This study investigates the effect of reciprocal kindness on individualdecisions with experimental evidences. The literature suggested that the coalition formation could be enlarged by altruism. This study employs the reciprocity model to illustrate the reciprocal behavior in both dictator and public goods games. We found that an altruistic participant in the dictator game could be hostile to others in the public good game due to the negative reciprocal feeling. When subjects were essential to make contributions to public goods, they were more likely to cooperate if they were treated badly. In contrast, when subjects were unnecessary, the reciprocal kindness could enhance cooperative tendencies. Overall, this study reveals that the reciprocal behavior could reshape the provision of public goods.
tion the balance of the general government. In addition to the condition of an equilibrium, social security and the stability of the value of pensions should also be ensured. The Hungarian regulation, however, has compelled not only economic politicians, but also future pensioners make their choice several times. The aim of this paper is to study such choices and decisions. The authors demonstrate the effect mechanism of individualdecisions through examples. They believe that decision-makers often do not con- sider the effect of their choices, and therefore the rightness of their steps is questionable.
According to DOI, the time element is associated with two dimensions: innovativeness (individual level) and the rate of adoption (system level). Rogers classifies individuals in a social system into five adopter categories according to their innovativeness level, i.e., the degree to which they are relatively earlier in adopting new ideas than other members. Each adopter cate- gory is associated with personality traits, communication behavior and socioeconomic status. The five categories are: Innovators, which comprise 2.5% of the social system, Early Adopters (13.5%), Early Majority (34%), Late Majority (34%) and Laggards comprising 16% . The measure of innovativeness is based upon the relative time at which an innovation is adopted. The rate of adoption is inferred by plotting the cumulative number of individuals adopting a new idea over time. The resulting distribution is an S-shaped curve indicating progressive dif- fusion through the five categories. Critical mass occurs at a point in time in which the rate of the adoption is fastest, i.e. the number of new adopters is increasing most rapidly. This point, referred to as the inflection point, occurs when about 16% of the individuals have adopted an innovation. According to the DOI, once the adoption of an innovation reaches an inflection point, further diffusion becomes self-sustained .
Eliciting subjective expectations in developing countries has raised issues concerning not only the ability of the respondents to provide expectations in a probabilistic format but also the length of the surveys concerned; these concerns have been refuted by other studies (Delavande, 2014) and also refuted by the three chapters presented in this thesis. The use of fully detailed scenarios, and in particular those scenarios of migration when the wage offered is fixed, help to deal with the information asymmetries and financial constraints that will prevent an individual to migrate. In the first chapter we found that together with the expected gain of migration, the opinion about the USA, China and Saudi Arabia is a determinant of the probability of migration to these countries, and the effect of these opinions vary across different socioeconomic backgrounds. We found that individuals that have received different types of educations react in a different way to the same job offer if the offer is placed in two different countries. Providing objective information about the cost of living, job opportunities and lifestyle to all students regardless their institution of enrolment could help to have accurate information sets about potential destination of migration.
Luck and individual choices play a central role in the distribution of income, health status, and social standing across individuals within a society. We examine how people view in- equalities arising from these two factors. An online platform designed by CRUK to solicit donations to cancer research o↵ers the potential donors an ability to choose the destinations of their contributions. For some of these destinations, hereditary causes of the disease are more prevalent while for others lifestyle causes are dominant. Moreover, this information is explicitly stated for some of the cancer types on the online platform. Thus, through their contributions donors are revealing how they view the adverse health outcomes that are more likely to be caused by luck versus those for which individual choices play a relatively large role. By testing the predictions of our theoretical model, we find that donors contribute more to hereditary cancers. Based on our estimations, we conclude that a non-negligible share of the donors embrace choice egalitarianism as a guiding principle in making their contributions. Interestingly, this e↵ect is mainly due to strong preference for choice egalitar- ianism among women. Among our other results are the findings that donations decrease with survival rates and that there is a significant amount of “in-gender favoritism” in donation behavior.
Extant studies of people’s pro-social behavior have looked at relatively few deci- sions by each individual and established models of social preferences have been informed by this kind of aggregate information. However, some of the more recent evi- dence has shown that individual motivations are quite heterogeneous. This is important from a positive point of view, since aggregate behavior often needs to be understood in terms of the interaction of agents with different kinds of social preferences. To bet- ter understand heterogeneity is also important from a normative standpoint. Fairness ideals can be expected to be diverse and to understand public debates on distributive justice one needs to have information about this diversity. As Almas et al. ( 2010 ) put it, “most adults believe that differences in individual achievements and efficiency considerations […] may justify an unequal distribution of income”. But, they disagree on which unequal distributions they consider to be fair. From a normative point of view, understanding the heterogeneity of preferences and views may help to get a better understanding of the sources of these disagreements. Cappelen et al. ( 2007 ) analyze how views on fairness ideals depend on individual characteristics, includ- ing talent and disposition to effort. Konow ( 2009 ) documents the existence of large variance in fairness ideals in a realistic experiment in which the diversity of moral judgments is sensible to the manipulation of information conditions in the labora- tory.
We consider an Arrow-Debreu economy in which expected-utility-maximizing agents are sensitive to regret. According to regret theory, the marginal utility of their consumption is increasing in the maximum payoﬀ that they could have obtained if they would have made another choice ex ante. We show that regret biases the optimal portfolio allocation towards assets that perform particularly well in low probability states. The competitive asset pricing kernel is convexified by regret if the distribution of the macroeconomic risk is logconcave. Regret also reduces the equity premium when the macro risk is positively skewed. We characterize the competitive allocation of risk when consumers have heterogenous preferences, and we show how to aggregate individual intensities of regret.
the individual characteristics – especially the beliefs - of decision-makers influence their decisions regarding out-of-home placements, and (2) whether the decisions of different professionals regarding an out-of-home placement converge to a greater degree when those decision-makers are provided with an evaluation of parents’ response to an intervention, for which convergence would be an indication for improved quality of decisions. The investigation was conceived and conducted through inter-disciplinary collaboration of researchers at Leiden University and the VU University Amsterdam. A parallel study is currently being conducted by a team in Scotland.
The focus of the current study will be on gauging the presence or the absence, not the magnitude of each bias examined; in other words, how overconfident someone is will not be decided, but rather if someone is overconfident or not. The main purpose of the research design was to distinguish general tendencies that are related to the loss aversion behavioral bias. It examines how individual equity investors react to psychological dilemmas presented to them. This was done by presenting a scenario to the respondents, all linked to the loss aversion bias theory, which are structured in a way that certain behaviors can be traced to the answers given. This approach was important since the current study focuses on psychological tendencies.
might generate lucrative returns in the future etc. The options of investments are huge; all of them having different risk-reward trade off. It has been established through research that financial literacy has a role to play in making sound investment decisions. Thus, it has become imperative to become financially literate to ensure well-being of individuals.
The outcome of the global financial crisis and the resultant unexplained unpredictability and market anomalies have raise doubt about the establishment of the Efficient Market Hypothesis and require the interest for another worldview of modern financial theory. In the ongoing decades, financial experts have endeavoured to come back to the first point to see how human psychology influences investors’ financial decisions. This evolution leads to the emergence of a new paradigm of financial research known as the behavioural finance. Being a generally new field in finance, behavioural finance applies psychology to study why people buy or sell financial assets based on the psychological principles of decisions making. Rather than totally supplanting traditional finance, behavioural finance assumes a corresponding job in understanding the issues that the traditional finance seems to neglect to comprehend (Subrahmanyam, 2007). Behavioral finance spotlights on how investors translate and act on data during their investment decision making. The standard supposition fundamental to traditional financial theory, that investors do dependably act in an impartial way is loose in behavioural finance. Behavioral finance researchers have reported a lot of proof that speculators' feelings and psychological blunders are related with different financial market oddities. Xu (2010) opined that behavioural finance recommended that some market marvels can be better comprehended by considering that investors are not completely rational and that human unsteadiness impacts the financial decisions of investors. Applying some mental hypotheses, behavioural finance shows that investors can't refresh their convictions or settle on judgments and choices under dangerous circumstances as effectively as proposed by the traditional finance theories. Rather they could be one-sided in gathering, accepting, and refreshing data, and in making inferences. For instance, investors may frame their convictions by utilizing general guidelines or some improved strategies (Slovic, 1972; Tversky and Kahneman, 1974).
basic before running the factor analysis. The results of the principal components revealed seven psychological factors. In the sample of Indian individual investor behaviour these sevenfactors on the basis of the underlying variables are named as (Representativeness, Anchoring, Information Heuristics, Risk Aversion, Overconfidence, Disposition Effect, and Gamblers Fallacy) Consistent with the prior literature, the result suggests that psychological biases, such as c Representativeness, Anchoring, Information Heuristics, are playing significant role in determining individual investor behaviour; but factor analysis reports certain behavioural factor such as Overconfidence, Disposition Effect, and Gamblers Fallacy which are not yet explained in prior literature in growing economies, particularly in Indian context with respect to Mysore city. The findings from the survey of Indian individual investors show that behavioural biases do influence their investment decision making processes.
3 making in economics suggests that decisions can be considerably improved when made by a group rather than individually (for an overview, see Charness and Sutter 2012). In contrast, the literature in psychology on individual versus group decision-making focuses more on the properties of the decision task to explain when individuals may or may not perform better than groups. The main distinction is made between intellective and judgmental tasks (Laughlin and Ellis 1986; see section 2.4 for further discussion). An intellective task has an objectively correct solution, whereas a judgmental task does not. Moreover, for intellective tasks, the degree of demonstrability is an important characteristic. If an individual is able to demonstrate to others the superiority of one possible solution over the alternatives, it has been shown that groups perform better than individuals at making such decisions (e.g., Laughlin et al. 2002; Maciejovsky and Budescu 2007).
A central issue here is how to estimate risk attitudes. The standard in the literature is the use of incentivized experiments, where individual’s choices have direct consequences on their earnings (see discussion on induced value theory in Smith (1976)) and many papers have adopted this strategy. However, conducting risk experiments in the field, for example with farmers, is costly, as well as technically and logistically complicated. An alternative is to use stated preference data collected via survey questionnaires, which are less expensive since they are not incentivized with money, and are easier to apply to a more extensive population. However, based on the logic of induced value theory, stated preference can be criticized for not having direct consequences for respondents. Falk and Heckman (2009) summarize this discussion and argue that experiments and surveys are complements, and both have their pros and cons. Risk experiments typically are conducted in a context-free environment, where individuals make decisions between different lotteries. Experiments can vary regarding the elicitation method or choice task, framed in the loss or gain domain, probabilities, and stakes (Jamison et al. 2012). 2 By contrast, survey methods often use Likert scales
The latter aspect points to the self-selection or ‘reflection’ problem, i.e. the potential endogeneity of contextual effects (e.g., Evans et al. 1992; Manski 1993). In the presence of selection processes, statistical controls for individual variables would not prevent finding a contextual effect, although it would be hardly possible to identify whether the context is actually influencing the individual’s behaviour, or whether the effect is merely a reflection of average characteristics of her environment. In other words, unobserved characteristics of an individual may influence the behaviour under investigation, but also her choice of the environment she lives in. Namely, individuals with a high preference for children should tend to move into regions with opportunity structures that they perceive as being favourable for the formation of a family and the socialisation of children, and vice versa (e.g., Huinink and Wagner 1989). Thus, some proportion of what might be considered as a contextual effect could be an ‘indirect’ effect only, which is mediated through migration decisions determined by individuals’ preferences and the ‘push-and-pull’ factors of regionally different living conditions. Moreover, selective migration may lead to positive feedback effects on already existing opportunity structures, thereby increasing differences in regional fertility levels.
These aspects should all be considered when modelling evacuation decisions in order to better understand how willingness and reluctance emerge. Several studies highlight that traditional beliefs, culture/inherited local knowledge, and economic aspects are found to be the common reasons for refusing to follow evacuation orders [19,31,36–38]. Although the economic aspect has no influence in the case of evacuation decisions in Merapi , it does encourage people to return home to protect their property or to feed cattle during the evacuation period . Some modelling studies show how social processes affect evacuation decisions. An example of a communication model among agents within a group, and from one group to different groups, has been presented by Canessa and Riolo . Agent interaction, specifically the mechanisms of how actions and messages from other agents motivate individuals, can be represented using an agent-based model . The aggregation behaviour of people was successfully presented by Qiu and Hu . However, models of the decision-making mechanisms as a result of these factors are limited. The evacuation decision model (EDM) developed in this paper is different from another recent model based on perceived risk by Reneke  and improved by Lovreglio et al. . These models [42,43] disregard the social characteristics of agents in defining risk perception. However, based on other research, risk perception does not stand alone, but depends on other factors [23,30,44]. Therefore, this paper attempts to address this problem by involving risk perception and some of the other aforementioned factors in evacuation decision making. For this purpose, Agent-based modelling (ABM) was employed to simulate the decision making mechanism during an emergency situation.
In the context of the Dewey Ranch decisions, a court should allow a sale if applicable nonbankruptcy law permits it or if there is a bona fide dispute. 205 Although Judge Baum
addressed both sections 363(f)(1) and 363(f)(4) as tightly sealed compartments without any interdependence, he relied on the same actions of the Debtors in failing to assert an antitrust action in what the court considered to be a timely manner and the same actions of the NHL in failing to make a decision on the relocation in arriving at his conclusions regarding both sections of 363. 206 In so doing, Judge Baum
u 0j are independent of the individual level disturbances, have the expectation zero and the variance σ u 2 . If the u 0j turn out to be statistically significant from zero, context
effects are present (e.g., Kreft and de Leeuw 1998: Chapter 3.4).
Multilevel generalised linear models (GLIM) can be used to overcome some of the shortcomings of simple random coefficient models, such as the underlying assumption of a normal error distribution. Hierarchical GLIM therefore allow the application of multilevel logistic regression models for the analysis of discrete dependent variables (see Guo and Zhao 2000 for an overview). The two-level model for a binary response variable is conceptually equivalent to equation . The probability of the binary outcome to be one is defined as p ij = Pr( y ij = 1), where p ij is modeled using a logit link function. With the standard assumption that y ij has a Bernoulli distribution, the
These ndings translate to a number of policy implications. Most important among them is transparency and dissemination of the expected nancial returns to recent high school graduates who are making decisions about their educational future. The ethos sur- rounding postsecondary education has increasingly become akin to A college degree is the best outcome for everyone regardless of cost. While true for most students, the results of this paper show that this does not apply to everyone, especially when it concerns degrees with low nancial returns and/or high levels of debt. The results from this paper may also be able to inform dierential tuition and student loan policies.