Several recent behavioral models of choice build on the idea that decision makers put more weight on attributes in which the available options differ more. We test this assumption in a controlled experiment where such biases will generate choice inconsistencies. As hypothesized, we find that...

The psychology literature provides ample evidence that people have difficulties taking the perspective of less-informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader...

Overconfidence is one of the most ubiquitous cognitive bias. There is copious evidence of overconfidence being relevant in a diverse set of economic domains. In this paper, we relate the recent concept of cognitive uncertainty with overconfidence. Cognitive uncertainty represents a decision...

In 2008, the Swedish property tax was reformed and a cap on yearly tax liabilities was introduced. A large fraction of owner occupied houses was subject to a substantial decrease in the tax. When the reform was announced, most analysts projected - in line with tax capitalization theory - that...

We experimentally prime subjects subliminally prior to charity donation decisions by showing words that have connotations to prosocial values for a very short duration of time (17ms). Our main finding is that, compared to a baseline condition, the prosocial prime increases donations with about...

In an experimental setting in which investors can entrust their money to traders, we investigate how compensation schemes affect liquidity provision and asset prices. Investors face a trade-off between risk and return. At the benefit of a potentially higher return, they can entrust their money...