Inattentive Consumers in Markets for Services

In an experiment on markets for services, we find that consumers are likely to stick to default tariffs and achieve suboptimal outcomes. We find that inattention to the task of choosing a better tariff is likely to be a substantial problem in addition to any task and tariff complexity effect. The institutional setup on which we primarily model our experiment is the UK electricity and gas markets, and our conclusion is that the new measures by the UK regulator Ofgem to improve consumer outcomes are likely to be of limited impact

Best-of-Three Contests: Experimental Evidence

We conduct an experimental analysis of a best-of-three Tullock contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The patterns of players‟ efforts and the probability that a contest ends in two rounds is consistent with „strategic momentum‟, i.e. momentum generated due to strategic incentives inherent in the contest. We do not find evidence for „psychological momentum‟, i.e. momentum which emerges when winning affects players‟ confidence. Similar to previous studies of contests, we find significantly higher efforts than predicted and strong heterogeneity in effort between subjects

Biology and law

The terms "biology" and "biological" are widely used in ways that confuse and denigrate possible contributions of biologists to human self-understanding. As with social scientists, biologists deal with learning, developmental plasticity, and strategizing in virtually all species they study. It is from theories about how human strategizing is molded by selection that biologists can contribute to understanding topics like law.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/26363/1/0000450.pd

The Availability Heuristic, Intuitive Cost-Benefit Analysis, and Climate Change

Because risks are on all sides of social situations, it is not possible to be “precautionary” in general. The availability heuristic ensures that some risks stand out as particularly salient, whatever their actual magnitude. Taken together with intuitive cost-benefit balancing, the availability heuristic helps to explain differences across groups, cultures, and even nations in the assessment of precautions to reduce the risks associated with climate change. There are complex links among availability, social processes for the spreading of information, and predispositions. If the United States is to take a stronger stand against climate change, it is likely to be a result of available incidents that seem to show that climate change produces serious and tangible harm

New Economy, Old Central Banks?

Proponents of the so-called New Economy claim that it entails a structural change of the economy. Such a change, in turn, would require the central bank to rethink its monetary policy to the extent that traditional relationships between inf1ation and economic growth are no longer valid. But such a rethinking presupposes that prospective advances in information technology and other factors associated with the new economy do not threaten the capacity of central banks to stabilise the general level of prices. It is the aim of this paper to shed some light on the latter, by analysing the monetary transmission mechanism in a 'new economy' environment. We argue that, although the form of central bank instruments and current methods for implementing monetary policy may change, the goals that the policy makers try to achieve by employing these instruments remain valid, and achievable