The internal control system (ICS) plays a crucial role in safeguarding firms against risks that could hinder the achievement of business objectives. However, implementing an effective ICS in small and medium-sized enterprises (SMEs) poses unique challenges, including a lack of skilled personnel...

We introduce an information provision experiment into a standard dynamic rational inattention model. We derive analytical results about how the treatment effect varies with characteristics of the environment and the individual. We use these results to discuss findings in the empirical literature...

Inadequate financial literacy and overconfidence in financial knowledge, coupled with the use of mobile payments (MPs), may contribute to harmful financial behaviors. While the relationship between financial knowledge confidence and financial behaviors is well documented, there is limited...

Understanding disparities in contest success is central to explaining how competition shapes the distribution of rewards, influence, or market shares. We introduce the Proportional Play Equilibrium (PPE), a boundedly rational alternative to Nash Equilibrium (NE) grounded in the Illusion of...

We introduce an information provision experiment into a standard dynamic rational inattention model. We derive analytical results about how the treatment effect varies with characteristics of the environment and the individual. We use these results to discuss findings in the empirical literature...

People often form mental models based on incomplete information, revising them as new relevant data becomes available. In this paper, we experimentally investigate how individuals update their models when data on predictive variables are gradually revealed. We find that people's models tend to...

Purpose This study aims to elucidate the dynamics of monetary and fiscal policy interactions in Brazil, focusing on the impacts of positive shocks in government consumption and interest rates. By comparing rational and behavioral agent responses, it clarifies how these frameworks influence gross...

The Triple Helix model argues for the need to increase entrepreneurial activity among academics, with support from the government and industry. It is widely used but often relies on assumptions of rational coordination and overlooks how real-world decision-making is shaped by bounded cognition,...

Interactive decision-making relies on strategic reasoning. Two prominent frameworks capture this idea. One follows a structural perspective, exemplified by level-k and Cognitive Hierarchy models, which represent reasoning as an algorithmic process. The other adopts an epistemic perspective,...

Overconfidence is a well-established behavioral bias that involves the overestimation of one's own capabilities. We introduce a model in which managers and agents exert effort in a joint production, after the manager decides on the allocation of the tasks. A rational manager tends to reduce...

We develop a framework for categorization in games, applicable both to multistage games of complete information and static games of incomplete information. Players use categories to form coarse beliefs about their opponents' behavior. Players best-respond given these beliefs, as in analogy-based...

The behavioral theory of the firm explains how firms react to performance feedback, yet little is known about how firms integrate backward-looking feedback with forward-looking assessments of market opportunity. This study proposes and tests a retrenchment model grounded in SWOT-based behavioral...