Andrea Civelli, Cary A. Deck, J. LeBlanc, Antonella Tutino
This paper presents a laboratory experiment that directly tests the theoretical predictions of consumption choices under rational inattention. Subjects are asked to select consumption when income is random. They can optimally decide to reduce uncertainty about income by acquiring signals about it. The informativeness of the signals directly relates to the cognitive effort required to process the information. We find that subjects? behavior is largely in line with the predictions of the theory: 1) Subjects optimally make stochastic consumption choices; 2) They respond to incentives and changes in the economic environment by varying their attention and consumption; 3) They respond asymmetrically to positive and negative shocks to income, with negative shocks triggering stronger and faster reactions than positive shocks.
{"title":"Rationally Inattentive Consumer: An Experiment","authors":"Andrea Civelli, Cary A. Deck, J. LeBlanc, Antonella Tutino","doi":"10.24149/wp1813","DOIUrl":"https://doi.org/10.24149/wp1813","url":null,"abstract":"This paper presents a laboratory experiment that directly tests the theoretical predictions of consumption choices under rational inattention. Subjects are asked to select consumption when income is random. They can optimally decide to reduce uncertainty about income by acquiring signals about it. The informativeness of the signals directly relates to the cognitive effort required to process the information. We find that subjects? behavior is largely in line with the predictions of the theory: 1) Subjects optimally make stochastic consumption choices; 2) They respond to incentives and changes in the economic environment by varying their attention and consumption; 3) They respond asymmetrically to positive and negative shocks to income, with negative shocks triggering stronger and faster reactions than positive shocks.","PeriodicalId":375605,"journal":{"name":"DecisionSciRN: Economic Decision Theory (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115326053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The objective of this paper is to show that the behavioural mission of modelling a human being as an agent driven by economic as well as psychological impulses can be accommodated to a large extent within the neoclassical framework which consists of optimising agents arriving at equilibrium. First, it attempts to show that the non-homoeconomicus is as capable of ‘rationality’ as a homoeconomicus (self-centred human); in fact being self-centred has no major implications for the ability to be ‘rational’. Second, it shows that the systematic biases associated with neoclassical predictions of human behaviour can be resolved in many cases by re-specifying the utility function to accommodate psychological factors. Thus, the contribution of the behavioural school would probably lie in altering the way in which neoclassical models are specified but not in rejecting neoclassical methodology altogether. At the same time, it is pointed out in this paper that bounded rationality (satisficing behaviour) of human beings in real life can often generate group behaviour that is systematically different from predictions emerging from the neo classical assumption of perfect rationality (optimising agents).
{"title":"Evolving a Neoclassical Approach to Behavioural Economics","authors":"S. Mitra","doi":"10.2139/ssrn.3134615","DOIUrl":"https://doi.org/10.2139/ssrn.3134615","url":null,"abstract":"The objective of this paper is to show that the behavioural mission of modelling a human being as an agent driven by economic as well as psychological impulses can be accommodated to a large extent within the neoclassical framework which consists of optimising agents arriving at equilibrium. First, it attempts to show that the non-homoeconomicus is as capable of ‘rationality’ as a homoeconomicus (self-centred human); in fact being self-centred has no major implications for the ability to be ‘rational’. Second, it shows that the systematic biases associated with neoclassical predictions of human behaviour can be resolved in many cases by re-specifying the utility function to accommodate psychological factors. Thus, the contribution of the behavioural school would probably lie in altering the way in which neoclassical models are specified but not in rejecting neoclassical methodology altogether. At the same time, it is pointed out in this paper that bounded rationality (satisficing behaviour) of human beings in real life can often generate group behaviour that is systematically different from predictions emerging from the neo classical assumption of perfect rationality (optimising agents).","PeriodicalId":375605,"journal":{"name":"DecisionSciRN: Economic Decision Theory (Topic)","volume":"3 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131614311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We evaluate the impact of timing on decision outcomes when both the timing and the relevant decision are chosen under uncertainty. Sports betting provides the testing ground, as we exploit an original dataset containing more than one million online bets on games of the Italian Major Soccer League. We find that individuals perform systematically better when they place their bets farther away from the game day. The better performance of early bettors holds controlling for (time-invariant) unobservable ability, learning during the season, and timing of the odds. We attribute this result to the increase of noisy information on game day, which hampers the capacity of late (non-professional) bettors to use very simple prediction methods, such as team rankings or last game results. We also find that more successful bettors tend to bet in advance, focus on a smaller set of events, and prefer games associated with smaller betting odds.
{"title":"The Importance of Betting Early","authors":"A. Innocenti, T. Nannicini, R. Ricciuti","doi":"10.2139/ssrn.1999459","DOIUrl":"https://doi.org/10.2139/ssrn.1999459","url":null,"abstract":"We evaluate the impact of timing on decision outcomes when both the timing and the relevant decision are chosen under uncertainty. Sports betting provides the testing ground, as we exploit an original dataset containing more than one million online bets on games of the Italian Major Soccer League. We find that individuals perform systematically better when they place their bets farther away from the game day. The better performance of early bettors holds controlling for (time-invariant) unobservable ability, learning during the season, and timing of the odds. We attribute this result to the increase of noisy information on game day, which hampers the capacity of late (non-professional) bettors to use very simple prediction methods, such as team rankings or last game results. We also find that more successful bettors tend to bet in advance, focus on a smaller set of events, and prefer games associated with smaller betting odds.","PeriodicalId":375605,"journal":{"name":"DecisionSciRN: Economic Decision Theory (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128054631","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：