Decades of research in economics and psychology has identified a large number of behavioral regularities — specific patterns of behavior present in the choices of a large fraction of decision makers, such as the endowment effect, ambiguity aversion or altruism — that run counter to the standard rational model of economic decision-making. However, these regularities are often studied in isolation, and their theoretical or empirical relationship is rarely discussed. In his research, Pietro Ortoleva, PhD, studies the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision-making. He and his team elicit 21 behaviors using an incentivized survey on a representative sample (n = 1,000) of the U.S. population. Their data show a clear and relatively simple structure underlying the correlations between these measures. Using principal components analysis, they reduce the 21 variables to six components corresponding to clear clusters of high correlations. They examine the relationship between these components, cognitive ability, and demographics and discuss the theoretical implications of the structure we uncover. These results could constitute the first step towards the development of a comprehensive yet parsimonious model of economic decision-making.
This event is free and open to the public, but registration is required to enter the building.'
This seminar is part of the the Cognition and Decision Seminar Series, which is sponsored by the Program for Economic Research and the Center for Decision Sciences at Columbia University.