Behavioral Biases and the Law

Empirical and experimental evidence shows that individuals exhibit behavioral biases in their decision-making processes that depart from the full rationality paradigm. This paper discusses the effectiveness of alternative debiasing strategies, designed to induce socially preferable outcomes. Following Jolls, C. and Sunstein, C.R. (2006). Debiasing through law. J. Leg. Stud. 35: 199–242, this paper examines legal strategies that aim at “debiasing through law”, attempting to reduce or eliminate boundedly rational behavior. Alternatively, policymakers can implement “insulating” legal strategies that separate the outcome from the biased behavior, without attempting to eradicate behavioral biases from the decision-making process. This paper compares these strategies in many areas, such as tort law, consumer safety law, and property law.

On Rational Choice and the Representation of Decision Problems

In economic theory, an agent chooses from available alternatives—modeled as a set. In decisions in the field or in the lab, however, agents do not have access to the set of alternatives at once. Instead, alternatives are represented by the outside world in a structured way. Online search results are lists of items, wine menus are often lists of lists (grouped by type or country), and online shopping often involves filtering items which can be viewed as navigating a tree. Representations constrain how an agent can choose. At the same time, an agent can also leverage representations when choosing, simplifying their choice process. For instance, in the case of a list he or she can use the order in which alternatives are represented to make their choice. In this paper, we model representations and decision procedures operating on them. We show that choice procedures are related to classical choice functions by a canonical mapping. Using this mapping, we can ask whether properties of choice functions can be lifted onto the choice procedures which induce them. We focus on the obvious benchmark: rational choice. We fully characterize choice procedures which can be rationalized by a strict preference relation for general representations including lists, list of lists, trees and others. Our framework can thereby be used as the basis for new tests of rational behavior. Classical choice theory operates on very limited information, typically budgets or menus and final choices. This is in stark contrast to the vast amount of data that specifically web companies collect about their users’ choice process. Our framework offers a way to integrate such data into economic choice models.

The Strength of the Kinship Politics Network and Modalities of Pilar Saga in the 2020 South Tangerang Regional Head Election

The issue of kinship politics networks and modalities Pilar Saga is built on the Ratu Atut Chosiyah's dynastic politics. Interestingly, the dynastic political network in Banten contributed to Pilar Saga's victory. Even the various corruption cases that ensnared Ratu Atut's family could not undermine her political network. For example, the corruption case of Ratu Atut for alleged bribery of the Constitutional Court and the trading of positions, T Chaeri Wardana for the corruption case of medical equipment, and Ratu Lilis Karyawati for the Cibenuangen River bypass case in Lebak, Banten. The purpose of this study was to analyze the extent to which Pilar Saga's kinship politics network and modalities influenced his victory in the 2020 South Tangerang Regional Head Election. This study used a qualitative approach with a descriptive method in South Tangerang. The research data was taken through observation and library research to strengthen the conclusion. The results show that the Pilar Saga political network and modalities, apart from being built from the Atut dynasty, were also boosted by the performance achievements of the incumbent Pilar Saga pair. The incumbent in the previous period with Airin Rachmi Diany (Atut's sister-in-law) was able to bring South Tangerang City to be the best Regency/City area in Banten in HDI (Human Development Index) numbers. On this basis, the rational behavior of voters in South Tangerang was not fooled by the various cases that ensnared their relatives in the corruption of the Ratu Atut Chosiyah dynasty.

APPLICATION OF UTILITY THEORY IN THE STUDY OF ENTREPRENEURIAL RISKS

Тhe article discusses entrepreneurial risks from the point of view of rational behavior, which is based on obtaining satisfaction from the implementation of the project. The main approaches to the definition of risk and the works of leading researchers devoted to the problem of entrepreneurial risk are considered. Common components of risk situations, regardless of the area of the project, are highlighted. Achieving high results depends on maintaining a balance of interests of all project participants. The author's classification of entrepreneurial risks on three levels is given: macro, meso, micro, which made it possible to determine the boundaries of interests of economic entities participating in the project. The economic category of usefulness (utility) for all project participants and the economic effect as they are interested in the implementation of the project, commensurate with the costs and the results obtained, are revealed. The model "Entrepreneur - Consumer - Counterparties" is proposed, which demonstrates the realization of the interests of economic entities, which is consistent subjectivism, expressed in preference, expectation, cognition with a common interest in obtaining utility. It is proposed to develop a decision-making model in the risk management system based on the presented axioms: orderly, transit, ranked preference of project options, taking into account the expected utility by all economic entities in order to reduce entrepreneurial risks.

Characteristics of will as predictors of risk inclination of military university students in the process of professional military socialization

One of the important and relevant problems of social psychology is the study of the role of will characteristics as important regulators of risk behavior. It is especially interesting to investigate it in such a specific social group as military personnel, whose activities are associated with risk both directly and indirectly. In view of this, the purpose of the research presented in the article is to study changes in volitional determination of risk and rational behavior of the military university students in the process of professional military socialization. As a hypothesis, we suggest that different volitional characteristics mainly determine risk behavior and behavior associated with rationality. The research involves 182 military students (aged M = 20.5; SD = 1.6) of Saratov Military Institute of the National Guard of the Russian Federation. We used the following techniques to analyze changes in volitional determination of rational and risk behavior: the technique for diagnosing the manifestation of volitional personality traits “Volitional personality traits” (M. V. Chumakov); “Risk-taking” questionnaire (A. M. Schubert); the technique for diagnosing two personality traits – readiness for risk and rationality – as psychological variables reflecting the characteristics of personal regulation of the subject’s choices (such as decision-making) in the broad context of life situations “Personality factors of decision making” (T. V. Kornilova). We revealed the complication of the volitional determination of rational and risk behavior in the process of professional military socialization; we also found major volitional personality traits, that are predictors of readiness for risk and rationality. It is shown that 8% of variations in rational behavior are due to purposefulness and initiative, and 8% of variations in risk behavior are due to persistence. The study of the identified parameters can help in determining the inclination to risk and rationality of military personnel, their influence on behavior in the course of performing service and combat missions and, consequently, on their more effective and high-quality performance.

Coevolving Dynamics between Epidemic and Information Spreading considering the Dependence between Vigilance and Awareness Prevalence

It has been demonstrated that the propagation of information and awareness regarding a disease can assist in containing the outbreak of epidemics. Previous models for this coevolving usually introduced the dependence between these two processes by setting a lower but time-independent infection rate for individuals with awareness. However, a realistic scenario can be more complicated, as individual vigilance and the adopted protective measures may depend on the extent of the discussion on the disease, whereas individuals may be irrational or lack relevant knowledge, leading to improper measures being taken. These can introduce a time-varying dependence between epidemic dynamics and awareness prevalence and may weaken the effect of spreading awareness in containing a pandemic. To better understand this effect, we introduce a nonlinear dependence of the epidemic infection rate on awareness prevalence, focusing on the effect of different forms of dependence on the coevolving dynamics. We demonstrate that a positive correlation between vigilance and awareness prevalence can enhance the effect of information spreading in suppressing epidemics. However, this enhancement can be weakened if some individuals are irrational. Our results demonstrate the importance of rational behavior in the strategy of containing epidemics by propagation of disease information.