This paper concerns the prescriptive function of decision analysis. I suppose that an agent must choose an action yielding welfare that varies with the state of nature. The agent has a welfare function and beliefs, but he does not know the actual state of nature. It is often argued that such an...

We study the perfect Bayesian equilibrium of a model of learning over a general social network. Each individual receives a signal about the underlying state of the world, observes the past actions of a stochastically-generated neighborhood of individuals, and chooses one of two possible actions....

A growing literature offers indirect evidence that the distribution of bargaining power within a household influences decisions made by the household. The indirect evidence links household outcomes to variables that are assumed to influence the distribution of power within the household. In this...

Protective decisions are often puzzling. Among other anomalies, people insure against non-catastrophic events, underinsure against catastrophic risks, and allow extraneous factors to influence insurance purchases and other protective decisions. Neither expected utility theory nor prospect theory...

As the COVID-19 pandemic progresses, researchers are reporting findings of randomized trials comparing standard care with care augmented by experimental drugs. The trials have small sample sizes, so estimates of treatment effects are imprecise. Seeing imprecision, clinicians reading research...

Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home delivery or pharmacy...

We survey a representative sample of U.S. individuals about how well leading academic theories describe their financial beliefs and decisions. We find substantial support for many factors hypothesized to affect portfolio equity share, particularly background risk, investment horizon, rare...

Treatment for depression is complex, requiring decisions that may involve tradeoffs between exploiting treatments with the highest expected value or experimenting with treatments with higher possible payoffs. Using patient claims data, we show that among skilled doctors, using a broader...

In line with the fallacy of riskification of uncertainty by which decision makers believe that the effects of unpredictable phenomena can be captured accurately by probability distributions, organizational scholars commonly treat the organizational inefficiency in dealing with uncertainty...

It is common to analyze the effects of alternative monetary policy commitments under the assumption of fully model-consistent expectations. This implicitly assumes unrealistic cognitive abilities on the part of economic decision makers. The relevant question, however, is not whether the...