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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4
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0answers
64 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. ...
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3answers
90 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
109 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
198 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
94 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 ...
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117 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
20 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? ...
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83 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
378 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 ...
6
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1answer
271 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
85 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 (...
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1answer
147 views

Conceptual explanation/prediction of utility function. Extraction of utility function from Big Data

It seems to me, that utility function usually is just a set of facts. Is there a framework or model for utility function that can explain or predict utility function. I. e. if user has value for item ...
2
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1answer
196 views

What exactly does “carriers of utility” mean?

I understand what 'utility' mean in economics. While reading "Choices, Values, and Frames" by Daniel Kahneman I encountered above usage. I guess it means 'what utility is attributed to'. Google ...
2
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3answers
2k views

“omission bias” vs “action bias” — how can they be reconciled?

I'm having trouble reconciling these two biases. They seem to be the exact opposite of each other. Yet humans are allegedly pre-disposed to both. How can they be reconciled? Omission Bias: The ...
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2answers
346 views

List of behavioral economists [closed]

Even though there is a massive literature on behavioral economics, i couldn't find anywhere a list of economist that focus on that discipline. Since i am interested in environmental economics, i ...
21
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7answers
9k views

How does Black Friday work?

On days like Black Friday, everyone rushes out expecting huge savings on everything they buy. The level of demand seems to reach ludicrous levels, and one would expect smart merchants to react by ...
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0answers
27 views

Are there some guidelines/strategies for deciding between showing a list price vs “call for price”?

I suppose as a buyer many have been on the receiving end of "call for price" price discrimination or one of its less unpleasantly sounding synonyms. Now it's generally known that the average Joe hates ...
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2answers
99 views

Is Behavioural Economics Thymological, or does any branch or scholar concern itself with Thymology?

[Thymology] is what a man knows about the way in which people value different conditions, about their wishes and desires and their plans to realize these wishes and desires. It is the knowledge of ...
3
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2answers
145 views

Why do companies push users to use inferior software?

Sometimes, companies influence users in order to make them use inferior software and other services. For example, Microsoft makes it difficult to use anything other than Bing for Cortana, even though ...
5
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3answers
525 views

Are there two different meanings of the discount rate?

Today I suddenly became aware of how the term "discount rate" are frequently used in two different contexts: When people prefer to have something now rather than in the future. The reason is ...
5
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0answers
57 views

Are charitable donations on someone's behalf generally an effective incentive?

A study done in Sweden on 153 female, would-be blood donors showed surprising results. The women were divided into three groups– voluntary donation, paid donation, and paid donation with the ...
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1answer
110 views

Why do all apartment complexes in Albuquerque have pools?

Apartment builders have a constrained optimization problem whereby they balance building different amenities to attract tenants with varying preferences. Recently when searching for apartments I ...
3
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2answers
108 views

What does economics say about “starting from” pricing?

I was wondering what economics says about what I would call the “starting from” pricing pattern in advertising. My first question would be whether there’s a more properly defined term for it. It’s a ...
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1answer
518 views

Examples of firms using attachment bias

Are there any nice examples of firms using attachment bias to increase profits? Examples from the academic literature or well-motivated anecdotes are both acceptable. For instance, pet stores seem to ...
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1answer
87 views

Is there a “personality test” for societies? [closed]

You may have heard of the Myers Briggs personality profile test. Is there a similar test for societies? The MB has four dimensions Introversion/Extraversion iNtuition/Sensing Feeling/Thinking ...
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4answers
435 views

Tokens vs money

Recently I began thinking about why the use of tokens for money is so popular. In casinos, I think that it is well justified, but there are some cases when those arguments are not useful. For example, ...
4
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1answer
172 views

Random Choice interpretation

Due to McFadden Economists usually interpret Random Choice, in the population sense, as each DM being drawn from the probabilistic choice rule independently and identically. However, Psychologist have ...
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2answers
685 views

How is momentum justified as a common risk factor?

Momentum as a common risk factor? This question is partly a follow-up to another question found here. In this other question it was noted in momentum is difficult to explain as a common risk factor ...
5
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2answers
165 views

Tests of rational inattention

Can you provide a reference regarding a revealed preference test(s) of rational inattention models, as proposed by Sims, ergo, using a mutual information measure as the cost of putting attention. And ...
3
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3answers
332 views

Is technical analysis somehow a valid method for investment? [closed]

I personally think technical analysis (TA) is not useful at all but I still see lot of courses about technical analysis, and even people using it. They have the advantage of being easy to learn and ...
2
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1answer
40 views

Was there any use of scoring rules in economics or finance before Hanson published about LMSR?

Scoring rules arose in the field of meteorology, with the seminal paper published in 1950, but I can't find any references to their using in economics or finance until Hanson published in 2002. Half a ...
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3answers
331 views

What are the recent advancements in building a unified theory of bounded rationality?

It seems that bounded rationality models focus on explaining a particular psychological bias, in a very specific way. In particular, its seems that the state of the art consensus is that one size does ...
7
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1answer
120 views

How much impact does memory have on risk pricing?

Have studies been done that demonstrate the limits of human memory on reputation in the Iterated Prisoner's Dilemma? i.e. at what point (on average) does a player start to "forget" the actions of a ...