We study a model of observational learning in a set of agents who are connected through a social network. The agents face identical decision problems under uncertainty, where they are not aware of the relative profitability of their alternative choices. They choose repeatedly from a common set...

This paper presents a novel mechanism under which diversity affects performance even if it has no direct impact on payoffs. Diversity matters because it influences the degree of strategic uncertainty that players face. We model this by incorporating the dual process account of Theory of Mind...

In this paper we build a theoretical model to show the role of self-confidence in leading to inefficient job matching equilibria: under-confident highly-qualified workers do not apply for highly-skilled jobs, because mistakenly perceive themselves as having relatively lower abilities with...

We show that a one-off incentive to bias advice has persistent effects. In an experiment, advisers were paid a bonus to recommend a lottery which only risk-seeking individuals should choose to a less informed client. Afterwards, they had to choose for themselves and make a second recommendation...

Investors are periodically challenged with this question: with funds ready to invest, but faced with a market that is generally perceived to be expensive, is it better to wait for a market correction before investing? Many investors are certain that a correction must be around the corner, and...

We document that prior portfolio choices influence investors' expectations about asset values, and their future choices. We find that people update more from information consistent with their prior choices, leading to sticky portfolios over time. These effects are related to how the brain's...

We introduce a new method for measuring the decision to lie in experiments. In the game, the decision to lie increases own payment independent of the counterpart's decision, but potentially at a cost for the counterpart. We identify at the individual level the decision to lie, and measure how...

This paper reports the results of experiments designed to test whether individuals interacting on Facebook are more likely to succumb to the conjunction fallacy when they post their answers publicly and are exposed to the answers of others. Using the experimental design in Kahneman and Tversky...

I study experimental markets in which sellers interact with buyers who have biased beliefs about the characteristics of the product that is being sold. I examine whether such buyers can be exploited by sellers through the use of specifically designed pricing structures, as suggested by recent...

You're probably familiar, at least in passing, with the 'convexity' of long-term bonds - i.e. that yields dropping 1% produce a bigger price move than yields rising 1%. A significant amount of brainpower has gone into understanding all the ramifications of this convexity in the fixed income...