Traditionally, the Gambler's Fallacy is described as the belief that a sequence of independent outcomes over time should exhibit short-run reversals. The underlying psychological bias thought to drive this fallacy is Representativeness Bias: the idea that even a small sample of outcomes should...

This paper analyzes the herding behavior that characterizes lenders’ lending decisions on a microloan platform and explains how rational herding behavior can resolve the information-asymmetry problem, which is a well-known reason for the failure of online microloan platforms. Using a set of...

Facing lengthening lifespans and economic concerns, workers and governments are increasingly considering the possibility of delayed retirement ages. However, the postponement of retirement may not be universally feasible, since not all workers may be willing and able to continue working past the...

Collective knowledge is significantly affected by information about others’ viewpoints. However, under what conditions does the “wisdom of crowds” help versus harm knowledge of factual information? In this experiment, we present subjects with the task of answering 50 factual true or false...

The effects of asymmetric information are often difficult to detect empirically, such as in insurance settings. We show that allowing for reference-dependent preferences can assist with this empirical challenge. Using detailed auto insurance claims data, we show that policyholders exhibit...

How can a government regulate an existing transportation monopoly based on features of the transport market and route structures? We analyze the government's regulatory problem from the perspective of two possible strategies: partially publicizing the existing monopolist, and entering the...

How do environmental conditions influence the purchase of critical illness insurance, and why? The mechanism for any potential relationship between them has substantial welfare and policy implications. Prior literature has found a positive relationship between supplementary health insurance and...