Essays in Behavioral Economics and Microeconomic Theory
Author: Pauline Lisa Vorjohann
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Published: 2022*
Total Pages: 0
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Author: Pauline Lisa Vorjohann
Publisher:
Published: 2022*
Total Pages: 0
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DOWNLOAD EBOOKAuthor: Lukas Bolte
Publisher:
Published: 2023
Total Pages: 0
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DOWNLOAD EBOOKFollowing my research interests, this dissertation covers two fields of economics--behavioral economics (Chapters 1 and 2) and microeconomic theory (Chapters 3 and 4). Behavioral economics. In the first strand of my research, I develop and experimentally test theories to better understand individual-level behavioral phenomena and biases. In the last decades, behavioral economists have documented a variety of behavioral phenomena and biases across a range of economic environments, including information avoidance in health and financial domains, default effects in dynamic choice, belief distortions and probability weighting in choices over lotteries, and time inconsistency in preferences over consumption sequences. Behavioral economists typically explain each of these phenomena with a distinct mechanism. In the first chapter titled ``Emotional Inattention'' (joint with Collin B. Raymond), I develop a model that can simultaneously generate all of these phenomena and more, helping provide a unified account for many observed biases. It is a model of attention allocation, where in addition to its usual instrumental role, attention generates and regulates emotions. This role has been highlighted by psychologists but is rarely formally studied by economists. This second role of attention leads decision-makers to ignore low-payoff situations, leading to the so-called ostrich effect (where individuals ignore poorly performing financial assets), avoidance of potentially negative health tests, and pessimistic defaults in order to account for future inattention. When attention is allocated across possible realizations of an unknown state, the decision-maker has as-if distorted beliefs with additional weight on states that receive high attention. Similarly, when attention is allocated across time, the decision-maker develops preferences over the timing of consumption--they value consumption more in time periods with high attention, leading to as-if discounting. Because my model suggests these biases all emerge from a desire to manage emotions, it comes with many new predictions and implications for policymaking. Many documented deviations from the Bayesian benchmark--e.g., individuals' tendency to neglect correlation when processing information--are traditionally attributed to bounded rationality and hence thought of as cognitive mistakes. In the second chapter, titled ``Motivated Mislearning: The Case of Correlation Neglect'' (with Tony Q. Fan), I show that such cognitive ``mistakes'' can arise because of preferences and may thus not be actual mistakes. We designed an experiment to study the role of motivated reasoning in correlation neglect. In the main treatment, participants receive potentially redundant signals about an ego-relevant state--their IQ test performance. We then ask them how likely the signals are from the same source (and thus contain redundant information). Participants generally underappreciate the extent to which identical signals are more likely to come from the same source, but the bias is stronger for identical ego-favorable signals than for identical ego-unfavorable signals. This suggests that individuals may neglect the correlation between desirable signals to sustain motivated beliefs. Thus, cognitive ``mistakes'' that have traditionally been attributed to bounded rationality may, in fact, be utility maximizing. Microeconomic theory. The second strand of my work uses the tools of applied microeconomic theory to understand equilibrium outcomes when economic agents interact. In the third chapter, titled ``Robust contracting under double moral hazard'' (with Gabriel Carroll; forthcoming at Theoretical Economics), I seek to understand the prevalence of profit-sharing rules in agency relationships between private agents. In franchising partnerships, for instance, the franchisee typically pays an upfront fee and a fixed share of the revenue as royalties to the franchisor. We study a general contracting problem between a principal and an agent where both parties need to exert effort for production to take place. We identify a specific virtue of linear contracts: They are robust to uncertainty about the details of the environment and provide the highest payoff guarantees. We thus offer a tractable general-purpose model of double moral hazard and specifically express the robustness intuition underlying linear contracts. In the fourth chapter, titled ``Interactions across multiple games: cooperation, corruption, and organizational design, '' (with Jonathan B. Bendor, Nicole Immorlica, and Matthew O. Jackson), I built a model to understand how desired cooperation and undesired cooperation (e.g., corruption) are interlinked and how organizations can encourage the former while discouraging the latter. We show that because cooperation in one situation may depend on expectations of cooperation in others, it may be impossible to get desirable types of cooperation without also getting undesirable ones. More generally, we characterize this interdependency and study how the level of cooperation depends on the assignment of workers to teams and teams to tasks. Lastly, we study performance bonuses, occupational safety, and whistle-blowing rewards as possibly effective tools to promote desired and limit undesired cooperation.
Author: George Katona
Publisher: Ann Arbor, Mich. : Survey Research Center, Institute for Social Research, University of Michigan
Published: 1980
Total Pages: 120
ISBN-13:
DOWNLOAD EBOOKAuthor: Dimitry Mezhvinsky
Publisher:
Published: 2015
Total Pages: 206
ISBN-13:
DOWNLOAD EBOOKIn Chapter 2, I demonstrate that buyers engage in boycotting and "buycotting'" in order to respectively punish and reward a seller's policies of which they are neither the victim nor the beneficiary. Notably, the experimental results show that third-party punishment and reward occurs even when the mechanism for executing such punishment and reward is not straightforward and when no punishment (reward) may be viewed as the neutral or default choice. This paper also finds that the average buyer does not condition her boycotting and buycotting decisions on the actions of other buyers in this setting. In Chapter 3, I explore a setting featuring two simultaneous, private value eBay-style auctions for heterogeneous goods, in order to explain the prevalence of multiple, unique bidding strategies in eBay auctions. I find that multiple broad strategies of bidding may be supported as equilibrium strategies when goods are horizontally differentiated. I also demonstrate that eBay-style auctions may yield greater social efficiency than second-price sealed-bid auctions, under certain assumptions. Furthermore, I demonstrate that, when bidding costs are sufficiently high, the eBay auction mechanism may not yield efficient outcomes for either horizontally or vertically differentiated goods.
Author: Akio Matsumoto
Publisher: Springer
Published: 2016-09-22
Total Pages: 257
ISBN-13: 981101521X
DOWNLOAD EBOOKThis book reflects the state of the art in nonlinear economic dynamics, providing a broad overview of dynamic economic models at different levels. The wide variety of approaches ranges from theoretical and simulation analysis to methodological study. In particular, it examines the local and global asymptotical behavior of both macro- and micro- level mathematical models, theoretically as well as using simulation. It also focuses on systems with one or more time delays for which new methodology has to be developed to investigate their asymptotic properties. The book offers a comprehensive summary of the existing methodology with extensions to the more complex model variants, since considerations on bounded rationality of complex economic behavior provide the foundation underlying choice-theoretic and policy-oriented studies of macro behavior, which impact the real macro economy. It includes 13 chapters addressing traditional models such as monopoly, duopoly and oligopoly in microeconomics and Keynesian, Goodwinian, and Kaldor–Kaleckian models in macroeconomics. Each chapter presents new aspects of these traditional models that have never been seen before. This work renews the past wisdom and reveals tomorrow's knowledge.
Author: Zhuoqiong Chen
Publisher:
Published: 2016
Total Pages:
ISBN-13:
DOWNLOAD EBOOKAuthor: Florian Hett
Publisher:
Published: 2015
Total Pages: 0
ISBN-13: 9783832536787
DOWNLOAD EBOOKThis thesis deals with the empirical identification of incentive effects in various settings.The central chapter looks at the financial crisis of 2007-2009 and the incentive effects caused by policy interventions in financial markets. A hypothesis controversially discussed by academics as well as policy makers is that public bailouts for banks destroy market discipline, that is the incentives for decentralized monitoring by market participants. In turn, this might induce stronger risk-taking by banks and finally make future crises more likely and severe. The thesis describes a new methodology to identify this effect and shows that market discipline strongly deteriorated during the crisis period. In additional chapters, this thesis empirically identifies incentive effects in dynamic contest situations.
Author: George Katona
Publisher:
Published:
Total Pages: 107
ISBN-13: 9780783752679
DOWNLOAD EBOOKAuthor: Mie Augier
Publisher: Edward Elgar Publishing
Published: 2002
Total Pages: 488
ISBN-13:
DOWNLOAD EBOOKThis collection of essays was commissioned for this volume in honour of the ideas and work of the late Richard M. Cyert who made a seminal contribution to the fields of industrial organization and change. In keeping with the range and significance of his work, the essays in this volume examine the economics of decision making, uncertainty, information processing, learning, evolution and organizational structure. Topics covered include: behavioural and evolutionary theories of the firm; cognitive factors in organization and economic action; the place of rules in organizations; learning from experience and from the knowledge of others; selection in economic change; and the impact of information technology and the evolution of organizational forms. The collection emphasizes the adaptive nature of economic action and the links between econmies and studies of human information processing and action. It should be interesting reading for scholars with an interest in behavioural and adaptive economics, along with industrial organization.
Author: Klaus Weiermair
Publisher: University of Michigan Press
Published: 1990
Total Pages: 418
ISBN-13: 9780472101542
DOWNLOAD EBOOKExplores the X-efficiency paradigm in relation to the theory of the firm