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Bounded reasoning and higher-order uncertainty
Kets, Willemien - 2012
The standard framework for analyzing games with incomplete information models players as if they form beliefs about their opponents' beliefs about their opponents' beliefs and so on, that is, as if players have an infinite depth of reasoning. This strong assumption has nontrivial implications,...
Persistent link: https://www.econbiz.de/10010282936
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Everyday econometricians: Selection neglect and overoptimism when learning from others
Barron, Kai; Huck, Steffen; Jehiel, Philippe - 2019
In this paper, we design an investment game which allows us to study the influence of selection when learning from others. Using the theoretical study of selection neglect in Jehiel (2018) as a guide, we test (i) for the presence of selection neglect in this investment context, and (ii) some...
Persistent link: https://www.econbiz.de/10011984926
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Who lacks pension knowledge, why and does it matter? Evidence from Swedish retirement savers
Elinder, Mikael; Hagen, Johannes; Nordin, Mattias; … - 2020
controlling for financial literacy and subjective knowledge. Moreover, a large majority state the complexity of the pension system … have sufficient knowledge. That the complexity of the pension system and individuals' proclivity to procrastinate are …
Persistent link: https://www.econbiz.de/10012660614
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Finite depth of reasoning and equilibrium play in games with incomplete information
Kets, Willemien - 2013
The standard framework for analyzing games with incomplete information models players as if they have an infinite depth of reasoning, which is not always consistent with experimental evidence. This paper generalizes the type spaces of Harsanyi (1967-1968) so that players can have a finite depth...
Persistent link: https://www.econbiz.de/10010352842
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Robust multiplicity with a grain of naiveté
Heifetz, Aviad; Kets, Willemien - 2013
In an important paper, Weinstein and Yildiz (2007) show that if players have an infinite depth of reasoning and this is commonly believed, types generically have a unique rationalizable action in games that satisfy a richness condition. We show that this result does not extend to environments...
Persistent link: https://www.econbiz.de/10010352864
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Incentive Complexity, Bounded Rationality and Effort Provision
Abeler, Johannes; Huffman, David; Raymond, Collin; … - 2023
Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded … rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to … cause large shifts in behavior. Our results illustrate important implications of complexity for designing and regulating …
Persistent link: https://www.econbiz.de/10014377515
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What You See Is All There Is
Enke, Benjamin - 2020
computational complexity of the decision problem. These results point to the context-dependence of what comes to mind and the …
Persistent link: https://www.econbiz.de/10012207896
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On The Relevance Of Irrelevant Information
Parakhonyak, Alexei - 2009
This paper analyses the role of information in the search process. Ibuild a simple model of a good with two random … which neither affect expected utility norits variance. These changes have a great impact on the search behaviour …:the customer may start to search the characteristics and buy the goodeven if she did not do so before. The optimal search rule is …
Persistent link: https://www.econbiz.de/10010325724
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Nominalist Heuristics and Economic Theory
Pope, Robin; Selten, Reinhard; Kube, Sebastian - 2009
This paper introduces a new theoretic entity, a nominalist heuristic, defined as a focus on prominent numbers, indices or ratios. Abstractions used in the evaluation stage of decision making typically involve nominalist heuristics that are incompatible with expected utility theory which excludes...
Persistent link: https://www.econbiz.de/10010270023
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Prominent Numbers, Indices and Ratios in Exchange Rate Determination and Financial Crashes: in Economists’ Models, in the Field and in the Laboratory
Pope, Robin; Selten, Reinhard; Kube, Sebastian; von … - 2009
The prior paper in this sequel, Pope (2009) introduced the concept of a nominalist heuristic, defined as a focus on prominent numbers, indices or ratios. In this paper the concept is used to show three things in how scientists and practitioners analyse and evaluate to decide (conclude). First,...
Persistent link: https://www.econbiz.de/10010274186