Download or read book Affective Decision Making Under Uncertainty written by Donald J. Brown and published by Springer. This book was released on 2021-01-19 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is an exploration of the ubiquity of ambiguity in decision-making under uncertainty. It presents various essays on behavioral economics and behavioral finance that draw on the theory of Black Swans (Taleb 2010), which argues for a distinction between unprecedented events in our past and unpredictable events in our future. The defining property of Black Swan random events is that they are unpredictable, i.e., highly unlikely random events. In this text, Mandelbrot’s (1972) operational definition of risky random unpredictable events is extended to Black Swan assets – assets for which the cumulative probability distribution or conditional probability distribution of random future asset returns is a power distribution. Ambiguous assets are assets for which the uncertainties of future returns are not risks. Consequently, there are two disjoint classes of Black Swan assets: Risky Black Swan assets and Ambiguous Black Swan assets, a new class of ambiguous assets with unpredictable random future outcomes. The text is divided into two parts, the first of which focuses on affective moods, introduces affective utility functions and discusses the ambiguity of Black Swans. The second part, which shifts the spotlight to affective equilibrium in asset markets, features chapters on affective portfolio analysis and Walrasian and Gorman Polar Form Equilibrium Inequalities. In order to gain the most from the book, readers should have completed the standard introductory graduate courses on microeconomics, behavioral finance, and convex optimization. The book is intended for advanced undergraduates, graduate students and post docs specializing in economic theory, experimental economics, finance, mathematics, computer science or data analysis.

Download or read book Social and Economic Factors in Decision Making under Uncertainty written by Kinga Posadzy and published by Linköping University Electronic Press. This book was released on 2017-11-16 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this thesis is to improve the understanding of human behavior that goes beyond monetary rewards. In particular, it investigates social influences in individual’s decision making in situations that involve coordination, competition, and deciding for others. Further, it compares how monetary and social outcomes are perceived. The common theme of all studies is uncertainty. The first four essays study individual decisions that have uncertain consequences, be it due to the actions of others or chance. The last essay, in turn, uses the advances in research on decision making under uncertainty to predict behavior in riskless choices. The first essay, Fairness Versus Efficiency: How Procedural Fairness Concerns Affect Coordination, investigates whether preferences for fair rules undermine the efficiency of coordination mechanisms that put some individuals at a disadvantage. The results from a laboratory experiment show that the existence of coordination mechanisms, such as action recommendations, increases efficiency, even if one party is strongly disadvantaged by the mechanism. Further, it is demonstrated that while individuals’ behavior does not depend on the fairness of the coordination mechanism, their beliefs about people’s behavior do. The second essay, Dishonesty and Competition. Evidence from a stiff competition environment, explores whether and how the possibility to behave dishonestly affects the willingness to compete and who the winner is in a competition between similarly skilled individuals. We do not find differences in competition entry between competitions in which dishonesty is possible and in which it is not. However, we find that due to the heterogeneity in propensity to behave dishonestly, around 20% of winners are not the best-performing individuals. This implies that the efficient allocation of resources cannot be ensured in a stiff competition in which behavior is unmonitored. The third essay, Tracing Risky Decision Making for Oneself and Others: The Role of Intuition and Deliberation, explores how individuals make choices under risk for themselves and on behalf of other people. The findings demonstrate that while there are no differences in preferences for taking risks when deciding for oneself and for others, individuals have greater decision error when choosing for other individuals. The differences in the decision error can be partly attributed to the differences in information processing; individuals employ more deliberative cognitive processing when deciding for themselves than when deciding for others. Conducting more information processing when deciding for others is related to the reduction in decision error. The fourth essay, The Effect of Decision Fatigue on Surgeons’ Clinical Decision Making, investigates how mental depletion, caused by a long session of decision making, affects surgeon’s decision to operate. Exploiting a natural experiment, we find that surgeons are less likely to schedule an operation for patients who have appointment late during the work shift than for patients who have appointment at the beginning of the work shift. Understanding how the quality of medical decisions depends on when the patient is seen is important for achieving both efficiency and fairness in health care, where long shifts are popular. The fifth essay, Preferences for Outcome Editing in Monetary and Social Contexts, compares whether individuals use the same rules for mental representation of monetary outcomes (e.g., purchases, expenses) as for social outcomes (e.g., having nice time with friends). Outcome editing is an operation in mental accounting that determines whether individuals prefer to first combine multiple outcomes before their evaluation (integration) or evaluate each outcome separately (segregation). I find that the majority of individuals express different preferences for outcome editing in the monetary context than in the social context. Further, while the results on the editing of monetary outcomes are consistent with theoretical predictions, no existing model can explain the editing of social outcomes.

Download or read book Essays on Economic Psychology written by Hermann Brandstätter and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic behavior is explored from a psychological perspective by both, prominent economic psychologists with a long tradition in studying economic problems as well as economists who are open and interested in the psychological aspects of economic behavior. The contributions discuss the prospects and difficulties of this dialogue between psychology and economics and survey some important areas of research where such an interdisciplinary approach has proved to be successful. The text can also be used to introduce psychology to economists in order to give them an idea how to analyze economic problems from a psychological perspective. It also indicates many urgent and exciting research topics awaiting eager scholars to carry on the dialogue.

Download or read book Essays on Behavioral Economics written by George Katona and published by Ann Arbor, Mich. : Survey Research Center, Institute for Social Research, University of Michigan. This book was released on 1980 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Kahnemann and Tversky and the making of behavioral economics written by Floris Heukelom and published by Rozenberg Publishers. This book was released on 2009 with total page 186 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Handbook of Behavioural Economics and Smart Decision Making written by Morris Altman and published by Edward Elgar Publishing. This book was released on 2017-05-26 with total page 607 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Handbook is a unique and original contribution of over thirty chapters on behavioural economics, examining and addressing an important stream of research where the starting assumption is that decision-makers are for the most part relatively smart or rational. This particular approach is in contrast to a theme running through much contemporary work where individuals’ behaviour is deemed irrational, biased, and error-prone, often due to how people are hardwired. In the smart people approach, where errors or biases occur and when social dilemmas arise, more often than not, improving the decision-making environment can repair these problems without hijacking or manipulating the preferences of decision-makers. This book covers a wide-range of themes from micro to macro, including various sub-disciplines within economics such as economic psychology, heuristics, fast and slow-thinking, neuroeconomics, experiments, the capabilities approach, institutional economics, methodology, nudging, ethics, and public policy.

Download or read book Essays in Behavioral Economics written by Robert Jean Oxoby and published by . This book was released on 2000 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Risk Choice and Uncertainty written by George G. Szpiro and published by Columbia University Press. This book was released on 2020-01-07 with total page 413 pages. Available in PDF, EPUB and Kindle. Book excerpt: At its core, economics is about making decisions. In the history of economic thought, great intellectual prowess has been exerted toward devising exquisite theories of optimal decision making in situations of constraint, risk, and scarcity. Yet not all of our choices are purely logical, and so there is a longstanding tension between those emphasizing the rational and irrational sides of human behavior. One strand develops formal models of rational utility maximizing while the other draws on what behavioral science has shown about our tendency to act irrationally. In Risk, Choice, and Uncertainty, George G. Szpiro offers a new narrative of the three-century history of the study of decision making, tracing how crucial ideas have evolved and telling the stories of the thinkers who shaped the field. Szpiro examines economics from the early days of theories spun from anecdotal evidence to the rise of a discipline built around elegant mathematics through the past half century’s interest in describing how people actually behave. Considering the work of Locke, Bentham, Jevons, Walras, Friedman, Tversky and Kahneman, Thaler, and a range of other thinkers, he sheds light on the vast scope of discovery since Bernoulli first proposed a solution to the St. Petersburg Paradox. Presenting fundamental mathematical theories in easy-to-understand language, Risk, Choice, and Uncertainty is a revelatory history for readers seeking to grasp the grand sweep of economic thought.

Download or read book Prospect Theory written by Daniel Kahneman and published by . This book was released on 1979 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Is Behavioral Economics Doomed written by David K. Levine and published by Open Book Publishers. This book was released on 2012 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this book, David K. Levine questions the idea that behavioral economics is the answer to economic problems. He explores the successes and failures of contemporary economics both inside and outside the laboratory, and asks whether popular behavioral theories of psychological biases are solutions to the failures. The book not only provides an overview of popular behavioral theories and their history, but also gives the reader the tools for scrutinizing them.

Download or read book The Foundations of Behavioral Economic Analysis written by Sanjit S. Dhami and published by Oxford University Press. This book was released on 2016 with total page 1799 pages. Available in PDF, EPUB and Kindle. Book excerpt: It considers the evidence against the exponential discounted utility model and describes several behavioral models such as hyperbolic discounting, attribute based models and the reference time theory. Part IV describes the evidence on classical game theory and considers several models of behavioral game theory, including level-k and cognitive hierarchy models, quantal response equilibrium, and psychological game theory. Part V considers behavioral models of learning that include evolutionary game theory, classical models of learning, experience weighted attraction model, learning direction theory, and stochastic social dynamics. Part VI studies the role of emotions; among other topics it considers projection bias, temptation preferences, happiness economics, and interaction between emotions and cognition. Part VII considers bounded rationality. The three main topics considered are judgment heuristics and biases, mental accounting, and behavioral finance.

Download or read book Routledge Handbook of Behavioral Economics written by Roger Frantz and published by Routledge. This book was released on 2016-08-05 with total page 435 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is no doubt that behavioral economics is becoming a dominant lens through which we think about economics. Behavioral economics is not a single school of thought but representative of a range of approaches, and uniquely, this volume presents an overview of them. The wide spectrum of international contributors each provides an exploration of a central approach, aspect or topic in behavorial economics. Taken together, the whole volume provides a comprehensive overview of the subject which considers both key developments and future possibilities. Part One presents several different approaches to behavioural economics, including George Katona, Ken Boulding, Harvey Leibenstein, Vernon Smith, Herbert Simon, Gerd Gigerenzer, Daniel Kahneman, and Richard Thaler. This section looks at the origins and development of behavioral economics and compares and contrasts the work of these scholars who have been so influential in making this area so prominent. Part Two presents applications of behavioural economics including nudging; heuristics; emotions and morality; behavioural political economy, education, and economic innovation. The Routledge Handbook of Behavioral Economics is ideal for advanced economics students and faculty who are looking for a complete state-of-the-art overview of this dynamic field.

Download or read book Behavioral and neuroscientific analysis of economic decision making in animals written by Tobias Kalenscher and published by Frontiers E-books. This book was released on with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: The experimental analysis of animal behavior has a rich tradition in psychology, behavioral ecology and many other scientific branches dedicated to the study of decision making. However, it has never enjoyed a similar popularity in economics. This has recently changed with the dawn of neuroeconomics – a discipline combining the analytic and experimental tools of psychology and economics with the technologies available in neuroscience to unravel the neurobiological mechanisms underlying economic behavior. Since many of the sophisticated neuroscientific techniques can only be used on animals, neuroeconomists have come up with a large and ever-growing repertoire of animal models to probe economic decision making. Besides the value of using animals as model systems to emulate human economic behavior, the discipline of animal economic decision making exists in its very own right: an abundance of animal species at various evolutionary stages show behavior that complies with many of the predictions of economic theory, whilst, at the same time demonstrating violations of optimal choice models that are reminiscent of similar anomalies found in human behavior. Hence, the analysis of animal choice does not only offer insights into the evolutionary origins of economic decision making, it also testifies that the analysis of animal behavior is a convenient, economical and sound way to test competing economic decision models in optimally controlled experimental environments, to probe their neural implementation and to yield common denominators in choice behavior. In short, economic theory provides more than just an alternative language to describe animal psychology: its combination with biology, psychology and neuroscience gives way to synergy effects that open up new venues for studying economic choice. In this special issue, we would like to gather the latest results from this cross-disciplinary topic, address the overlap and discrepancies in (the neurobiology of) economic decision making found between species and identify the challenges that lie ahead in translating results from species to species, and ultimately to humans. The exclusive focus on non-human animals makes this Research Topic unique and distinct from previous special issues which covered a broader range of matters and subjects in the neurobiological analysis of decision making.

Download or read book Behavioral Economics and Its Applications written by Peter Diamond and published by Princeton University Press. This book was released on 2012-01-12 with total page 331 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the last decade, behavioral economics, borrowing from psychology and sociology to explain decisions inconsistent with traditional economics, has revolutionized the way economists view the world. But despite this general success, behavioral thinking has fundamentally transformed only one field of applied economics-finance. Peter Diamond and Hannu Vartiainen's Behavioral Economics and Its Applications argues that behavioral economics can have a similar impact in other fields of economics. In this volume, some of the world's leading thinkers in behavioral economics and general economic theory make the case for a much greater use of behavioral ideas in six fields where these ideas have already proved useful but have not yet been fully incorporated--public economics, development, law and economics, health, wage determination, and organizational economics. The result is an attempt to set the agenda of an important development in economics--an agenda that will interest policymakers, sociologists, and psychologists as well as economists. Contributors include Ian Ayres, B. Douglas Bernheim, Truman F. Bewley, Colin F. Camerer, Anne Case, Michael D. Cohen, Peter Diamond, Christoph Engel, Richard G. Frank, Jacob Glazer, Seppo Honkapohja, Christine Jolls, Botond Koszegi, Ulrike Malmendier, Sendhil Mullainathan, Antonio Rangel, Emmanuel Saez, Eldar Shafir, Sir Nicholas Stern, Jean Tirole, Hannu Vartiainen, and Timothy D. Wilson.

Download or read book Essays on Economic Decisions Under Uncertainty written by Jacques Drèze and published by CUP Archive. This book was released on 1990-05-25 with total page 460 pages. Available in PDF, EPUB and Kindle. Book excerpt: Professor Dreze is a highly respected mathematical economist and econometrician. This book brings together some of his major contributions to the economic theory of decision making under uncertainty, and also several essays. These include an important essay on 'Decision theory under moral hazard and state dependent preferences' that significantly extends modern theory, and which provides rigorous foundations for subsequent chapters. Topics covered within the theory include decision theory, market allocation and prices, consumer decisions, theory of the firm, labour contracts, and public decisions.

Download or read book An Introduction to Behavioral Economics written by Nick Wilkinson and published by Bloomsbury Publishing. This book was released on 2017-12-16 with total page 616 pages. Available in PDF, EPUB and Kindle. Book excerpt: The third edition of this successful textbook is a comprehensive, rigorous survey of the major topics in the field of behavioral economics. Building on the strengths of the second edition, it offers an up-to-date and critical examination of the latest literature, research, developments and debates in the field. Offering an inter-disciplinary approach, the authors incorporate psychology, evolutionary biology and neuroscience into the discussions. And, ultimately, they consider what it means to be 'rational', why we so often indulge in 'irrational' and self-harming behavior, and also why 'irrational' behavior can sometimes serve us well. A perfect book for economics students studying behavioural economics at higher undergraduate level or Master's level. This new edition features: - Extended material on heuristics and biases, and new material on neuroeconomics and its applications - A wealth of new topical case studies, such as voting behavior in Brexit and the Trump election and the current obesity epidemic - More examples and review questions to help cement understanding

Download or read book Advances in Behavioral Economics written by Colin F. Camerer and published by Princeton University Press. This book was released on 2004 with total page 768 pages. Available in PDF, EPUB and Kindle. Book excerpt: Today, behavioral economics has become virtually mainstream.