Discuss Economics Blog » Behavioral Economics

Thaler’s Stylized Facts on Horsetrack Betting

Ro Econ — Mon, 19 Sep 2011 16:01:46 +0000

Back to some behavioral economics. Thaler cites three stylized facts about horsetrack betting, they are as follows: 1. Most betters bring an amount of money that represents a small amount of their overall wealth. In terms of mental accounting, this money may represent the theory that money is non-fungible. Because they are not brining their [...]

Thaler’s Stylized Facts on Horsetrack Betting is a post from: Discuss Economics Blog

Mental accounting – 3 main components to the theory

Ro Econ — Mon, 28 Mar 2011 18:12:38 +0000

In mental accounting there are three main components to this theory. The three of them are as follows and may affect the individuals preferences as follows: Value Function This is a function that represents gains and looses with respect to some reference point. In rational behavior theory, it would predict that an individual gains some [...]

Mental accounting – 3 main components to the theory is a post from: Discuss Economics Blog

Hyperbolic Discounting Explained

Ro Econ — Wed, 14 Jul 2010 13:34:54 +0000

Hyperbolic discounting refers to the preference people have to accept smaller payoffs sooner rather than larger payoffs in the future. This means that in terms of an individual saving for retirement, the individual is much more inclined typically to spend the money now rather than have a larger amount later to spend, say on retirement. [...]

Hyperbolic Discounting Explained is a post from: Discuss Economics Blog

A Game theory question

Ro Econ — Wed, 05 May 2010 13:59:11 +0000

is anyone up on game theory here? i was talking to a computer programmer the other day about game theory and he mentioned that someone he knew who used to live in my district (this programmer is quite advanced in years shall we say), apparently he had innovated some new taxonomy of games (in the [...]

A Game theory question is a post from: Discuss Economics Blog

Maximizing Your Gift Giving Returns

Ro Econ — Fri, 08 Jan 2010 15:43:09 +0000

Deadweight Loss of Gift Giving> Came across an interesting article that discusses Christmas gift giving from the perspective of economists. Why bother giving a $100 gift to someone who will only appreciate it at $50? There is a loss of half of a Christmas gift, can we not maximize our gift giving by taking care [...]

Maximizing Your Gift Giving Returns is a post from: Discuss Economics Blog

The Law of Small Numbers Explained

Ro Econ — Wed, 17 Sep 2008 12:40:13 +0000

Here is a brief explanation on the law of small numbers. The Law of Small Numbers infers that when people see two small numbers that they have the natural propensity to round the numbers down to equal the same. This is a error in that small numbers may make a difference. In such a case [...]

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Presumptions of Self-control theories

Ro Econ — Mon, 21 Jul 2008 12:37:47 +0000

Here are some thoughts on presumption of self-control theories. They are based on the presumption that we have bounded willpower and that there needs to be a course of action to which keeps in the individual on track to meeting goals and expectations. Thus they derive incentive and constraints as solutions. Constrains, or rules, are [...]

Presumptions of Self-control theories is a post from: Discuss Economics Blog

Social dilemmas in Behavior Economics

Ro Econ — Wed, 16 Jul 2008 17:11:30 +0000

Social dilemmas are simple situations between a pair of people, to a group of people, that involve making decisions that will ultimately affect their well being and the well-being of the overall group. The 'players' in the social dilemma have the choice to cooperate to which is known as taking the best interest for the [...]

Social dilemmas in Behavior Economics is a post from: Discuss Economics Blog