Correlation Neglect in Belief Formation
|
|
- Hubert Booth
- 6 years ago
- Views:
Transcription
1 Correlation Neglect in Belief Formation Benjamin Enke Florian Zimmermann Bonn Graduate School of Economics University of Zurich NYU Bounded Rationality in Choice Conference May 31, 2015 Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 1 / 26
2 Motivation Many natural information structures generate correlated rather than mutually independent signals News media: press agencies, well-known journalists Social networks: well-connected people Akerlof / Shiller (2009) have argued that the resulting telling and re-telling of stories leads people to overract to information and hence generates aggregate booms or busts Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 2 / 26
3 Motivation So how do people process correlated information when the data-generating process is transparent and known? If they neglect correlations, do they learn from others through market interaction?... what are the cognitive underpinnings of such a bias? Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 3 / 26
4 We show A considerable fraction of people neglects correlations in an individual decision-making task The cognitive error generates pronounced and predictable price distortions in an experimental asset market Correlation neglect has its cognitive roots in selective attention, so that exogenous shifts in subjects focus have large effects on beliefs Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 4 / 26
5 Outline 1 Individual Decision-Making Experiments 2 Market Experiments 3 The Sources of Correlation Neglect Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 5 / 26
6 Outline 1 Individual Decision-Making Experiments 2 Market Experiments 3 The Sources of Correlation Neglect Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 6 / 26
7 Experimental setup Subjects are asked to estimate hypothetical continuous true state Payment via precision (quadratic scoring rule) 10 independent tasks Key idea of between-subjects design: Construct two sets of signals (one with and one without a known and simple correlation), which result in the same Bayesian posterior Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 7 / 26
8 Experimental setup Computer D Intermediary 3 Computer D Intermediary 3 Computer C Intermediary 2 Computer C Intermediary 2 Computer B Intermediary 1 Computer B Intermediary 1 Computer A Subject Computer A Subject Figure : Uncorrelated (left panel) and correlated (right panel) information structure Computers A-D generate four unbiased iid signals about state (drawn from truncated normal) For example, in one task: true state=10, signals A-D=12, 9, 10, 0 Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 8 / 26
9 Experimental setup Extensive instructions and control questions Robustness check to ensure that results are robust to slight variations in experimental frame, information structure, and payment method Experiments conducted in BonnEconLab, 94 subjects, average earnings $15 Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 9 / 26
10 Results Individual Decision-Making In 9 out of 10 tasks, beliefs significantly differ in the direction predicted by correlation neglect at 5% (Wilcoxon ranksum test) Does not depend on magnitude of true state (10 vs. 46,422) Significant difference in earnings across treatments ( $3.50) Clear patterns in subjects responses allow estimation of naïveté types : 0 = Bayesian, 1 = Full correlation neglect Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 10 / 26
11 Results Individual Decision-Making Density Median naïveté parameter Correlated treatment Uncorrelated treatment kernel = epanechnikov, bandwidth = Figure : Kernel density estimates of median naïveté parameters Similar picture emerges when estimating subjects updating rules through finite mixture model Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 11 / 26
12 Outline 1 Individual Decision-Making Experiments 2 Market Experiments 3 The Sources of Correlation Neglect Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 12 / 26
13 Market experiments experimental setup Incorporate belief elicitation task into standard continuous double auction with uncertainty over value of the assets; value equals true state from individual-level design Four buyers obtain monetary endowment, four sellers four assets each Identical signals for each subject; everybody received either correlated or uncorrelated information 10 trading periods, full reset after each period 288 subjects, average earnings $25 Note that magnitude of signal A relative to the other signals predicts direction of price distortion Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 13 / 26
14 Results Market Across periods / true states, prices are significantly distorted away from the Bayesian benchmark In 9 out of 10 periods, prices significantly differ across treatments at 5% (Wilcoxon ranksum test) Again, data relatively clean: Price trajectory closely tracks correlation neglect prediction Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 14 / 26
15 Results Market Ordering of rounds # Trading period Bayes Correlated minus uncorrelated treatment Correlation neglect Figure : Difference between median normalized market prices in the correlated and uncorrelated treatments across trading rounds Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 15 / 26
16 Results Market We measured individual-level beliefs, which allows us to identify who is naïve / sophisticated This naïveté parameter predicts what it should predict, both across markets and across individuals within markets... Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 16 / 26
17 Results Market Table : Determinants of prices, asset holdings, and profits in the correlated market treatment Group-level median correlation neglect (χ) (0.16) (0.20) Dependent variable: Normalized Median asset holdings Median asset holdings Median market price if underpricing if overpricing profit (1) (2) (3) (4) (5) (6) (7) (8) Individual median correlation neglect (χ) (0.17) (0.19) (0.12) (0.14) (0.05) (0.05) Constant (0.12) (1.04) (0.12) (0.94) (0.14) (1.31) (0.03) (0.28) Additional controls No Yes No Yes No Yes No Yes Observations R OLS estimates, standard errors clustered at the market group level. p < 0.10, p < 0.05, p < 0.01 Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 17 / 26
18 Outline 1 Individual Decision-Making Experiments 2 Market Experiments 3 The Sources of Correlation Neglect Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 18 / 26
19 Potential Mechanisms Clearly, there is some bounded rationality happening But what exactly is it, i.e., what are the cognitive mechanisms underlying correlation neglect? Important to know not just to de-bias people, but also to develop an empirical understanding of the potential ingredients (micro-foundations) of a general theory of boundedly rational updating Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 19 / 26
20 Potential Mechanisms 1 Conceptual or mathematical problems: Why would double-counting introduce a bias? How can I invert the messages in any case? 2 Cognitive effort costs: I could do it, but the stakes are too low. 3 Face value bias: This is not about correlations per se: Regardless of which feature distorts the signal, I m overwhelmed by the complexity and simply take the average of whatever I see. 4 Selective Attention: There s a lot going on in this problem. I m thinking about the information structure, but which feature do I actually need to focus on? In total, 11 treatments with almost 500 subjects Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 20 / 26
21 Conceptual or Mathematical Problems Computer B Computer B Intermediary Intermediary Computer A Subject Computer A Subject Figure : Simple uncorrelated (left panel) and correlated (right panel) information structure Requires the same conceptual understanding of double-counting, but virtually everybody gets it right When we explicitly ask people to invert the messages, almost everybody can do it Conceptual or mathematical problems do not drive correlation neglect Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 21 / 26
22 Cognitive Effort Costs We triple the stake size (maximum variable earnings $40) Effort as proxied for by response times goes up by 25% but subjects beliefs are unaffected Suggests that subjects try harder, but do not reflect upon their problem-solving strategy Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 22 / 26
23 Face Value Bias If subjects take all information at face value, they should also make mistakes in settings in which the signals are distorted by an external source, rather than through the interdependence of multiple signals Treatment 1: Independent signals get multiplied by 1.5 Treatment 2: Add known constant to correlated messages In both treatments, subjects un-do the external distortions, showing that the bias is indeed about correlations per se Treatment Multiply Treatment Face value Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 23 / 26
24 Selective Attention If subjects intuitively focus too little on the mechanics generating the correlation, they should perform significantly better when we (exogenously) shift their attention towards the correlation Treatment 1: We presented the correlated and uncorrelated information structure alternately (within subject) Treatment 2: Think carefully about what the intermediaries do! What does that imply for the estimates of the intermediaries? Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 24 / 26
25 Selective Attention Density Treatment Alternating Density Treatment Intermediaries Median normalized belief Correlated Uncorrelated Alternating kernel = epanechnikov, bandwidth = Median normalized belief Correlated Uncorrelated Intermediaries kernel = epanechnikov, bandwidth = Beliefs significantly differ from correlated treatment, indistinguishable from uncorrelated condition Once subjects allocate their attention to the critical feature of the environment at hand, they correctly solve the problem Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 25 / 26
26 Conclusion and Relation to Literature Clean evidence for people s neglect of correlations in information sources Support for key assumption underlying naïve social learning theories (e.g., DeMarzo et al., 2003; Eyster and Rabin, 2010) or applications in political economy (Levy and Razin, 2015; Ortoleva and Snowberg, 2015) Bias persists in simple experimental market and generates predictable price distortions Findings regarding sources of correlation neglect highlight importance of attentional mechanisms in supplying selective inputs into belief formation process Conceptually related to recent efforts to model the mental process of belief formation through selective attention (Gennaioli and Shleifer, 2010; Bordalo et al., 2014; Schwartzstein, 2014) Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 26 / 26
27 Treatment Multiply Computer D Computer C Computer B Intermediary 3 Intermediary 2 Intermediary 1 Computer A Subject Figure : Treatment Multiply. The intermediaries multiply the reports of the intermediaries with 1.5. Back Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 27 / 26
28 Treatment Face value Computer D Intermediary 3 Machine 3 Computer C Intermediary 2 Machine 2 Computer B Intermediary 1 Machine 1 Computer A Subject Figure : Treatment Face value. The machines add X to the reports of the intermediaries. Back Benjamin Enke (Bonn) Correlation Neglect in Belief Formation NYU BRIC 28 / 26
Correlation Neglect in Belief Formation
Correlation Neglect in Belief Formation Benjamin Enke Florian Zimmermann September 16, 2015 Abstract Many information structures generate correlated rather than mutually independent signals, the news media
More informationCorrelation Neglect in Belief Formation *
Correlation Neglect in Belief Formation * Benjamin Enke Florian Zimmermann December 4, 2017 Abstract Many information structures generate correlated rather than mutually independent signals, the news media
More informationCorrelation Neglect in Belief Formation
Correlation Neglect in Belief Formation Benjamin Enke Florian Zimmermann October 21, 2015 Abstract Many information structures generate correlated rather than mutually independent signals, the news media
More informationCorrelation Neglect in Belief Formation
DISCUSSION PAPER SERIES IZA DP No. 7372 Correlation Neglect in Belief Formation Benjamin Enke Florian Zimmermann April 2013 Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor Correlation
More informationInformation Cascade Experiments
Information Cascade Experiments Lisa R. Anderson and Charles A. Holt * I. CASCADES ' The theoretical literature on "herding" pertains to situations where people with private, incomplete information make
More informationIntroduction to Behavioral Economics Like the subject matter of behavioral economics, this course is divided into two parts:
Economics 142: Behavioral Economics Spring 2008 Vincent Crawford (with very large debts to Colin Camerer of Caltech, David Laibson of Harvard, and especially Botond Koszegi and Matthew Rabin of UC Berkeley)
More informationI. Introduction. Armin Falk IZA and University of Bonn April Falk: Behavioral Labor Economics: Psychology of Incentives 1/18
I. Introduction Armin Falk IZA and University of Bonn April 2004 1/18 This course Study behavioral effects for labor related outcomes Empirical studies Overview Introduction Psychology of incentives Reciprocity
More informationEC352 Econometric Methods: Week 07
EC352 Econometric Methods: Week 07 Gordon Kemp Department of Economics, University of Essex 1 / 25 Outline Panel Data (continued) Random Eects Estimation and Clustering Dynamic Models Validity & Threats
More informationInattentive Inference
Inattentive Inference Thomas Graeber October 15, 218 Abstract Most information structures have multiple unobserved causes. Learning about a specific cause requires taking into account other causes in the
More informationEmanuela Carbonara. 31 January University of Bologna - Department of Economics
Game Theory, Behavior and The Law - I A brief introduction to game theory. Rules of the game and equilibrium concepts. Behavioral Games: Ultimatum and Dictator Games. Entitlement and Framing effects. Emanuela
More informationAUG Expert responses to issues raised by British Gas during the query period for the first draft 2017/18 AUG Statement, 14 March 2017.
AUG Expert responses to issues raised by British Gas during the query period for the first draft 2017/18 AUG Statement, 14 March 2017. Below are the issues raised by British Gas. Following each issue is
More informationDoes Strategic Play Explain the Decay in Contributions in a Public Goods Game? Experimental Evidence
Does Strategic Play Explain the Decay in Contributions in a Public Goods Game? Experimental Evidence Ananish Chaudhuri Department of Economics University of Auckland a.chaudhuri@auckland.ac.nz Tirnud Paichayontvijit
More informationIntroduction to Applied Research in Economics Kamiljon T. Akramov, Ph.D. IFPRI, Washington, DC, USA
Introduction to Applied Research in Economics Kamiljon T. Akramov, Ph.D. IFPRI, Washington, DC, USA Training Course on Applied Econometric Analysis June 1, 2015, WIUT, Tashkent, Uzbekistan Why do we need
More informationCarrying out an Empirical Project
Carrying out an Empirical Project Empirical Analysis & Style Hint Special program: Pre-training 1 Carrying out an Empirical Project 1. Posing a Question 2. Literature Review 3. Data Collection 4. Econometric
More informationIntroduction to Machine Learning. Katherine Heller Deep Learning Summer School 2018
Introduction to Machine Learning Katherine Heller Deep Learning Summer School 2018 Outline Kinds of machine learning Linear regression Regularization Bayesian methods Logistic Regression Why we do this
More informationMeta-Analysis and Publication Bias: How Well Does the FAT-PET-PEESE Procedure Work?
Meta-Analysis and Publication Bias: How Well Does the FAT-PET-PEESE Procedure Work? Nazila Alinaghi W. Robert Reed Department of Economics and Finance, University of Canterbury Abstract: This study uses
More informationJournal of Political Economy, Vol. 93, No. 2 (Apr., 1985)
Confirmations and Contradictions Journal of Political Economy, Vol. 93, No. 2 (Apr., 1985) Estimates of the Deterrent Effect of Capital Punishment: The Importance of the Researcher's Prior Beliefs Walter
More informationSession 1: Dealing with Endogeneity
Niehaus Center, Princeton University GEM, Sciences Po ARTNeT Capacity Building Workshop for Trade Research: Behind the Border Gravity Modeling Thursday, December 18, 2008 Outline Introduction 1 Introduction
More informationBeliefs and Utility - Experimental Evidence on Preferences for Information
Beliefs and Utility - Experimental Evidence on Preferences for Information Armin Falk - briq and University of Bonn (joint with Florian Zimmermann) June 2017 - Belief Based Utility Conference, CMU Introduction
More informationProblem Set 5 ECN 140 Econometrics Professor Oscar Jorda. DUE: June 6, Name
Problem Set 5 ECN 140 Econometrics Professor Oscar Jorda DUE: June 6, 2006 Name 1) Earnings functions, whereby the log of earnings is regressed on years of education, years of on-the-job training, and
More informationSUPPLEMENTARY INFORMATION
Supplementary Statistics and Results This file contains supplementary statistical information and a discussion of the interpretation of the belief effect on the basis of additional data. We also present
More informationBehavioral Economics, Past, Present and Future by Richard Thaler [AER 2016]
Behavioral Economics, Past, Present and Future by Richard Thaler [AER 2016] Hosein Joshaghani Sharif University of Technology February 06, 2018 1 / 24 What is the contribution of behavioral economics?
More informationTRACER STUDIES ASSESSMENTS AND EVALUATIONS
TRACER STUDIES ASSESSMENTS AND EVALUATIONS 1 INTRODUCTION This note introduces the reader to tracer studies. For the Let s Work initiative, tracer studies are proposed to track and record or evaluate the
More informationHow Much Should We Trust the World Values Survey Trust Question?
How Much Should We Trust the World Values Survey Trust Question? Noel D. Johnson * Department of Economics George Mason University Alexandra Mislin Kogod School of Business, American University Abstract
More information3 CONCEPTUAL FOUNDATIONS OF STATISTICS
3 CONCEPTUAL FOUNDATIONS OF STATISTICS In this chapter, we examine the conceptual foundations of statistics. The goal is to give you an appreciation and conceptual understanding of some basic statistical
More informationUsing Experimental Methods to Inform Public Policy Debates. Jim Murphy Presentation to ISER July 13, 2006
Using Experimental Methods to Inform Public Policy Debates Jim Murphy Presentation to ISER July 13, 2006 Experiments are just one more tool for the applied economist Econometric analysis of nonexperimental
More informationSession 3: Dealing with Reverse Causality
Principal, Developing Trade Consultants Ltd. ARTNeT Capacity Building Workshop for Trade Research: Gravity Modeling Thursday, August 26, 2010 Outline Introduction 1 Introduction Overview Endogeneity and
More informationAugust 29, Introduction and Overview
August 29, 2018 Introduction and Overview Why are we here? Haavelmo(1944): to become master of the happenings of real life. Theoretical models are necessary tools in our attempts to understand and explain
More informationEmpowered by Psychometrics The Fundamentals of Psychometrics. Jim Wollack University of Wisconsin Madison
Empowered by Psychometrics The Fundamentals of Psychometrics Jim Wollack University of Wisconsin Madison Psycho-what? Psychometrics is the field of study concerned with the measurement of mental and psychological
More informationThe Common Priors Assumption: A comment on Bargaining and the Nature of War
The Common Priors Assumption: A comment on Bargaining and the Nature of War Mark Fey Kristopher W. Ramsay June 10, 2005 Abstract In a recent article in the JCR, Smith and Stam (2004) call into question
More informationRestoring the ETS - perspective from a cement compliance company
Strength. Performance. Passion. Restoring the ETS - perspective from a cement compliance company Carsten Schirmeisen, Holcim Climate Change Platts European Emissions Markets 2012, Carsten Schirmeisen,
More informationDoes the elicitation method impact the WTA/WTP disparity?* Sarah Brebner a and Joep Sonnemans a,b,c a
Does the elicitation method impact the WTA/WTP disparity?* Sarah Brebner a and Joep Sonnemans a,b,c a CREED, University of Amsterdam b Tinbergen Institute c Corresponding author, j.h.sonnemans@uva.nl February
More informationEcon 270: Theoretical Modeling 1
Econ 270: Theoretical Modeling 1 Economics is certainly not the only social science to use mathematical theoretical models to examine a particular question. But economics, since the 1960s, has evolved
More informationAn Experimental Test of a Search Model under Ambiguity
DISCUSSION PAPER SERIES IZA DP No. 7933 An Experimental Test of a Search Model under Ambiguity Takao Asano Hiroko Okudaira Masaru Sasaki January 2014 Forschungsinstitut zur Zukunft der Arbeit Institute
More informationHoward Sheth Model. The model claims that a person s purchase decision is often influenced by more than one individuals.
Howard Sheth Model The Howard Sheth theory of buyer behaviour is a sophisticated integration of the various social, psychological and marketing influences on consumer. The model claims that a person s
More informationPreview from Notesale.co.uk Page 23 of 50
Page 23 of 50 Study 1: sales tax of toiletries in department store Design - DDD: triple difference estimator - compared the within-treatment-store" DiD estimator DD(TS) to a within-control-store" DiD estimator
More informationExpert judgements in risk and reliability analysis
Expert judgements in risk and reliability analysis Jan-Erik Holmberg M2-E2117 Risk analysis, April 17, 2016 Aalto university Contents Definitions Applications Bayesian approach Examples 2 Background Objective,
More informationThe Game Prisoners Really Play: Preference Elicitation and the Impact of Communication
The Game Prisoners Really Play: Preference Elicitation and the Impact of Communication Michael Kosfeld University of Zurich Ernst Fehr University of Zurich October 10, 2003 Unfinished version: Please do
More informationBelief Formation in a Signalling Game without Common Prior: An Experiment
Belief Formation in a Signalling Game without Common Prior: An Experiment Alex Possajennikov University of Nottingham February 2012 Abstract Using belief elicitation, the paper investigates the formation
More informationHow to use the Lafayette ESS Report to obtain a probability of deception or truth-telling
Lafayette Tech Talk: How to Use the Lafayette ESS Report to Obtain a Bayesian Conditional Probability of Deception or Truth-telling Raymond Nelson The Lafayette ESS Report is a useful tool for field polygraph
More informationW. Brooke Elliott 2012 Audit Symposium
Discussion of The Effects of Environmental Attitudes, Perceived Environmental Information Importance, Corporate Environmental Performance, and Independent Assurance on Investor Judgments W. Brooke Elliott
More informationCausality and Statistical Learning
Department of Statistics and Department of Political Science, Columbia University 27 Mar 2013 1. Different questions, different approaches Forward causal inference: What might happen if we do X? Effects
More informationSupporting Information
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Supporting Information Variances and biases of absolute distributions were larger in the 2-line
More informationChapter 1 Review Questions
Chapter 1 Review Questions 1.1 Why is the standard economic model a good thing, and why is it a bad thing, in trying to understand economic behavior? A good economic model is simple and yet gives useful
More informationLecture 01 Analysis of Animal Populations: Theory and Scientific Process
1 of 1 Lecture 01 Analysis of Animal Populations: Theory and Scientific Process Motivation 1. Review the basic theory of animal population dynamics 2. Lay the foundation for the analysis of animal populations
More informationToday s lecture. A thought experiment. Topic 3: Social preferences and fairness. Overview readings: Fehr and Fischbacher (2002) Sobel (2005)
Topic 3: Social preferences and fairness Are we perfectly selfish? If not, does it affect economic analysis? How to take it into account? Overview readings: Fehr and Fischbacher (2002) Sobel (2005) Today
More informationChapter 1 Social Science and Its Methods
Chapter 1 Social Science and Its Methods MULTIPLE CHOICE 1) Scientific knowledge is knowledge that has been: A) systematically gathered, classified, related, and interpreted. B) rediscovered and cherished
More informationDo children in private Schools learn more than in public Schools? Evidence from Mexico
MPRA Munich Personal RePEc Archive Do children in private Schools learn more than in public Schools? Evidence from Mexico Florian Wendelspiess Chávez Juárez University of Geneva, Department of Economics
More informationAnalysis of TB prevalence surveys
Workshop and training course on TB prevalence surveys with a focus on field operations Analysis of TB prevalence surveys Day 8 Thursday, 4 August 2011 Phnom Penh Babis Sismanidis with acknowledgements
More informationSoros s Reflexivity Concept in a Complex World: Cauchy Distributions, Rational Expectations, and Rational Addiction
Marquette University e-publications@marquette Economics Faculty Research and Publications Economics, Department of 12-1-2013 Soros s Reflexivity Concept in a Complex World: Cauchy Distributions, Rational
More informationOutline. Experimental Economics. Advantages of Experimental Data (1) 11/21/ Principle of Economic Experiments. Experimental Method
Outline 1. Principles of Economics Experiments Experimental Economics Experimental Method 2. Experimental Design 3. Human Subjects 4. Laboratory facilities 5. Conducting an experiment 6. Data Analysis
More informationBehavioural Economics University of Oxford Vincent P. Crawford Michaelmas Term 2012
Behavioural Economics University of Oxford Vincent P. Crawford Michaelmas Term 2012 Introduction to Behavioral Economics and Decision Theory (with very large debts to David Laibson and Matthew Rabin) Revised
More informationIntroduction to Applied Research in Economics
Introduction to Applied Research in Economics Dr. Kamiljon T. Akramov IFPRI, Washington, DC, USA Training Course on Introduction to Applied Econometric Analysis November 14, 2016, National Library, Dushanbe,
More informationChanneled Attention and Stable Errors
Channeled Attention and Stable Errors Tristan Gagnon-Bartsch Harvard Matthew Rabin Harvard Joshua Schwartzstein Harvard Business School Preliminary Extended Abstract Abstract A common critique of models
More informationBehavioral Game Theory
Outline (September 3, 2007) Outline (September 3, 2007) Introduction Outline (September 3, 2007) Introduction Examples of laboratory experiments Outline (September 3, 2007) Introduction Examples of laboratory
More informationMASSACHUSETTS INSTITUTE OF TECHNOLOGY
MASSACHUSETTS INSTITUTE OF TECHNOLOGY HARRY DI PEI harrydp@mit.edu OFFICE CONTACT INFORMATION 77 Massachusetts Avenue, E52-301 harrydp@mit.edu http://economics.mit.edu/grad/harrydp MIT PLACEMENT OFFICER
More informationLecture 2: Learning and Equilibrium Extensive-Form Games
Lecture 2: Learning and Equilibrium Extensive-Form Games III. Nash Equilibrium in Extensive Form Games IV. Self-Confirming Equilibrium and Passive Learning V. Learning Off-path Play D. Fudenberg Marshall
More informationIntroduction to Econometrics
Global edition Introduction to Econometrics Updated Third edition James H. Stock Mark W. Watson MyEconLab of Practice Provides the Power Optimize your study time with MyEconLab, the online assessment and
More informationIntroduction to Applied Research in Economics
Introduction to Applied Research in Economics Dr. Kamiljon T. Akramov IFPRI, Washington, DC, USA Regional Training Course on Applied Econometric Analysis June 12-23, 2017, WIUT, Tashkent, Uzbekistan Why
More informationInformation Cascade Experiments
Information Cascade Experiments Lisa R. Anderson and Charles A. Holt * forthcoming in The Handbook of Results in Experimental Economics Smith and Plott, editors I. CASCADES The theoretical literature on
More informationA NON-TECHNICAL INTRODUCTION TO REGRESSIONS. David Romer. University of California, Berkeley. January Copyright 2018 by David Romer
A NON-TECHNICAL INTRODUCTION TO REGRESSIONS David Romer University of California, Berkeley January 2018 Copyright 2018 by David Romer CONTENTS Preface ii I Introduction 1 II Ordinary Least Squares Regression
More informationPractical Bayesian Optimization of Machine Learning Algorithms. Jasper Snoek, Ryan Adams, Hugo LaRochelle NIPS 2012
Practical Bayesian Optimization of Machine Learning Algorithms Jasper Snoek, Ryan Adams, Hugo LaRochelle NIPS 2012 ... (Gaussian Processes) are inadequate for doing speech and vision. I still think they're
More informationPros. University of Chicago and NORC at the University of Chicago, USA, and IZA, Germany
Dan A. Black University of Chicago and NORC at the University of Chicago, USA, and IZA, Germany Matching as a regression estimator Matching avoids making assumptions about the functional form of the regression
More informationEnumerative and Analytic Studies. Description versus prediction
Quality Digest, July 9, 2018 Manuscript 334 Description versus prediction The ultimate purpose for collecting data is to take action. In some cases the action taken will depend upon a description of what
More informationRapid Gain in AD Tx 4/21/2014
Reid Wilson, Ph.D. Anxiety Disorders Treatment Center 421 Bennett Orchard Trail Chapel Hill, NC 27516 [919] 942-0700 rrw@med.unc.edu www.anxieties.com 1 2 Trade books with the following publishers Harper
More informationHandout on Perfect Bayesian Equilibrium
Handout on Perfect Bayesian Equilibrium Fudong Zhang April 19, 2013 Understanding the concept Motivation In general, the Perfect Bayesian Equilibrium (PBE) is the concept we are using when solving dynamic
More informationInference from Streaks in Random Outcomes: Experimental Evidence on Beliefs in Regime-Shifting and the Law of Small Numbers
Inference from Streaks in Random Outcomes: Experimental Evidence on Beliefs in Regime-Shifting and the Law of Small Numbers Elena Asparouhova, Michael Hertzel, and Michael Lemmon This version: May 2008
More informationSUPPLEMENTARY INFORMATION
SUPPLEMENTARY INFORMATION 1. Online recruitment procedure using Amazon Mechanical Turk... 2 2. Log-transforming decision times... 3 3. Study 1: Correlational decision time experiment on AMT... 4 4. Studies
More informationEndogenous sample selection and partial naiveté: A laboratory study
Endogenous sample selection and partial naiveté: A laboratory study Ignacio Esponda (WUSTL) Emanuel Vespa (UC Santa Barbara) August 26, 2015 Abstract Accounting for sample selection is a challenge not
More informationClicker quiz: Should the cocaine trade be legalized? (either answer will tell us if you are here or not) 1. yes 2. no
Clicker quiz: Should the cocaine trade be legalized? (either answer will tell us if you are here or not) 1. yes 2. no Economic Liberalism Summary: Assumptions: self-interest, rationality, individual freedom
More informationUnlike standard economics, BE is (most of the time) not based on rst principles, but on observed behavior of real people.
Behavioral Economics Lecture 1. Introduction and the Methodology of Experimental Economics 1. Introduction Characteristica of Behavioral Economics (BE) Unlike standard economics, BE is (most of the time)
More informationAssessment and Estimation of Risk Preferences (Outline and Pre-summary)
Assessment and Estimation of Risk Preferences (Outline and Pre-summary) Charles A. Holt and Susan K. Laury 1 In press (2013) for the Handbook of the Economics of Risk and Uncertainty, Chapter 4, M. Machina
More informationthe Global Financial Crisis and the Discipline of Economics by Adam Kessler
Cognitive Dissonance the Global Financial Crisis and the Discipline of Economics by Adam Kessler Psychology has become a prominent field in the modern world, with psychology knowledge being applied in
More informationAn Experimental Study of Persuasion Bias and Social Influence in Networks
An Experimental Study of Persuasion Bias and Social Influence in Networks Jordi Brandts Ayça Ebru Giritligil Roberto A. Weber May 215 Barcelona GSE Working Paper Series Working Paper nº 829 An Experimental
More informationReading and maths skills at age 10 and earnings in later life: a brief analysis using the British Cohort Study
Reading and maths skills at age 10 and earnings in later life: a brief analysis using the British Cohort Study CAYT Impact Study: REP03 Claire Crawford Jonathan Cribb The Centre for Analysis of Youth Transitions
More informationDemographic Responses to a Political Transformation: Evidence of Women s Empowerment from a Natural Experiment in Nepal
Demographic Responses to a Political Transformation: Evidence of Women s Empowerment from a Natural Experiment in Nepal Jayash Paudel 1 Pedro de Araujo 2 1 University of Massachusetts Amherst 2 Colorado
More informationExperimental Testing of Intrinsic Preferences for NonInstrumental Information
Experimental Testing of Intrinsic Preferences for NonInstrumental Information By Kfir Eliaz and Andrew Schotter* The classical model of decision making under uncertainty assumes that decision makers care
More informationLouis Lévy-Garboua Paris School of Economics, Université de Paris 1, & CIRANO. Séminaire CIRANO, 15 Novembre 2012
Confidence, Aspirations, and the Efficiency and Equity of Educational Systems when Students have an Imperfect Knowledge of their Ability: an Experimental Approach Louis Lévy-Garboua Paris School of Economics,
More informationCitation for published version (APA): Ebbes, P. (2004). Latent instrumental variables: a new approach to solve for endogeneity s.n.
University of Groningen Latent instrumental variables Ebbes, P. IMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you wish to cite from it. Please check the document
More informationTake it or leave it: experimental evidence on the effect of time-limited offers on consumer behaviour Robert Sugden* Mengjie Wang* Daniel John Zizzo**
CBESS Discussion Paper 15-19 Take it or leave it: experimental evidence on the effect of time-limited offers on consumer behaviour by Robert Sugden* Mengjie Wang* Daniel John Zizzo** *School of Economics,
More informationTopic 3: Social preferences and fairness
Topic 3: Social preferences and fairness Are we perfectly selfish and self-centered? If not, does it affect economic analysis? How to take it into account? Focus: Descriptive analysis Examples Will monitoring
More informationInformation Processing and Commitment
Information Processing and Commitment Armin Falk and Florian Zimmermann March 2016 Abstract Beliefs are often found to be sticky and rather immune to new information. In this paper we highlight a specific
More information1. Introduction: Methods, Objectives, Advantages and Limitations of Experimental Economics
1. Introduction: Methods, Objectives, Advantages and Limitations of Experimental Economics Some points of view An example Control in experiments Induced-Value-Theory Limits and objections Falk: Experimental
More informationWRITTEN PRELIMINARY Ph.D. EXAMINATION. Department of Applied Economics. January 17, Consumer Behavior and Household Economics.
WRITTEN PRELIMINARY Ph.D. EXAMINATION Department of Applied Economics January 17, 2012 Consumer Behavior and Household Economics Instructions Identify yourself by your code letter, not your name, on each
More informationRapid Gain Anxiety Disorders 1/12/2015
Reid Wilson, Ph.D. Anxiety Disorders Treatment Center 421 Bennett Orchard Trail Chapel Hill, NC 27516 [919] 942-0700 UNC School of Social Work January 12, 2015 1 rrw@med.unc.edu www.anxieties.com 2 Trade
More informationMotivated Cognitive Limitations
Motivated Cognitive Limitations Christine L. Exley and Judd B. Kessler May 3, 2018 Abstract Behavioral biases are often blamed on agents inherent cognitive limitations. We show that biases can also arise,
More informationSome Thoughts on the Principle of Revealed Preference 1
Some Thoughts on the Principle of Revealed Preference 1 Ariel Rubinstein School of Economics, Tel Aviv University and Department of Economics, New York University and Yuval Salant Graduate School of Business,
More informationEc331: Research in Applied Economics Spring term, Panel Data: brief outlines
Ec331: Research in Applied Economics Spring term, 2014 Panel Data: brief outlines Remaining structure Final Presentations (5%) Fridays, 9-10 in H3.45. 15 mins, 8 slides maximum Wk.6 Labour Supply - Wilfred
More informationIrrationality in Game Theory
Irrationality in Game Theory Yamin Htun Dec 9, 2005 Abstract The concepts in game theory have been evolving in such a way that existing theories are recasted to apply to problems that previously appeared
More informationGeneralization and Theory-Building in Software Engineering Research
Generalization and Theory-Building in Software Engineering Research Magne Jørgensen, Dag Sjøberg Simula Research Laboratory {magne.jorgensen, dagsj}@simula.no Abstract The main purpose of this paper is
More informationBayesian and Frequentist Approaches
Bayesian and Frequentist Approaches G. Jogesh Babu Penn State University http://sites.stat.psu.edu/ babu http://astrostatistics.psu.edu All models are wrong But some are useful George E. P. Box (son-in-law
More informationIs No News (Perceived As) Bad News? An Experimental Investigation of Information Disclosure
Is No News (Perceived As) Bad News? An Experimental Investigation of Information Disclosure Ginger Zhe Jin Michael Luca Daniel Martin Working Paper 15-078 Is No News (Perceived As) Bad News? An Experimental
More informationMacroeconometric Analysis. Chapter 1. Introduction
Macroeconometric Analysis Chapter 1. Introduction Chetan Dave David N. DeJong 1 Background The seminal contribution of Kydland and Prescott (1982) marked the crest of a sea change in the way macroeconomists
More informationMBios 478: Systems Biology and Bayesian Networks, 27 [Dr. Wyrick] Slide #1. Lecture 27: Systems Biology and Bayesian Networks
MBios 478: Systems Biology and Bayesian Networks, 27 [Dr. Wyrick] Slide #1 Lecture 27: Systems Biology and Bayesian Networks Systems Biology and Regulatory Networks o Definitions o Network motifs o Examples
More informationInference from Streaks in Random Outcomes: Experimental Evidence on Beliefs in Regime-Shifting and the Law of Small Numbers
Inference from Streaks in Random Outcomes: Experimental Evidence on Beliefs in Regime-Shifting and the Law of Small Numbers Elena Asparouhova, Michael Hertzel, and Michael Lemmon This version: December
More informationUNLOCKING VALUE WITH DATA SCIENCE BAYES APPROACH: MAKING DATA WORK HARDER
UNLOCKING VALUE WITH DATA SCIENCE BAYES APPROACH: MAKING DATA WORK HARDER 2016 DELIVERING VALUE WITH DATA SCIENCE BAYES APPROACH - MAKING DATA WORK HARDER The Ipsos MORI Data Science team increasingly
More informationAppendix: Instructions for Treatment Index B (Human Opponents, With Recommendations)
Appendix: Instructions for Treatment Index B (Human Opponents, With Recommendations) This is an experiment in the economics of strategic decision making. Various agencies have provided funds for this research.
More informationPerformance in competitive Environments: Gender differences
Performance in competitive Environments: Gender differences Uri Gneezy Technion and Chicago Business School Muriel Niederle Harvard University Aldo Rustichini University of Minnesota 1 Gender differences
More information