Svetlana Pevnitskaya is an Experimental Economist with interests in game theory and individual decision-making. Prof. Pevnitskaya contributed to a number of areas in economics including studies of auctions, dynamic games with externalities, the effect of options to reward and punish on economic behavior, and more recently information aggregation in networks and decision making under uncertainty. Prof. Pevnitskaya holds PhD from USC with pre-doctoral work at Caltech and is Associate Professor of Economics at Florida State University.

Paul J. Healy is a Professor of Economics at Ohio State University. He earned his PhD in Social Science from Caltech in 2005, after completing his bachelor’s degree at Purdue University in 2000. Before Ohio State, Dr. Healy was an Assistant Professor of Economics at Carnegie Mellon’s Tepper School of Business. His research focus is wide-ranging, with papers on mechanism design and implementation, behavioral game theory, overconfidence, public goods, Bayesian decision theory, individual decision-making under uncertainty, and experimental methodology. He has published in the American Economic Review, the Journal of Political Economy, Psychological Review, Management Science, and several other field and general-interest journals. In 2009 Dr. Healy received an NSF CAREER award for his work on behavioral mechanism design. He is currently an associate editor of American Economic Review: Insights, is on the executive committee of the Economic Science Association, and previously served as associate editor of European Economic Review.

Rationality and common belief of rationality (RCBR) is a standard benchmark in game theory. Yet, a body of experimental research points to departures from RCBR. These RCBR departures are typically viewed as an artifact of limits in the ability to engage in interactive reasoning, i.e., to reason through sentences of the form “I think, you think, I think, etc …” We develop a conceptual and practicable framework to test the hypothesis that departures from RCBR are determined by limits in interactive reasoning. The identification strategy benefits from not relying on auxiliary measures of “ability” or “sophistication” that can capture concepts distinct from limited ability to engage in interactive reasoning. We conduct an experiment based on this identification strategy and show that at least 60% of subjects have RCBR departures that are not an artifact of limited ability to engage in interactive reasoning. Moreover, the experiment provides insight into how players’ reason when they depart from RCBR. It suggests that players’ reasoning depends on certain natural heuristics. 

Amanda Friedenberg is a Professor of Economics at the University of Arizona. Her work includes game theory, political economy, and (newly) experiments.

I design a laboratory experiment to study why experience fails to prevent retail investors from trading speculatively and suffering losses in expectation.  Subjects in the experiment observe private information and then decide whether to swap Arrow securities with a partner. A no-trade theorem applies to the setting so that under rational expectations, trade should never be realized. I show that experience reduces trade resulting from overconfidence, but fails to correct strategic naivete, as experienced subjects continue to ignore the selection bias implied by their partners’ willingness to trade. This result is most salient for subjects with high-quality information, who trade more frequently after learning their information reliably predicts the state of the world but do not choose to trade less when learning their partners’ information is similarly high-quality. After revealing their partners’ information about the state of the world—thus removing the role of strategic naivete—I find subjects are less willing to trade and are more responsive to their partners’ information quality. My results imply retail investors lose from trading because they fail to consider the information driving others’ trading decisions and repeated experience does not fully correct this bias.

Joshua Knobe is a professor of cognitive science and of philosophy at Yale University. His research focuses especially on how people employ core concepts, such as the concept of causation, intention, knowledge, freedom and purpose.  Much of his work is in the field of experimental philosophy.

Using a laboratory experiment, we identify whether decision makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report which of several axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their stated axiom preferences. We give them the opportunity to re-evaluate their decisions when lotteries conflict with desired axioms. We find that a majority of individuals want to follow the canonical axioms and revise their lottery choices to be consistent with them. We interpret this to mean that many axiom violations we observed were mistakes.

We present a field experiment to study the effects of non-monetary incentives on healthy food choices of 282 children in elementary schools. Previous interventions have typically paid participants for healthy eating, but this often may not be feasible. We introduce a system where food items are graded based on their nutritional value, involving parents or classmates as change agents by providing them with information regarding the food choices of their children or friends. We find parents’ involvement in the decision process to be particularly beneficial in boosting healthy food choices, with very strong results that persist months after the intervention.

Some transactions are restricted or prohibited, although people may want to engage in them (e.g., the sale of human organs, surrogacy, and prostitution). It is not well understood what causes feelings of indignation or repugnance.  We study two potential reasons: lack of agency of the parties and extreme consequences of the transaction. Limited agency arises, e.g., when one party cannot decide freely because she is not able to reject the transaction offered, a third person who profits from the transaction takes the decision on her behalf, or she is forced to proceed with the transaction due to social pressure. In a laboratory experiment, we ask spectators whether they want to prohibit a transaction or not. We find that transactions with extreme outcomes (listening to a painful tone) are more frequently prohibited than those with mild outcomes (waiting in the laboratory). We also show that lack of agency and extreme outcomes reinforce each other, since the combination of both properties leads to prohibition rates of up to 80 percent.