Behavioral Economics

.

Sommario

• Part 1: Introduction


• Chapter 1. Introduction and Key Concepts of Microeconomics


• 1. What is Behavioral Economics?


• 2. Key Concepts of Microeconomics


• Opportunity Cost


• The Marginal Principle


• The Equimarginal Principle


• Nash Equilibrium


• Comparative Statics


• Pareto Efficiency


• Lotteries and Certainty Equivalent


• Chapter 2. Insights from Behavioral Science


• 1. Social Preferences and Norms


• Adam Smith and the Impartial Spectator


• Rule Following Task: Avatar Pedestrian


• Sharing the Rewards of Collaboration


• Incurring a Cost to Enforce a Social Norm


• The 50-50 Norm


• 2. Mental Shortcuts


• Mental Accounting


• Default Options


• 3. Cognitive Bias


• The Decoy Effect


• Present Bias


• 4. Problems with Probabilities


• Rare Events


• Gambler's Fallacy


• 5. Instincts and Deliberation


• Apple versus Cupcake


• Hunting Practices of the Ju/'hoansi


• Why Do We Do That?


• Appendix to Chapter 2


• 1. Anchors


• 2. Confirmation Bias


• 3. Overconfidence Effect


• 4. Availability Heuristic


• Part 2: Social Preferences


• Chapter 3. Social Norms: Sharing and Enforcement


• 1. Utility Maximization with a Social Norm


• 2. Sharing Behavior: The Dictator Game


• Game Structure and Results


• Variation in Sharing Behavior


• 3. Norm Enforcement: Ultimatum Game


• Game Structure


• Norm-Sensitive Responder


• Equilibrium Responder Share


• Norm-Sensitive Proposer


• 4. Results from Ultimatum-Game Experiments


• Meta Analysis of Ultimatum Experiments


• Crosswalk Rules and the Ultimatum Game


• Competition Between Responders


• Widget 3.1: Equilibrium in the Ultimatum Game


• Chapter 4. Trust


• 1. The Trust Game: Investment and Production


• Game Structure


• Outcome in the Absence of a Sharing Norm


• 2. Sharing Norm for the Producer


• Producer's Tradeoff


• Varying Norm Sensitivity and Return Fractions


• Investor Decision


• 3. Sharing Norm for the Investor


• Investor's Tradeoff


• Relative Norm Sensitivity and Equilibrium


• Social Norms, Efficiency, and Social Capital


• 4. Experiments and Implications


• Experimental Results


• Trust Game and Social Capital


• Trust Game and Oxytocin


• Chapter 5. Public Goods


• 1. Free Riding and Experiments


• The Free-Rider Problem


• Results from Voluntary-Contribution Experiments


• 2. Social Norms and Voluntary Contributions


• Norm: Efficient Choice


• Norm: Equal Contribution


• Explaining a Path of Decreasing Contributions


• 3. Punish Free Riders?


• Punishing Norm Violators


• Summary of Experimental Results


• Chapter 6. Reciprocity in the Workplace


• 1. Worker Reciprocity and Social Capital


• Perfect or Imperfect Information in the Workplace?


• Social Norms and Pareto Improvements


• 2. Worker Identity and Effort


• Utility-Maximizing Effort


• Insiders versus Outsiders


• Norm Sensitivity and Effort


• Producer Investment in Identity Management


• 3. Response to a Higher Wage


• Wages and a Sharing Norm


• Wages and the Work-Effort Norm


• Wages and Profit


• 4. Evidence of Worker Reciprocity


• Field Experiments


• A Gift-Exchange Experiment


• Chapter 7. Voluntary Prices


• 1. Voluntary Prices: Pay What You Want


• The Equal-Sharing Price and Norm-Violation Cost


• Variation in Norm Sensitivity


• Sustainability of PWW Systems


• Economic Experiment: Pay What You Want versus Pay it Forward


• Widget 7.1 PWW Price and Social Norms


• 2. Public Broadcasting: Free Riders and Punishing Pledge Drives


• Payoffs to Members and Free Riders


• Choosing the Length of a Pledge Drive


• Chapter 8. Imitation and Cultural Learning


• 1. Imitation and Conformity


• Over-Imitation by Humans


• Over-Imitation: Humans versus Chimpanzees


• Conformity and Matching Pennies


• 2. Faithful Imitation and Cultural Learning


• Manioc and Obscure Production Processes


• Social Learning: Humans versus Chimpanzees


• Part 3: Time Preferences


• Chapter 9. Discounting and Present Bias


• 1. Conventional Discounting and Present Bias


• The Quasi-Hyperbolic Discount Function


• Widget 9.1 Conventional Discounting and Present Bias


• Present Bias and Doubling Your Apples


• Time Inconsistency


• Time Inconsistency and the Relative Values of Bundles


• Present Bias and Regret


• 2. Estimates of Discounting Parameters


• Estimates of Conventional Discounting and Present Bias


• Economic Experiment: Patience Among Mothers and Children


• Widget 9.2 Roll Your Own Current Value


• 3. Illustrations: Cupcake, Weed, Bucket List


• Cupcake versus Apple


• Homeowner versus Weed


• The Bucket List


• Chapter 10. Time Preferences and Saving


• 1. Discounting and Intertemporal Choice


• Saving and the Equimarginal Principle


• Widget 10.1 Discounting, Present Bias, and Saving


• Present Bias and Regret


• 2. Saving Mandates and Nudges


• Response to Mandate: Active Saver


• Response to Mandate: Non-Saver


• Nudges: Defaults, Save More Tomorrow, and Saving Lotteries


• 3. Clueless versus Savvy Consumers


• Three-Period Model of Intertemporal Choice


• Consumption Path of the Clueless (Naive)


• Widget 10.2: Three-Period Consumption Program


• Regret of the Clueless


• Consumption Path of a Savvy Consumer


• Commitment Devices and Saving


• 4. Present Bias and Pre-Commitment by Pigeons


• Chapter 11. When to Act


• 1. Procrastination: Waiting Too Long


• Present Bias and a Clueless Decision Maker


• Conditions for Procrastination


• Widget 11.1 Present Bias and Procrastination


• Self Awareness and Procrastination


• Clueless versus Self-Aware: How to Tell the Difference


• 2. Preproperation: Acting Too Soon


• Present Bias and a Clueless Decision Maker


• Conditions for Preproperation


• Self Awareness and Preproperation


• Chapter 12. Application of Present Bias--Sin Taxes and Fertilizer


• 1. Personally Harmful Products and Sin Taxes


• A Model of a Personally Harmful Good


• Present Bias and a Personally Harmful Good


• Price and Consumer Choice


• Savvy Consumers and Hobbling


• Support for Sin Taxes


• Widget 12.1 Present Bias and a Sin Tax


• 2. Present Bias and Fertilizer Investment


• Review of Intertemporal Choice Model


• Present Bias and the Fertilizer Investment


• Policy Options


• Part 4: Mental Accounting and the Endowment Effect


• Chapter 13. Mental Accounting for Consumers


• 1. Mental Accounting and Fungibility


• Consumer Budgets and Fungibility


• Mental Accounting and Coupons


• 2. Other Implications of Mental Accounting


• Mental Accounting and Sunk Cost


• Decoupling Cost and Benefit: Credit Cards and Ride-Hailing Services


• Regular versus Premium Gasoline


• Chapter 14. Loss Aversion and the Endowment Effect


• 1. Painful Loss and Loss Aversion


• Conventional Benefits and Costs of Exchange


• The Pain of Loss Exceeds the Joy of Gain


• Loss Aversion Parameter


• Loss Aversion and Reappraisal


• 2. The Endowment Effect


• Classic Endowment Experiment


• Evidence for the Endowment Effect


• Endowment Effect for Chimpanzees and Capuchin Monkeys


• The Endowment Effect and Asset Exchange


• Part 5: Risk Preferences


• Chapter 15. Risk Preferences and Prospect Theory


• 1. Three (of Four) Features of Prospect Theory


• Utility Function for Prospect Theory


• Widget 15.1 The Shape of the Utility Curve


• Utility Value and Certainty Equivalent


• Widget 15.2 Utility Value and Certainty Equivalent


• 2. Risk Aversion and Risk Neutrality


• Risk Aversion and the Risk Premium


• Risk Neutrality: Linear Utility and No Loss Aversion


• Sources of Risk Aversion


• 3. The Values of Key Parameters


• Loss Aversion


• Decreasing Sensitivity to Gain and Loss


• Widget 15.3: Compute Your for Gain and Loss


• Measuring Sensitivity to Stimulus


• Experiment: Risk Preferences and Cognitive Ability


• 4. Risk Preferences of Rats


• Chapter 16. Problems with Probability


• 1. Probability in Prospect Theory


• Prelec Probability Weighting


• Psychological Foundations


• Widget 16.1 The Graphics of Probability Weighting


• A Closer Look at Rare Events


• 2. Learning by Description versus Learning by Experience


• 3. Solving Puzzles with Probability Weighting


• The Numbers Game Puzzle


• The Longshot Puzzle


• Chapter 17. Prospect Theory and Asset Markets


• 1. Decreasing Sensitivity and Attitudes Toward Risk


• Decreasing Sensitivity to Gain and Risk Aversion


• Decreasing Sensitivity to Loss and Risk Seeking


• Constant Sensitivity and Risk Neutrality


• Widget 17.1 Reservation Prices for Gain and Loss Lotteries


• 2. Disposition Puzzle


• Reservation Price in a Winner Market


• Reservation Price in a Loser Market


• Reservation Prices and Time on the Market


• Evidence for the Disposition Puzzle


• 3. Disposition Puzzle Disappears?


• Let Bygones be Bygones


• Constant Sensitivity to Gain and Loss


• 4. The Equity Premium Puzzle


• Loss Aversion and Utility Values


• Professional Traders: Too Much Information?


• Widget 17.2 Equity Premium Puzzle


• Chapter 18. Prospect Theory and Insurance


• 1. Willingness to Pay for Insurance


• Decreasing Marginal Disutility of Loss


• Certainty Equivalent and Willingness to Pay for Insurance


• Willingness to Pay for Insurance versus Break-Even Price


• Economic Experiment: Willingness to Pay for Insurance


• Widget 18.1: WTP versus Price of Insurance


• 2. Probability Weighting and Insurance Puzzles


• Decreasing Sensitivity and Probability Weighting


• Widget 18.1 Hazard Insurance


• The Hazard Insurance Puzzle


• 3. Insurance Deductible Puzzle


• Insurance Deductibles


• Surprise Loss Aversion


• Chapter 19. Reference Points and Goals


• 1. Goals and the Marginal Principle


• Goal-Related Marginal Benefit


• Full Marginal Benefit and Choice


• Goals on the Golf Course


• 2. Applications: Rainy Day Taxis and Abstinence


• Rainy Day Taxi


• Widget 19.1 Regular versus Goal-Oriented Taxi Drivers


• Abstinence


• Part 6: Natural Selection and Human Behavior


• Chapter 20. Natural Selection and Behavioral Economics


• 1. Background Concepts from Evolutionary Biology


• DNA, Genetic Mutations, and Natural Selection


• Illustration: A Fire-Building Manual


• 2. A Closer Look at Fitness and Evolution


• Fitness, Natural Selection, and Evolution


• Fitness Contests and Geometric Mean Fitness


• Economics versus Biology: Spider Somersaults


• 3. Genes, Environment, Norms, Culture, and Cognition


• Genes and the Environment


• Genes and Culture


• Genes and Social Norms


• Instinctive Urges versus Deliberation


• Chapter 21 Natural Selection and Cooperation


• 1. Humans versus Chimpanzees


• Cooperation: Skills and Motivation


• Sharing


• Willingness to Enforce Norms


• Natural Selection and Cooperation


• 2. Consumption and Production Benefits of Cooperation


• Benefits from Consumption Smoothing


• Benefits from Economies of Scale


• 3. The Co-Evolution of Genes and Culture


• Genes and Culture


• Cultural Learning


• Chapter 22. Natural Selection, Loss Aversion, and Time Preferences


• 1. Natural Selection and Loss Aversion


• Steady versus Fluctuating Reproduction


• Gain Equals the Loss


• Gain Exceeds the Loss


• Fitness Equivalence


• Environmental Conditions and Genetic Mixes


• Widget 22.1: Fitness and Loss Aversion


• 2. Natural Selection and Time Preferences


• Tradeoffs from Investment


• Low Investment Productivity


• High Investment Productivity


• Lessons from Historical Data


• Chapter 23. Natural Selection and Risk Aversion


• 1. Small Reward and Risk Aversion


• Geometric Mean Fitness


• Natural Selection and Risk Aversion


• 2. Large Reward and Risk Neutrality


• Greater Fitness for Risk Takers


• Natural Selection Favors Risk Taking


• Fitness Equivalence


• Risk Aversion in Bonobos, Shrews, and Other Creatures


• Widget 23.1: Fitness and Risk Aversion


• 3. Subsistence and Risk Seeking


• Subsistence and Risk Preferences


• The Flexible Risk Preferences of Juncos


• Chapter 24. Bargaining and the Endowment Effect


• 1. A Hunter-Gatherer Exchange Economy


• Hunter-Gatherer Fitness


• Edgeworth Box and Gains from Exchange


• Bargaining and Equilibrium


• 2. Natural Selection: Bargaining Outcomes


• Endowment Effect and Nash Equilibrium


• Disagreement Value and the Nash Bargaining Solution


• Endowment Effect and Group Fitness


• Widget 24.1: Nash Bargaining, Fitness, and the Endowment Effect


• Egalitarian Economy and the Endowment Effect

Info autore

Arthur O'Sullivan is Dr. Robert B. Pamplin Jr. Professor of Economics at Lewis & Clark College. He is the author of Urban Economics, Ninth Edition (2019), the best-selling urban economics text, and co-author, with Steven Sheffrin and Stephen Perez, of Economics: Principles, Applications, and Tools, Tenth Edition (2020).

Riassunto

The text is designed as the main text for an undergraduate course in Behavioral Economics, which is a growing course for students of economics at the undergraduate level. The presentation is grounded in microeconomics and traditional economic models to discuss observed human behavior. The book presents models that show the trade-offs between material benefits and social concerns. The models incorporate social concerns such as altruism, guilt, exploitation, fairness, and cognitive dissonance. Unlike many other books on behavioral economics, the text is not a catalog of human quirks. Although the book highlights all sorts of observed behavior that appears irrational and misguided, it doesn't stop there. It examines the possible motives for the puzzling behavior. For many misguided and regrettable choices, we highlight actions taken to control the behavior and mitigate the damage. We use the insights of anthropologists and economists to explore the role of natural selection in shaping human thinking and behavior. A decision that appears irrational today may be understandable in the context of millions of years of natural selection. Recent work explores the role of natural selection in (i) loss aversion, (ii) the endowment effect, (iii) time preferences, and (iv) responses to the free-rider problem.

Testo aggiuntivo

Of all the textbooks I've seen this matches the style that I teach the course the best. It covers the main topics of behavioral topics well, strikes the right balance between simplicity and rigor, has nice graphics, and covers interesting side topics.

Dettagli sul prodotto

• Autori: O'Sullivan , Arthur O'Sullivan, Arthur O''sullivan, O'Sullivan Arthur
• Editore: Oxford University Press
• Lingue: Inglese
• Formato: Tascabile
• Pubblicazione: 31.05.2022
• EAN: 9780197515921
• ISBN: 978-0-19-751592-1
• Pagine: 472
• Categorie: Scienze sociali, diritto, economia > Economia > Economia politica; Behavioural economics, BUSINESS & ECONOMICS / Economics / Social & Behavioral