Speaker: Pietro Ortoleva, Professor of Economics and Public Affairs, Princeton University
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.
All attendees must register in order to gain access to the Jerome L. Greene Science Center. This event is part of the Cognition and Decision Seminar Series, sponsored by the Program for Economic Research and the Center for Decision Sciences at Columbia University.
