Recordings of Independent Interest from the Course Behavioral Economics

Several (parts of) recordings may be of interest on their own, and can be studied independently, in this (broad) course. Some are listed below. Here is a more extensive alphabetic list of topics with links.

• Ordinal revolution in economics
  8 minutes: recording 1.03 (from 1:45 to 9:30);   slides 15-20
  How economics in 1930s chose choice-data as its empirical primitive;
  homo economicus; Vienna circle; revealed preference paradigm

  
  

• Revealed preference
  9 minutes: recording 1.04 (0:20-9:15);   slides 22-24
  How to derive binary preferences from general choices;
  weak axiom of revealed preference (WARP)

  
  

• Risk and expected utility
  10 minutes: recording 1.05 (0:00-9:40);   slides 29-35
  von Neumann-Morgenstern behavioral foundation of expected utility;
  vNM-independence

  
  

• Time and discounted utility
  12 minutes: recording 1.06;   slides 39-42
  Koopmans’ behavioral foundation of discounted utility;
  stationarity; impatience; additive separability

  
  

• Welfare
  9 minutes: recording 1.07 (0:00-9:22);   slides 43-47
  Harsanyi’s behavioral foundation of utilitarianism
  Pareto optimality; (no) equity

  
  

• Arrow’s voting paradox
  5 minutes: recording 1.08 (0:28-5:30);   slides 50-53
  Also Condorcet paradox

  
  

• Allais paradox
  20 minutes: independent recording
  Prevailing violation of expected utility for risk;
  violation of independence; most controversial debate on rationality in decision theory

  
  

• Ellsberg paradox
  6 minutes: independent recording (0:00-6:14)
  Prevailing violation of expected utility for uncertainty;
  ambiguity

  
  

• Present bias; time inconsistency
  7 minutes: recording 1.11 (0:00-7:28);   slides 62-64
  Definition, and discussion of rationality;
  immediacy effect; overweighting the present

  
  

• Preference reversals
  7 minutes: recording 1.12 (0:00-7:00);   slides 65-71
  Heaviest blow to classical approach;
  scale compatibility

  
  

• Emotions in game theory
  11 minutes: recording 1.13 (0:00-11:00);   slides 72-78
  Deviations from Nash equilibrium;
  ultimatum game; trust game; fairness; altruism

  
  

• Biases and heuristics
  6 minutes: recording 1.14 (0:00-5:30);   slides 81-87
  Representativeness heuristic; Linda et al.

  
  

• Original 1979 prospect theory
  22 minutes: recording 2.02 (0:00-22:26);   slides 96-107
  Historical meaning & definition;
  probability weighting; inverse-S; co-existence of gambling and insurance

  
  

• Chew’s weighted utility
  12 minutes: recording 2.03;   slides 108-113
  Betweenness

  
  

• Gul’s disappointment aversion
  11 minutes: recording 2.04;   slides 114-119
  Betweenness

  
  

• Quiggin’s rank-dependent utility
  6 minutes: recording 2.05 (0:00-6:12);   slides 120-123
  Rank-dependence;
  History; restoration of stochastic dominance; restoration of prospect theory

  
  

• Biseparable utility
  4 minutes: recording 2.05 (6:37-10:50);   slides 125-127
  Convenient model for two outcomes;
  combines many models for risk, and for ambiguity

  
  

• Neo-additive utility
  11 minutes: recording 2.06 (0:00-11:25);   slides 128-135
  Overweighting best and worst outcomes;
  very tractable

  
  

• Critics of prospect theory
  2 minutes: recording 2.06 (12:32-14:35);   slides 138-138
  Experimental economists; Gigerenzer;
  thesis-antithesis-synthesis

  
  

• Decreasing impatience & stationarity
  12 minutes: recording 2.07 (0:38-end);   slides 140-145
  Definitions

  
  

• Hyperbolic discounting
  16 minutes: recording 2.08;   slides 145-150
  Loewenstein & Prelec's (1992) two-parameter model
  original, specific, hperbolic model; not the later very broad (mis)use of the term hyperbolic

  
  

• Quasi-hyperbolic discounting
  7 minutes: recording 2.09;   slides 151-157
  Overweighting the present
  beta-delta model; very tractable; popularized by Laibson

  
  

• Unit invariance discounting
  15 minutes: recording 2.10 (0:00-14:55);   slides 157-161
  Only discount family (in 2023) that can accommodate increasing impatience

  
  

• Fehr-Schmidt welfare
  10 minutes: recording 3.01 (0:58-10:54);   slides 166-169
  Inequality aversion;
  very tractable

  
  

• Kahneman’s experienced utility
  3 minutes: recording 3.01 (11:20-13:56);   slides 171-172
  Abandons revealed preference;
  uses only introspective experiences directly at moment of experiencing

  
  

• Happiness
  2 minutes: recording 3.01 (13:56-17:25);   slides 173-174
  Abandons revealed preference;
  uses introspective judgments of happiness

  
  

• Prospect theory - improving QALYs
  8 minutes: recording 3.04 (0:19-8:10);   slides 223-225
  Prospect theory improves quality-of-life measurements

  
  

• Prospect theory - insurance
  3 minutes: recording 3.04 (8:11-11:28);   slides 226-227
  Prospect theory turns insurance upside down

  
  

• Arbitraging time inconsistency
  4 minutes: recording 3.05 (0:14-4:19);   slides 230-230
  Pumping money (arbitrage) out of time inconsistency

  
  

• Naive versus sophisticated
  8 minutes: recording 3.06 (0:00-7:56);   slides 233-241
  Procrastination under sophistication and naivety

  
  

• Decoy effect
  5 minutes: recording 3.08 (0:56-6:08);   slides 251-254
  Violating weak axiom of revealed preference;
  context effect; decoy/attraction/asymmetric-dominance effect

  
  

• Compromise effect
  2 minutes: recording 3.08 (6:08-7:58);   slides 255-257
  Violating weak axiom of revealed preference;
  

  
  

• Endowment effect
  9 minutes; recording 3.09;   slides 260-264
  Loss aversion; WTP-WTA discrepancy