regarding the beta delta agent.
Can someone give me a hint how I can come up with the levels of utility?
Thanks in advance!
0
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1answer
51 views
What is the best example social norm effect economy?
Here is my example.
I read the paper called "Social norms and Energy Conservation" (2010) by Hunt Allcott, about the energy conservation of households by providing them with the amount of energy ...
0
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1answer
89 views
What economics theory explains changes in purchasing different types of goods?
I am thinking about the first of the month. I spend more of my money on superior goods and, because of that decision, less on normal and inferior goods. Are income and substitution effects enough to ...
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2answers
83 views
Do people really care about higher moments?
I have heard that people often handle uncertainty using point estimates not probability distributions. However, I have been unable to find any evidence for this in the heuristics and biases literature....
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0answers
39 views
Behavioral game theory for elections process with two candidates
I'm looking for resources and explanations about a game that would explain what two candidates should expect from an election process?
Example : Should they reveal their program first or second?
...
1
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1answer
40 views
Luce Choice Axiom, Quantal Response Equilibrium
How is the Quantal response equilibrium model influenced by the Luce choice axiom since Quantal Response equilibrium takes into account the rationality parameter ß and I dont see the mention of ...
5
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1answer
122 views
Bounded rationality with Quantal Response Equilibrium model for an Extensive Form game
I am working on my Master thesis based on bounded rationality in behavioral game theory models, I wanted to know if QRE(Quantal Response Equilibrium) can be applied to games where players have ...
4
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0answers
25 views
References? — Coordination Between Groups
Can anyone provide references for research that focuses on coordination between groups of decision makers rather than within group coordination with individual decision makers? \
Edits given the ...
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1answer
64 views
Has any person ever actually planned his or her consumption according to Modigliani’s LCH?
https://en.wikipedia.org/wiki/Life-cycle_hypothesis?wprov=sfti1
It seems self-evident to me that nobody on Earth actually does this. Real people are short-sighted, undisciplined, and lack the ...
2
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1answer
63 views
Entrepreneurs and risk aversion
The are various opinion whether entrepreneurs are more or less risk-averse than the general population. The commonly held belief is that they are less so, but the contrary opinion exists as well. ...
3
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1answer
461 views
Game theory with rational and irrational players
Are there game theoretic models where one player is rational and the other is irrational (i.e., plays with behavioral limitations)?
The motivation for this question is that behavioral economics has ...
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0answers
40 views
«Behavioural economics is also useful in macroeconomics»
In this VOXEU article, the authors talk about a model in which behaviour economics is applied to macroeconomics.
I'm trying to understand fig.1, and the following sentence: «This means that if the ...
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3answers
58 views
The right term for a market that tends towards consumers switching suppliers freely
Say there's a bunch of competing businesses, car repair shops for example, in a certain market. Business is good and there's a substantial average turnaround time for all of them. Someone decides they'...
5
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0answers
155 views
Fact-checking Dan Ariely (2008) on Duke basketball tickets story
In Predictably Irrational (2008, pp. 127-133), Dan Ariely describes the Krzyzewskiville phenomenon (Duke students camp for weeks to get basketball tickets), and how he and Ziv Camron used it to study ...
3
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1answer
78 views
Was there resistance, historically, to the idea that human behavior deviates from rational decision making theory?
I have edited this question considerably to narrow the focus.
A recent New York Times article was published on the Nobel Prize for Economics. The article discusses that Nobel laureate Richard Thaler ...
9
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3answers
627 views
Was the Concorde project an example of the sunk-cost fallacy?
The sunk-cost fallacy has also been dubbed the Concorde Fallacy.
Examples of the Concorde Fallacy in the academic literature and beyond
I believe Dawkins and Carlisle (1976) were the first to use ...
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2answers
61 views
Concept for “when a mechanism exists which can be exploited, people will exploit it”
I dimly recall a concept, I think defined by an economist, although I cannot remember the details or context. I think an example--apocryphal or not--was welfare recipients who would have more ...
2
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1answer
47 views
Looking for an article in Behavioral Economics about Inequality
I have been searching for an article that I know exists, but somehow am unable to find.
The article is about an economic game where participants are assigned to a group, and can observe how much ...
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5answers
7k views
Should I stay or should I quit?
Is there an economic theory of quitting an activity? A theory that weighs the investment costs put into something and the opportunity costs of pursuing it.
I am aware of Fershtman and Gneezy ...
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0answers
41 views
Terminology for separability in price and value
Take an agent with mean-variance utility over something that is uncertain:
$$
U(x) = \mu_x^\theta - \sigma_x^\lambda
$$
$A\in \{0,1\}$ happens if $U(x)>0$, and $x$ is a random variable
$$
A = \...
1
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0answers
13 views
Origin of “enforcement is only effective in the presence of the enforcer?” [closed]
If this question is off-topic, my apologies. It seems borderline to me.
I have had several people tell me (without reference) this idea that:
Enforcement is ineffective because enforcement will ...
0
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2answers
35 views
How long do stock markets usually take to process complex new public information?
Here is a question that I've been thinking about for a while:
Theoretically, assuming investors are rational, a stock's price will be equal to its its intrinsic value (present value of discounted ...
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4answers
150 views
Examples of behavioural breakdowns in game theory?
I'm trying to compile multiple scenarios of the breakdown of game theory. Specifically, I'm looking for scenarios where game theory predicts certain behaviours, but in real-world scenarios or ...
4
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1answer
45 views
Looking for behavioral economics research about the redemption of gift cards
This is a long shot! I was wondering if anyone could point me to any behavioral economics or other economics research on perceived value, specifically I'm looking at why some people don't redeem ...
3
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0answers
95 views
Framing effects and the use of subjective wellbeing measures in behavioural
In my first foray into behavioural economics I have encountered two themes;
- Self-reported subjective wellbeing (SWB) is commonly used as a measure of wellbeing. Survey based SWB measures are ...
5
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1answer
66 views
Testing if one regressor is a proxy for another
I'm reading Guiso, Sapienza and Zingales: "Trusting the Stock Market" The Journal of Finance, Vol. 63, No. 6, 2008 and have a question about how they test whether trust is a proxy for risk aversion.
...
0
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1answer
212 views
An example of endowment effect
Suppose a Decision Maker (DM) has willingness to pay (WTP) of 100, and her actual elicited willingness to accept (WTA) is 110, can this DM be a standard rational agent? Why or why not?
My thinking is ...
3
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1answer
376 views
Behavioral economics and utility function
I'm not very familiar with behavioral economics, but as a recommendation of a teacher I'm reading "A Behavioral New Keynesian Model" by Xavier Gabaix. There's a part that I don't understand, here it ...
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1answer
114 views
Can lying be disincentivized without serious curtailments of free speech?
In the new age of Alternate Facts, one might argue that many actors personally benefit hugely from lying, at the expense of other sectors of society.
Economically speaking you might argue that this is ...
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5answers
4k views
What is the difference between risk, uncertainty and ambiguity
I am trying to pin down the difference between risk, uncertainty and ambiguity.
As I understand, when behavioral economists talk about choice under uncertainty, they mean choice when agents face ...
3
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1answer
62 views
Is there fundamental economical reasoning for patriotism?
Patriotism is an emotional attachment to a nation which an individual
recognizes as their homeland.
That is description from Wikipedia and I think it is safe to say that universally all countries ...
0
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1answer
283 views
Game theory vs Experimental economics
What are the main differences in the methods of game theory and experimental economics? Which method is better suited to analyze strategic behavior?
4
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1answer
32 views
Sources on Educational intervention changing consumer preferences?
I'm doing some research on how education can change a consumers preference for a given good or service. Im looking for more research papers or books that discuss such a topic.
I've looked around ...
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1answer
60 views
Need help identifying this cognitive bias or fallacy pointed out by Kahneman in Thinking Fast and Slow
This was in Thinking Fast and Slow by Kahneman.
He described a situation where someone might prefer A to B, and B to C, but then might prefer C to A (when A and C are directly compared to each other)....
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0answers
57 views
Don't let me take the last bit
I believe everyone has experienced something like the following once in her or his life :
There is a cake on the table and three people to share it.
The three people each eat a quarter of the cake.
...
8
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3answers
86 views
Why does a buyer value a dollar in a small purchase (e.g. TV) differently to a dollar in a large purchase (e.g. car)?
I am referring to how buyers will haggle over 200 when purchasing an item worth, say, 500 but not bat an eyelid paying an extra 5000 on, say, a house.
I am seeking a very brief explanation of this ...
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3answers
106 views
Is there an economic rationale for wanting to know the gender of a child before it is born?
[Rewritten to express issues in economics terms:]
In terms of the classic economic rational actor (Aka homo economicus) is there some rationale to want to know the child's gender before it is born.
...
8
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1answer
182 views
On the Ms. Exponential vs Ms. Hyperbolic vignette
I've come across this little parable purporting to show why exponential discounting is superior to hyperbolic discounting1:
The greater bowing [of the hyperbolic discount curve] means that if a ...
2
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1answer
82 views
Has anyone studied how people's indifference curves can change?
I'm wondering if anyone has looked at how people's indifference curves can change, whether systematically due to experimental manipulations, or if they just vary due to noise.
I thought about this ...
3
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0answers
99 views
Causes of upward trend in median first marriage age in USA?
I found a chart here of median age at first marriage by year from 1890 to 2010. It looks like it dips to a low during the 60s then has an upward trend until 2010.
As an answer, I'm looking for any ...
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0answers
19 views
How to consolidate data for “single customer view”, what models to use for representing customer? [closed]
There is trend to arrive at "single customer view" - combine all the available quantitative and qualitative data about single customer. How to organize those data for using in prediction and anylsis?
...
0
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0answers
76 views
Is utility function used in customer data/profile analysis? What alternatives in practice?
Utility function is great theoretical concept but is it used in customer data analysis or in building customer profile (e.g. from Big data or cash register/checkout data, ecommerce history) or in ...
6
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1answer
359 views
Why has increased productivity over the last 100 years not affected how much people work?
If we are generally richer and more productive due to better technology and other factors, why do we still work so much?
I understand that there are various incentives to work (e.g. implicit status ...
7
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1answer
233 views
What is the point of silent auctions?
A while back, someone decided to auction off something unique and valuable, as a silent auction: everyone would submit one bid only, and whoever bid the highest would win.
I submitted a bid that I ...
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1answer
79 views
What is the percentage of free riders in public goods games?
Of all experimental public good games that have been conducted in laboratory & field settings, what is the average percentage of subjects that can be classified as free-riders (as opposed to (...
