Sendhil Mullainathan Education Fields of Interest Professional Affiliations and Activities
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When Does Behavioural Economics Really Matter?
When does behavioural economics really matter? Ian McAuley, University of Canberra and Centre for Policy Development (www.cpd.org.au) Paper to accompany presentation to Behavioural Economics stream at Australian Economic Forum, August 2010. Summary Behavioural economics integrates the formal study of psychology, including social psychology, into economics. Its empirical base helps policy makers in understanding how economic actors behave in response to incentives in market transactions and in response to policy interventions. This paper commences with a short description of how behavioural economics fits into the general discipline of economics. The next section outlines the development of behavioural economics, including its development from considerations of individual psychology into the fields of neurology, social psychology and anthropology. It covers developments in general terms; there are excellent and by now well-known detailed descriptions of the specific findings of behavioural economics. The final section examines seven contemporary public policy issues with suggestions on how behavioural economics may help develop sound policy. In some cases Australian policy advisers are already using the findings of behavioural economics to advantage. It matters most of the time In public policy there is nothing novel about behavioural economics, but for a long time it has tended to be ignored in formal texts. Like Molière’s Monsieur Jourdain who was surprised to find he had been speaking prose all his life, economists have long been guided by implicit knowledge of behavioural economics, particularly in macroeconomics. Keynes, for example, understood perfectly the “money illusion” – people’s tendency to think of money in nominal rather than real terms – in his solution to unemployment. -
Price Competition with Satisficing Consumers
View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Aberdeen University Research Archive Price Competition with Satisficing Consumers∗ Mauro Papiy Abstract The ‘satisficing’ heuristic by Simon (1955) has recently attracted attention both theoretically and experimentally. In this paper I study a price-competition model in which the consumer is satisficing and firms can influence his aspiration price via marketing. Unlike existing models, whether a price comparison is made depends on both pricing and marketing strategies. I fully characterize the unique symmetric equilibrium by investigating the implications of satisficing on various aspects of market competition. The proposed model can help explain well-documented economic phenomena, such as the positive correla- tion between marketing and prices observed in some markets. JEL codes: C79, D03, D43. Keywords: Aspiration Price, Bounded Rationality, Price Competition, Satisficing, Search. ∗This version: August 2017. I would like to thank the Editor of this journal, two anonymous referees, Ed Hopkins, Hans Hvide, Kohei Kawamura, Ran Spiegler, the semi- nar audience at universities of Aberdeen, East Anglia, and Trento, and the participants to the 2015 OLIGO workshop (Madrid) and the 2015 Econometric Society World Congress (Montreal) for their comments. Financial support from the Aberdeen Principal's Excel- lence Fund and the Scottish Institute for Research in Economics is gratefully acknowledged. Any error is my own responsibility. yBusiness School, University of Aberdeen - Edward Wright Building, Dunbar Street, AB24 3QY, Old Aberdeen, Scotland, UK. E-mail address: [email protected]. 1 1 Introduction According to Herbert Simon (1955), in most global models of rational choice, all alternatives are eval- uated before a choice is made. -
Ebook Download Lectures on Inequality, Poverty and Welfare 1St
LECTURES ON INEQUALITY, POVERTY AND WELFARE 1ST EDITION PDF, EPUB, EBOOK Antonio Villar | 9783319455617 | | | | | Lectures on Inequality, Poverty and Welfare 1st edition PDF Book Arthur Lewis Charles L. There is little doubt that good child care can help children succeed and that one way income support can help children succeed is by enabling their parents to purchase better child care. Cambridge, Massachusetts: Harvard University Press. Economic theory Political economy Applied economics. Presidents of the International Economic Association. Growing evidence shows that low income can have lasting adverse effects on children and that bolstering family income can help poor children catch up in a range of areas. Figure 5. In some ways people had got used to the idea that India was spiritual and religion-oriented. Retrieved 26 April The school had many progressive features, such as distaste for examinations or competitive testing. The key approach consists in linking inequality and poverty measurement with welfare evaluation. Resources, Values, and Development. His influential monograph Collective Choice and Social Welfare , which addressed problems related to individual rights including formulation of the liberal paradox , justice and equity, majority rule, and the availability of information about individual conditions, inspired researchers to turn their attention to issues of basic welfare. In the Bengal famine, rural laborers' negative freedom to buy food was not affected. In order for citizens to have a capacity to vote, they first must have "functionings". In addition to his important work on the causes of famines, Sen's work in the field of development economics has had considerable influence in the formulation of the " Human Development Report ", [15] published by the United Nations Development Programme. -
Featured Topic Social & Behavioral Science Interventions at the Federal Level in This Issue Nudging People to Get Flu Vaccinations
a publication of the behavioral science & policy association volume 2 issue 2 2016 featured topic social & behavioral science interventions at the federal level in this issue Nudging people to get flu vaccinations behavioralpolicy.org founding co-editors disciplinary editors Craig R. Fox (UCLA) Behavioral Economics Sim B Sitkin (Duke University) Senior Disciplinary Editor Dean S. Karlan (Yale University) bspa executive director Associate Disciplinary Editors Oren Bar-Gill (Harvard University) Colin F. Camerer (California Institute ofTechnology) Kate B.B. Wessels M. Keith Chen (UCLA) advisory board Julian Jamison (World Bank) Paul Brest (Stanford University) Russell B. Korobkin (UCLA) David Brooks (New York Times) Devin G. Pope (University of Chicago) John Seely Brown (Deloitte) Jonathan Zinman (Dartmouth College) Robert B. Cialdini (Arizona State University) Adam M. Grant (University of Pennsylvania) Cognitive & Brain Science Daniel Kahneman (Princeton University) Senior Disciplinary Editor Henry L. Roediger III (Washington University) James G. March (Stanford University) Associate Disciplinary Editors Yadin Dudai (Weizmann Institute & NYU) Jeffrey Pfeffer (Stanford University) Roberta L. Klatzky (Carnegie Mellon University) Denise M. Rousseau (Carnegie Mellon University) Hal Pashler (UC San Diego) Paul Slovic (University of Oregon) Steven E. Petersen (Washington University) Cass R. Sunstein (Harvard University) Jeremy M. Wolfe (Harvard University) Richard H. Thaler (University of Chicago) Decision, Marketing, & Management Sciences executive committee Senior Disciplinary Editor Eric J. Johnson (Columbia University) Associate Disciplinary Editors Linda C. Babcock (Carnegie Mellon University) Morela Hernandez (University of Virginia) Max H. Bazerman (Harvard University) Katherine L. Milkman (University of Pennsylvania) Baruch Fischhoff (Carnegie Mellon University) Daniel Oppenheimer (UCLA) John G. Lynch (University of Colorado) Todd Rogers (Harvard University) John W. -
The Institutionalist Reaction to Keynesian Economics
Journal of the History of Economic Thought, Volume 30, Number 1, March 2008 THE INSTITUTIONALIST REACTION TO KEYNESIAN ECONOMICS BY MALCOLM RUTHERFORD AND C. TYLER DESROCHES I. INTRODUCTION It is a common argument that one of the factors contributing to the decline of institutionalism as a movement within American economics was the arrival of Keynesian ideas and policies. In the past, this was frequently presented as a matter of Keynesian economics being ‘‘welcomed with open arms by a younger generation of American economists desperate to understand the Great Depression, an event which inherited wisdom was utterly unable to explain, and for which it was equally unable to prescribe a cure’’ (Laidler 1999, p. 211).1 As work by William Barber (1985) and David Laidler (1999) has made clear, there is something very wrong with this story. In the 1920s there was, as Laidler puts it, ‘‘a vigorous, diverse, and dis- tinctly American literature dealing with monetary economics and the business cycle,’’ a literature that had a central concern with the operation of the monetary system, gave great attention to the accelerator relationship, and contained ‘‘widespread faith in the stabilizing powers of counter-cyclical public-works expenditures’’ (Laidler 1999, pp. 211-12). Contributions by institutionalists such as Wesley C. Mitchell, J. M. Clark, and others were an important part of this literature. The experience of the Great Depression led some institutionalists to place a greater emphasis on expenditure policies. As early as 1933, Mordecai Ezekiel was estimating that about twelve million people out of the forty million previously employed in the University of Victoria and Erasmus University. -
Behavioral Economics and Marketing in Aid of Decision Making Among the Poor
Behavioral Economics and Marketing in Aid of Decision Making Among the Poor The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters Citation Bertrand, Marianne, Sendhil Mullainathan, and Eldar Shafir. 2006. Behavioral economics and marketing in aid of decision making among the poor. Journal of Public Policy and Marketing 25(1): 8-23. Published Version http://dx.doi.org/10.1509/jppm.25.1.8 Citable link http://nrs.harvard.edu/urn-3:HUL.InstRepos:2962609 Terms of Use This article was downloaded from Harvard University’s DASH repository, and is made available under the terms and conditions applicable to Other Posted Material, as set forth at http:// nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of- use#LAA Behavioral Economics and Marketing in Aid of Decision Making Among the Poor Marianne Bertrand, Sendhil Mullainathan, and Eldar Shafir This article considers several aspects of the economic decision making of the poor from the perspective of behavioral economics, and it focuses on potential contributions from marketing. Among other things, the authors consider some relevant facets of the social and institutional environments in which the poor interact, and they review some behavioral patterns that are likely to arise in these contexts. A behaviorally more informed perspective can help make sense of what might otherwise be considered “puzzles” in the economic comportment of the poor. A behavioral analysis suggests that substantial welfare changes could result from relatively minor policy interventions, and insightful marketing may provide much needed help in the design of such interventions. -
Sendhil Mullainathan [email protected]
Sendhil Mullainathan [email protected] _____________________________________________________________________________________ Education HARVARD UNIVERSITY, CAMBRIDGE, MA, 1993-1998 PhD in Economics Dissertation Topic: Essays in Applied Microeconomics Advisors: Drew Fudenberg, Lawrence Katz, and Andrei Shleifer CORNELL UNIVERSITY, ITHACA, NY, 1990-1993 B.A. in Computer Science, Economics, and Mathematics, magna cum laude Fields of Interest Behavioral Economics, Poverty, Applied Econometrics, Machine Learning Professional Affiliations UNIVERSITY OF CHICAGO Roman Family University Professor of Computation and Behavioral Science, January 1, 2019 to present. University Professor, Professor of Computational and Behavioral Science, and George C. Tiao Faculty Fellow, Booth School of Business, July 1, 2018 to December 31, 2018. HARVARD UNIVERSITY Robert C Waggoner Professor of Economics, 2015 to 2018. Affiliate in Computer Science, Harvard John A. Paulson School of Engineering and Applied Sciences, July 1, 2016 to 2018. Professor of Economics, 2004 (September) to 2015. UNIVERSITY OF CHICAGO Visiting Professor, Booth School of Business, 2016-17. MASSACHUSETTS INSTITUTE OF TECHNOLOGY Mark Hyman Jr. Career Development Associate Professor, 2002-2004 Mark Hyman Jr. Career Development Assistant Professor, 2000-2002 Assistant Professor, 1998- 2000 SELECTED AFFILIATIONS Co - Founder and Senior Scientific Director, ideas42 Research Associate, National Bureau of Economic Research Founding Member, Poverty Action Lab Member, American Academy of Arts -
Connections in Transportation Department of Urban Studies and Planning, MIT, Spring 2015
Behavior and Policy 11.478 Behavior and Policy: Connections in Transportation Department of Urban Studies and Planning, MIT, Spring 2015 Full Reading List Part I: Behavior and Policy in a Nutshell Class 1. Cafeteria Trays and Multiple Frameworks • Etheredge (1976) The case of the unreturned cafeteria trays: An Investigation based upon theories of motivation and human behavior Class 2. Ten Instruments for Behavioral Change • Miller and Prentice (2013) Psychological Levers of Behavior Change, Chapter 17 in Eldar Shafir, The Behavioral Foundations of Public Policy • Richard Thaler, Cass R. Sunstein: Nudge: Improving Decisions About Health, Wealth, and Happiness, Introduction • Daniel Kahneman: Thinking, Fast and Slow, Introduction Class 3. Measurement, Tools and Technology (Emile Bruneau) • Emile Bruneau 2015 "Putting Neuroscience to Work for Peace”, Working Paper • Duflo, E., Glennerster, R., & Kremer, M. (2007). Using randomization in development economics research: A toolkit. Handbook of development economics, 4, 3895-3962. • Greenwald, A. G., Nosek, B. A., & Banaji, M. R. (2003). Understanding and using the implicit association test: I. An improved scoring algorithm. Journal of personality and social psychology, 85(2), 197. You may try the Implicit Association Test here https://implicit.harvard.edu/ • Winter Mason and Siddharth Suri (2012) Conducting Behavioural Research on Amazon’s Mech Turk, Behavior Research Method 44(1) Class 4. My Brain at the Bus Stop: EEG & Waiting • Dan Ariely and Gregory S. Berns (2010), “Neuromarketing: The Hope and Hype of Neuroimaging in Business.” Nature Reviews Neuroscience. • Li, Zelin, F. Duarte, J. Zhao, Z. Zhao (2015) My brain at the bus stop: an exploratory framework for applying EEG-based emotion detection techniques in transportation study, working paper Class 5. -
Savings by and for the Poor: a Research Review and Agenda
Savings by and for the Poor: A Research Review and Agenda Dean Karlan, Aishwarya Lakshmi Ratan, and Jonathan Zinman Abstract The poor can and do save, but often use formal or informal instruments that have high risk, high cost, and limited functionality. This could lead to undersaving compared to a world without market or behavioral frictions. Undersaving can have important welfare consequences: variable consumption, low resilience to shocks, and foregone profitable investments. We lay out five sets of constraints that may hinder the adoption and effective usage of savings products and services by the poor: transaction costs, lack of trust and regulatory barriers, information and knowledge gaps, social constraints, and behavioral biases. We discuss each in theory, and then summarize related empirical evidence, with a focus on recent field experiments. We then put forward key open areas for research and practice. JEL Codes: D12, D91, G21, O16 Keywords: Savings, Randomized Evaluation, Poverty Working Paper 346 www.cgdev.org November 2013 Savings by and for the poor: A research review and agenda Dean Karlan Yale University, IPA, J-PAL, and NBER Aishwarya Lakshmi Ratan Yale University, IPA Jonathan Zinman Dartmouth College, IPA, J-PAL, and NBER This paper was developed as a guiding white paper for the Yale Savings and Payments Research Fund, supported by the Bill and Melinda Gates Foundation, and with support from UNU-WIDER, based on a lecture at the 2011 Poverty and Behavioral Economics Conference. Contact and affiliations are as follows. Karlan, [email protected]; Yale University, Innovations for Poverty Action, Abdul Latif Jameel Poverty Action Lab at M.I.T, and NBER. -
Failures of Utility Maximization Failures Of
2/1/2017 Failures of Utility Maximization • Choice difficulty • Too much choice • Asymmetric dominance/compromise effects Failures of Utility Maximization • Leaving money on the table • Endowment effect Behavioral Economics • Status quo bias • Faming effects Columbia University • Preference reversals Mark Dean • Random Choice 1 2 Failures of Utility Maximization Choice Difficulty • Choice difficulty • Basic Idea: People may dislike making difficult • Too much choice comparisons • Asymmetric dominance/compromise effects • • Leaving money on the table May behave in such a way as to avoid having • Endowment effect to make such comparisons • Status quo bias • Faming effects • Preference reversals • Random Choice 3 4 Example: Tversky and Shafir (1992) Example: Tversky and Shafir (1992) • 80 Subjects • 80 Subjects • Each subject filled out a questionnaire • Each subject filled out a questionnaire • Paid $1.50 for doing so • Paid $1.50 for doing so • Two treatments: • Two treatments: 25% 75% 5 6 1 2/1/2017 Example: Tversky and Shafir (1992) Example: Tversky and Shafir (1992) • 80 Subjects • Clear violation of IIA • Each subject filled out a questionnaire – If money was chosen in the ‘big’ choice set, should also should have been chosen in the • Paid $1.50 for doing so smaller choice set • Two treatments: • Interpretation: Stay with the money in order to avoid the ‘difficult choice’ between the different types of pen • Taken as an example of ‘decision avoidance’ 25% 75% 53% 47% 7 8 Failures of Utility Maximization Too Much Choice • Choice difficulty -
Efficiency Wages, Insiders and Outsiders, and the Great Depression’
EFFICIENCY WAGES, INSIDERS AND OUTSIDERS, AND THE GREAT DEPRESSION’ Ranjit S. Dighe State University ofNew York at Oswego ABSTRACT This paper uses available quantitative and qualitative evidence from the I 930s to evaluate two prominent explanations of the wage explosion of the New Deal years of 1933—41: efficiency wages and insider-outsider models. The quantitative evidence includes various data on wage changes, hours, turn over, and strikes. Economically-based efficiency-wage models and the in sider-outsider model are found wanting as explanations of 1 930s labor mar kets. Efficiency-wage theories that emphasize worker morale fare better. This paper explains the 1930s wage burst as an interaction between New Deal policies and efforts by employers to maintain worker morale and productiv icy in a climate of growing union strength. The Great Depression, as the ultimate example of a persistent labor market disequi librium in American macroeconomic history; is inevitably seen by many as the ultimate case of sticky wages. Whatever importance one attaches to wage stickiness as a causal factor behind the mass unemployment of the 1930s, the failure ofthat unemployment to exert greater downward pressure on wages is striking. The downward rigidity ofwages in the Great Contraction of 1929—33 seems to receive the most attention from economic historians, but nearly all of the lasting increase in real wages came during the New Deal years of 1933_41.2 (See Figure.) From 1929 to June 1933, the average hourly earnings (AHE) offactory workers, measured against wholesale prices, rose just 4.5% in real product terms. (In nominal terms, they fell 23.7%, from $.590 to $.450.) From June 1933 when Congress passed the National Industrial Recovery Act (NIRA), the centerpiece of Presi dent Franklin D. -
Lee G. Branstetter
Lee G. Branstetter Carnegie Mellon University • H. John Heinz III College • School of Public Policy and Management 5000 Forbes Avenue Pittsburgh, PA 15213 • TEL (412) 268-4649 • [email protected] CURRENT ACADEMIC APPOINTMENTS Carnegie Mellon University Pittsburgh, PA Heinz College and Department of Social and Decision Sciences Director, Future of Work Initiative, 2016-present Professor of Economics and Public Policy, 2014-present Associate Professor of Economics and Public Policy (with tenure), 2006-2013 National Bureau of Economic Research Cambridge, MA Research Associate, 2006-present Faculty Research Fellow, 1996-2006 Affiliated with the Program on Productivity, Innovation, and Entrepreneurship and the Program on International Trade and Investment. Peterson Institute for International Economics Washington, DC Nonresident Senior Fellow, 2013-present ____________________________________________________________________________________________________ PREVIOUS APPOINTMENTS Council of Economic Advisers Washington, DC Executive Office of the President of the United States Senior Economist for International Trade and Investment, 2011-2012 Journal of International Economics Associate Editor, 2003-2011 Columbia Business School New York, NY Daniel Stanton Associate Professor of Business, 2004 – 2006 Director, International Business Program, 2002 – 2006 Associate Professor of Finance and Economics, 2001 – 2006 University of California, Davis Davis, CA Director, East Asian Studies Program, 1999 – 2001 Assistant Professor of Economics, 1996