MORRIS ALTMAN, EDITOR

Transcription

1 Real-World Decision Making An Encyclopedia of Behavioral Economics MORRIS ALTMAN, EDITOR 0 GREENWOOD» An Imprint of ABC-CLIO, LLC Santa Barbara, California Denver, Colorado

2 Contents Preface Introduction xiii xv A-Z Entries Addiction 1 Advertising and Behavioral Economics 3 Akerlof, George 5 Allocative Efficiency and X-Efficiency 6 Altruism 8 Altruistic Punishments 10 Ambiguity Aversion 12 Amygdala and Behavioral Economics 14 Anchoring 16 Animal Spirits 17 Anomalies (Economic Behavior) 19 Asymmetrie Information 20 Bandwagon Effect 23 Bargaining Power 24 Beauty Contest/Guessing Game 26 Behavioral Economics 27 Behavioral Finance 31 Behavioral Insights Team 33 Behavioral Responses According to In-Depth Interviews 35 Bounded Rationality 36 Brain Scans and Behavioral Economics 39 Bröken Windows 40 Bubbles (dot.com; Financial Markets; Housing; Tulips) 42 Bubbles (Great Depression) 44 Bubbles (Markets) 46 Büffet (All-You-Can-Eat Behavior) 48

3 vi CONTENTS Bullying and Economic Efficiency Calendar Effect ^ Capabilities Approach 54 Carnegie School ^ Certainty Effect ^ Charitable Donatione ^ Childhood Effects on Adult Behavior 60 Coase Theorem, Property Rights, and Endowment Effect 61 Cognitive Dissonance 63 Commons, John R. 64 Communication and Colinsion 68 Complexity and Heuristics 70 Conjunction Effect " 1 Consumer Confidence 72 Contingent Valvation 74 Cooperative Organizations 76 Creativity 78 Credit Cycles 7V Culture and Behavioral Economics 81 Cyert, Richard 82 Deception 85 Decision Cost 86 Descartes's Error and the Emotional Bram 88 Development Economics 90 Dictator Game g Dictator Game (Brief Note) y 3 Dilution Effect Q4 Discrimination and Behavioral Economics y*5 Disposition Effect gj Diversihcation Bias yy Dual Motive Theory (DMT) and Dual Interest Theory (Dil ) 101 Duesenberry James S. j 0 3 Ecological Rationality ^5 Economic Psychology 1 ^ Economic Science Association Economic Sociology ^ j Q

4 Efficiency Wage Hypothesis 112 Efficient Market Hypothesis 113 Emotions and Decision Making 115 Emotions and Phineas Gage 117 Endowment Effect 118 Entrepreneurship 120 Envy 122 Equity Premium Puzzle 123 Errors and Biases 125 Ethical Consumption 126 Ethical Production 128 Evolutionary Economics 129 Evolutionary Mismatch 132 Expectations (Rational and Adaptive) 133 Expected Utility and Behavioral Economics 135 Experimental Design 137 Experimental Economics 139 Experimental Economics Software: z-tree (Zürich Toolbox for Readymade Economic Experiments) 141 Experiments (Classroom) 142 Experiments (Field) 143 Experiments (Incentives) 145 Fair Wage 149 Fairness 150 Fast and Frugal Decision Trees 152 Fast and Frugal Heuristics 154 Fat Tails 155 Faux Currency 158 Feminist and Behavioral Economics 159 Financial Literacy 160 Firm (Behavioral Theory) 162 Framing 164 Frank, Robert H. 166 Gambler's Fallacy 169 Gambling Behavior 170 Game Theory (Behavioral/Cooperative) 172

5 Gender Differences Genoeconomics Gigerenzer, Gerd Golden Rule, Cooperation, and Productivity 180 Greenwald-Stiglitz Theorem and Behavioral Economics 181 Habits Happiness Happiness and Productivity 189 Hayek, Friedrich 191 Health Economics 192 Heckman, James 195 Hedonic Treadmill 196 Herding 197 Heterogeneous Agents 199 Heuristics 200 Honesty 202 Household Decisions 203 Human Rights and Decision Making 205 Hyperbolic Discounting 207 IAREP (International Association for Research in Economic Psychology) 209 ICABEEP (International Confederation for the Advancement of Behavioral Economics and Economic Psychology) 211 Identity Economics 212 Ignorance of Base Rates 213 Impulsive Behavior 215 Inefficient Markets 217 Inequity Aversion 219 Institutional Economics 221 Intertemporal Preferences and Consumption 223 Intuition and Decision Making 225 Irrationality and Subrationality 226 Junk Food 229 Kakneman, Daniel 231 Katona, George 232 Keynes John Maynard 234 Kunreuther, Howard C

6 Labels and Signaling (Information Provision, Framing, and Economic Efficiency) Labor Market Regulation Labor Supply and Target Income Law and Behavioral Economics Law and Economics, and Social Norms Leibenstein, Harvey Limits of Arbitrage Liquidity Trap and Liquidity Preference Loss Aversion Lucas Critique and Behavioral Economics Macroeconomics (Behavioral) March, James G. Mental Accounting Metapreferences Minsky Moment Momentum Investing Money Illusion Moods and Financial Markets Moral Hazard and Behavioral Economics Moral Motivation Multiple Equilibria Myopie Loss Aversion Nash Equilibrium Nastiness Experiments Neuroeconomics Neuroplasticity Noise Trading Nonmonetary Incentives Norms North, Douglass Nudging Oakeshott, Michael Obesity Organ Donation and Framing Organizational Capital

7 Ostrom, Elinor Overconfidence Overconsumption Overemployment and Underemployment 309 O 1 O Paternalism Path Dependency 315 Peer Pressure 316 Pensions and Eraming 318 Plott, Charles 320 Population Growth 321 Preference Pollution 323 Preference Reversal 324 Preferences (Interdependent) 326 Preferences (Revealed) 327 Preferences (True) 329 Present-Biased Preferences 331 Pretense of Knowledge 333 Price Stickiness 335 Price-Quality Illusion 336 Priming and Financial Decisions 338 Principal-Agent Theory and Behavioral Economics 339 Prisoners Dilemma 341 Profit Maximization and Behavioral Economics 344 Prospect Theory 345 Public Good Game 347 Rationality (Process and Neoclassical) 351 Reasons 352 Reciprocity 353 Reference Effects 355 Regret 357 Relational Goods Relative Income Effects 360 Relative Positioning 362 Relative Thinking 364 Religion and Decision Making 365 Representativeness Bias g

8 Risk and Knightian Uncertainty 369 Roth, AlvinE. 371 Sample Size Null Hypothesis Significance Testing 373 Satisficing 374 Schelling, Thomas C. 376 Self-Control 378 Self-Fulfilling Prophecies 379 Self-Serving Bias 381 Selten, Reinhard 382 Sen, Amartya 383 Shiller, Robert 385 Simon, Herbert 387 Slovic, Paul 388 Smith, Adam, and Moral Sentiments 390 Smith, Adam, and Theory of Moral Sentiments 391 Smith, Vernon L. 393 Snob Effect 395 Social Capital and Behavioral Economics 397 Social Capital and Personal Capital (Gary Becker) 399 Social Cohesion 401 Social Preferences within a Population 402 Social Ties 404 Society for the Advancement of Behavioral Economics 406 Somatic Marker Hypothesis 407 Spontaneous Order 409 Sports Economics and Economic Psychology 410 Sports Economics and Performance Inefficiencies 412 Statistical Significance and Behavioral Economics 415 Status Quo Bias 417 Stiglitz, Joseph 419 Strategy Method (and Payment Cards) 421 Subjective Expected Utility 422 Suicide 424 Sunk Cost Fallacy 425 Survival Principle 426 Switching Costs 428

9 Tax Avoidance, Tax Evasion, and the Skadow Economy 431 Tax Compliance 432 Thaler, Richard 434 Tipping 435 Tit-for-Tat 437 Tragedy of the Commons 438 Transaction Costs and Behavioral Economics 440 Trust 442 Trust Game 444 Trust Heuristic 446 Tversky, Arnos 447 Ultimatum Game 451 Uncertainty Effect 452 Unemployment, Psychology, and X-Inefficiency 454 Utility (Experienced) 456 Utility (Remembered) 457 Validity, External (Generalizability) 461 Vehlen, Thorstein B. 463 Wage Stickiness, Loss Aversion, and the Phillips Curve 465 Warm Glow 467 Williamson, Oliver 469 Winners Curse 470 X-Efficiency/X-Inefficiency 473 Contributors 475 About the Editor 4^3 Index