This semester sees the return of the Cognition and Decision Seminar Series, which brings together scholars from economics, psychology, neuroscience and other fields who are united by an interest in the cognitive mechanisms involved in decision making and related behavior, and the ways in which a better understanding of these mechanisms can lead to more accurate models of human behavior and more effective public policies.
The seminar organizers are Mark Dean, Eric Johnson, Michael Shadlen, Daphna Shohamy, and Michael Woodford. The Cognition and Decision Seminar Series is jointly sponsored by the Cognitive and Behavioral Economics Initiative of the Department of Economics and the Center for Decision Sciences.
Prof. Pietro Ortoleva from Princeton University will be presenting, "Econographics": 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 this paper, we study 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. We elicit 21 behaviors using an incentivized survey on a representative sample (n = 1,000) of the U.S. population. Our data show a clear and relatively simple structure underlying the correlations between these measures. Using principal components analysis, we reduce the 21 variables to six components corresponding to clear clusters of high correlations. We 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.
