Related papers: A Two-Ball Ellsberg Paradox: An Experiment
People reason heuristically in situations resembling inferential puzzles such as Bertrand's box paradox and the Monty Hall problem. The practical significance of that fact for economic decision making is uncertain because a departure from…
We design a double-or-quits game to compare the speed of learning one's specific ability with the speed of rising confidence as the task gets increasingly difficult. We find that people on average learn to be overconfident faster than they…
Despite the growing numbers of forcibly displaced persons worldwide, many people living under conflict choose not to flee. Individuals face two lotteries - staying or leaving - characterized by two distributions of potential outcomes. This…
Which social decisions are influenced by intuitive processes? Which by deliberative processes? The dual-process approach to human sociality has emerged in the last decades as a vibrant and exciting area of research. Yet, a perspective that…
Nontransitive choices have long been an area of curiosity within economics. However, determining whether nontransitive choices represent an individual's preference is a difficult task since choice data is inherently stochastic. This paper…
In this article, we look at a hat-guessing game, in which each player must guess the color of their own hat while only seeing the hats of the other players. We focus on the case of two hat colors and a countably infinite number of players.…
A binary classifier capable of abstaining from making a label prediction has two goals in tension: minimizing errors, and avoiding abstaining unnecessarily often. In this work, we exactly characterize the best achievable tradeoff between…
We compare three populations commonly used in experiments by economists and other social scientists: undergraduate students at a physical location (lab), Amazon's Mechanical Turk (MTurk), and Prolific. The comparison is made along three…
This paper studies dynamic asset allocation with interest rate risk and several sources of ambiguity. The market consists of a risk-free asset, a zero-coupon bond (both determined by a Vasicek model), and a stock. There is ambiguity about…
McGranaghan, Nielsen, O'Donoghue, Somerville, and Sprenger [2024] show that standard paired choice tests for the common ratio effect are structurally biased when choice is stochastic, proposing valuation tests as a robust alternative. Using…
This paper studies lying in a novel context. Previous work has focused on situations in which people are either fully aware of the economic consequences of all available actions (e.g., die-under-cup paradigm), or they are uncertain, but…
Heisenberg's uncertainty principle implies that if one party (Alice) prepares a system and randomly measures one of two incompatible observables, then another party (Bob) cannot perfectly predict the measurement outcomes. This implication…
In this paper, I will demonstrate a new perspective on the Two Envelope Problem. I hope to show with convincing clarity how the paradox results from an inherent problem pertaining to the interpretation of Bayesian probability. Specifically,…
The global dynamics is investigated for a duopoly game where the perfect foresight hypothesis is relaxed and firms are worst-case maximizers. Overlooking the degree of product substitutability as well as the sensitivity of price to…
In this study, I present a theoretical social learning model to investigate how confirmation bias affects opinions when agents exchange information over a social network. Hence, besides exchanging opinions with friends, agents observe a…
Likelihood ratio tests are intuitively appealing. Nevertheless, a number of examples are known in which they perform very poorly. The present paper discusses a large class of situations in which this is the case, and analyzes just how…
The systematic biases seen in people's probability judgments are typically taken as evidence that people do not reason about probability using the rules of probability theory, but instead use heuristics which sometimes yield reasonable…
Expected utility theory (EUT) is widely used in economic theory. However, its subjective probability formulation, first elaborated by Savage, is linked to Ellsberg-like paradoxes and ambiguity aversion. This has led various scholars to work…
Many experimental studies report that economics students tend to act more selfishly than students of other disciplines, a finding that received widespread public and professional attention. Two main explanations that the existing literature…
What happen in the brain when human beings play games with computers? Here a simple zero-sum game was conducted to investigate how people make decision via their brain even they know that their opponent is a computer. There are two choices…