Core Concepts
Behavioral economists often critique lab experiments for using participants from affluent, industrialized backgrounds, known by this acronym.
What is WEIRD (Western, Educated, Industrialized, Rich, and Democratic)?
The idea that people value an item more once they own it—like a mug in an experiment—is known as this effect.
What is the endowment effect?
Seeking only information that supports one’s preexisting beliefs and ignoring contradictory evidence is called this.
What is confirmation bias?
LATE stands for…
What is local average treatment effect?
Who will grade the final projects for this course?
Who is Matt Lowe?
A paper on “pleas” showed that describing outcomes as losses rather than neutral drastically changes acceptance rates. People’s choices can shift dramatically when the same information is presented differently, this is an example of which bias?
What is the framing effect?
Setting a pre-chosen option so that people must opt out, rather than opt in (ie. organ donation), is a classic example of which policy tool in behavioral economics?
What is a default nudge?
Relying too heavily on the first piece of information when making subsequent judgments is an example of this bias.
What is anchoring bias?
This term refers to participants dropping out of a study before completion, which can distort the final results if not properly addressed.
What is attrition?
This MIT researcher merges psychology and economics to study attention and decision-making, often referred to as “rational inattention.”
Who is Rahul Bhui?
This bias occurs when people plan to work or save in the future but deviate when the time comes, revealing a conflict between intentions and actions.
What is present bias or dynamic inconsistency?
One presentation showed how credit card spending reduces the salience of payments, drawing on which concept that segments finances by category?
What is mental accounting?
When people discount future outcomes more steeply in the near term than over longer horizons, which discounting model applies?
What is hyperbolic discounting?
In empirical studies, analyzing outcomes for everyone assigned to a treatment group, regardless of actual uptake, yields this type of estimate.
What is the intention-to-treat (ITT) effect?
At SFU, this professor’s experimental macroeconomics research shows how better central bank communication can reduce public confusion and stabilize expectations.
Who is Luba Petersen?
Some individuals avoid learning about unpleasant health risks, preserving their optimistic belief – a selective information process called what?
What is motivated cognition (or information avoidance)?
Modifying a cafeteria so healthy foods are more prominent exemplifies a method of reshaping choice without removing options. What is this called?
What is choice architecture?
Standard economics assumes people discount future payoffs at a constant rate, known by this name, contradicting many experimental findings.
What is exponential discounting?
A challenge in many lab-based studies is relying on subjects from only Western, affluent societies, which reduces what key aspect of the study’s conclusions?
What is external validity (or generalizability)?
Renowned for linking culture, history, and development, this UBC economist reveals how social and historical factors can influence modern economic outcomes.
Who is Nathan Nunn?
Under prospect theory, people often evaluate outcomes relative to a certain position, illustrating the concept of ____ rather than final states.
What is reference dependence (or reference‐dependent utility)?
In the famous paper by Camerer, Babcock, Loewenstein, & Thaler, these workers unintentionally earn less on busy days by quitting early due to “target earnings.”
Who are New York City taxi drivers?
Fehr and Schmidt’s famous paper presents a model in which people’s utility is diminished by unequal payoffs. It’s known by this name.
What is the inequity aversion model?
This social experiment measures attitudes toward groups and issues by tracking the return rates of letters addressed to various entities, revealing how people's beliefs and values influence their reactions to situations.
What is Stanley Milgram's "lost letter" experiment?
Working at SFU, this guest uses experimental methods to study how individuals interpret incentives in labor, highlighting social preferences and fairness in the workplace.
Who is David J. Freeman?