We document two new facts about the distributions of answers in famous statistical problems: they are i) multi-modal and ii) unstable with respect to irrelevant changes in the problem. We offer a model in which, when solving a problem, people represent each hypothesis by attending "bottom up" to...

We propose a framework where perceptions of uncertainty are driven by the interaction between cognitive constraints and the way that people learn about it--whether information is presented sequentially or simultaneously. People can learn about uncertainty by observing the distribution of...

This paper examines the effects of a proportional capital gains tax in an economy with an Austrian sector (with wine and trees) and an ordinary sector. We analyze the effect of capital gains taxation (on both an accrual and a realization basis) on the efficiency with which resources are used...

Choosing what is morally right can be based on the consequences (ends) resulting from the decision - the Consequentialist view - or on the conformity of the means involved with some overarching notion of duty - the Deontological view. Using a series of experiments, we investigate the overall...

Insiders can artificially deflect the market prices of financial instruments from their full-information or inside value' by issuing deceptive accounting reports. Incentive support for disinformational activity comes through forms of compensation that allow corporate insiders to profit...

This chapter presents an economic approach to character and personality traits with an application to the study of virtue. Economists interpret psychological traits, including character traits and virtue, as strategies that shape responses to situations (actions) determined by underlying...

The elegant economic picture of rational consumers achieving Pareto optimality through trade in decentralized self-organized markets is blurred by market imperfections and choices inconsistent with consumer self-interest. Behavioral economics has documented these errors in choice, and considered...