Chapter Summary: We consider the recent financial crisis as an overlapping sequence of interdependent financial bubbles followed by their collapse. Governments and regulatory agencies have made it a prime goal to moderate future crises. Many attempts at financial, economic and social engineering...

The tempting fate effect is that the probability of a fateful outcome is deemed higher following an action that ``tempts'' the outcome than in the absence of such an action. In this paper we evaluate the hypothesis that the effect is due to an illusion of control induced by a causal framing of...

In a laboratory experiment, we measure subjects’ willingness to pay for a transparently useless decision right concerning the choice between two real effort tasks. We also elicit for each participant her change in beliefs about the likelihood of receiving her preferred task if she rather than...

We propose a new set of stylized facts quantifying the structure of financial markets. The key idea is to study the combined structure of both investment strategies and prices in order to open a qualitatively new level of understanding of financial and economic markets. We study the detailed...

Entrepreneurial decision making biases have various effects on entrepreneurial decisions and on the fate of entrepreneurial enterprises, subsequently. These biases emanate from a lot of factors and have been a prosperous topic for entrepreneurship- related scholars and both their causes as well...

We propose a new set of stylized facts quantifying the structure of financial markets. The key idea is to study the combined structure of both investment strategies and prices in order to open a qualitatively new level of understanding of financial and economic markets. We study the detailed...

Preference for control affects investment behavior. Participants of laboratory experiments invest different amount of money in a risky asset when face with two different methods of control which have identical payoff structure and probability distribution, but provide different sense of control....

This paper investigates one possible explanation for people’s conflicting attitudes regarding protection of private information. The proliferation of studies about crimes such as identity theft and cyber-stalking, together with the sharp increase in the number of victims, and the easiness with...

We study the following basic intuition: when faced with a decision how to split their investment between a risky lottery and an asset with a fixed return, people increase the proportion invested in the risky option the more they like the lottery. We find counter-examples to this, and in fact we...

The illusion of control refers to the inference of action-outcome contingency in situations where outcomes are in fact random. The strength of this illusion has been found to be affected by whether the frequency of successes increases or decreases over repeated trials, in what can be termed a...