Archivio per novembre 2012

29
Nov
12

Behavioral Economics: Past, Present, Future

See on Scoop.itBounded Rationality and Beyond

Colin F. Camerer –

Behavioral economics increases the explanatory power of economics by providing it with more realistic psychological foundations. This book consists of representative recent articles in

behavioral economics. This chapter is intended to provide an introduction to the approach and methods of behavioral economics, and to some of its major findings, applications, and promising new directions. It also seeks to fill some unavoidable gaps in the chapters’ coverage of topics.

 

See on www.usapr.org

29
Nov
12

Applying Behavioral Economics to the Developing World

See on Scoop.itBounded Rationality and Beyond

Speaking from an engineering and (hopefully) entrepreneurial perspective, one of the reasons why work in the developing world is fascinating is the challenge it poses.

See on risingpyramid.org

29
Nov
12

Forecasting Economic and Financial Variables with Global VARs

See on Scoop.itBounded Rationality and Beyond

M. Hashem Pesaran- Til Schuermann – L. Vanessa Smith

This paper considers the problem of forecasting real and financial macroeconomic variables across a large number of countries in the global economy. To this end a global vector autoregressive (GVAR) model previously estimated over the 1979Q1-2003Q4 period by Dees, de Mauro, Pesaran, and Smith (2007), is used to generate out-of-sample one quarter and four quarters ahead forecasts of real output, inflation, real equity prices, exchange rates and interest rates over the period 2004Q1-2005Q4. Forecasts are obtained for 134 variables from 26 regions made up of 33 countries covering about 90% of world output. The forecasts are compared to typical benchmarks: univariate autoregressive and random walk models. Building on the forecast combination literature, the effects of model and estimation uncertainty on forecast outcomes are examined by pooling forecasts obtained from different GVAR models estimated over alternative sample periods. Given the size of the modeling problem, and the heterogeneity of economies considered — industrialised, emerging, and less developed countries — as well as the very real likelihood of possibly multiple structural breaks, averaging forecasts across both models and windows makes a significant difference. Indeed the double-averaged GVAR forecasts performed better than the benchmark competitors, especially for output, inflation and real equity prices.

See on www.cesifo-group.de

29
Nov
12

Forecasting from ignorance: The use and usefulness of recognition in lay predictions of sports events

See on Scoop.itBounded Rationality and Beyond

Thorsten Pachur, ,Guido Biele

Max Planck Institute for Human Development, Center for Adaptive Behavior and Cognition,  Berlin, Germany

 

Whereas previous studies on how people make forecasts of sports events focused primarily on experts, we examined how laypeople do this task. In particular, we (a) tested the recognition heuristic [Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: the recognition heuristic. Psychological Review, 109, 75–90], which requires partial ignorance, against four alternative mechanisms in describing laypeople’s forecasts for the European Soccer Championships 2004; (b) evaluated how well recognition predicted the outcomes of the matches compared to direct indicators of team strength (e.g., past performance, rankings); and (c) studied the less-is-more effect—the phenomenon that knowing less leads to more correct forecasts than knowing more—which can occur when the recognition heuristic is used. Two groups of participants (laypeople, experts) made forecasts for the first-round matches of the tournament. Of the five candidate mechanisms, the recognition heuristic predicted laypeople’s forecasts best: when applicable, it accounted for 90% of the forecasts. The recognition heuristic correctly predicted the actual winner of the matches substantially better than chance but did not achieve the accuracy of direct indicators of team strength. The experts made more correct forecasts than the laypeople. Moreover, we found no benefit of ignorance among the group of laypeople, although the conditions for a less-is-more effect specified by Goldstein and Gigerenzer were fulfilled.

See on www.sciencedirect.com

29
Nov
12

A Beginner’s Guide to Irrational Behavior Dan Ariely

See on Scoop.itBounded Rationality and Beyond

We are a social entrepreneurship company that partners with the top universities in the world to offer courses online for anyone to take, for free.

In this course we will learn about some of the many ways in which people behave in less than rational ways, and how we might overcome these problems.

Behavioral economics and the closely related field of behavioral finance couple scientific research on the psychology of decision making with economic theory to better understand what motivates investors, employees, and consumers. This course will be based heavily on my own research. We will examine topics such as how emotion rather than cognition determines economic decisions, “irrational” patterns of thinking about money and investments, how expectations shape perceptions, economic and psychological analyses of dishonesty by presumably honest people, and how social and financial incentives combine to motivate labor by everyday workers and CEOs alike. This highly interdisciplinary course will be relevant to students with interests in General Management, Behavioral Finance, Entrepreneurship, Social Entrepreneurship, and Marketing.

This class has two main goals:To introduce you to the range of cases where people (consumers, investors, managers, and significant others) make decisions that are inconsistent with standard economic theory and the assumptions of rational decision making. This is the lens of behavioral economics.To help you think creatively about the applications of behavioral economic principles for the development of new products, technology based products, public policies, and to understand how business and social policy strategies could be modified with a deeper understanding of the effects these principles have on employees and customers.

See on www.coursera.org

28
Nov
12

Risk, Entitlements and Fairness Bias: Explaining Preferences for Redistribution in Multi-person Setting

See on Scoop.itBounded Rationality and Beyond

Mitesh Kataria ) and Natalia Montinari – 2012

Researchers frequently studied the casual relationships of other-regarding preferences by applying experimental methods in bilateral settings (e.g., dictator game and ultimatum game). We use a framed experiment on taxes to study preferences for redistribution in a multi-person setting. We find presence of heterogeneous preferences with a substantial share of tax rate choices in line with both payoff maximization and other-regarding preferences. Notably, our data is not consistent with inequality aversion but points to other forms of other-regarding preferences, as fairness and altruism. By manipulating how subjects are assigned to a given level of pre-tax income, we vary the individual entitlements. We find a difference in the willingness to redistribute income when comparing the treatment where pre-tax income is assigned by relative performance in a production task (a general knowledge quiz) to the treatment where pre-tax income is assigned by luck. We do not find any significant difference in comparison to the intermediate treatment where pre-tax income is assigned by a combination of luck and performance. The perception of a “fair” tax is different depending on whether subjects’ pre-tax income is below or above average, which is in line with a fairness bias. Finally, subjects not knowing whether their pre-tax income is below or above the average when choosing the tax rate behave as if they were more other-regarding.

See on pubdb.wiwi.uni-jena.de

28
Nov
12

A Reader in Behavioral Economics

See on Scoop.itBounded Rationality and Beyond

A Reader in Behavioral Economics…Erik Angner
November 20, 2012
This pdf portfolio contains readings to accompany Erik Angner’s A Course in Behavioral Economics (Basingstoke: Palgrave, 2012). As the title suggests, the book is an introduction to the increasingly influential discipline of behavioral economics: the effort to provide economics with more psychologically plausible foundations. For more information about the book, please see http://www.facebook.com/BehavioralEconomics.
The Reader is organized by book chapter; a complete Table of Contents is provided in a separate file. For copyright reasons, the reader does not contain full-text articles, but rather links to the papers on each publisher’s website. From there, they can be downloaded by anyone with full access. Most research libraries should have full online access to all these works.
To the instructor. Assuming all students have library privileges, as is usual, this Reader can be distributed as is directly to the students. Though it can be edited to suit your needs, it requires no action on your part. This Reader will be updated continuously. I would be most grateful for suggestions for improvement.

EconomicsWikipedia: Economics is the social science that analyzes the production, distribution, and consumption of goods and services. →

See on www.academia.edu




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