Two well-known violations of Expected Utility Theory (EUT) are the Allais Paradox and the preference reversal between gamble choices and gamble bids. The Allais Paradox undermines the independence axiom, according to which the preferences for two gambles should be unaffected by an independent...

Diversification is a fundamental concept in economics, decision theory and finance. It also lies at the core of the Darwinian evolution argument, and diversifying behavior known as bet-hedging has been widely documented in other species. The central premise of this paper is that attitudes...

Hypernudges have been proposed as the future of behavioural science. Combining the behavioural insights of nudge theory with the tremendous power of big data and algorithms, hypernudges offer the potential of pervasive and embedded personalised choice architecture.Yet, quite where hypernudges...

Attitudes toward risk underlie virtually every important economic decision an individual makes. In this experimental study, I examine how introducing a time delay into the execution of an investment plan influences individuals' risk preferences. The field experiment proceeded in three stages: a...

9-ending prices are a dominant feature of many retail settings, which according to the existing literature, is because consumers perceive them as being relatively low. Are 9-ending prices really lower than comparable non 9-ending prices? Surprisingly, the empirical evidence on this question is...

How does the generosity of social insurance coverage affect demand for healthcare and health outcomes of elderly people? This paper examines the effects of insurance coverage on long-term care (LTC) utilization and its health consequences using novel administrative data of the public long-term...

We propose and develop a dynamic theory of endogenous preference formation in which people adopt worldviews that shape their judgments about their experiences. The framework highlights the role of mindset flexibility, a trait that determines the relative weights the decision maker places on her...

Biased responses in survey studies could seriously harm and mislead our economic decision-making. To mitigate survey response bias, we suggest an alternative way of combining two existing strategies, cheap talk and the Bayesian Truth Serum (BTS). In our three proof-of-concept experiments, we...

Is being informed about nudging detrimental to the effect of the nudge? This paper reports results from an experimental study (n = 623) testing the effects of transparency on the effectiveness of a default nudge while controlling for reactance and decision time. Overall, the data show that more...

We challenge the standard definition of economic rationality as consistency by making use of a novel distinction between axioms of decision theory: consistency and preference axioms. We argue that this distinction has been overlooked by the literature and, as a result, evidence that consistency...