The empirical relationship between nonstandard economic behaviors

Does boredom affect economic risk preferences?

Previous literature and conventional wisdom have led researchers to believe that boredom increases economic risk taking, but the evidence in support of this conclusion is limited and has important shortcomings. In four experiments (including more than 1,300 subjects), we systematically studied the effects of boredom on economic risk preferences. Across different risk elicitation tasks, boredom inductions, incentive schemes, subject pools, and using both reduced form and structural analyses, we consistently failed to find an effect of boredom on risky decisions. Our results disprove that boredom leads to even small increments in risk taking in one-shot elicitation tasks, and small to medium increases in multiple-choice elicitations. These findings question an important established belief, contribute to better understand the consequences of boredom, and have substantive implications for experiments on economic decision making.

Can nudging overcome procrastinating on preventive health investments?

A fundamental puzzle about human behavior is low investment in preventive health inputs. Present-biased preferences have frequently been put forth as a theoretical explanation for this, but with limited empirical evidence supporting it, especially in developing countries. We extend our previous analysis of a field experiment testing advertising strategies to increase demand for a potentially life-saving preventive health technology, voluntary medical male circumcision. Offering compensation of US$10 conditional on a complement to the procedure, a short counseling session at a providing clinic, tripled uptake of the procedure. This is consistent with the idea that subsidizing a complement encouraged procrastinating men with latent demand to invest in preventive health. In addition, framing the basic advertisement using the statement "Are you tough enough?" doubled uptake.

Decision-Making under Uncertainty: How Easterners and Westerners Think Differently

It has long been known that Easterners exhibit more conservative attitudes, cautiousness behaviors, and self-control ability than Westerners; people in Eastern countries show stronger defensive reactions to societal threats than Western people. Are East Asians really risk averters or do some richer underlying preferences drive their behaviors in their decision-making under uncertainty? To answer this question, we examined the risk and ambiguity attitudes of East Asian populations in both gain and loss domains using classical behavioral economic experimental methods. Based on our sample of university students, we found that Easterners are more risk intolerant but more willing to accept ambiguous conditions than their Westerner counterparts in the gain domain. Perhaps surprisingly, Eastern people and Western people have a similar attitude toward risk and ambiguity in the loss domain. The higher level of risk aversion observed among East Asians may be due to the cultural difference between Western countries and Eastern countries. Historically, such risk aversion may make sense, because it would minimize the influence of numerous ecological and historical threats and socio-political practices. Our findings suggest that models that were designed to analyze and predict aggregate behaviors and markets may be ineffective for Eastern populations, and, in the future, it is of significance to develop appropriate representative agent models from the eastern perspective.