307 records from EconBiz based on author Name

1. Risky intertemporal choices have a common value function, but a separate choice function

abstract

Luckman et al. (2018) experimentally tested the conjecture that a single model of risky intertemporal choice can account for both risky and intertemporal choices, and under the conditions of their experiment, found evidence supporting it. Given the existing literature, that is a remarkable result which warrants (conceptual) replication. Following a tradition in psychology, Luckman et al. (2018) had first-year psychology students participate that were rewarded with non-monetary course credits (see also Luckman et al., 2020). Proper incentivisation is a long-standing bone of contention among experimentally working economists and psychologists, last but not least when it comes to the elicitation of preferences of any kind. Another reason to be sceptical is that the experiment was not properly powered up; the no-difference results reported by the authors might be spurious. In our conceptual replication of Luckman et al. (2018), we find significant differences between the risky and intertemporal choices at both the group and individual level. We find further that there is no significant difference between choices made by participants that are paid a flat incentive and participants that are paid under the random incentive scheme, at the group level. We find that order effects matter for intertemporal choices, but not for risky choices. At the individual level, we find evidence in favour of the model that assumes a common value function, but separate choice functions. This result is robust across our incentive systems, and order of presentation, but sensitive to different prior distributions.

Fidanoski, Filip; Dixit, Vinayak; Ortmann, Andreas;
2025
Type: Graue Literatur; Non-commercial literature; Arbeitspapier; Working Paper;
Availability: Link Link

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2. How common is the common-ratio effect?

Blavatskyy, Pavlo; Panchenko, Valentyn; Ortmann, Andreas;
2023
Type: Aufsatz in Zeitschrift; Article in journal;
Availability: Link
Citations: 1 (based on OpenCitations) Cited By

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3. Ecological Rationality and Economics : Where the Twain Shall Meet

abstract

Over the past decades psychological theories have made significant headway into economics, culminating in the 2002 (partially) and 2017 Nobel prizes awarded for work in the field of Behavioural Economics. Many of the insights imported from psychology into economics share a common trait: the presumption that decision makers use shortcuts that lead to deviations from rational behaviour (the Heuristics-and-Biases program). Many economists seem unaware that this viewpoint has long been contested in cognitive psychology. Proponents of an alternative program (the Ecological-Rationality program) argue that heuristics need not be irrational, particularly when judged relative to characteristics of the environment. We sketch out the historical context of the antagonism between these two research programs and then review more recent work in the Ecological-Rationality tradition. While the heuristics-and-biases program is, via Behavioural Economics, now well-established in (mainstream neo-classical) economics, we show there is considerable scope for the Ecological-Rationality program to interact with economics. In fact, we argue that there are many existing, yet overlooked, bridges between the two, based on independently derived research in economics that can be construed as being aligned with the tradition of the Ecological-Rationality program. We close the chapter with a discussion of the open challenges and difficulties of integrating the Ecological Rationality program with economics

Ortmann, Andreas; Spiliopoulos, Leonidas;
2023
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link

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4. Can a Single Model Account for Both Risky Choices and Inter-Temporal Choices? Testing the Assumptions Underlying Models of Risky-Intertemporal Choice : A Conceptual Replication

abstract

Luckman et al. (2018) experimentally tested the conjecture that a single model of risky intertemporal choice can account for both risky and intertemporal choices, and under the conditions of their experiment, found evidence supporting it. Given the existing literature, that is a remarkable result which warrants (conceptual) replication. A key reason to be sceptical about the result is that Luckman et al. (2018), following a well-established tradition in psychology, had first-year psychology students participate that were rewarded with non-monetary course credits, casting shadows of doubt on whether their participants were properly incentivised for accurate experimentation. Proper incentivization is a long-standing bone of contention among experimentally working economists and psychologists and it is widely accepted among economists that the elicitation of risk preferences and time preferences is very much a function of the way that experimenter incentivize choices. Another reason to be sceptical about the result is that the experiment was not properly powered up; hence the no-difference results reported by the authors might be spurious. In our conceptual replication, we find significant differences between the risky and intertemporal choices at both the group and individual level. We find further that there is no significant difference between choices made by participants that are paid a flat incentive and participants that are paid under the random incentive scheme. We find that order effects matter for intertemporal choices, but not for risky choices. At the individual level, we find evidence in favour of the model that assumes a common value function, but separate choice functions. This result is robust across the incentive systems, and order of presentation, but sensitive to different prior distributions. Other semi-nested models are sensitive to the different orders of presentation as well as incentive systems

Fidanoski, Filip; Dixit, Vinayak; Ortmann, Andreas;
2023
Availability: Link Link

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5. Risky Intertemporal Choices Have A Common Value Function, But A Separate Choice Function

Fidanoski, Filip; Dixit, Vinayak; Ortmann, Andreas;
2025
Type: Working Paper;
Availability:

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6. Preventing Search with Wicked Defaults

abstract

We study a setting where a buyer chooses one of several available options whose values are initially unknown but can be discovered through costly search. Search is sequential, with perfect recall, which implies it is optimal for the buyer to search until the best option encountered so far exceeds a reservation value. In the baseline setting, the starting point of search is random. In a wicked default condition, the starting point of search is set optimally by a profit-maximizing firm to be the worst option above the reservation value, thereby preventing further search. This default extracts maximum surplus from the buyer when the seller's profits from and the buyer's valuations of the options are misaligned. The firm's profit increases in all cases, whereas welfare implications for buyers depend on the cost of search: low-cost buyers are better off, while high-cost buyers are worse off. Our experimental results are consistent with these predictions, even though the effect sizes are moderated due to sub-optimal search. Informing buyers that the default is selected in a profit-maximizing way does not change their aggregate behavior. Sellers thus continue to benefit from wicked defaults even when their motivations are revealed

Ortmann, Andreas; Ryvkin, Dmitry; Wilkening, Tom; Zhang, Jingjing;
2022
Type: Arbeitspapier; Working Paper; Graue Literatur; Non-commercial literature;
Availability: Link Link

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7. Exploring the demand for elective egg freezing : a laboratory experiment

Keller, Elena; Ortmann, Andreas; Chambers, Georgina Mary;
2024
Type: Aufsatz in Zeitschrift; Article in journal;
Availability: Link

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8. Reading Smith Through the Conceptual Lenses of Game Theory : a Reconstruction of Smith’s Way of Thinking, Inspired by His Lectures on Rhetoric and Languages

abstract

Game theory is a branch of social sciences that formalizes decision-making in situations where two or more individuals or groups interact, possibly having conflicting interests. In Ortmann & Walraevens (2022) we have reconstructed Smith’s ways of thinking about the social world by analyzing his early work on rhetoric and languages. We document that Smith had an astute understanding of interactive decision-making in all walks of life and of the role persuasion plays in it. Game theory is a natural way to capture this understanding and we showed that Smith used, from the LBRL over the TMS to the WN, what we called reasoning routines that map tightly into eductive and evolutive game theory. The present manuscript is a primer of sorts on our book and the insights that we establish through it. We argue that understanding Smith’s reasoning routines, or conceptual lenses, is a major step towards understanding the deep structure of his oeuvre, and for that matter his universal teachings

Ortmann, Andreas; Walraevens, Benoit;
2023
Availability: Link Link

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9. Defaults and cognitive effort

Ortmann, Andreas; Ryvkin, Dmitry; Wilkening, Tom; Zhang, Jingjing;
2023
Type: Aufsatz in Zeitschrift; Article in journal;
Availability: Link

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10. Exploring the Demand for Elective Egg Freezing : An Incentive-Compatible Experiment

abstract

Background: Infertility affects one in eight couples worldwide. In vitro fertilization (IVF) is now considered a mainstream fertility treatment to increase the chance of conceiving a child in infertile individuals. The main cause of infertility is advanced female age due to the number and quality of eggs available. Elective egg freezing (EEF) is an increasingly common novel type of fertility treatment to prolong fertility in young female patients by freezing eggs for later use. Currently EFF is not funded by any government health insurance schemes. There is limited data on the responsiveness of demand for EEF to treatment costs and patient income.Objective: We conducted a proof-of-concept analysis to demonstrate that government funding decisions can be studied within a lab experiment: We explore the effects of government funding levels and various participant characteristics on the demand for EEF and IVF and determine price and income elasticities of demand within an incentive-compatible experiment.Methods: 217 adult female participants of reproductive age between 20-29 years old (average age: 23.7 years) and without children were recruited from a pool of students as well as from Prolific, an online data collection platform. To assess their preferences and sensitivity to treatment costs of either immediate EEF and using frozen eggs at age 40 years, or IVF treatment at 40 years, participants were assigned to one of three experimental treatments that were calibrated to real-world data from Australia and elsewhere: (1) low-income endowment + full information about infertility and available treatments; (2) high income + full information; (3) high income + low information. The experiment consisted of 3 experimental conditions corresponding to different levels of government funding for IVF and EEF with 2 decision periods (a ‘planning period’ and a ‘family-formation period’) to explore how demand for IVF and EEF changes based on the level of government funding. In each period, participants had to indicate their preferred treatment choice with the goal of achieving a live birth within each experimental condition. The experiment was followed by risk- and time-preference elicitation tasks. Compensation was based on decisions made and associated final outcomes to achieve proper incentivization. The experiment was pre-registered on the Open Science Framework Platform (https://doi.org/10.17605/OSF.IO/K5PXY and https://doi.org/10.17605/OSF.IO/G6D7Q).Results: Under the experimental condition where disposable income was set at AU$5,000 per annum, full information on procedures was provided and no government funding was provided, 75.0% of participants chose immediate EEF in their 20s, 19.4% chose IVF at age 40 years, and 5.6% chose to attempt conception naturally at age 40. A higher proportion of women chose to undergo EEF with higher levels of income, increased government funding, and the provision of full information on procedures. More than 95% of participants chose EEF in the condition with full government funding. The demand for EEF and IVF were shown to be inelastic to price, with price elasticities ranging from -0.10 to -0.18 for EEF and -0.36 to -0.41 for IVF. Demand did not significantly change with income level. The level of government funding had a significant impact on treatment demand with the odds of selecting EEF increasing by 1,354% when the price of EEF decreased from AU$19,000 to AU$0.Conclusions: Our study shows that government funding decisions for medical interventions can be explored within an experimental setting. The fact that most participants chose to undergo EEF in the experiment suggests that the demand for EEF by women in their twenties is high if they are provided with accurate information about the age-related fertility decline and benefits of EEF to prolong their fertility. Overall, we find that the increase in the price for EEF and IVF through restrictions in government funding significantly reduces demand for such treatments. However, income level was not shown to have an effect on demand, suggesting a high value associated with fertility treatment

Keller, Elena; Ortmann, Andreas; Chambers, Georgina M.;
2022
Availability: Link Link

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