rvenkat + behavioral_economics   44

Explaining Preferences from Behavior: A Cognitive Dissonance Approach | The Journal of Politics: Ahead of Print
The standard approach in positive political theory posits that action choices are the consequences of preferences. Social psychology—in particular, cognitive dissonance theory—suggests the opposite: preferences may themselves be affected by action choices. We present a framework that applies this idea to three models of political choice: (1) one in which partisanship emerges naturally in a two-party system despite policy being multidimensional, (2) one in which interactions with people who express different views can lead to empathetic changes in political positions, and (3) one in which ethnic or racial hostility increases after acts of violence. These examples demonstrate how incorporating the insights of social psychology can expand the scope of formalization in political science.

--It is still only a model. Yes, one that systematically corrects and improves on rational choice models but some studies testing their claims would be nice.
political_psychology  social_psychology  behavioral_economics  rational_choice  critique  maya.sen  via:nyhan 
march 2018 by rvenkat
Frictions or Mental Gaps: What’s Behind The Information We (Don't) Use and When Do We Care?
Consumers suffer significant losses from not acting on available information. These losses stem from frictions such as search costs, switching costs, and rational inattention, as well as what we call mental gaps resulting from wrong priors/worldviews, or relevant features of a problem not being top of mind. Most research studying such losses does not empirically distinguish between these mechanisms. Instead, we show that most highly cited papers in this area presume one mechanism underlies consumer choices and assume away other potential explanations, or collapse many mechanisms together. We discuss the empirical difficulties that arise in distinguishing between different mechanisms, and some promising approaches for making progress in doing so. We also assess when it is more or less important for researchers to distinguish between these mechanisms. Approaches that seek to identify true value from demand, without specifying mechanisms behind this wedge, are most useful when researchers are interested in evaluating allocation policies that strongly steer consumers towards better options with regulation, traditional policy instruments, and defaults. On the other hand, understanding the precise mechanisms underlying consumer losses is essential to predicting the impact of mechanism policies aimed primarily at reducing specific frictions or mental gaps without otherwise steering consumers. We make the case that papers engaging with these questions empirically should be clear about whether their analyses distinguish between mechanisms behind poorly informed choices, and what that implies for the questions they can answer. We present examples from several empirical contexts to highlight these distinctions.
behavioral_economics  information  heuristics  dmce  teaching  via:sunstein 
february 2018 by rvenkat
How Do Individuals Repay Their Debt? The Balance-Matching Heuristic
We study how individuals repay their debt using linked data on multiple credit cards from five major issuers. We find that individuals do not allocate repayments to the higher interest rate card, which would minimize the cost of borrowing. Instead, individuals allocate repayments using a balance-matching heuristic under which the share of repayments on each card is matched to the share of balances on each card. We show that balance matching captures more than half of the predictable variation in repayments, performs substantially better than other models, and is highly persistent within individuals over time. Consistent with these findings, we show that machine learning algorithms attribute the greatest variable importance to balances and the least variable importance to interest rates in predicting repayment behavior.
behavioral_economics  dmce  teaching  via:noahpinion 
january 2018 by rvenkat
Interpreting Signals in the Labor Market: Evidence from Medical Referrals [Job Market Papr] | Heather Sarsons
This paper provides evidence that a person's gender influences the way others interpret information about his or her ability and documents the implications for gender inequality in labor markets. Using data on primary care physicians' (PCPs) referrals to surgeons, I find that PCPs view patient outcomes differently depending on the performing surgeon's gender. PCPs become more pessimistic about a female surgeon's ability than a male's after a patient death, indicated by a sharper drop in referrals to the female surgeon. However, PCPs become more optimistic about a male surgeon's ability after a good patient outcome, indicated by a larger increase in the number of referrals the male surgeon receives. PCPs also change their behavior toward other female surgeons after a bad experience with one female surgeon, becoming less likely to refer to new women in the same specialty. There are no such spillovers to other men after a bad experience with one male surgeon. Consistent with learning models, PCPs' reactions to events are strongest when they have just begun to refer to a surgeon. However, the empirical patterns are consistent with Bayesian learning only if PCPs do not have rational expectations about the true distribution of surgeon ability.

-- ah, it is becoming a new academic literary genre: the job market paper
gender  labor  discrimination  health  economics  behavioral_economics  dmce  teaching 
november 2017 by rvenkat
An expressive voting model of anger, hatred, harm and shame | SpringerLink
To consider some political implications of angry voters, we alter the standard expressive model in a fundamental way. One result is that an angry voter with a strong sense of shame at the thought of voting to harm others, may still do so, even when the harm is brutal. Indeed, his willingness to vote for harming others may increase if the proposed harm becomes more severe, even though the angry voter is more “decent” (less willing to harm others) than most of us sometimes are. Several examples are given that are consistent with the most troubling implications of the model. An empirical appendix follows the concluding section which tests the implications of the model indirectly.

--classic rational voter :), class discussion, hw,...?
rational_choice  behavioral_economics  voting  political_science  dmce  teaching  via:noahpinion 
november 2017 by rvenkat
Ethno-nationalist populism and the mobilization of collective resentment - Bonikowski - 2017 - The British Journal of Sociology - Wiley Online Library
Scholarly and journalistic accounts of the recent successes of radical-right politics in Europe and the United States, including the Brexit referendum and the Trump campaign, tend to conflate three phenomena: populism, ethno-nationalism and authoritarianism. While all three are important elements of the radical right, they are neither coterminous nor limited to the right. The resulting lack of analytical clarity has hindered accounts of the causes and consequences of ethno-nationalist populism. To address this problem, I bring together existing research on nationalism, populism and authoritarianism in contemporary democracies to precisely define these concepts and examine temporal patterns in their supply and demand, that is, politicians’ discursive strategies and the corresponding public attitudes. Based on the available evidence, I conclude that both the supply and demand sides of radical politics have been relatively stable over time, which suggests that in order to understand public support for radical politics, scholars should instead focus on the increased resonance between pre-existing attitudes and discursive frames. Drawing on recent research in cultural sociology, I argue that resonance is not only a function of the congruence between a frame and the beliefs of its audience, but also of shifting context. In the case of radical-right politics, a variety of social changes have engendered a sense of collective status threat among national ethnocultural majorities. Political and media discourse has channelled such threats into resentments toward elites, immigrants, and ethnic, racial and religious minorities, thereby activating previously latent attitudes and lending legitimacy to radical political campaigns that promise to return power and status to their aggrieved supporters. Not only does this form of politics threaten democratic institutions and inter-group relations, but it also has the potential to alter the contours of mainstream public discourse, thereby creating the conditions of possibility for future successes of populist, nationalist, and authoritarian politics.

--my summary: framing effects and latent preferences produce a mechanism for ethno-nationalism, authoritarianism and populism to interact. But I don't understand this *context* business as well. Feels like a _everything is obvious_ explanation...Not very convincing

-- see also the special issue
us_politics  european_politics  brexit  trumpism  political_psychology  framing_effects  political_economy  behavioral_economics  democracy  public_opinion  social_movements  via:nyhan 
november 2017 by rvenkat
Risk Attitudes Across The Life Course - Dohmen - 2017 - The Economic Journal - Wiley Online Library
This article investigates how risk attitudes change over the life course. We study the age trajectory of risk attitudes all the way from early adulthood until old age, in large representative panel data sets from the Netherlands and Germany. Age patterns are generally difficult to identify separately from cohort or calendar period effects. We achieve identification by replacing calendar period indicators with controls for the specific underlying factors that may change risk attitudes across periods. The main result is that willingness to take risks decreases over the life course, linearly until approximately age 65 after which the slope becomes flatter.

a dilute version here

-- any comments, historians?
risk_assessment  behavioral_economics  macroeconomics  demographics  dmce  teaching  via:noahpinion 
october 2017 by rvenkat
Attention Manipulation and Information Overload
Limits on consumer attention give firms incentives to manipulate prospective buyers’ allocation of attention. This paper models such attention manipulation and shows that it limits the ability of disclosure regulation to improve consumer welfare. Competitive information supply, from firms competing for attention, can reduce consumers’ knowledge by causing information overload. A single firm subjected to a disclosure mandate may deliberately induce such information overload to obfuscate financially relevant information, or engage in product complexification to bound consumers’ financial literacy. Thus, disclosure rules that would improve welfare for agents without attention limitations can prove ineffective for consumers with limited attention. Obfuscation suggests a role for rules that mandate not only the content but also the format of disclosure; however, even rules that mandate “easy-to-understand” formats can be ineffective against complexification, which may call for regulation of product design.
behavioral_economics  information  rationality  rational_choice  computational_complexity  agency  heuristics  dmce  teaching  models_of_behavior  via:sunstein 
october 2017 by rvenkat
The Value of Flexible Work: Evidence from Uber Drivers
Participation in flexible contract work has increased dramatically over the last decade, often in settings where new technologies lower the transaction costs of providing labor flexibly. One prominent example of this is the ride-sharing company Uber, which allows drivers to provide (or not provide) rides anytime they are willing to accept prevailing prices for this service. An Uber-style arrangement offers workers flexibility in both setting a customized work schedule and also adjusting it throughout the day. Using high-frequency data of hourly earnings for Uber drivers, we document the ways in which drivers utilize this real-time flexibility and we estimate the driver surplus generated by this flexibility. We estimate how drivers' reservation wages vary in high frequency from hour to hour, which allows us to study the surplus and supply implications of both flexible and traditional work arrangements. Our results indicate that, while the Uber relationship may have other drawbacks, Uber drivers benefit significantly from real-time flexibility, earning more than twice the surplus they would in less flexible arrangements. If required to supply labor inflexibly at prevailing wages, they would also reduce the hours they supply by more than two-thirds. The implications of our findings for the future of flexible work are discussed.

-- nice counterpoint to NYTimes article!
labor  economics  automation  behavioral_economics  via:nyhan 
april 2017 by rvenkat
Algorithmic Labor and Information Asymmetries: A Case Study of Uber’s Drivers by Alex Rosenblat, Luke Stark :: SSRN
Uber manages a large, disaggregated workforce through its ridehail platform, one that delivers a relatively standardized experience to passengers while simultaneously promoting its drivers as entrepreneurs whose work is characterized by freedom, flexibility, and independence. Through a nine-month empirical study of Uber driver experiences, we found that Uber does leverage significant indirect control over how drivers do their jobs. Our conclusions are twofold: First, the information and power asymmetries produced by the Uber application are fundamental to its ability to structure control over its workers; second, the rhetorical invocations of digital technology and algorithms are used to structure asymmetric corporate relationships to labor, which favor the former. Our study of the Uber driver experience points to the need for greater attention to the role of platform disintermediation in shaping power relations and communications between employers and workers.
labor  economics  algorithms  automation  microeconomics  behavioral_economics 
april 2017 by rvenkat
The Taking Economy: Uber, Information, and Power by Ryan Calo, Alex Rosenblat :: SSRN
Sharing economy firms such as Uber and Airbnb facilitate trusted transactions between strangers on digital platforms. This creates economic and other value and raises a set of concerns around racial bias, safety, and fairness to competitors and workers that legal scholarship has begun to address. Missing from the literature, however, is a fundamental critique of the sharing economy grounded in asymmetries of information and power. This Article, coauthored by a law professor and a technology ethnographer who studies the ride-hailing community, furnishes such a critique and indicates a path toward a meaningful response.

Commercial firms have long used what they know about consumers to shape their behavior and maximize profits. By virtue of sitting between consumers and providers of services, however, sharing economy firms have a unique capacity to monitor and nudge all participants — including people whose livelihood may depend on the platform. Much activity is hidden away from view, but preliminary evidence suggests that sharing economy firms may already be leveraging their access to information about users and their control over the user experience to mislead, coerce, or otherwise disadvantage sharing economy participants.

This Article argues that consumer protection law, with its longtime emphasis of asymmetries of information and power, is relatively well positioned to address this under-examined aspect of the sharing economy. But the regulatory response to date seems outdated and superficial. To be effective, legal interventions must (1) reflect a deeper understanding of the acts and practices of digital platforms and (2) interrupt the incentives of sharing economy firms to abuse their position.
algorithms  data  ethics  law  behavioral_economics  labor  automation  dmce  teaching 
april 2017 by rvenkat
n recent years, behavioural economics has gained considerable traction in the policy discourse, with a particular conceptual framework called libertarian paternalism, which informs nudge policy, dominating. Libertarian paternalism requires policies to protect individual liberty, to be focused specifically upon improving the welfare of those towards whom the intervention is targeted, and to be informed by the findings of behavioural economics. In practice, however, many of the interventions that are being advocated as nudges do not meet all of these criteria. Moreover, libertarian paternalism is not the only framework in which behavioural economics can inform policy. Coercive paternalism and behavioural regulation, frameworks that respectively underpin shove and budge policies, both use behavioural economics to inform public policy, and both face their own set of limitations. This article attempts to bring a degree of intellectual clarity to the potentially important contribution that behavioural economics can make to public policy.
behavioral_economics  policy  dmce  teaching 
april 2017 by rvenkat
Akerlof, G.A. and Shiller, R.J.: Phishing for Phools: The Economics of Manipulation and Deception. (eBook, Paperback and Hardcover)
Ever since Adam Smith, the central teaching of economics has been that free markets provide us with material well-being, as if by an invisible hand. In Phishing for Phools, Nobel Prize–winning economists George Akerlof and Robert Shiller deliver a fundamental challenge to this insight, arguing that markets harm as well as help us. As long as there is profit to be made, sellers will systematically exploit our psychological weaknesses and our ignorance through manipulation and deception. Rather than being essentially benign and always creating the greater good, markets are inherently filled with tricks and traps and will "phish" us as "phools."

Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away. Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life. We spend our money up to the limit, and then worry about how to pay the next month's bills. The financial system soars, then crashes. We are attracted, more than we know, by advertising. Our political system is distorted by money. We pay too much for gym memberships, cars, houses, and credit cards. Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous.

Phishing for Phools explores the central role of manipulation and deception in fascinating detail in each of these areas and many more. It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation. At the same time, the book tells stories of individuals who have stood against economic trickery—and how it can be reduced through greater knowledge, reform, and regulation.

-- maybe a book review assignment?
behavioral_economics  book  judgment_decision-making  dmce  teaching 
march 2017 by rvenkat
Information Gaps for Risk and Ambiguity by Russell Golman, George Loewenstein, Nikolos Gurney :: SSRN
We apply a model of preferences for information to the domain of decision making under risk and ambiguity. An uncertain prospect exposes an individual to an information gap. Gambling makes the missing information more important, attracting more attention to the information gap. To the extent that the uncertainty (or other circumstances) makes the information gap unpleasant to think about, an individual tends to be averse to risk and ambiguity. Yet in circumstances in which thinking about an information gap is pleasant, an individual may exhibit risk- and ambiguity-seeking. The model provides explanations for source preference regarding uncertainty, the comparative ignorance effect under conditions of ambiguity, aversion to compound risk, and a variety of other phenomena. We present an empirical test of one of the model’s novel predictions.
dmce  teaching  judgment_decision-making  behavioral_economics 
march 2017 by rvenkat
Information Avoidance
We commonly think of information as a means to an end. However, a growing theoretical and experimental literature suggests that information may directly enter the agent's utility function. This can create an incentive to avoid information, even when it is useful, free, and independent of strategic considerations. We review research documenting the occurrence of information avoidance, as well as theoretical and empirical research on reasons why people avoid information, drawing from economics, psychology, and other disciplines. The review concludes with a discussion of some of the diverse (and often costly) individual and societal consequences of information avoidance.
judgment_decision-making  heuristics  behavioral_economics  dmce  teaching 
march 2017 by rvenkat
The Quest for Parsimony in Behavioral Economics: New Methods and Evidence on Three Fronts
Behavioral economics identifies myriad deviations from classical economic assumptions about consumer decision-making, but lacks evidence on how its diverse phenomena fit together and whether they are amenable to modeling as low-dimensional constructs. We pursue such parsimony on three fronts, with success on two and instructive failure on the third. Elicitation parsimony reduces impediments to data collection by streamlining standard methods for directly measuring a person’s behavioral tendencies. We do so for 17 potentially behavioral factors per individual in a large, nationally representative sample, and several sets of results indicate that our streamlined elicitations yield low-cost, high-quality data. Behavioral sufficient statistic parsimony aggregates information across behavioral factors, within-person, to create two new lower-dimensional, consumer-level measures of behavioral tendencies. These statistics usefully capture cross-sectional variation in behavioral tendencies, strongly and negatively correlating with a rich index of financial condition even after (over-)controlling for demographics, classical risk attitudes and patience, cognitive skills including financial literacy, and survey effort. Our quest for common factor parsimony largely fails: within-consumer correlations between behavioral factors tend to be low, and the common factor contributing to all 17 behavioral factors within-individual is weakly identified and does not help explain outcomes conditional on the other covariates. Altogether our results provide many new insights into behavioral factors: their distributions, inter-relationships, distinctions from classical factors, and links to outcomes. Our findings also support the two leading approaches to modeling behavioral factors—considering them in relative isolation, and summarizing them with reduced-form sufficient statistics—and provide data and methods for honing both approaches
behavioral_economics  methods  econmetrics  to_read  via:noahpinion 
january 2017 by rvenkat
The Preference for Belief Consonance by Russell Golman, George Loewenstein, Karl O. Moene, Luca Zarri :: SSRN
We consider the determinants and consequences of a source of utility that has received limited attention from economists: people’s desire for the beliefs of other people to align with their own. We relate this ‘preference for belief consonance’ to a variety of other constructs that have been explored by economists, including identity, ideology, homophily and fellow-feeling. We review different possible explanations for why people care about others’ beliefs and propose that the preference for belief consonance leads to a range of disparate phenomena, including motivated belief-formation, proselytizing, selective exposure to media, avoidance of conversational minefields, pluralistic ignorance, belief-driven clustering, intergroup belief polarization and conflict. We also discuss an explanation for why disputes are often so intense between groups whose beliefs are, by external observers’ standards, highly similar to one-another
groups  collective_cognition  social_psychology  behavioral_economics  dmce  teaching  via:sunstein 
july 2016 by rvenkat
Do Credit Card Companies Screen for Behavioral Biases?
We look at the supply side of the credit card market to analyze the pricing and marketing strategies of credit card offers. First, we show that card issuers target less-educated customers with more steeply back-loaded fees (e.g., lower introductory APRs but higher late and over-limit fees) compared offers made to educated customers. Second, issuers use rewards programs to screen for unobservable borrower types. Conditional on the same borrower type, cards with rewards, such as low introductory APR programs, also have more steeply backloaded fees. In contrast, cards with mileage programs, which are offered mainly to the most-educated consumers, rely much less on back-loaded fees. Finally, using shocks to the credit risk of customers via increases in state-level unemployment insurance, we show that card issuers rely more heavily on back-loaded and hidden fees when customers are less exposed to negative cash flow shocks. These findings are in line with the recent behavioral contract theory literature.
behavioral_economics  scoring_culture  big_data  ethics  bad_institution  dmce  bias  teaching  via:sunstein 
june 2016 by rvenkat
Procrastination in Teams by Joshua S. Gans, Peter Landry :: SSRN
Naively present-biased agents are known to be severe procrastinators. In team settings, procrastination can represent a form of free-riding that, in excess, can jeopardize a team's ability to meet a deadline. Despite their reputations, we show how naivete and present bias can, under the right conditions, be desirable traits in a teammate that enable a team to optimize its performance while eliminating inefficient free-riding. These benefits emerge only from a more flexible specification (in comparison to existing models) as to how naive players reassess prior beliefs upon confronting present bias. By allowing the 'depth' and 'direction' of such reassessments to vary, our model links present-biased discounting theories to the recently-revived interest in modeling non-Bayesian reactions to null events, while offering a distinct approach reminiscent of level-k reasoning. Key themes from our results include the value of behavioral diversity, the opposite effects of 'introspection' and 'extrospection' on motivation, and that under- and over-thinking can both undermine efficiency.

-- there is one other place where the work explicitly talks about non-Bayesian updating, need to search for it. I am sure Josh Tenenbuam's mafia will make it Bayesian, somehow!
groups  judgment_decision-making  collective_cognition  collective_intention  behavioral_economics  dmce  teaching 
june 2016 by rvenkat
Behavioral Economics: Past, Present and Future by Richard H. Thaler :: SSRN
Abstract: There has been growing interest in the field come to me known as “behavioral economics” which attempts to incorporate insights from other social sciences, especially psychology, in order to enrich the standard economic model. This interest the underlying psychology of human behavior returns economics to its earliest roots. Scholars such as Adam Smith talked about such key concepts as loss aversion, overconfidence, and self-control. Nevertheless, the modern version of behavioral economics introduced in the 1980s met with resistance by some economists, who preferred to retain the standard neo-classical model. They introduced several arguments for why psychology could safely be ignored. In this essay I show that these arguments have been rejected, both theoretically and empirically, so it is time to move on. The new approach to economics should include two different kinds of theories: normative models that characterize the optimal solution to specific problems and descriptive models that capture how humans actually behave. The latter theories will incorporate some variables I call supposedly irrelevant factors. By adding these factors such as framing or temptation we can improve the explanatory power of economic models. If everyone includes all the factors that do determine economic behavior, then the field of behavioral economics will no longer need to exist.
behavioral_economics  review  dmce  teaching 
june 2016 by rvenkat
The Foundations of Behavioral Economic Analysis - Sanjit Dhami - Oxford University Press

This is the first definitive introduction to behavioral economics aimed at advanced undergraduate and postgraduate students. Authoritative, cutting edge, yet accessible, it guides the reader through theory and evidence, providing engaging and relevant applications throughout. It is divided into nine parts and 24 chapters:

Part I is on behavioral economics of risk, uncertainty, and ambiguity. The evidence against expected utility theory is examined, and the behavioral response is outlined; the best empirically supported theory is prospect theory.

Part II considers other-regarding preferences. The evidence from experimental games on human sociality is given, followed by models and applications of inequity aversion, intentions based reciprocity, conditional cooperation, human virtues, and social identity.

Part III is on time discounting. It considers the evidence against the exponential discounted utility model and describes several behavioral models such as hyperbolic discounting, attribute based models and the reference time theory.

Part IV describes the evidence on classical game theory and considers several models of behavioral game theory, including level-k and cognitive hierarchy models, quantal response equilibrium, and psychological game theory.

Part V considers behavioral models of learning that include evolutionary game theory, classical models of learning, experience weighted attraction model, learning direction theory, and stochastic social dynamics.

Part VI studies the role of emotions; among other topics it considers projection bias, temptation preferences, happiness economics, and interaction between emotions and cognition.

Part VII considers bounded rationality. The three main topics considered are judgment heuristics and biases, mental accounting, and behavioral finance.

Part VIII considers behavioral welfare economics; the main topics are soft paternalism, and choice-based measures of welfare. Finally, Part IX gives an abbreviated taster course in neuroeconomics.

--at homocide blunt instrument size, I hope it is as good as it can be. To be published late 2016.
book  behavioral_economics  game_theory 
april 2016 by rvenkat
Praise: Substitution versus Income Effects, Bryan Caplan | EconLog | Library of Economics and Liberty
-- why do I get the feeling that behavioral economics explanations are mostly 'just-so' stories?
dmce  teaching  behavioral_economics  via:wolfers 
february 2016 by rvenkat
Groupthink: Collective Delusions in Organizations and Markets
I develop a model of (individually rational) collective reality denial in groups, organizations and markets. Whether participants' tendencies toward wishful thinking reinforce or dampen each other is shown to hinge on a simple and novel mechanism. When an agent can expect to benefit from other's delusions, this makes him more of a realist; when he is more likely to suffer losses from them this pushes him toward denial, which becomes contagious. This general "Mutually Assured Delusion" principle can give rise to multiple social cognitions of reality, irrespective of any strategic payoff interactions or private signals. It also implies that in hierachical organizations realism or denial will trickle down, causing subordinates to take their mindsets and beliefs from the leaders. Contagious "exuberance" can also seize asset markets, leading to evidence-resistant investment frenzies and subsequent deep crashes. In addition to collective illusions of control, the model accounts for the mirror case of fatalism and collective resignation. The welfare analysis differentiates valuable group morale from harmful groupthink and identifies a fundamental tension in organizations' attitudes toward free speech and dissent.
groups  behavioral_economics  political_psychology  ideology  collective_cognition 
november 2015 by rvenkat
Test, Learn, Adapt: Developing Public Policy with Randomised Controlled Trials - Publications - GOV.UK
‘Test, Learn, Adapt’ is a paper which the Behavioural Insights Team is publishing in collaboration with Ben Goldacre, author of Bad Science, and David Torgerson, Director of the University of York Trials Unit. The paper argues that Randomised Controlled Trials (RCTs), which are now widely used in medicine, international development, and internet-based businesses, should be used much more extensively in public policy.

‘Test, Learn, Adapt’ sets out nine separate steps that are required to set up any RCT. Many of these steps will be familiar to anyone putting in place a well-designed policy evaluation - for example, deciding in advance the outcome that we are seeking to achieve. Others are less familiar - for example, randomly allocating the intervention to control or intervention groups.

The introduction of a randomly assigned control group enables you to compare the effectiveness of new interventions against what would have happened if you had changed nothing. RCTs are the best way of determining whether a policy or intervention is working. We believe that policymakers should begin using them much more systematically.

-- Report co-authored by Goldacre and Behavioral Insights Team in the UK
policy  experimental_design  behavioral_economics  scientific_method  teaching  dmce 
august 2015 by rvenkat
Thinking, Fast and Slow? Some Field Experiments to Reduce Crime and Dropout in Chicago
This paper describes how automatic behavior can drive disparities in youth outcomes like delinquency and dropout. We suggest that people often respond to situations without conscious deliberation. While generally adaptive, these automatic responses are sometimes deployed in situations where they are ill-suited. Although this is equally true for all youths, disadvantaged youths face greater situational variability. This increases the likelihood that automaticity will lead to negative outcomes. This hypothesis suggests that interventions that reduce automaticity can lead to positive outcomes for disadvantaged youths. We test this hypothesis by presenting the results of three large-scale randomized controlled trials (RCTs) of interventions carried out on the south and west sides of Chicago that seek to improve the outcomes of low-income youth by teaching them to be less automatic. Two of our RCTs test a program called Becoming a Man (BAM) developed by Chicago-area non-profit Youth Guidance; the first, carried out in 2009-10, shows participation improved schooling outcomes and reduced violent-crime arrests by 44%, while the second RCT in 2013-14 showed participation reduced overall arrests by 31%. The third RCT was carried out in the Cook County Juvenile Temporary Detention Center (JTDC) in 2009-11 and shows reductions in return rates of 22%. We also present results from various survey measures suggesting the results do not appear to be due to changes in mechanisms like emotional intelligence or self-control. On the other hand results from some decision-making exercises we carried out seem to support reduced automaticity as a key mechanism.

-- Designing policy via Nudges. Curious how they are so sure that the nudge based interventions worked and that there are no other factors.
behavioral_economics  policy  via:smullainathan  experimental_design  teaching  dmce 
july 2015 by rvenkat
International Behavourial Insights Conference 2015
Hosted -I think- by British Government's Behavioral Insights team. The list of speakers are a who-is-who of the field.

Some of the members are behavioral economists at non-profit-s (ideas42 and Poverty Action Lab)
conference  behavioral_economics  policy 
june 2015 by rvenkat
Wolfgang Pesendorfer's Home Page
He has interesting papers in social choice. His work suggests a certain impartiality towards various actor models.
economist  game_theory  behavioral_economics 
may 2015 by rvenkat

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