homo economicus

Six thousand chess players took part in a beauty contest

2009-08-06T16:41:00.003+02:00

Researchers from the University of Kassel ran a Beauty Contest experiment among visitors of the ChessBase website. Compared to previous versions of the game run on the internet the chess players don't seem particularly smarter than other types of players (although drawing any rockhard conclusions from comparing between completely different experiments is a bit pointless). The most interesting part of the results is that better chess players - as identified by a higher ELO rating - pick lower, better numbers, although the effect is not particularly big and the grandmasters (n=28) who participated didn't seem to do better than the rest at all.

Revenge and the people who seek it

2009-06-07T17:05:00.001+02:00

[T]he punishers reported feeling worse than the non-punishers, but predicted they would have felt even worse had they not been given the opportunity to punish. The non-punishers said they thought they would feel better if they'd had that opportunity for revenge—even though the survey identified them as the happier group.

Monitor on Psychology reviews some recent(ish) studies on revenge.

Secret of Googlenomics

2009-05-26T12:10:00.002+02:00

"All of a sudden we realized we were in the auction business."

Wired on Hal Varian's work as Google's Chief Economist.

Monkey cooperation and fairness

2009-05-22T15:24:00.001+02:00

(via)

Irrational Everything

2009-04-19T17:40:00.002+02:00

Where did he go wrong? Because he did not distinguish between the firms and their 'agents' [their managers]. There is a huge gulf between the companies and their agents. Firms take the long view, while agents have short perspectives and take the short view. The compensation models of the corporation and their agents are different.

Haaretz interviews Daniel Kahneman.

Taxing, a Ritual to Save the Species

2009-04-16T13:52:00.001+02:00

The New York Times analyses the biological foundations of taxation.

Herbert Gintis gave 5 stars to: Rationality in Economics

2009-02-21T17:58:00.002+01:00

One of my favourite (economics related) rss-feeds is the one bringing all of Herb Gintis' Amazon reviews straight to my Google Reader. Gintis reads a lot and always has an outspoken opinion about what he reads. Here is his take on Vernon Smith's latest book.

An interview with George Akerlof

2009-02-20T16:50:00.003+01:00

In a short interview with George Akerlof in the Atlantic:

Actually, if you don't take psychology into account, I think it's fairly hard to give a model of the economy that explains a great deal of the economic fluctuations that are going on.

There have been a number of books looking at the psychology of economic behaviour recently but Akerlof's new one, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism (with Robert Shiller), is the first to look at the role of psychology in macroeconomics.

Appeasing the Gods, With Insurance

2009-02-19T14:32:00.001+01:00

John Tierney in the New York Times describes some new research that suggests that buying insurance will make the buyer think the event against which (s)he is insured is less likely to happen.

Some things that caught my eye in the reports from the recent AAAS meeting in Chicago

2009-02-18T16:13:00.002+01:00

Mathemetician Elwyn Berlekamp has devised a version of the Chinese game Go, called Coupon Go, where (experienced) players are invited to assign a value to particular moves. This will, hopefully, help in solving this particularly complex game. Unlike for instance chess, where computerized players have beat even the top players, even the best Go programs apparentely don't manage to perform beyond an intermediate amateur level. A slightly older talk by Berlekamp about Coupon Go is here on Youtube.

Colin Camerer gave a talk called Interface Between Cognitive Psychology and Economics. Sadly I can't seem to find anything more indepth about it than the press release. Among other things he describes some interesting empirical findings about how people play so called LUPI (lowest unique positive integer) games, where the winner is the person who picks the lowest number that is picked by only one player. That part seems to be based on this paper.

Neural Link Discovered Between Intelligence And Self-Control

2008-09-11T17:49:00.002+02:00

Two Yale psychologists show that increased activation of the anterior prefrontal cortex is linked with both higher intelligence and less impatience in a financial reward test.

How You Spend Affects How Much You Spend

2008-09-08T16:58:00.000+02:00

Those familiar with George Loewenstein's work on the pain of spending (and how that pain is greater when paying in cash than by credit card) won't be a study showing that people seem to be willing to pay more for something when paying by credit card compared to cash.

Why we buy what we buy

2008-05-21T18:09:00.001+02:00

The Guardian went shopping with Dan Ariely.

Strange findings about voting for primary day

2008-05-20T17:57:00.001+02:00

Thaler and Sunstein review five remarkable findings regarding voting behaviour.

'Emotional Inflation' Leads To Stock Market Meltdown

2008-04-30T17:55:00.001+02:00

A psychoanalytic approach to stock market behaviour.

Market investors’ relationships to their assets and shares are akin to love-hate relationships with our partners. Just as in a relationship where the future is unexpected, as the market fluctuates you have to be prepared to suffer uncertainty and anxiety and go through good times and bad times with your shares.

Haven't had the time yet to read the actual paper, but I did notice that a Mervyn King is thanked in the acknowldegements. Would that be the Mervyn King who is the Governor of the Bank of England?

Why Things Cost $19.95

2008-04-29T17:43:00.001+02:00

Marketing scientists from the University of Florida suggest that round numbers trigger a different - wider - frame of reference than more exact numbers. Participants in one of their studies guessed the wholesale price of a plasmascreen tv to be lower if the retail price was $5000 than when it was $4.888 or $5.012. (via)

Nigel Howard (1934 - 2008)

2008-04-29T12:20:00.001+02:00

Obituary of the man who thought there was not enough attention for emotions in game theory and came up with Drama Theory.

The sunny side of fairness

2008-04-28T15:49:00.001+02:00

Neuroscientists from UCLA show that fairness, independent from monetary outcomes, triggers the happiness region in our brain. The authors used different versions of the ultimatum game where equal amounts of money were offered out of different original endowments (and as such, fair or unfair proposals). Additionally, accepting an unfair proposal seems to involve increased activity in an area that is involved with emotional regulation and decreased activity in the bit in our brains that does negative emotions. Suggesting that accepting an unfair proposal involves actively surpressing negative emotions. Original article here (pdf) (abstract).

Does What Is Says on the Tin

2007-10-29T15:54:00.001+01:00

* Cognitive Dissonance Observed in Children and Monkeys
* Optimism Brain Regions Identified

Decision-makers Seek Internal Balance, Not Balanced Alternatives

2007-10-29T15:53:00.000+01:00

Psychiatrists advocating a homeostatic approach of decision making.

Death & Glory: A Story of Ants, Ageing and Altruism

2007-10-14T15:11:00.001+02:00

Ants become more altruistic with age.

Why It Is Impossible For Some To 'Just Say No'

2007-10-11T12:32:00.001+02:00

Experimental evidence that humans have limited self-control resources. Having to control our impulses in one task makes it harder to do so in another, consecutive task.

Being Paid by the Hour Changes The Way We Think About Time

2007-10-11T12:29:00.001+02:00

An hourly wage makes us more inclined to choose to work more hours for more money rather than fewer hours for less money.

Brain's 'Social Enforcer' Centers Identified

2007-10-08T15:47:00.001+02:00

Neurologically these systems appear to be less developed in younger individuals than in adults.

Patience, Fairness and the Human Condition

2007-10-05T15:15:00.000+02:00

The Economist tries to tie three current bio-experimental economic stories together in an attempt to say something about the evolution of (economic) concepts like fairness and patience.

Chimps Don't Mind Being Chumps In Raisin Game

2007-10-05T15:11:00.000+02:00

Chimpanzees turn out to be much more rational than humans in an ultimatum game.

From Despotism to Democracy: Leadership and Coordination in Animal Groups

2007-10-04T14:33:00.000+02:00

A (free) talk next tuesday at the London Zoological Society. (via)

Neuroeconomics with Jason Zweig

2007-10-04T14:31:00.000+02:00

Another interview met Jason Zweig, author of Your Money and Your Brain, but since this one's a video it's got plenty of room to show one of neuroeconomics biggest draws, the pretty pictures. (via)

A Reality Check for Home Sellers

2007-10-03T13:27:00.000+02:00

On the psychology of real estate economics.

Genes Influence People's Economic Choices

2007-10-02T12:44:00.001+02:00

A new study finds role for genes in the ultimatum game by comparing identical and fraternal twins.

Why Buy? Researchers Seek An Answer

2007-10-02T12:43:00.000+02:00

Brandweek on mostly marketing related neurological research.

A Short Course In Thinking About Thinking

2007-10-01T16:00:00.001+02:00

Must admit I haven't had the time yet to read/view it myself but there's this impressive thing by Daniel Kahneman on Edge.

Playing Games With The Planet

2007-10-01T15:59:00.002+02:00

The international response to climate change can be seen as a Prisoner's Dilemma - the preferred option for every country is for other countries to take action - but whereas this would predict detrimental results in a one-shot situation in reality the players will meet again.

The Obscure Game-Theory Problem That Explains Why Rich Countries Are Rich.

2007-10-01T15:59:00.001+02:00

The Northern Rock bank run interpreted as a stag hunt game.

Monkey Puzzle

2007-09-25T15:25:00.000+02:00

Rhesus monkeys fail to find the Nash equilibrium strategy in Rock Paper Scissors.

Your Money and Your Brain

2007-09-23T17:13:00.000+02:00

Podcast interview with Jason Zweig, author of Your Money & Your Brain.

What Chimpanzees Can Teach Us About Economics

2007-09-23T11:57:00.000+02:00

It seems that chimpanzees too are susceptible to the endowment effect. Owning a jar of peanut butter makes them value it more.

The Northern Rock Bank Run

2007-09-20T10:59:00.001+02:00

Eric Rasmusen weighs in on the issue. To be honest, I had expected more game theoretic analyses of what's going on in the UK right now in the press. A bank run is one of those classic economic-psychological phenomena and it doesn't happen often that we can observe in the real world.

Are You a Tightwad or a Spendthrift? And What Does This Mean for Retailers?

2007-09-20T10:58:00.000+02:00

George Loewenstein (and colleagues) has constructed a new scale that measures 'individual differences in the pain of paying'. Do you spend more or less than you'd ideally like to spend?

Hidden Persuasion or Junk Science?

2007-09-11T14:40:00.001+02:00

Advertising Age takes on neuromarketing. (via)

Your Brain on Gambling

2007-09-10T14:34:00.001+02:00

On the neuroscience of gambling.

The Psychology of Stocks

2007-09-07T14:27:00.001+02:00

NPR interviews Michael Maubossin. On, among other things, when the wisdom of the crowds turns into herd behavior. (via)

Viewing the Hostage Crisis Through Game Theory

2007-09-07T14:26:00.000+02:00

The recent situation with Korean hostages in Afghanistan viewed through game theoretic eyes.

Altruism Emerges When Thoughts Focus On God

2007-09-05T15:14:00.003+02:00

Subjects primed with religion give more in the Dictator Game. (A large majority gives even more to the other than they keep for themselves which I find quite remarkable.)

Your Money & Your Brain

2007-09-05T15:14:00.001+02:00

A promotional page - with short ecxerpt - for Jason Zweig's new book on neuroeconomics.

Why Guilt Doesn't Keep Some of Us From Making the Same Mistakes Twice

2007-08-23T15:00:00.000+02:00

Actually, the way I understand it, guilt does in fact keep us from repeated indulgence. Impulsive consumers do feel negative emotions, but no guilt, like prudent consumers.

What Makes Some People Impulsive?

2007-08-22T12:05:00.000+02:00

Neuroscientists have identified the part of the brain that's responsible for nót doing something.

Tilburg Institute for Behavioral Economic Research

2007-08-22T10:12:00.001+02:00

Tiber, the new research institute for behavioral economics at Tilburg University, opens next week.

The Logic of Investment and the Logic of Obligation in Maasai Culture

2007-08-21T12:00:00.000+02:00

On playing the trust-game with the Maasai.

On the Efficiency of AC/DC

2007-08-21T08:43:00.000+02:00

An interesting, if slightly useless, take on the ultimatum game: subjects are more generous ánd are willing to accept lower offers when listening to Shoot To Thrill than to It's A Long Way To The Top. According to the authors the vocal stylings of Brian Johnson cause more efficient decisions.

Update: of course it's a joke.

But I Know You Know That I Know

2007-08-20T14:06:00.001+02:00

In an ultimatum game proposers offer a smaller fraction of the pie to their opponents if they know this opponent has just seen a movie that is expected to make them happy than if they have seen something of a provocative, and supposedly angry-making nature. The study doesn't appear to say whether proposers were right and people who have just seen a sitcom are willing to accept lower offers. They do report that their original finding disappears as soon as the second player knows the type of movie the proposer has seen and the proposer knows this.

What Makes Us Care

2007-08-20T14:05:00.002+02:00

George Loewenstein tries to find out why sometimes knowing more about a particular tragedy makes us less likely to help. Sympathy works in mysterious, non-rational ways.

The Big Wombassa

2007-08-20T14:05:00.001+02:00

Daniel Gilbert interviewed on affective forecasting. How come we are so bad at predicting our future emotional states? (The Washington Post takes a slightly different approach with another appearance from George Loewenstein)

Note That He Relies On You

2007-08-10T13:11:00.000+02:00

Adding just one sentence to the instructions - Note that your opponent relies on you - increases how much subjects give to their opponent in a Dictator Game.

Vernon Smith on Markets and Experimental Economics

2007-08-07T14:27:00.000+02:00

Podcast of an interview with experimental economist (and 2002 Nobel laureate) Vernon Smith.

Blatant Benevolence and Conspicuous Consumption

2007-08-06T11:07:00.000+02:00

Altruism reinterpreted as conspicuous consumption. In both cases it is essentially a way of signalling towards the opposite sex. (via)

Is It Possible That Heroin Junkies and Crackheads Are Rational?

2007-08-06T11:06:00.000+02:00

Slate on Murphy and Becker's concept of rational addiction.

Is Greed Good?

2007-08-02T11:07:00.001+02:00

Various experimental economic studies on fairness, trust and reputation help explain why Ebay works.

Should National Security Depend on Michael Chertoff's Gut

2007-08-02T11:06:00.001+02:00

Salon interviews Gerd Gigerenzer on his work on intuition, gut feelings and decision making in general.

In Games, an Insight Into the Rules of Evolution

2007-08-01T15:21:00.000+02:00

The New York Times profiles mathematical biologist Martin Novlak. After applying models he used working on the evolution of cooperation in the Prisoner's Dilemma to understand the behaviour of cancer he now seems to be working on networks and reputation.

Requiem For A Poker Game

2007-07-30T10:48:00.000+02:00

Poker is not as much fun as it used to be, according to Salon. Other news tells us the psychological component is still important though.

Better Brain Control Through Advertising

2007-07-26T13:02:00.003+02:00

When it is against just one durable sofa, the soft sofa is preferred in 42% of the cases. When pitched against fóur durable sofas, this percentage increases to 77%.

Humanitarians, You're Not As Generous As You Think

2007-07-26T13:02:00.001+02:00

People who consider themselves to be humanitarians only give more to the poor than others when they think this poverty is based on bad luck (instead of, for instance, lazyness).

The Top 10 Most Important Papers in Neuroeconomics

2007-07-23T13:47:00.001+02:00

Does what it says on the tin: the 10 most important papers in neuroeconomics, according to Natural Rationality.

Chimps May Leave Spite To Us Humans

2007-07-23T13:46:00.000+02:00

Spite seems to bea specifically human concept.

High Testosterone Marketing

2007-07-19T13:56:00.003+02:00

Neuromarketing continues on the topic of the role of testosterone in economic decisions.

The Brain Behind Economics

2007-07-19T13:56:00.001+02:00

Short introduction in (the technical side of) neuro-economics.

Rebel With A Cause: Why Certain Products Are Used As Markers Of Difference

2007-07-18T09:08:00.003+02:00

Looking into why we prefer divergence from the majority when we're buying CD's but not when purchasing dish soap.

Investing in Things?

2007-07-18T09:08:00.001+02:00

Self-doubt appears to be positively related with materialism.

Woman Marry For Money

2007-07-18T09:07:00.001+02:00

Woman are less likely to consider marrying a partner with a lower socioeconomic standing.

The Early Science of Altruism

2007-07-17T12:08:00.001+02:00

Wired Science Blog interviews neuro-scientist Jordan Grafman on the biology of altruism. Here is the second part.

The Big Throwdown

2007-07-17T12:07:00.000+02:00

There's more to Rock Paper Scissors than meets the eye.

The False Altruism of Alumni Giving

2007-07-17T12:06:00.000+02:00

Alumni donations to their alma mater are correlated with their child's age and likelyhood of applying to this particular school.

Free Choice + Punishment = Cooperation

2007-07-16T08:56:00.000+02:00

Results from a computer simulation suggest that cooperation in a public good is highest when participation is voluntary (and when there are agents who punish freeloaders).

Why We Do What We Do On eBay

2007-07-16T08:50:00.000+02:00

Describes the work of various researchers using real life data from eBay-transactions to study economic behaviour.

An academic study shows investors tend to buy stocks that their neighbors do

2007-07-15T12:48:00.000+02:00

There seems to be quite a relation between postal codes and portfolio decisions. In areas with, according to a different measure, higher levels of social interaction this relationship is strongest.

Money isn't everything

2007-07-06T16:17:00.000+02:00

There appears to be a negative relation between testosteron and rejection rate in the ultimatum game. (via)

Intelligent People Are More Patient In Financial Matters

2007-07-06T15:39:00.000+02:00

Higher IQ seems to lead to a longer time-horizon when dealing with finances. Smarter people are also more tolerant of risk.

Trust Elixir a Potent Whiff

2007-07-02T12:46:00.000+02:00

Some chemikal called oxytocin appears to regulate how trusting we are.

One Good Turn Deserves Another

2007-06-26T11:05:00.000+02:00

The authors of that neurological taxation-is-fun study respond to reader comments in the New York Times.

Human-like Altruism Shown In Chimpanzees

2007-06-26T11:04:00.000+02:00

Altruism - acting on behalf of others, even toward genetically unrelated individuals, without personal gain - is not limited to humans.

Taxes a Pleasure? Check the Brain Scan

2007-06-19T10:11:00.001+02:00

John Tierney weighs in on this weeks Taxation is Fun-story (or rather: the neurological evidence for the warm glow of altruism) in the New York Times.

The Prospects for Homo economicus

2007-06-18T10:01:00.000+02:00

A neurological approach of loss aversion.

Plants Recognize Their Siblings, Biologists Discover

2007-06-15T12:59:00.000+02:00

Bioligists show that plants are less competitive towards siblings than towards strangers when they share a pot.

Paying Taxes, According To The Brain, Can Bring Satisfaction

2007-06-15T10:58:00.000+02:00

Neurological researchs shows that paying taxes is fun (but not as fun as donating money voluntarily).

Competition, Loss Of Selfishness Mark Shift To Supersociety

2007-06-13T11:04:00.000+02:00

Between-group competition makes us, evolutionary, more altruistic.

Pain, Not Logic, Dictates Spending

2007-06-12T12:40:00.000+02:00

An interview with George Loewenstein. His main point has been featured on this site a couple of times before: neurological research shows that spending money triggers the same part of the brain that deals with (physical) pain.

Agencies Don Lab Coats to Reach Consumers

2007-06-12T12:36:00.001+02:00

On how neuroscience could help marketing more effective.

The Flip Side of Altruism

2007-06-12T12:23:00.000+02:00

An interview with Herbert Gintis on, for instance, why road rage is a form of altruism.

(Gintis, by the way, has written a great number of book-reviews at Amazon.)

The Fisherman Is A Predator Like Any Other

2007-06-10T13:40:00.000+02:00

Peruvian fishing-boats move in much the same way as natural predators.

Incoherent pietism and Sharia arbitrage

2007-06-08T13:29:00.000+02:00

The Financial Times on Islamic Finance. The writer also runs this Islam & Economics weblog.

The Joy of Giving vs. the Pain of Buying

2007-05-30T13:06:00.003+02:00

Neuromarketing reports on two recent studies on the neurological side of altruism.

Chinese Investors Crunching Numbers Are Glad to See 8s

2007-05-30T10:39:00.000+02:00

The Wall Street Journal on the role of numerology in Chinese stock markets. (via)

Your Plate Is Bigger Than Your Stomach

2007-05-29T13:51:00.001+02:00

Behavioral economic insights about how the size of our plate influences how much we eat as the early signs of a Century of Behavior Change.

The Traveler's Dilemma

2007-05-29T13:50:00.000+02:00

Meta-rationality in the Traveler's Dilemma.

Why It's Easy To Blow The Tax Refund And Hard To Catch A Cab In The Rain

2007-05-25T21:52:00.002+02:00

The Washington Post on mental accounting.

(See Richard Thaler being interviewed in a cab here. It's an old episode of a Dutch tv-show which also contains interviews with Al Roth and Daniel Kahneman)

Considering 'What Might Have Been' Is Key In Evaluating Behavior

2007-05-25T21:52:00.001+02:00

Neurological research shows the importance of so-called fictive learning ('what would have happened if the circumstances were different?') in decision-making.

The Psychology of Banner Ads

2007-05-23T13:01:00.001+02:00

Even though you probably don't notice them, banner ads dó seem to work. Repeated exposure creates positive feeling towards the product. (Via)

People Misjudge Their Own Skill Level When Buying Equipment

2007-05-23T13:00:00.000+02:00

We tend to overestimate how good we are at a particular task and are likely to buy equipment that's more suited for a higher skill level.

Evolution, Immigration and Trade

2007-05-22T21:14:00.001+02:00

Paul Rubin on the evolutionary aspects of (understanding) international economics. You can find the Cato's Institute Regulation journal - where more articles on this topic by Rubin have appearead recently - here.