Showing 1 - 10 of 1,198
This paper explores the socially optimal level of insurance given that individuals are subject to behavioral biases, in particular narrow framing and loss aversion. The central issue of this normative analysis is whether or not a social welfare function (SWF) should take into consideration the...
Persistent link: https://www.econbiz.de/10013003269
This paper surveys recent work on the evolutionary origins of preferences. We are especially interested in the circumstances under which evolution would push preferences away from the self-interested perfectly-rational expected utility maximization of classical economic theory in order to...
Persistent link: https://www.econbiz.de/10014025696
specific feature and estimate its impact on lender demand. We then counterfactually evaluate alternative platform policies and …
Persistent link: https://www.econbiz.de/10014237036
We consider a decision maker who enjoys choosing from a varied set of alternatives. Building on behavioral evidence, we propose testable axioms which characterize preference for variety, and provide a representation theorem. We go on to illustrate the potential effects of preference for variety...
Persistent link: https://www.econbiz.de/10009410477
We propose a novel method to model an agent who is imperfectly attentive in the sense that she may consider only some of the alternatives available. Our methodology departs from the standard 'revealed preference' one: we make plausible assumptions on the values to the imperfectly attentive agent...
Persistent link: https://www.econbiz.de/10010517698
A well-known finding in behavioral economics is that people often avoid ambiguous gambles whose outcome probabilities are unknown in favor of risky gambles whose outcome probabilities are known, a phenomenon that is called ambiguity aversion. In a novel preregistered online experiment with 1195...
Persistent link: https://www.econbiz.de/10012861160
Behavioural welfare economics provides tools to elicit welfare preferences when individuals use nonstandard behavioural models. Current proposals either require assumptions on the models or elicit preferences that become coarser and coarser as the dataset grows. We propose an informational...
Persistent link: https://www.econbiz.de/10014323569
illustrate our method using the PSID from the United States. We find that static measures overstate cost-of-living increases for …
Persistent link: https://www.econbiz.de/10014576596
We generalize the standard revealed preference exercise in economics, and prove a sufficient condition under which the revealed preference formulation of an economic theory has universal implications and when these implications can be recursively enumerated. We apply our theorem to two theories...
Persistent link: https://www.econbiz.de/10011704924
Persistent link: https://www.econbiz.de/10001533676