219 research outputs found
Information, fairness, and efficiency in bargaining
Economic theory assumes people strive for efficient agreements that benefit
all consenting parties. The frequency of mutually destructive conflicts
such as strikes, litigation, and military conflict, therefore, poses an important
challenge to the field
Behavioral Economics: Past, Present, Future
Behavioral economics increases the explanatory power of economics by providing it with
more realistic psychological foundations. This book consists of representative recent articles in
behavioral economics. This chapter is intended to provide an introduction to the approach and
methods of behavioral economics, and to some of its major findings, applications, and promising
new directions. It also seeks to fill some unavoidable gaps in the chapters’ coverage of topics
Adam Smith, Behavioral Economist
In The Wealth of Nations, published in 1776, Adam Smith famously argued that
economic behavior was motivated by self-interest. But 17 years earlier in 1759,
Smith had proposed a theory of human behavior that looks anything but self-interested.
In his first book, The Theory of Moral Sentiments, Smith argued that behavior
was determined by the struggle between what Smith termed the “passions” and the
“impartial spectator.” The passions included drives such as hunger and sex, emotions
such as fear and anger, and motivational feeling states such as pain. Smith viewed
behavior as under the direct control of the passions, but believed that people could
override passion-driven behavior by viewing their own behavior from the perspective of
an outsider—the impartial spectator—a “moral hector who, looking over the shoulder
of the economic man, scrutinizes every move he makes” (Grampp, 1948, p. 317)
Labor Supply of New York City Cabdrivers: One Day at a Time
Life-cycle models of labor supply predict a positive relationship between hours supplied and transitory changes in wages. We tested this prediction using three samples of wages and hours of New York City cabdrivers, whose wages are correlated within days but uncorrelated between days. Estimated wage elasticities are significantly negative in two out of three samples. Elasticities of inexperienced drivers average approximately −1 and are less than zero in all three samples (and significantly less than for experienced drivers in two of three samples). Our interpretation of these findings is that cabdrivers (at least inexperienced ones): (i) make labor supply decisions “one day at a time” instead of intertemporally substituting labor and leisure across multiple days, and (ii) set a loose daily income target and quit working once they reach that target
Biased Judgments of Fairness in Bargaining
When court trials (or arbitration) are the
mechanisms for resolving bargaining impasses,
the costs and risks associated with
third-party intervention should motivate
settlement (Henry Farber and Harry Katz,
1979). However, empirical evidence suggests
that impasses and inefficient settlements are
common in the legal system and in contract
negotiations. For example, one study of asbestos
suits found that only 37 cents of every dollar
spent by both sides end up in the plaintiffs'
hands (James Kakalik et al., 1983)
The Hertz/VPM polarimeter: Design and first light observations
We present first results of Hertz/VPM, the first submillimeter polarimeter
employing the dual Variable-delay Polarization Modulator (dual-VPM). This
device differs from previously used polarization modulators in that it operates
in translation rather than mechanical rotation. We discuss the basic theory
behind this device, and its potential advantages over the commonly used half
wave plate (HWP). The dual-VPM was tested both at the Submillimeter Telescope
Observatory (SMTO) and in the lab. In each case we present a detailed
description of the setup. We discovered nonideal behavior in the system. This
is at least in part due to properties of the VPM wire grids (diameter, spacing)
employed in our experiment. Despite this, we found that the dual-VPM system is
robust, operating with high efficiency and low instrumental polarization. This
device is well suited for air and space-borne applications.Comment: 31 pages, 11 figures, 2 table
The Wick in the Candle of Learning: Epistemic Curiosity Activates Reward Circuitry and Enhances Memory
Curiosity has been described as a desire for
learning and knowledge, but its underlying mechanisms
are not well understood. We scanned subjects with functional
magnetic resonance imaging while they read trivia
questions. The level of curiosity when reading questions
was correlated with activity in caudate regions previously
suggested to be involved in anticipated reward. This
finding led to a behavioral study, which showed that subjects
spent more scarce resources (either limited tokens or
waiting time) to find out answers when they were more
curious. The functional imaging also showed that curiosity
increased activity in memory areas when subjects guessed
incorrectly, which suggests that curiosity may enhance
memory for surprising new information. This prediction
about memory enhancement was confirmed in a behavioral
study: Higher curiosity in an initial session was correlated
with better recall of surprising answers 1 to 2 weeks later
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