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Behavioral Economics Commons™

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2017

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Articles 31 - 51 of 51

Full-Text Articles in Behavioral Economics

Behavioral Finance And Its Impact On Investing, Jordan Fieger Apr 2017

Behavioral Finance And Its Impact On Investing, Jordan Fieger

Senior Honors Theses

The field of behavioral finance has seen incredible growth over the past half century as it has explored the effect that cognitive psychological biases can have on investors’ financial decisions. Behavioral finance stands in stark contrast to the efficient market hypothesis, as it attributes market inefficiencies to investors who are not perfectly rational human beings. It offers a solution to the observed 3.5% gap that active equity investors miss out on in the market compared to passive index funds, which it attributes to their emotions and psychological biases. These common human biases can be grouped into five major categories: heuristics, …

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Social Media Influence: Metrics Matter, Juliana Houldcroft Apr 2017

Social Media Influence: Metrics Matter, Juliana Houldcroft

Honors Projects in Marketing

It is imperative for companies to engage in social media marketing as consumers are often dependent on online information and electronic word-of-mouth. Past literature claims that consumers evaluate the influence of communications differently on social media than they would in a traditional environment because of the nature of the internet. This study aims to analyze user’s perceptions of social media marketing influence and determines if user’s perception of influence changes based on the number of social media metrics (likes, comments, and shares) that accompany a Facebook post. The study also investigates if perceptions of influence vary depending on a user’s …

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East Asia Pacific Economies: Looking Good, Singapore Management University Apr 2017

East Asia Pacific Economies: Looking Good, Singapore Management University

Perspectives@SMU

The World Bank expects recovering global trade and commodity prices to buoy regional prospects

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Will Politics Trump Economic Growth?, Singapore Management University Apr 2017

Will Politics Trump Economic Growth?, Singapore Management University

Perspectives@SMU

While economic uncertainties remain, investors should not worry about the White House jeopardising the U.S. economy

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Foreign Business Entrepreneurship In Cape Town: How To Start A Business - Stories Of 6 Cape Town Based Immigrants, Aleksandra Bogoevska Apr 2017

Foreign Business Entrepreneurship In Cape Town: How To Start A Business - Stories Of 6 Cape Town Based Immigrants, Aleksandra Bogoevska

Independent Study Project (ISP) Collection

South Africa has become a shelter for immigrants from all over the world (Wilkinson, 2015). Combined with its internationally recognized economy, it is a tempting location for foreigners to establish a business (“Starting a Business in South Africa as a Foreigner – A Complete Guide”, n.d.). With this in mind, the intent of this study is twofold. First, this project aims at analyzing how foreigners establish businesses in Cape Town. Its objective is to trace the entrepreneurial process from the initial stages to its recent development. Second, it aims at outlining their experiences in Cape Town, thus serve as a …

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To Buy Or Not To Buy? Controversies In Consumption, Meghan Pierce Phd Mar 2017

To Buy Or Not To Buy? Controversies In Consumption, Meghan Pierce Phd

Explorer Café

No abstract provided.

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Local And Global Sd-Strategy-Proofness Of Ordinal Mechanisms On Block-Connected Domains, Peng Liu Mar 2017

Local And Global Sd-Strategy-Proofness Of Ordinal Mechanisms On Block-Connected Domains, Peng Liu

Research Collection School Of Economics

The adjacency by Monjardet (2009) is weakened to a flip between two adjacently ranked blocks and called block-adjacency. The connectedness defined accordingly, blockconnectedness, covers some interesting unconnected domains. An ordinal mechanism on a block-connected domain is block-adjacent sd-strategy-proof if reporting the true preference always leads to a lottery that stochastically dominates the lottery delivered by reporting any preference block-adjacent to the sincere one.A condition on a block-connected domain called path-nestedness is proposed and shown sufficient for the equivalence between sd-strategy-proofness and block-adjacent sd-strategy-proofness. The sequentially dichotomous domain by Liu (2017) is an application. In addition, we systematically search for the …

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Coordination When There Are Restricted And Unrestricted Options, Shaun P. Hargreaves Heap, David Rojo Arjona, Robert Sugden Feb 2017

Coordination When There Are Restricted And Unrestricted Options, Shaun P. Hargreaves Heap, David Rojo Arjona, Robert Sugden

Economics Faculty Articles and Research

One might expect that, in pure coordination games, coordination would become less frequent as the number of options increases. Contrary to this expectation, we report an experiment which found more frequent coordination when the option set was unrestricted than when it was restricted. To try to explain this result, we develop a method for eliciting the general rules that subjects use to identify salient options in restricted and unrestricted sets. We find that each such rule, if used by all subjects, would generate greater coordination in restricted sets. However, subjects tend to apply different rules to restricted and unrestricted sets.

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Decoding Chinese Foreign Policy, Singapore Management University Feb 2017

Decoding Chinese Foreign Policy, Singapore Management University

Perspectives@SMU

States need to understand Beijing’s practice of ‘false dilemmas’ and its revanchist narrative, and stand firm without provoking China unnecessarily

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Loss Aversion, Upset Preference, And Sports Television Viewing Audience Size, Brad Humphreys, Levi Pérez Jan 2017

Loss Aversion, Upset Preference, And Sports Television Viewing Audience Size, Brad Humphreys, Levi Pérez

Economics Faculty Working Papers Series

A growing body of research examines the effect of loss aversion (LA) on consumers’ decisions to watch or attend sporting events. Much of this research focuses on live game attendance. In contrast to the predictions of uncertainty of outcome hypothesis (UOH), loss-averse consumers prefer watching either potential upsets, or dominant performances by strong favorites, to events with uncertain outcomes. We test for LA vs. UOH effects in television viewing audience data for free over-the-air broadcasts of 304 Spanish football matches from 2008/09 to 2015/16. This setting generates substantial variation home team win probabilities because of the presence of Real Madrid …

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Who Reacts To Income Tax Rate Changes? The Relationship Between Income Taxes And The Motivation To Work: The Case Of Azerbaijan, Orkhan Nadirov, Bruce Dehning, Khatai Aliyev, Minura Iskandarova Jan 2017

Who Reacts To Income Tax Rate Changes? The Relationship Between Income Taxes And The Motivation To Work: The Case Of Azerbaijan, Orkhan Nadirov, Bruce Dehning, Khatai Aliyev, Minura Iskandarova

Accounting Faculty Articles and Research

This research investigates the effects of income taxation on the motivation to work by employing a survey method for the Azerbaijan population. The two research questions of interest are, if subjects consider income taxes when deciding how many hours to work and how subjects would react to a hypothetical 5% income tax rate increase. Also examined are the responses to these questions between subjects with different socio-economic characteristics. Examining cross-sectional data of 326 respondents reveals that income taxes do not influence Azerbaijan labour market participants’ motivation to work, regardless of their socio-economic characteristics. Empirical results indicate that reactions to hypothetical …

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Are Fair Weather Fans Affected By Weather? Rainfall, Habit Formation And Live Game Attendance, Qi Ge, Brad Humphreys, Kun Zhou Jan 2017

Are Fair Weather Fans Affected By Weather? Rainfall, Habit Formation And Live Game Attendance, Qi Ge, Brad Humphreys, Kun Zhou

Economics Faculty Working Papers Series

We analyze habit formation in sports attendance utilizing rainfall as an unexpected, transitory shock to attendance costs. Using attendance data from Major League Baseball (MLB) and NOAA weather data, we analyze the impact of variation in game day weather conditions on current and future MLB attendance. The empirical strategy permits identification of both the formation and persistence of habit from exogenous weather shocks. Past adverse weather shocks increase future attendance by about 200 fans per game. Our study contributes to the literature developing empirical evidence of habit formation in the field and provides policy implications for optimal ticket pricing strategies.

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Education, Income, And Social Behavior Across Missouri, Gail Heyne Hafer, R. W. Hafer Jan 2017

Education, Income, And Social Behavior Across Missouri, Gail Heyne Hafer, R. W. Hafer

Center for Applied Economics

This study investigates the relationship between education and several economic and social outcomes. On the economic side we consider the link between education and income. We also look at how education is related to health choices and social cohesion. Our basic question is: “What is the relationship between educational decisions made in the past and economic and social outcomes today?” Answers to this question reflect not only personal educational choices, but also shed light on the policy issue of why it is important to improve educational attainment.

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Are Voters Cursed When Politicians Conceal Policy Preferences?, Nichole Szembrot Jan 2017

Are Voters Cursed When Politicians Conceal Policy Preferences?, Nichole Szembrot

Faculty Scholarship

In campaigns, candidates often avoid taking positions on issues, concealing the policy preferences that would guide them if elected. This paper describes a novel explanation for ambiguity in political campaigns. It develops a model of candidate competition in which policy-motivated candidates can choose whether or not to announce their policy preferences to voters. It applies Eyster and Rabin's (2005) concept of cursed equilibrium, which allows for varying degrees of understanding of the connection between type (policy preference) and strategy (whether to announce). If voters updated according to Bayes' Rule, they would understand that candidates who do not announce positions are …

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The Nature Of Sequential Innovation, Christopher Buccafusco, Stefan Bechtold, Christopher Jon Sprigman Jan 2017

The Nature Of Sequential Innovation, Christopher Buccafusco, Stefan Bechtold, Christopher Jon Sprigman

Faculty Scholarship

When creators and innovators take up a new task, they face a world of existing creative works, inventions, and ideas, some of which are governed by intellectual property (IP) rights. This presents a choice: Should the creator pay to license those rights? Or, alternatively, should the creator undertake to innovate around them? Our Article formulates this “build on/build around decision” as the fundamental feature of sequential creativity, and it maps a number of factors—some legal, some contextual—that affect how creators are likely to decide between building on existing IP or building around it. Importantly, creators are influenced by more than …

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The Moral High Road In The Undercity: An Examination Of Ethics In A Mumbai Slum, Mary L. Bauer Jan 2017

The Moral High Road In The Undercity: An Examination Of Ethics In A Mumbai Slum, Mary L. Bauer

Catholic Studies Faculty Publications

As of 2016, 1.6 billion people around the globe lacked proper shelter and of these, one billion lived in informal settlements, also called slums, according to data collected by the United Nations (UN-Habitat 2016). Investigative journalist Katherine Boo spent four years, between 2007 and 2011, interviewing and shadowing the residents of one such slum on the outskirts of Mumbai. Her goal was to draw attention to socio-economic inequality (Boo, 2014 pp. 247-248), but in the course of collecting data about the consequences of poverty and residents’ attempts to rise out of it, she also recorded information about their moral choices, …

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Chinese Superstition And Real Estate Prices: Transaction-Level Evidence From The Us Housing Market, Brad Humphreys, Adam Nowak, Yang Zhou Jan 2017

Chinese Superstition And Real Estate Prices: Transaction-Level Evidence From The Us Housing Market, Brad Humphreys, Adam Nowak, Yang Zhou

Economics Faculty Working Papers Series

We investigate the impact of Chinese superstition on prices paid by Chinese home buyers in Seattle, Washington. Chinese consider 8 lucky and 4 unlucky. Empirical results indicate Chinese buyers pay a 1-2% premium for addresses including an 8 and a 1% discount for addresses including a 4. These results are unrelated to unobserved property quality: no premium exists when Chinese sell to non-Chinese. Absent explicit identfiers for Chinese individuals, we develop a binomial name classifier using methods from the biomedical and document classification literature, allowing for falsification tests using other ethnic groups and mitigating ambiguity attributable to transliteration of Chinese …

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Retirement Adequacy Of Mature Workers In Singapore, Rhema Vaithianathan, Stephen Hoskins Jan 2017

Retirement Adequacy Of Mature Workers In Singapore, Rhema Vaithianathan, Stephen Hoskins

Research Collection School Of Economics

In the last decade, the Singapore resident population has grown older with more elderly and fewer younger people. As Singapore Department of Statistics noted, the proportion of residents aged 65 years and over has increased from 9% to 13% over the past ten years. There are now fewer working-age adults to support each resident aged 65 years and over as indicated by the falling resident old-age support ratio from 7.7 in 2007 to 5.1 in 2017. The support ratio is expected to halve to 2.5 by 2030. As Singaporeans are both living and working longer, it is vital for the …

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The Economics Of Healthcare Rationing, Michael D. Frakes, Matthew B. Frank, Kyle Rozema Jan 2017

The Economics Of Healthcare Rationing, Michael D. Frakes, Matthew B. Frank, Kyle Rozema

Faculty Scholarship

This article examines the economics of healthcare rationing. We begin with an overview of the various dimensions across which healthcare rationing operates, or at least has the potential to operate, in the first place. We then describe the types of economic analyses used in healthcare rationing decision-making, with particular reference to cost-benefit analysis and cost-effectiveness analysis. We also discuss healthcare rationing in practice, such as how economic analyses inform decisions regarding which services to cover, and conclude by discussing various practical and conceptual challenges that may arise with economic analyses and that span both economics and ethics.

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The Perverse Consequences Of Disclosing Standard Terms, Tess Wilkinson-Ryan Jan 2017

The Perverse Consequences Of Disclosing Standard Terms, Tess Wilkinson-Ryan

All Faculty Scholarship

Although assent is the doctrinal and theoretical hallmark of contract, its relevance for form contracts has been drastically undermined by the overwhelming evidence that no one reads standard terms. Until now, most political and academic discussions of this phenomenon have acknowledged the truth of universally unread contracts, but have assumed that even unread terms are at best potentially helpful, and at worst harmless. This Article makes the empirical case that unread terms are not a neutral part of American commerce; instead, the mere fact of fine print inhibits reasonable challenges to unfair deals. The experimental study reported here tests the …

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Contract Consideration And Behavior, David A. Hoffman, Zev. J. Eigen Jan 2017

Contract Consideration And Behavior, David A. Hoffman, Zev. J. Eigen

All Faculty Scholarship

Contract recitals are ubiquitous. Yet, we have a thin understanding of how individuals behave with respect to these doctrinally important relics. Most jurists follow Lon Fuller in concluding that when read, contract recitals accomplish their purpose: to caution against inconsiderate contractual obligation. Notwithstanding the foundational role that this assumption has played in doctrinal and theoretical debates, it has not been tested. This Article offers what we believe to be the first experimental evidence of the effects of formal recitals of contract obligation — and, importantly too, disclaimers of contractual obligation — on individual behavior. In a series of online experiments, …

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