Prospect Theory Goes Public: Experimental Evidence on Cognitive Biases in Public Policy and Management Decisions

2018 ◽  
Vol 78 (6) ◽  
pp. 828-840 ◽  
Author(s):  
Nicola Bellé ◽  
Paola Cantarelli ◽  
Paolo Belardinelli
Keyword(s):  
Public Policy ◽  
Experimental Evidence ◽  
Prospect Theory ◽  
Cognitive Biases ◽  
Management Decisions

scholarly journals The effect of behavioral biases on financial decisions

2021 ◽  
Vol 10 (2) ◽  
Author(s):  
David Peón ◽  
Manel Antelo
Keyword(s):  
Empirical Analysis ◽  
Social Factors ◽  
Financial Management ◽  
Cognitive Biases ◽  
Heuristics And Biases ◽  
Management Decisions ◽  
Financial Decisions ◽  
Behavioral Traits ◽  
Behavioral Biases ◽  
Systematic Exposition

Financial management decisions are made by people, and people, in all instances, are shaped by their behavioral traits. Here we provide extensive insight on the theoretical and empirical analysis made on cognitive biases and their influence on financial decisions. To provide a systematic exposition, we set three broad categories: heuristics and biases, choices (including framing and preferences) and social factors. We then describe the main biases within each category and provide an extensive revision of the main theoretical and empirical developments about their impact on financial decisions.

scholarly journals Experimental evidence for delayed post-conflict management behaviour in wild dwarf mongooses

2021 ◽  
Author(s):  
Amy Morris-Drake ◽  
Julie Kern ◽  
Andy Radford
Keyword(s):  
Conflict Management ◽  
Experimental Evidence ◽  
Playback Experiment ◽  
Group Conflict ◽  
Temporal Delay ◽  
Management Decisions ◽  
Delayed Effects ◽  
Post Conflict ◽  
Management Behaviour

In many species, within-group conflict leads to immediate avoidance of potential aggressors or increases in affiliation, but no studies have investigated delayed post-conflict management behaviour. Here, we experimentally test that possibility using wild dwarf mongooses (Helogale parvula). First, we used natural and playback-simulated foraging displacements to demonstrate that bystanders take notice of the vocalisations produced during such within-group conflict events. We then used another playback experiment to assess delayed effects of within-group conflict on grooming interactions. Overall, fewer individuals groomed on evenings following an afternoon of simulated conflict, but those that did groomed more than on control evenings. Subordinate bystanders groomed with the simulated aggressor significantly less, and groomed more with one another, on conflict compared to control evenings. Our study provides experimental evidence that dwarf mongooses acoustically obtain information about within-group contests (including protagonist identity), retain that information and use it to inform conflict-management decisions with a temporal delay.

scholarly journals Raj Chetty: 2013 Clark Medal Recipient

2014 ◽  
Vol 28 (2) ◽  
pp. 143-152
Author(s):  
Martin Feldstein
Keyword(s):  
Public Policy ◽  
Experimental Evidence ◽  
Social Insurance ◽  
Public Economics ◽  
Public Spending ◽  
Empirical Methods ◽  
Policy Issues ◽  
Large Sets ◽  
Selection Of

Raj Chetty is eminently deserving of being awarded the John Bates Clark Medal at the age of 33. His research has transformed the field of public economics. His work is motivated by important public policy issues in the fields of taxation, social insurance, and public spending for education. He approaches his subjects with a creative redefinition of the problems that he studies, and his empirical methods often draw on experimental evidence or unprecedentedly large sets of integrated data. While his work is founded on basic microeconomics, he modifies this framework to take into account behavioral and institutional considerations. Chetty is a prolific scholar. It is difficult to summarize all of Chetty's research or even to capture the details of his most significant papers. I have therefore chosen a selection of Chetty's important papers dealing with taxation, social insurance, and education that contributed to his selection as the winner of the John Bates Clark Medal.

Combating Information Attacks in the Age of the Internet: New Challenges for Cognitive Engineering

2018 ◽  
Vol 60 (8) ◽  
pp. 1081-1094 ◽  
Author(s):  
Mica R. Endsley
Keyword(s):  
Public Policy ◽  
Cognitive Biases ◽  
Health And Safety ◽  
Cognitive Engineering ◽  
Online Information ◽  
Cognitive Mechanisms ◽  
Wide Range ◽  
Network Propagation ◽  
Basic Facts ◽  
Public Policy Decisions

Objective: This article provides an overview of the characteristics of misinformation and information attack and their effects on the perceptions of the public, with the objective of outlining potential solutions and needed research for countering this growing problem. Background: Society is facing a significant challenge from the spread of misinformation through websites and social media that has driven a divergence in people’s perceptions and understanding of basic facts associated with many issues relevant to public policy decisions, including the economy, taxation, and the deficit; climate change and the environment; and vaccinations and public health and safety. A number of factors are driving this fracture, including information presentation challenges that lead to poor information understanding, deliberate information attacks, social network propagation, poor assessments of information reliability, and cognitive biases that lead to a rejection of information that conflicts with preexisting beliefs. Results: A framework for understanding information attack is provided, including common sources, features, avenues, cognitive mechanisms, and major challenges in overcoming information attacks. Conclusion and Application: Potential solutions and research needs are presented for improving people’s understanding of online information associated with a wide range of issues affecting public policy.

scholarly journals How to Split Gains and Losses? Experimental Evidence of Dictator and Ultimatum Games

Games ◽  
2018 ◽  
Vol 9 (4) ◽  
pp. 78 ◽  
Author(s):  
Thomas Neumann ◽  
Sabrina Kierspel ◽  
Ivo Windrich ◽  
Roger Berger ◽  
Bodo Vogt
Keyword(s):  
Experimental Evidence ◽  
Prospect Theory ◽  
Ultimatum Game ◽  
Dictator Game ◽  
Monetary Loss ◽  
Ultimatum Games ◽  
Prior Experiences ◽  
Gains And Losses ◽  
Monetary Gain ◽  
Distribution Problems

Previous research has typically focused on distribution problems that emerge in the domain of gains. Only a few studies have distinguished between games played in the domain of gains from games in the domain of losses, even though, for example, prospect theory predicts differences between behavior in both domains. In this study, we experimentally analyze players’ behavior in dictator and ultimatum games when they need to divide a monetary loss and then compare this to behavior when players have to divide a monetary gain. We find that players treat gains and losses differently in that they are less generous in games over losses and react differently to prior experiences. Players in the dictator game become more selfish after they have had the experience of playing an ultimatum game first.

Does the Level of Work Effort Influence Tax Evasion? Experimental Evidence

2014 ◽  
Vol 65 (2) ◽  
Author(s):  
Christoph Bühren ◽  
Thorben C. Kundt
Keyword(s):  
Experimental Evidence ◽  
Prospect Theory ◽  
Tax Evasion ◽  
Work Effort ◽  
Real Effort

AbstractUsing a real effort experiment, we analyze the dependence of tax evasion on the amount of effort invested to generate income. In three treatments, subjects were either endowed with income or had to work moderately or arduously to earn it. In line with prospect theory, subjects evaded more taxes when they worked hard for their income. We find little evidence for the prediction that tax evasion in the endowed treatment is higher than that in the moderate-effort treatment.

Sign in / Sign up

Export Citation Format

Share Document