There are two regularities we have learned from experimental studies of choice under risk. The first is that the majority of people weigh objective probabilities non-linearly. The second regularity, although less commonly acknowledged, is that there is a large amount of heterogeneity in how...

We study incentive schemes that combine self-chosen goals with prosocial rewards. We design a real-effort task experiment with MTurk workers. Upon achieving self-chosen goals, rewards are paid to the worker in the monetary treatments or to charities in the prosocial treatments. To explore the...

The existence of multiple equilibria is one explanation for why some countries are rich while others are poor. This explanation also allows the possibility that changes in political and economic institutions might help poor countries jump from a bad economic equilibrium into a better one,...

The way we describe and evaluate ourselves or self-concept has a significant effect on our behaviors. An individual who describes herself as altruistic is more likely to engage in helpful behaviors than someone who does not possess such self-concept. Self-concept, in turn, is influenced by...

Nobel Prize winner Daniel Kahneman's last published paper is an adversarial collaboration in which he and Matthew Killingsworth reconcile conflicting empirical results from their previous research on income and reported happiness, with Barbara Mellers as a facilitator. The empirical results use...

In this paper we study whether mood affects: 1) Willingness to pay (WTP); and 2) The effectiveness of the demand revealing mechanism. We study decisions using a random nth price auction with induced values and homegrown values. Our data show no clear support for negative mood effects on WTP and,...

In this paper we study the effect of induced positive mood on price patterns in experimental asset markets. We conduct experimental asset markets where subjects go through a mood induction procedure prior to trade. After the subjects are induced with positive affect, they can trade an...

We study whether probability weighting is observed when individuals are presented with a series of choices between lotteries consisting of real non-monetary adverse outcomes, electric shocks. Our estimation of the parameters of the probability weighting function proposed by Tversky and Kahneman...

This paper considers a duopoly price-choice game in which the unique Nash equilibrium is the Bertrand outcome. Price competition, however, is imperfect in the sense that the market share of the high-price firm is not zero. Economic intuition suggests that price levels should be positively...

The existence of multiple equilibria is one explanation for why some countries are rich while others are poor. This explanation also allows the possibility that changes in political and economic institutions might help poor countries "jump" from a bad economic equilibrium into a better one,...