Download or read book Essays on Behavioral Economics and Policy Design written by and published by . This book was released on 2015 with total page 131 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Behavioral Economics written by Ghida Karbala and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 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 Essays in Behavioral Economics and Environmental Policy written by Steven E. Sexton and published by . This book was released on 2012 with total page 202 pages. Available in PDF, EPUB and Kindle. Book excerpt: Social planners have long relied upon non-coercive interventions in order to achieve social welfare improvements that are not obtained by markets or direct policy. Such policies are perhaps nowhere more relevant and common than in environmental economics. Environmental goods and services are typically not traded in markets because of the difficulties of property rights assignment. And yet efforts to create markets or correct market failures by coercive policy are fraught with controversy. Thus, in addition to coercive mechanisms, social planners use information provision campaigns, appeals for cooperation, and "nudges" to improve the efficiency of environmental resource allocations. Non-coercive interventions have grown in popularity among social planners as behavioral economics has gained acceptance within the mainstream of the field. Indeed, such policies typically affect market outcomes and achieve environmental goals only insofar as they can exploit or correct decision making that deviates from standard theory. In this dissertation, agent behavior is analyzed to assess the potential of non-coercive interventions to achieve socially preferred environmental outcomes. In a first essay, the concept of conspicuous conservation is introduced as a modern variant of conspicuous consumption that affords status for displays of austerity meant to signal environmental preferences rather than displays of ostentation meant to signal wealth. I identify conspicuous conservation in the automobile market and estimate a willingness to pay up to several thousand dollars for the "green" signal transmitted by ownership of the Toyota Prius. In a second essay, I demonstrate how automatic bill payment programs can induce excessive consumption of goods and services by boundedly rational consumers who exhibit inattention to prices. As automatic payment programs have spread throughout industries characterized by recurring payments, from utility and telecommunication services to insurance and loan markets, this essay is the first to consider their implications for consumer demand and welfare. It is also the first to test empirically whether enrollment in such programs increases demand, as price salience theory suggests. It is shown that residential electricity consumption increases on average 2-4.5% due to enrollment in automatic payment programs, while commercial electricity consumption grows much as 6%. Moreover, bill-smoothing programs that utilities offer to low-income households are shown to induce an 8-9% increase in electricity consumption. A final essay examines the extent to which free transit fares and appeals for car-trip avoidance reduce car pollution on smoggy days. With data on freeway traffic volumes and transit ridership, public appeals for cooperation are shown to have no significant effect on car trip demand. Free transit fares, however, do have a significant effect on car trip demand. But the effect is perverse in that it generates an increase in car trips and related pollution. Free fares also increase transit ridership. These results suggest that free transit rides do not induce motorists to substitute to transit, but instead subsidize regular transit rides and additional trips. Appeals for cooperation also have no affect on carpooling behavior. Viewed in their totality, these essays communicate the importance of behavioral theories in formulating environmental policies and predicting agents' responses to such policies. Policies formulated without due regard for agents' bounded rationality and multifaceted motivations are doomed to unintended consequeces. However, recognition of these behavioral responses and their incorporation in policy design can result in improved environmental outcomes and efficient policies.

Download or read book Essays on Behavioral Economics written by George Katona and published by . This book was released on with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Behavioral Economics and Decision Making Under Risk written by Andrew Royal and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Market Design and Behavioral Economics written by Edward Gilbert Augenblick and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is the combination of three distinct papers on Behavioral Economics and Market Design. In the first paper, I theoretically and empirically analyze consumer and producer behavior in a relatively new auction format, in which each bid costs a small amount and must be a small increment above the current high bid. I describe the set of equilibrium hazard functions over winning bids and identify a unique function with desirable conditions. Then, I examine bidder behavior using two datasets of 166,000 auctions and 13 million individual bids, captured with a real-time collection algorithm from a company called Swoopo. I find that players overbid significantly in aggregate, yielding average revenues of 150% of the good's value and generating profits of €18 million over four years. While the empirical hazard rate is close to the predicted hazard rate at the beginning of the auction, it deviates as the auction progresses, matching the predictions of my model when agents exhibit a sunk cost fallacy. I show that players' expected losses are mitigated by experience. Finally, I estimate both the current and optimal supply rules for Swoopo using high frequency data, demonstrating that the company achieves 98.6% of potential profit. The analysis suggests that over-supplying auctions in order to attract a larger userbase is costly in the short run, creating a large structural barrier to entrants. I support this conclusion using auction-level data from five competitors, which establishes that entrants collect relatively small or negative daily profits. The second paper (joint with Scott Nicholson) addresses the impact of making multiple previous choices on decision making, which we call "choice fatigue." We exploit a natural experiment in which different voters in San Diego County are presented with the same contest decision at different points on the ballot, providing variation in the number of previous decisions made by the voters. We find that increasing the position of a contest on the ballot increases the tendency to abstain and to rely on decision shortcuts, such as voting for the status-quo or the first candidate listed in a contest. Our estimates suggest that if an average contest was placed at the top of the ballot (when voters are "fresh"), abstentions would decrease by 10%, the percentage of "no" votes on propositions (a vote for the status-quo) would fall by 2.9 percentage points, and the percentage of votes for the first candidate would fall by .5 percentage points. Interestingly, if this occurred, our results suggests that 22 (6.25%) of the 352 propositions in our dataset would have passed rather than failed. Implications of the results range from the dissemination of information by firms and policy makers to the design of electoral institutions and the strategic use of ballot propositions. The third paper (joint with Jesse Cuhna) paper presents evidence from a field experiment on the impact of inter-group competition on intra-group contributions to a public good. We sent political solicitations to potential congressional campaign donors that contained either reference information about the past donations of those in the same party (cooperative treatment), those in the competing party (competition treatment), or no information (the control group). The donation rate in the competitive and cooperative treatment groups was 85% and 42% above that in the control, respectively. Both treatments contained a monetary reference point, which influenced the distribution of donations. While the cooperative treatment induced more contributions concentrated near the mentioned reference point, the competitive treatment induced more contributions at nearly twice the level of the given reference point, leading to a higher total contributed amount. This suggests that both cooperative and "pro-social" motives can drive higher contribution rates and total contributions, but the elicitation of competitive behavior can be more profitable in certain fundraising situations.

Download or read book Renaissance in Behavioral Economics written by Roger Frantz and published by Routledge. This book was released on 2007-06-14 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economists working on behavioral economics have been awarded the Nobel Prize four times in recent years. This book explores this innovative area and in particular focuses on the work of Harvey Leibenstein, one of the pioneers of the discipline. The topics covered in the book include agency theory; dynamic efficiency; evolutionary economics; X-efficiency; the effect of emotions, specifically affect on decision-making; market pricing; experimental economics; human resource management; the Carnegie School, and intra-industry efficiency in less developed countries.

Download or read book Essays in Behavioral Economics written by Peter McGee and published by . This book was released on 2011 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Behavioral economics is the branch of the discipline that attempts to incorporate and explain data that appear to be at odds with traditional economic theory by appealing to psychological and cognitive phenomena. This dissertation addresses consumer decision making in various settings and examines the effects of factors outside the scope of standard economic models. Chapter 1 looks at the effect of an individual uncertainty over what a good is worth to them in the context of an auction. In a laboratory experiment with uncertainty over final values, 28% and 17% percent of bids in private-value English and first-price auctions, respectively, were above the subject's expected value of item - - behavior that cannot be explained by risk preferences. In both auction formats, a subset of bidders repeatedly bids above the expected value of the item. Prices in English are 13% percentage points higher in auctions with more than one bidder making bids at odds with elicited risk preferences ("overbidders") than in auctions with no bidders making such bids, but there are no differences between the prices in first-price auctions with different numbers of overbidders. In contrast to earlier findings with certain values, the revenues in English and first-price auctions with more than one overbidder are not statistically different from one another. Chapter 2 examines the impact of theoretically unimportant incentives on auction behavior. Bidding one's value in a second-price, private-value auction is a dominant solution (Vickrey, 1961). However, repeated experimental studies find much more overbidding than underbidding, resulting in overbidding on average. Our experimental work introduces manipulations against which the dominant strategy is immune, yet they affect bidding in a predictable way. Our finding suggests that although subjects fail to discover the dominant strategy, they nevertheless respond sensibly to the "steepness" of payoffs out of equilibrium. These results lend support to existing models such as QRE which assume that less than fully rational players will respond to out of equilibrium incentives in a systematic way, even though the full effect of our manipulations is not explained by these models. We suggest a new model that can explain these results. Chapter 3 delves search behavior. That consumers search more in response to an increase in prices than to a decrease in prices has been documented and motivated a great deal of theoretical research. Models generating this asymmetric consumer search do so by assuming imperfect consumer information about the price distribution and/or heterogeneous costs of search. I demonstrate that such assumptions are unnecessary by showing that subjects search asymmetrically after price distribution shifts in a laboratory experiment in which subjects know the price distribution and face a common cost of search. Subjects who experience an upward shift in the price distribution are 6 percentage points more likely to search than subjects who experience either no shift in prices or a downward shift. An alternative model of reference-dependent preferences in which consumers view potential purchases as "losses" or "gains" relative to a reference price generates asymmetric search.

Download or read book Behavioural Economics and Policy Design written by Donald Low and published by World Scientific. This book was released on 2012 with total page 214 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This book aims to demonstrate how successful policies in Singapore have integrated conventional economic principles with insights from the emerging field of behavioural economics even before the latter became popular. Using examples from various policy domains, it shows how good policy design often requires a synthesis of insights from economics and psychology. Policies should not only be compatible with economic incentives, but should also be sensitive to the cognitive abilities, limitations and biasesof citizens. Written by policy practitioners in the Singapore government, this book is an introduction to how behavioural economics and the findings from cognitive psychology can be intelligently applied to the design of public policies."--Publisher's description.

Download or read book Essays in Behavioural Economics and Incentive Design written by V. Chaudhary and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Behavioral Health Economics written by Tarso Mori Madeira and published by . This book was released on 2015 with total page 83 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is composed of two chapters. Each chapter presents a study testing a theory from behavioral economics in a health economics setting using field data. The first chapter studies the role of present bias in the choice of health insurance. I analyze the consequences of a policy change that removes deadlines for enrollment in high-quality (5-star) Medicare drug coverage plans (Part D), while maintaining existing deadlines for enrollment in all other plans. Although the goals of the policy were to increase enrollment in 5-star plans and to provide incentives for insurers to improve quality, the removal of deadlines might lead to the opposite. First, rational beneficiaries might wait to enroll in 5-star plans only when a negative health event occurs, which would both decrease enrollment and increase adverse selection. Second, without deadlines, present-biased beneficiaries might procrastinate, which would also lead to a drop in enrollment, driven by an overall increase in inertia. I develop a model to examine these different hypotheses and test its predictions using Medicare administrative micro data for the period of 2009-2012. I employ a difference-in-differences design within a differentiated-product discrete-choice demand framework. My identification strategy takes advantage of the fact that the policy did not actually change enrollment rules everywhere in the United States, as most counties were not within the coverage area of a 5-star provider in 2012, the year the policy was implemented. I have three main findings. First, the policy backfires: it decreases enrollment in the Part D program by 2.55pp from a baseline of 51.76\%, and decreases average market share of 5-star plans by 1.37pp from a baseline of 7.78\%. Second, the policy does not seem to impact adverse selection, suggesting the rational model might not fully account for the results. Third, the removal of deadlines leads to a drop in the probability that a previously enrolled beneficiary switches plans of 3.18pp (baseline 9.08\%), suggesting that at least some Medicare beneficiaries are present-biased. The second chapter studies role of projection bias in mental health treatment decisions. Evidence from psychology suggests that on a bad-weather day, individuals may feel more depressed than usual. If people are not fully able to account for the effect of transient weather, they may take systematically biased treatment decisions. I derive a model of a person considering treatment for depression and show that when projection bias is present, transient weather might influence choice. I use detailed administrative medical records from the MarketScan \textregistered database and daily county-level meteorological data from the National Climatic Data Center. My period of analysis is 01/01/2003 through 12/31/2004. My main analysis focuses on patient behavior during a small interval of time after they have been seen by a physician. I look at how weather influences antidepressant filling decision within patient and only include appointments that involved a major diagnosis of a mental disease or disorder. I find that a one standard deviation increase in the amount of cloud coverage (2.73 oktas) leads to a 0.063 percentage point increase in the probability that a patient fills an antidepressant prescription on appointment day. That is a 1.04\% increase from the 6.07\% baseline. I also find effects associated with snow, rain, and temperature. All effects fade with time and are not significant within seven days of the appointment. Most of the impact of cloud coverage on antidepressant filling is due to an increase on the number of new prescriptions, not an increase in refills. Virtually all the effect happens at the pharmacy, not via mail order. Most regions have similar coefficients associated with cloud coverage, with stronger results in the Northeast and Upper Midwest. Finally, most of the impact happens during Winter.

Download or read book Essays in Behavioral Economics written by Ashling M Scott and published by . This book was released on 2018 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic theory hinges on the fact that humans are rational. However, in the wild, research demonstrates human behavior often deviates from rationality. This deviation may result in suboptimal behavior. Researchers in behavioral economics and psychology have tried understand these irrational behaviors and clarified many of the ways humans are likely to be biased. Yet, we are still exploring ways to help people overcome their behavioral biases. This dissertation explores behavioral biases in three different contexts: technology, human cooperation, and banking. This dissertation demonstrates a behavioral bias in A/B testing in technology and quantifies the amount to which this bias is a problem. Second, this dissertation proposes a light institutional intervention of giving more information to study the impacts on trust. Third, this dissertation explores the effects of offering a new financial product to overcome behavioral biases around opening bank accounts and savings. Overall, these papers demonstrate behavioral biases can lead to suboptimal outcomes such as making the wrong business decision or missing out on the benefits of cooperation, or failure to open a bank account and save. Luckily, there are some ways we can overcome biases (Chapter 3), but not all interventions work in the ways we would expect (Chapter 2). The first chapter introduces the behavior of ''p-hacking", where decision makers stop experiments earlier or later than proper statistical validity requires, possibly because they are overly eager to obtain significant results. Such behavior may result in invalid test conclusions and financial losses. We investigate whether online A/B experimenters ``p-hack'' by stopping their experiment based on the p-value of the effect. Our data comes from a leading platform and contains 2,101 A/B tests that track the magnitude and significance level of the effect on every day of the experiment. We estimate the causal effect of reaching a particular p-value on stopping behavior by applying a regression discontinuity design to hazard modeling. Experimenters indeed p-hack, especially for positive lift values. Moreover, experimenters p-hack more if the lift is mildly positive rather than strongly positive. A latent class analysis shows that approximately 57% of experimenters p-hack at the 90% confidence threshold. A false discovery rate (FDR) analysis estimates that p-hacking increases false discoveries by 27.5%, while the overall rate of false-discoveries is 38%. This chapter is coauthored with Ron Berman, Leo Pekelis, and Christophe Van den Bulte. In the second chapter, I introduce an information signal and role organization that may engender more trusting behavior. Trust is an essential ingredient for unlocking economic surplus. However, consider the prisoner's dilemma--all parties gain from cooperation, yet each party has an incentive to deviate. How can we organize society to unlock the possible gains from trust in such situations? We've all had experiences that indicate it is possible. Studies have shown prosocial individuals are more trustworthy. We can take advantage of this fact and suggest pairing prosocial individuals with less prosocial individuals who will trust them if their type is known. In this case, it takes information, timing, and only one pro-social individual to unlock the trust surplus. I find information actually decreases overall trust and does not impact . Consequently, too much information might negatively influence cooperation and trust by changing our biases. In the final chapter coauthored with Paul Gertler, Sean Higgins, and Enrique Siera, I explore whether a financial incentive can nudge people into opening a bank account and saving. Despite the benefits of saving in formal financial institutions, take-up of no-fee formal savings accounts is low among the poor. Surprisingly, even after opening a savings account, use of the account is often low. In a large randomized experiment across 110 bank branches throughout Mexico, we provide a temporary incentive to both open and use a savings account: we offer prize-linked savings accounts with cash-prize lotteries, where lottery tickets are awarded as a function of savings balances. We find that 41% more accounts are opened in treatment branches than in control branches on average, and the number of accounts opened in treatment branches increases steadily over time while the lotteries were being offered. Although the incentive to save is temporary as lotteries are only offered for two months, the new accounts continue to be used over time. After five years, clients who opened accounts in response to the lottery continue saving and making transactions at the same rates as those who opened accounts in control branches during the same months.

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 in Behavioral Economics written by Yiming Liu and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Behavioural Public Policy written by Adam Oliver and published by Cambridge University Press. This book was released on 2013-10-24 with total page 252 pages. Available in PDF, EPUB and Kindle. Book excerpt: How can individuals best be encouraged to take more responsibility for their well-being and their environment or to behave more ethically in their business transactions? Across the world, governments are showing a growing interest in using behavioural economic research to inform the design of nudges which, some suggest, might encourage citizens to adopt beneficial patterns of behaviour. In this fascinating collection, leading academic economists, psychologists and philosophers reflect on how behavioural economic findings can be used to help inform the design of policy initiatives in the areas of health, education, the environment, personal finances and worker remuneration. Each chapter is accompanied by a shorter 'response' that provides critical commentary and an alternative perspective. This accessible book will interest academic researchers, graduate students and policy-makers across a range of disciplinary perspectives.