Behavioral Economics Commons^™

Lies, Probabilities, And Threats In Ultimatum Games, Mark Ferreira

Economics Honors Papers

Many papers have used the ultimatum game as a means to test bargaining behavior. A subset of experiments has examined the use of cheap talk and asymmetric in bargaining scenarios. Yet, this earlier work leaves out many of the complicated factors that occur in bargaining in the real world. No research has looked at the interaction of probabilities and threats in ultimatum games. The experiment described here makes two novel modifications to the ultimatum game: First: participant’s have the ability to send threats. Second: the game uses probabilities to determine whether or not the endowment size becomes revealed. The data …

Reverse Line Movements In Nfl Gambling: Parallels To Financial Market Biases And The Imitation Of Informed Bettor Strategies, Philip S. Crawford

CMC Senior Theses

Participants in the NFL gambling market can largely be divided into two distinct groups: informed bettors (“Sharps”) and uninformed bettors (“Squares”). Empirical and anecdotal evidence suggest that the dynamic between Sharp and Square bettors is very similar to that between institutional and retail investors. Professionals tend to be far better informed and utilize rational betting/investing strategies while individuals exhibit biases which perpetuate irrational strategies and therefore pricing inefficiencies. This study finds that uninformed participants in financial markets and the NFL betting market do share similar biases, and that these biases can be exploited by informed participants to generate positive excess …

Mandatory Process, Matthew B. Lawrence

Faculty Articles

This Article suggests that people tend to undervalue their procedural rights—their proverbial “day in court”—until they are actually involved in a dispute. The Article argues that the inherent, outcome-independent value of participating in a dispute resolution process comes largely from its power to soothe a person’s grievance— their perception of unfairness and accompanying negative emotional reaction—win or lose. But a tendency to assume unchanging emotional states, known in behavioral economics as projection bias, can prevent people from anticipating that they might become aggrieved and from appreciating the grievance-soothing power of process. When this happens, people will waive their procedural rights …

Are Religion And Environmentalism Complements Or Substitutes?: A Club-Based Approach, Feler Bose, Timothy M. Komarek

Economics Faculty Publications

In this article, we analyze the causal link between membership in environmental groups and active participation and membership in religious groups. We use a club-based model and employ OLS and spatial econometrics with controls to test for whether membership and participation in a religious group is a substitute or complement for membership in environmental groups. Instrumental variables estimation was used as a robustness check. We found that religious participation and religious membership in evangelical groups are a substitute for environmental membership. Much of the work on environmental concerns has focused on answers to survey questions, not on membership. We used …

The Effects Of Personality On Intertemporal Choice, Nicholas Hogan

Honors College Theses

This dissertation attempts to unveil new information concerning intertemporal choice, by trying to find a correlation between personality and the temporal choices that people make. The methodology for doing so is as follows: a survey was distributed and responses were regressed using Ordinary Least Squares (OLS). Given that there were two questions (one formatted using a calendar date and the other using a word format) about intertemporal choice (subjects were asked to choose a certain payoff corresponding to a specific point in time), there were two models constructed. Each model had the following variable structure: the dependent variable was the …

Successfully Financing Classical Music Kickstarter Projects, Sarah Chung

Scripps Senior Theses

With the rise of technology and finance, crowdfunding has been uprising as a popular method of financing projects. Kickstarter provides an online platform in which anyone with Internet access can upload their own project “pitch” to gain funding for their idea on an all-or-nothing model. My thesis explores financial trends and factors that potentially contribute to a successful Kickstarter campaign within the classical music projects subcategory. I use a logistic regression and the Ordinary Least Squares model to examine a dataset of already successfully funded projects and a second dataset that contains both successfully and unsuccessfully funded projects that were …

The Balloon Analogue Risk Task And Behavioral Correlates In Pigeons, Aaron P. Smith

Theses and Dissertations--Psychology

Individuals experience risk ubiquitously, but measuring risk taking is difficult. The balloon analogue risk task (BART) was developed in order to assess risk taking through having subjects press a key that accrues reward but also risk losing all reward with each press. In humans, greater responding in this task is associated with other maladaptive risk taking behaviors. The present research modeled this relationship in pigeons due to their previously shown propensity towards risk taking behavior. Experiment 1 used an unsignaled balloon task in which losing could only occur after 5 pecks. Results showed below optimal performance with greater pecks associated …

Price, Perceived Value And Customer Satisfaction: A Text-Based Econometric Analysis Of Yelp! Reviews, Eleanor A. Dwyer

Scripps Senior Theses

We examine the antecedents of customer satisfaction in the restaurant sector, paying particular attention to perceived value and price level. Using Latent Dirichlet Allocation, we extract latent topics from the text of Yelp! reviews, then analyze the relationship between these topics and satisfaction, measured as the difference between review rating and user average review rating.

Against Game Theory, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

People make choices. Often, the outcome depends on choices other people make. What mental steps do people go through when making such choices? Game theory, the most influential model of choice in economics and the social sciences, offers an answer, one based on games of strategy such as chess and checkers: the chooser considers the choices that others will make and makes a choice that will lead to a better outcome for the chooser, given all those choices by other people. It is universally established in the social sciences that classical game theory (even when heavily modified) is bad at …

A Critical Review Of Ontario’S Blue Box Program: Identifying And Testing Best Practices In Printed Paper And Packaging Recycling, Calvin Lakhan

Theses and Dissertations (Comprehensive)

This dissertation undertook a critical review of four recycling policies used in Ontario which are designed to promote household waste diversion and reduce material management costs. These policies include:

1) Municipal funding should be directly tied to program performance relative to their peer group. 2) All municipalities should make investments in recycling promotion and education, and will be reimbursed $1 per household for all recycling promotion and education expenditures

3) Where possible, municipalities should implement pay as you throw schemes for household waste as a means to minimize the amount of material being disposed of in the waste stream.

4) …

"Microfinance As A Determinant Of Domestic Violence In Bangladesh: Who Is At Risk?", Alvin Christian

Dissertations and Theses

This paper examines the impact that microfinance participation has on reported domestic violence rates among women in Bangladesh. While microfinance programs are aimed at reducing poverty, they may have unintended consequence and contribute to domestic violence or Intimate Partner Violence (IPV). Using nationally representative data from the Urban Health Survey (2006), I study the association between microfinance participation and domestic violence among currently married women. The outcome variable is domestic violence, which is coded as a dummy variable, where a women either has experienced domestic violence episodes or she hasn’t. Predictor variables include microfinance participation, community attitudes, liberal views, labor …

Political Choice And Economic Crisis In Brazil: A Case Of Mismanagement Of Public Money, Evellyn Brasil Monteiro

Dissertations and Theses

A few years ago, Brazil was the country where everybody would like to invest. Because it was one of the members of the BRIC, group of emergent countries with fast-growing economies including also Russia, India and China that gave the investors warranties that those investments would be successful. The current situation is very different from the one pictured not too long ago. High interest rates, high inflation, undervalued currency, and international political scandals describe the very serious economic crisis the country has been facing recently, making the economic growth forecast decrease. In 2013, the variation of Gross Domestic Product (GDP) …

Towards Principles And Standards For The Benefit-Cost Analysis Of Safety, W. Kip Viscusi, Scott Farrow

Vanderbilt Law School Faculty Publications

Benefit-cost analysis (BCA) is frequently applied to decisions involving public safety which requires analyzing risk and assessing options to manage risks. Principles and standards may assist analysts, decision-makers, and the public in developing and interpreting such BCAs. Principles and standards at best represent commonly held views among a community of practice. Such views are continually evolving with advances in the field. This paper presents a modularized format towards principles and standards that may assist in focusing discussion and decisions about whether such proposals actually reflect principles and standards within the benefit-cost analysis community of practice. Among topics covered are welfare …

Are Subjects Making Financial Decisions In Lab Auctions Or Are They Just Gambling?, Cary Deck, Jungmin Lee, Javier Reyes

Economics Faculty Articles and Research

Optimal bidding strategies in first-price and Dutch auctions are theoretically isomorphic but depend on bidder risk attitudes. However, laboratory experiments consistently find different behaviour between auction formats. This article explores whether the notion in psychology that financial and gambling risks are viewed differently can explain the discrepancy. Ultimately, the evidence does not support this hypothesis, but a bidder's propensity to gamble is associated with how much risk he takes in both auctions whereas his propensity to take financial risks is not. The results suggest that subjects may view themselves as gambling in laboratory auctions rather than making financial decisions.

Equity By The Numbers: Measuring Poverty, Inequality, And Injustice, Matthew D. Adler

Faculty Scholarship

Can we measure inequity? Can we arrive at a number or numbers capturing the extent to which a given society is equitable or inequitable? Sometimes such questions are answered with a “no”: equity is a qualitative, non-numerical consideration.

This Article offers a different perspective. The difficulty with equity measurement is not the impossibility of quantification, but the overabundance of possible metrics. There currently exist at least four families of equity-measurement frameworks, used by scholars and, to some extent, governments: inequality metrics (such as the Gini coefficient), poverty metrics, social-gradient metrics (such as the concentration index), and equity-regarding social welfare functions. …

Reputation Building Through Failure, Huan Wang, Yi Zhang

Research Collection School Of Economics

In China, many entrepreneurs receive strong supports each time their business fails. This contradicts existing literature and differs from rare revival elsewhere. The major explanation lies in China’s unfriendly and unstable policy environments, due to which business failure per se cannot discern competence. Therefore, entrepreneurs failing because of policy shocks have the incentive for extra efforts to build reputation of competence and trustworthiness. This mechanism prepares a pool of seasoned entrepreneurs who can help alleviate damages of not only policy shocks, but also such system shocks as business cycle and sector upgrading, and therefore makes the economy more adaptable.

Wellbeing Of Singapore’S Youths, Kong Weng Ho

Research Collection School Of Economics

Given Singapore’s focus on human capital investment in its residents, the nation’s youths have experienced increases in their financial, educational, and physical wellbeing. However, how have our youths fared in their emotional and mental wellbeing? Figures from the World Values Survey show reported a gradual decline in life satisfaction for both general population and youths. Data from four waves of the National Youth Survey confirms this trend. This chapter explores and examines the non-economic channels that may have countered the positive influence of economic success on the wellbeing of youths, namely, changing family structure, heightened stressors, shifting life goals, time …

Aggregate Consumption And Debt Accumulation: An Empirical Examination Of Us Household Behavior, Yun K. Kim, Mark Setterfield, Yuan Mei

Research Collection School Of Economics

The outbreak of the financial crisis in 2008 witnessed a significant contraction in US consumption spending, as households began deleveraging following a period marked by historically high levels of household borrowing. These events call into question the canonical life-cycle theory of consumption, with its benign view of debt as a neutral instrument of optimal intertemporal expenditure smoothing. This paper draws attention to an alternative, post-Keynesian account of consumption spending in which current income, household borrowing and household indebtedness all affect current consumption. Central to the analysis is an empirical investigation of US consumption spending since the 1950s. The results of …

Why Healthy Behavior Is The Hard Choice, Lawrence O. Gostin

Georgetown Law Faculty Publications and Other Works

Our society is structured to encourage unhealthy diets and physically inactive lifestyles, which are key risk factors for chronic diseases including diabetes, heart diseases, and cancers. We are bombarded with advertisements for hyperprocessed foods laden with saturated fat, salt, sugar, and refined carbohydrates, “low-fat” foods often contain high amounts of sugar and salt, and parks and recreation spaces are often inaccessible or unsafe.

Four simple ideas - taxes on unhealthy products, product reformulation, improving the informational environment, and increasing healthy food accessibility - could make healthy behaviors the “default” choice for most consumers. First, taxes on unhealthy products, such as …

Infant Mortality: Cross Section Study Of The United State, With Emphasis On Education, Daniel C. Sheets-Poling

Student Research – Stevenson Center

On the surface infant mortality is usually thought of as just a unfortunate part of life in what can happen to an individual family, but infant mortality is part of the factors that affect social capital, which can lead back to overall trust in a community. When that trust starts to wither within a community, economic activity will be affected as community members will not behave as they usually do within their given economic boundaries. While social capital is not solely affected by infant mortality, it does show what type of health status an area has. As a community, state, …