This experimental economics thesis uses the Classical Secretary Problem (CSP) to simulate a sequential observation and selection problem in the context of employer hiring decisions. The CSP is paired with an overconfidence test to examine whether there is a relationship between a subject’s level of overconfidence and his or her success in making optimal hiring decisions. No significant differences were found between subjects with varying overconfidence levels, but significant deviation was found between subjects’ behaviors and the selections dictated by the optimal policy. Significant learning among all subjects was also discovered between the first and second half of the CSP, indicating a tendency among subjects to revise strategies and correct mistakes.
This online journal article, by Randall J. Stiles and Jill Tiefenthaler, appeared in the July/August 2012 issue of EDUCAUSE review. The article addresses five risk areas that leaders in higher education might address when putting forth an analytics initiative.
This thesis uses the Occupy Wall Street movement as a case study to analyze how individuals decide to take part in social movements. Moving away from rational utility models, it applies a emotion-based model of decision-making that better explains collective action participation. Interviews with individual activists provided information about their incentives, which were then compared with results from the social psychology research on behavior in group contexts. The results mirrored this literature, and showed that when deciding to act, individuals calculate a broad range of incentives, many of which are entirely non-material. As they come to identify with a movement, these incentives are consciously and subconsciously altered to favor participation. Simultaneously, collective identification comes to guide decisions to participate. Recognition of the specific incentives relevant in social movement contexts should facilitate understanding of movement dynamics for academics and movement organizers alike.
For individual investors deciding upon an investment strategy involves self evaluation of aversion to risk, social responsibility, and desired returns. Traditional economic theories proclaim individuals are rational creatures who make investment decisions unemotionally to obtain a desired portfolio performance. Recent economists have challenged these foundational theories by proposing that the decision making process for individuals includes abstract factors of emotions and behavioral ripostes. Through research and surveying individuals from varying demographics, the effect of different emotionally states on investment strategies can be examined. The hypothesis states that younger or less investment educated individuals are more susceptible to emotionally-driven investment decisions than older more experienced investors. The results show these demographics do have differing effects on individuals' investment strategies.
Modeling decision making behavior has challenged economist and psychologist alike. This study uses data from the game show Deal or No Deal from the Netherlands, Germany, United States to study the factors that influence decision making. Each decision on the show is the choice between a definite amount offered by a “banker” or the choice to continue playing in hopes of winning more money, much like a stock option holder’s decision to exercise their option. Using a model similar to one that was used to determine the psychological factors that affected stock option exercise activity, this study seeks to find what drives the decisions on the show. The findings are that the bank offers are not significant, however, the percent of the expected value of the bank offer is. This suggests that players are viewing their choice in a complex manner, expanding the influences outside of the offer and what is expected if they keep playing. The results of how contestants play in comparison to one another varied across countries in significance, indicating that cultural difference may play a role in decision making behavior.
This thesis explores the significant factors affecting the decision of family ranchers to produce grass-finished beef. While the majority of mainstream cattle producers sell cattle to be finished in grain-based supplemental feeding programs, a grass-finished beef market has emerged as an alternative to conventional grain-finished beef production. Among the key determinants of ranchers choosing to produce grass-finished beef are health issues, personal beliefs, the abundance of grass as a natural food source, and the opportunity to establish market leadership. Relying on six case studies of Wyoming ranches producing grass-finished beef, this thesis uses firsthand accounts of cattle market participants to determine how the aforementioned variables impact the benefits, challenges and costs of participation in this niche market.