INDIVIDUAL OR TEAM DECISION-MAKING – CAUSES AND CONSEQUENCES OF SELF-SELECTION People are social animals. There are at least two kinds of decision-making techniques. One technique is to make decisions individually. The other technique is to make decisions as a team. A recent study by Martin Kocher, Sabine Straub and Matthias Sutter, in Discussion Papers on […]
MODELING PREFERENCES THAT RESPECT REFERENCE POINTS Reference-dependent preferences are everywhere. A working paper by Berkeley’s Botond Koszegi and Matt Rabin provides a welcome model of them. Read on. Quote: “Our goal in this paper was to put forward a fully specified model of reference dependent preferences that can accommodate existing evidence and, most importantly, be […]
THE SOCIAL DILEMMA OF EXAGERATING THE POSITIVE-OF PEOPLE AND OF POLICIES Imagine you are invited to a party with ten strangers and asked to play an unusual game. Upon arrival you are presented with a choice. You can either 1) choose to receive $10 now, which you may keep, or 2) choose to receive $20, […]
HOW FINANCIAL INCENTIVES AND COGNITIVE ABILITIES AFFECT TASK PERFORMANCE IN LABORATORY SETTINGS Ondrej Rydval and Andreas Ortmann have a paper forthcoming in Economic Letters in which they re-analyze some data from Gneezy and Rustichini (2000) and look at the relative importance of financial incentives and cognitive capabilities on reasoning tasks. The various NIS levels reflect […]
THE INVOLVEMENT OF THE ORBITOFRONTAL CORTEX IN THE EXPERIENCE OF REGRET The study of decision making would be incomplete without consideration of the role of regret. A recent article seeks its place in the brain. The orbitofrontal cortex is a small area of the brain that is located just behind the eyes. It is involved […]
A recent article in The Journal of Economic Perspectives by Justin Wolfers and Eric Zitzewitz describes how a new kind of market for prediction and forecasting delivers surprisingly accurate results in a variety of domains. Here, we see predicted versus actual movie opening takes, based on data from the Hollywood Stock Exchange. Exerpt from article: […]
Will decision making styles figure into who the US chooses as a president? This question is taken up in a recent Wall Street Journal article: For those without WSJ access, an exerpt: [While they differ on issues, t]here is also a big difference in their decision-making styles. Mr. Bush often makes quick judgments. Mr. Kerry […]
Eric Johnson and Dan Goldstein have published an investigation of the effect of policy defaults on organ donation in the journal Science [Download]. Defaults determine whether a citizen is in the organ donor pool unless they choose not to be (an “opt out” system, as in some European countries) or is not in the organ […]
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