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Seminars

Behavioral Attenuation (With Benjamin Enke, Thomas Graeber, and Jeffrey Yang)

Date: Friday, Nov 8, 2024, 10:00 ~ 11:30
Speaker: Ryan Oprea (University of California, Santa Barbara)
Location: Zoom을 통한 온라인 세미나

Abstract: We report a large-scale examination of behavioral attenuation: due to informationprocessing constraints, the elasticity of people’s decisions with respect to economic fundamentals is generally too small. We implement more than 30 experiments, 20 of which were crowd-sourced from leading experts. These experiments cover a broad range of economic decisions, from choice and valuation to belief formation, from strategic games to generic optimization problems, involving investment, savings, effort supply, product demand, taxes, environmental externalities, fairness, cooperation, beauty contests, information disclosure, search, policy evaluation, memory, forecasting and inference. In 93% of our experiments, the elasticity of decisions to fundamentals decreases in participants’ cognitive uncertainty, our measure of the severity of information-processing constraints. Moreover, in decision problems with objective solutions, we observe elasticities that are universally smaller than is optimal. Many widely-studied decision anomalies represent special cases of behavioral attenuation. We discuss both its limits and why it often gives rise to the classic phenomenon of diminishing sensitivity.

※ 본 세미나는 VEAEBES(Virtual East Asia Experimental and Behavioral Economics Seminar Series) 주최로 열리는 세미나 입니다.
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