Twenty years ago, behavioral economics did not exist as a field. Most economists were deeply skeptical—even antagonistic—toward the idea of importing insights from psychology into their field. Today, behavioral economics has become virtually mainstream. It is well represented in prominent journals and top economics departments, and behavioral economists, including several contributors to th…
Penelitian ini mengeksplorasi kemungkinan bias yang mempengaruhi preferensi pengobatan pasien dengan penyakit kronis. Preferensi pasien dengan penyakit kronis terhadapap pengobatan tradisional dianalisis melalui teori ekonomi perilaku seperti loss aversion, underconfidence bias, dan, risk aversion. Sebelumnya, penggunaan pengobatan tradisional diatribusikan pada kondisi sosioekonomi. Elisitasi …
We show that the compensation for rare events accounts for a large fraction of the average equity and variance risk premia. Exploiting the special structure of the jump tails and the pricing thereof, we identify and estimate a new Investor Fears index. The index reveals large time-varying compensation for fears of disasters. Our empirical investigations involve new extreme value theory approxim…
Stock market participation is monotonically related to IQ, controlling for wealth, income, age, and other demographic and occupational information. The high correlation between IQ and participation exists even among the affluent. Supplemental data from siblings, studied with an instrumental variables approach and regressions that control for family effects, demonstrate that IQ's influence on pa…
Can psychology-guided information disclosure induce borrowers to lower their use of high-cost debt? In a field experiment at payday stores, we find that information that makes people think less narrowly (over time) about finance costs results in less borrowing. In particular, reinforcing the adding-up dollar fees incurred when rolling over loans reduces the take-up of future payday loans by 11%…
Affordable loss involves decision makers estimating what they might be able to put at risk and determining what they are willing to lose in order to follow a course of action. Using the entrepreneur's new venture plunge decision, this article combines insights from behavioral economics to develop a detailed analysis of the affordable loss heuristic. Specifically, we develop propositions to expl…
We construct a new dataset to examine herding behavior in the ASEAN-5 (Indonesia, Singapore, Malaysia, the Philippines and Thailand) and the US stock market. Our dataset consists of daily closing prices on the most liquid stock indices in the ASEAN-5 and the US stock market. Based on the Newey?West estimator, we show that the dominant global factor influencing herding behavior is the US federal…
Depart from a decision-making process that incorporates intertemporal choices based on behavioral economics theory, we evaluate acceptance of smoking cessation contracts among smokers in Greater Jakarta. By using a potential gain-losses design, negative penalties of different magnitudes, this study finds interesting issues regarding the decision-making process that violates the standards of eco…