Zusammenfassung der Mastervorlesung Behavioral Economics (Verhaltensökonomik) mit den Schwerpunkten: Behavioral Decision Theory, Behavioral Game Theory, Social Preferences.
Table of Contents
1. Behavioral Decision Theory
1.1 Expected Utility Theory
1.1.1 Axioms of Expected Utility Theory
1.2. Classical Anomalies
1.3 Value formation
1.3.1 Menu effects -> violates generally the invariance assumption (relevant marketing practice)
1.3.2 Status Quo and endowment effect: nur für greifbare Dinge
1.3.3 Preferences reversals
1.4 Probability judgment
1.4.1 Representativeness heuristic
1.4.2 Availability and anchoring heuristic:
1.4.3 Self-evaluation bias (egocentric bias)
1.5 Prospect Theory
1.5.1 General principles
1.5.2 Loss Aversion
1.5.3 Shape of the utility (value) function
1.5.4 Decision weighting
1.6 Mental Accounting
2. Intertemporal Choice and sustainable decisions
2.1 The Discounted utility model (DUM)
2.1.1 Assumptions and features of the Discounted utility model:
2.1.3 Some anomalies in the Discounted Utility Model (DUM)
2.2 Alternative intertemporal choice models
2.2.1 Time inconsistent preferences (bspw. Wecker auf 8e stellen, um 8e dann nicht aufstehen)
2.2.2 Hyperbolic discounting
3. Behavioral Game Theory
3.1 Nature of (Behavioral) Game Theory
3.2 Equilibrium concepts
3.3 Bargaining
3.4 Iterated dominance games
3.5 Models of bounded rationality (limited cognitive capacity)
3.5.1 Level-k-Model
3.5.2 Cognitive Hierarchy Model
3.6 Signaling
3.7 Learning
4. Social preferences
4.1 Empirical evidence
4.2 Factors affecting social preferences
4.3 Modeling social preferences
4.4 Inequality aversion models
4.4.1 The inequality aversion model of Fehr & Schmidt, FS-Model
4.4.2 The ERC-Model of Bolton & Ockenfels
Objectives and Core Topics
The primary objective of this work is to provide a comprehensive analysis of Behavioral Economics by contrasting standard economic assumptions with empirical observations. It investigates how human decision-making processes, intertemporal choices, and strategic interactions in game theory deviate from classical rational choice models due to cognitive limitations and social preferences.
- Behavioral Decision Theory and deviations from Expected Utility Theory.
- Intertemporal choice models, hyperbolic discounting, and self-control problems.
- Behavioral Game Theory, focusing on bounded rationality and signaling.
- Social preferences, including inequality aversion and models like Fehr-Schmidt and ERC.
Excerpt from the Book
1.2. Classical Anomalies
Allais-Paradox: The Allais-Paradox violates the independence axiom and is an example of what is called consequence effect.
Ellsberg-Paradox: 90 marbles in an urn, 30 red and 60 black and yellow, but in undefined relation. The majority chooses (1a) and (2b). This choice violates the independence axiom, because the number of yellow marbles is identical for a and b.
Interpretation: Individuals prefer risk over ambiguity (Doppeldeutigkeit). Risk: Outcomes are uncertain, but probabilities are known. Ambiguity: Outcomes are uncertain, and probabilities are not known.
Chapter Summary
1. Behavioral Decision Theory: Examines decision-making under risk and critiques the Expected Utility Theory through various heuristics and the introduction of Prospect Theory.
2. Intertemporal Choice and sustainable decisions: Analyzes how individuals make choices over time, focusing on the Discounted Utility Model and why people often exhibit time-inconsistent preferences.
3. Behavioral Game Theory: Explores strategic interactions, highlighting how models of bounded rationality and learning better predict outcomes than standard equilibrium concepts.
4. Social preferences: Investigates the role of altruism, fairness, and reciprocity in economic games, presenting models that quantify these behaviors.
Keywords
Behavioral Economics, Prospect Theory, Expected Utility Theory, Hyperbolic Discounting, Bounded Rationality, Game Theory, Nash Equilibrium, Social Preferences, Inequality Aversion, Fehr-Schmidt Model, ERC Model, Heuristics, Loss Aversion, Signaling, Reciprocity.
Frequently Asked Questions
What is the fundamental focus of this publication?
The work explores the field of Behavioral Economics, specifically investigating where traditional economic models (based on perfect rationality) fail to account for observed human behavior.
Which core thematic areas are addressed?
It covers decision-making under risk, intertemporal choices, strategic game theory, and the impact of social preferences on individual and collective economic outcomes.
What is the primary goal of the analysis?
The goal is to demonstrate how cognitive biases and social tendencies necessitate more nuanced models than those traditionally used in standard economic theory.
Which scientific methodology is employed?
The text utilizes a comparative methodology, evaluating standard economic axioms against experimental data and psychological findings to derive better-fitting models.
What is covered in the main body of the text?
The body spans decision heuristics, the Prospect Theory, intertemporal models, behavioral game theory concepts (like the Level-k-Model), and models for social preferences like the FS and ERC models.
Which keywords characterize this work?
Key terms include Prospect Theory, Bounded Rationality, Hyperbolic Discounting, Inequality Aversion, and Nash Equilibrium, among others.
How does the Prospect Theory differ from standard Utility Theory?
It replaces the standard utility function with a value function that is sensitive to reference points and incorporates asymmetric treatment of gains and losses.
What are the implications of hyperbolic discounting?
It suggests that individuals are present-biased, meaning they are more impatient in the short term, leading to self-control problems like procrastination.
How do the Fehr-Schmidt and ERC models differ?
The Fehr-Schmidt model focuses on absolute differences in payoffs, whereas the ERC model emphasizes relative shares and symmetrical attitudes toward inequality.
- Quote paper
- Marcus Kreysch (Author), 2014, Behavioral Economics. Lernzusammenfassung, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/278066
