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In a model where consumers have quasi-hyperbolic preferences, we compare immediate subsidies paid for health-conscious consumption and future subsidies rewarding good health outcome. We characterize the subsidy rates which implement the unbiased choice. These rates differ because of two...
Persistent link: https://www.econbiz.de/10011420788
We use novel data on individual activity in a sports betting market to study the effect of past performance sequences on individual behavior in a real market. The revelation of fundamental values in this market enables us to disentangle whether behavior is caused by sentiment or by superior...
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This paper proposes a new method to identify gambler's fallacy (GF) and hot-hand fallacy (HHF). In the classical method, subjects are classified as exhibiting GF/HHF even they are just randomizing/indifferent between options. In our method, subjects play the game twice and we vary the payoff...
Persistent link: https://www.econbiz.de/10012859406
The life-cycle theory of saving behavior (Modigliani, 1988) suggests that humans strive towards an equal intertemporal … distribution of wealth. However, behavioral life-cycle theory (Shefrin & Thaler, 1988) proposes that people use self control … heuristics to postpone wealth until later in life. According to this theory, people use a system of cognitive budgeting known as …
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