Welfare Economics. A key theme of Cognitive Economics is finite cognition (often misleadingly called “bounded rationality …

numerical cognition, and test its ability to explain the choice frequencies that we observe in a laboratory experiment … imprecise (and noisy) mental representation of the decision situation. In this model, risk aversion is predicted without any … need for a nonlinear utility-of-wealth function, and instead results from a sort of perceptual bias — but one that …

The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates … misperceptions of probability drive the favorite-longshot bias, as suggested by Prospect Theory …

design an experiment that treats the two goods (a mug and a pen) symmetrically in all but in the probabilities with which … they are expected to be owned. Thus, our "endowmentless" endowment effect experiment shuts down all alternative mechanisms …

reliance on intuitions. In none of the tasks are very high stakes sufficient to de-bias participants, or come even close to …

aversion results from a sort of perceptual bias—but one that represents an optimal decision rule, given the limitations of the … result from judgments based on imprecise (and noisy) mental representations of the decision situation. In this model, risk … lotteries, based on other evidence regarding numerical cognition, and test its ability to explain the choice frequencies that we …

. This study also presents empirical evidence from a laboratory experiment in which students at a selective college were …