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on Cognitive and Behavioural Economics |
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Issue of 2024‒09‒16
two papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Diarmaid Ó Ceallaigh (Economic and Social Research Institute, Dublin); Kirsten I.M. Rohde (Erasmus University Rotterdam and Maastricht University); Hans van Kippersluis (Erasmus University Rotterdam) |
| Abstract: | Anecdotally, physical activity appears to be a textbook example of time in- consistency, which is the failure to follow through on ex-ante preferences and plans. Interestingly, our longitudinal survey finds that, over a fort- night, exercising more than preferred/planned is actually more prevalent than exercising less. However, over time a majority of our sample exercise less than preferred/planned in at least one of two consecutive fortnights. We find little evidence that time inconsistency is associated with present bias, its most popular explanation in economics. We find instead that it is associated with time-varying affective psychological processes such as willpower and temptations. |
| JEL: | C21 D91 I12 |
| Date: | 2024–04–25 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240028 |
| By: | Bent Flyvbjerg; Alexander Budzier; M. D. Christodoulou; M. Zottoli |
| Abstract: | The paper explores "uniqueness bias, " a behavioral bias defined as the tendency of planners and managers to see their decisions as singular. For the first time, uniqueness bias is correlated with forecasting accuracy and performance in real-world project investment decisions. We problematize the conventional framing of projects as unique and hypothesize that it leads to poor project performance. We test the thesis for a sample of 219 projects and find that perceived uniqueness is indeed highly statistically significantly associated with underperformance. Finally, we identify how decision makers can mitigate uniqueness bias in their projects through what Daniel Kahneman aptly called "decision hygiene, " specifically reference class forecasting, premortems, similarity-based forecasting, and noise audits. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.07710 |