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Estimating Individual Ambiguity Aversion: A Simple Approach

list, john; Gneezy, Uri; Imas, Alex - National Bureau of Economic Research (NBER) - 2015

We introduce a simple, easy to implement instrument for jointly eliciting risk and ambiguity attitudes. Using this instrument, we structurally estimate a two-parameter model of preferences. Our findings indicate that ambiguity aversion is significantly overstated when risk neutrality is assumed....

Persistent link: https://www.econbiz.de/10011189100

What's Psychology Worth? A Field Experiment in the Consumer Credit Market

Bertrand, Marianne; Mullainathan, Sendhil; Zinman, Jonathan - National Bureau of Economic Research (NBER) - 2005

Numerous laboratory studies find that minor nuances of presentation and description change behavior in ways that are inconsistent with standard economic models. How much do these context effect matter in natural settings, when consumers make large, real decisions and have the opportunity to...

Persistent link: https://www.econbiz.de/10005778075

Who Is (More) Rational?

Silverman, Dan; Choi, Syngjoo; Kariv, Shachar; Müller, … - National Bureau of Economic Research (NBER) - 2011

Revealed preference theory offers a criterion for decision-making quality: if decisions are high quality then there exists a utility function that the choices maximize. We conduct a large-scale field experiment that enables us to test subjects' choices for consistency with utility maximization...

Persistent link: https://www.econbiz.de/10008839445

Tipping Points and Ambiguity in the Economics of Climate Change

Lemoine, Derek M.; Traeger, Christian P. - National Bureau of Economic Research (NBER) - 2012

We model welfare-maximizing policy in an infinite-horizon setting when the probability of a tipping point, the welfare change due to a tipping point, and knowledge about a tipping point's trigger all depend on the policy path. Analytic results demonstrate how optimal policy depends on the...

Persistent link: https://www.econbiz.de/10010969374

Continuous-Time Methods for Integrated Assessment Models

Judd, Kenneth L.; Lontzek, Thomas S.; Cai, Yongyang - National Bureau of Economic Research (NBER) - 2012

Continuous time is a superior representation of both the economic and climate systems that Integrated Assessment Models (IAM) aim to study. Moreover, continuous-time representations are simple to express. Continuous-time models are usually solved by discretizing time, but the quality of a...

Persistent link: https://www.econbiz.de/10010950988

Robust Optimal Policy in a Forward-Looking Model with Parameter and Shock Uncertainty

Giannoni, Marc P. - National Bureau of Economic Research (NBER) - 2006

This paper characterizes a robust optimal policy rule in a simple forward-looking model, when the policymaker faces uncertainty about model parameters and shock processes. We show that the robust optimal policy rule is likely to involve a stronger response of the interest rate to fluctuations in...

Persistent link: https://www.econbiz.de/10005084782

Satisficing Contracts

Bolton, Patrick; Faure-Grimaud, Antoine - National Bureau of Economic Research (NBER) - 2009

We propose a model of equilibrium contracting between two agents who are "boundedly rational" in the sense that they face time-costs of deliberating current and future transactions. We show that equilibrium contracts may be incomplete and assign control rights: they may leave some enforceable...

Persistent link: https://www.econbiz.de/10005830681

Thinking Ahead: The Decision Problem

Bolton, Patrick; Faure-Grimaud, Antoine - National Bureau of Economic Research (NBER) - 2005

We propose a model of bounded rationality based on time-costs of deliberating current and future decisions. We model an individual decision maker%u2019s thinking process as a thought-experiment that takes time and let the decision maker %u201Cthink ahead%u201D about future decision problems in...

Persistent link: https://www.econbiz.de/10005718599

Do Natural Field Experiments Afford Researchers More or Less Control than Laboratory Experiments? A Simple Model

list, john; Al-Ubaydli, Omar - National Bureau of Economic Research (NBER) - 2015

A commonly held view is that laboratory experiments provide researchers with more “control” than natural field … experiments, and that this advantage is to be balanced against the disadvantage that laboratory experiments are less generalizable …. This paper presents a simple model that explores circumstances under which natural field experiments provide researchers …

Persistent link: https://www.econbiz.de/10011133521

Unilateral Facilitation Does Not Raise International Labor Migration from the Philippines

McKenzie, David Mckenzie; Beam, Emily; Yang, Dean - National Bureau of Economic Research (NBER) - 2014

Significant income gains from migrating from poorer to richer countries have motivated unilateral (source-country) policies facilitating labor emigration. However, their effectiveness is unknown. We conducted a large-scale randomized experiment in the Philippines testing the impact of...

Persistent link: https://www.econbiz.de/10011103517