In der ersten Abhandlung untersuche ich die Auswirkungen von Informationsfriktionen und Aufwandskosten auf die Effektivität von Steuervergünstigungen bei der Förderung von Spenden für wohltätige Zwecke. Mittels eines groß angelegten Umfrageexperiments und einem Feldexperiment prüfe ich empirisch, ob die Verringerung von Informationsfriktionen durch Hervorhebung von Steuervergünstigungen und Bereitstellung von Informationen über die Höhe von Steuervergünstigungen Spendenentscheidungen verändert. Meine Ergebnisse zeigen, dass die Spenden steigen, wenn Steuervergünstigungen hervorgehoben und Informationen bereitgestellt werden. Ich lege dar, dass der Hauptverhaltensmechanismus, der Informationsfriktionen zugrunde liegt, Unaufmerksamkeit ist. Die zweite Abhandlung ist eine gemeinsame Arbeit mit Steffen Altmann, Armin Falk, Paul Heidhues und Rajshri Jayaraman. In dieser Arbeit untersuchen wir die Auswirkungen von voreingestellten Beträgen auf Spenden für wohltätige Zwecke in einem groß angelegten Feldversuch auf einer Online-Spendenplattform. Wir beobachten eine starke Auswirkung von voreingestellten Beträgen auf das individuelle Verhalten, stellen jedoch fest, dass die Gesamtspende nicht von voreingestellten Beträgen beeinflusst wird. Mit einem Strukturmodell wird untersucht ob die Personalisierung von voreingestellten Beträgen die Spendeneinnahmen erhöhen kann. In der dritten Abhandlung, die in Zusammenarbeit mit Rajshri Jayaraman und Michael Kaiser verfasst wurde, untersuchen wir gemeinnützige Spenden für Naturkatastrophen auf einer großen Online-Plattform. Wir beobachten, dass der Großteil der Spenden für wohltätige Zwecke an einen winzigen Teil der Naturkatastrophen geht, bei denen es sich in der Regel um besonders schwere Katastrophen handelt, über die in den Medien berichtet wird. Unter Verwendung eines Ereignisstudiendesigns finden wir Hinweise, die mit zwei Erscheinungsformen der Spenderermüdung übereinstimmen, jedoch nicht mit einer dritten. / In the first essay, I study the implications of information frictions and hassle costs for the effectiveness of tax incentives in encouraging charitable giving. Empirically, I test whether mitigating information frictions by making tax incentives more salient and by providing information on the magnitude of tax incentives alters donation decisions by conducting a large-scale survey experiment, representative of the German adult population and I complement this with a large-scale field experiment on an online donation platform. My findings indicate that when tax incentives are made salient, and when information is provided, donations increase. I find that the main behavioral mechanism underlying information frictions is inattention. Analyzing who responds more to salience and information provision shows that it is predominantly individuals that face lower hassle costs and have high incomes. The second essay is joint work with Steffen Altmann, Armin Falk, Paul Heidhues, and Rajshri Jayaraman. In this paper, we study the effects of defaults on charitable giving in a large-scale field experiment on an online fundraising platform. We document a strong effect of defaults on individual behavior but nevertheless find that aggregate donation levels are unaffected by defaults. In contrast, co-donations increase in the default amount. We complement our experimental results with a structural model that investigates whether personalizing defaults based on individuals’ donation histories can increase donation revenues. In the third essay, which is joint work with Rajshri Jayaraman and Michael Kaiser, we investigate charitable donations to natural disasters on a large online platform. We document that the bulk of charitable donations go to a tiny fraction of natural disasters, which tend to be severe disasters that receive media coverage. Using an event study design, we find evidence consistent with temporal fatigue and donor fatigue, but not with crowding out.

Unterscheidet sich die Ausprägung sozialer Präferenzen zwischen Unternehmern und Nicht-Unternehmern? Beeinflussen die sozialen Präferenzen von Unternehmern welchen Geschäftstyp (soziales vs. kommerzielles Unternehmen) sie gründen? Haben soziale Präferenzen einen Einfluss auf produktive und/oder unproduktive unternehmerische Motive? Spielt die Persönlichkeitsstruktur in diesem Kontext eine Rolle? Die vorliegende Dissertation behandelt diese Fragen anhand von vier experimentellen Studien mit Unternehmern, Landwirten, Studierenden der Betriebs- und Volkswirtschaftslehre, sowie Mitarbeitern, Kollaboratoren und Investoren von Start-up-Unternehmen. Dabei werden unterschiedliche Methoden in Labor, Online, sowie „Lab-in-the field“ Experimenten angewendet. Die Ergebnisse zeigen, dass Unternehmer im Vergleich zu den anderen Testgruppen, generell stärker ausgeprägte soziale Präferenzen besitzen, insbesondere bezüglich kooperativer Eigenschaften. Darüber hinaus wird kein Zusammenhang zwischen den sozialen Präferenzen von Unternehmern und ihrer Entscheidung ein soziales oder kommerzielles Unternehmen zu gründen gefunden. / How do entrepreneurs’ social inclinations compare to those of non-entrepreneurs? Does the social preference structure of entrepreneurs provide us with information regarding the business type they choose to operate (i.e., whether they choose to run a social business versus a commercial business)? Do social preferences relate to (un)productive entrepreneurial motives? Does personality play a role in this context? This dissertation addresses these research questions by conducting four experimental studies with actual entrepreneurs, business and economics students, farmers, and start-up employees, collaborators and investors. Thereby, different methods are applied in laboratory, online, and lab-in-the-field experiments. The findings suggest entrepreneurs to hold generally stronger social tendencies, in particular in relation to cooperation. No link between social preferences and the choice of founding a social or commercial business is found.

Kapitel 1: Narrative persuasion (mit Kai Barron) Anhand eines Experiments untersuchen wir die Verwendung von Narrativen in einem Kontext in dem Sender:innen möglicherweise andere Anreize haben als Empfänger:innen. Unsere Ergebnisse zeigen, dass Sender:innen eigennützige Narrative konstruieren und sie auf objektive Informationen zuschneiden. Desweiteren finden wir, dass Sender:innen in der Lage sind, die Erwartungen von Empfänger:innen zu verändern. Drittens ermitteln wir, dass Empfänger:innen Narrative überzeugend finden, die gut zu den objektiven Informationen passen. Schließlich stellen wir fest, dass es schwierig ist, gegen narratives Überreden zu schützen. Kapitel 2: Signaling motives in lying games Dieses Kapitel untersucht ein Lügenspiel, in dem Agent:innen ihren moralischen Typ signalisieren. In der theoretischen Analyse zeigt sich ein Signalisierungsmotiv, bei dem es den Agent:innen missfällt, der Lüge verdächtigt zu werden, und bei dem einige Lügen stärker stigmatisiert werden als andere. Die Gleichgewichtsvorhersage des Modells kann experimentelle Daten aus früheren Studien erklären. Ich verdeutliche die Beziehung des untersuchten Modells zu Modellen in denen Agent:innen eine Abneigung haben, des Lügens verdächtigt zu werden und biete Anwendungen auf Narrative, Lernen und das Offenlegen von Lügen. Kapitel 3: Because I don't deserve it: Entitlement and lying (mit Daniel Parra) Wir untersuchen die Auswirkungen von Anspruchsdenken auf die Bereitschaft zu lügen. In einem Laborexperiment erhalten Teilnehmer:innen entweder ein hohes oder niedriges Einkommen. Das Einkommen wird entweder leistungsabhängig oder unabhängig gezahlt. Die Ergebnisse zeigen folgendes: Unter Teilnehmer:innen die ein leistungsabhängiges Einkommen erhalten haben, lügen diejenigen, die weniger Geld verdient haben, weniger als diejenigen, die mehr verdient haben. Wir finden keine Unterschiede bei denjenigen die lügen können, um leistungsunabhängiges Einkommen zu behalten. / Chapter 1: Narrative persuasion (with Kai Barron) Using an experiment, we examine the use of narratives as a persuasive tool in a context where senders may hold incentives that differ from those of receivers. Our results reveal several insights about the underlying mechanisms that govern narrative persuasion. First, we show that advisors construct self-interested narratives and make them persuasive by tailoring them to fit the objective information. Second, we demonstrate that advisors can shift investors' beliefs about the future performance of a company. Third, we identify the types of narratives that investors find convincing. Finally, we find that narrative persuasion is difficult to protect against. Chapter 2: Signaling motives in lying games This chapter studies the implications of agents signaling their moral type in a lying game. In the theoretical analysis, a signaling motive emerges where agents dislike being suspected of lying and where some lies are more stigmatized than others. The equilibrium prediction of the model can explain experimental data from previous studies, on partial lying, where individuals lie to gain a non-payoff-maximizing amount. I discuss the relationship with theoretical models of lying that conceptualize the image concern as an aversion to being suspected of lying and provide applications to narratives, learning, and the disclosure of lies. Chapter 3: Because I don't deserve it: Entitlement and lying (with Daniel Parra) We study the effect of entitlement on the willingness to lie. In a laboratory experiment, participants receive either a high or low endowment. In one treatment, the allocation depends on participants' performance, and in the other, it depends on random draw. Our study shows that entitlement influences lying in an intuitive direction: when performance determines income, those who earn less money lie less than those who earn more. We do not find differences in lying when participants lie to keep windfall endowments.

The experiments presented and analyzed in this dissertation concern two well-established phenomena in behavioral economics: that human decision makers hold biased beliefs about probability and that free-form communication between economic agents promotes cooperation far in excess of what standard theory predicts. First, Chapter 2 studies subjective probability, focusing on the well-established existence of both the Hot Hand and Gambler's Fallacies — the false expectation of positive and negative autocorrelation, respectively. Both biases are prevalent throughout a wide variety of real-world contexts; what causes a person to favor one over the other? We conduct an experiment in which we observe fully informed subjects switching between the Hot Hand and Gambler's Fallacies when predicting future outcomes of mathematically identical sequences. Subjects exhibit the Gambler's Fallacy when predicting single outcomes but favor the Hot Hand when asked explicitly to estimate probabilities. Connecting our results to existing theory suggests that very subtle changes in framing lead decision makers to employ substantially different approaches to form predictions. The remainder of this dissertation studies cheap talk communication between human subjects playing incentivised trust games. In Chapter 3, we study free-form communication using a dataset of over 1000 messages sent between participants in a laboratory Trust game. We employ Natural Language Processing to systematically generate meaningful partitions of the messages space which we can then examine with established regression approaches. Our investigation reveals features correlated with trust that have not previously been considered. Most notably, highly detailed, specific promises establish trust more effectively than other messages which signal the same intended action. Additionally, we observe that the most and least trusted messages in our dataset differ starkly in their quality. Highly trusted messages are longer, more detailed, and contain fewer grammatical errors whereas the least trusted messages tend to be brief and prone to errors. In Chapter 4, we examine whether the difference is message quality affects trust by acting as a signal of effort. We report the results of an experiment designed to test whether promises which require higher levels of effort result in greater trust from their recipients. We find that more costly promises lead recipients to trust more frequently. However, there is no corresponding, significant difference in the trustworthiness of their senders. Further, when asked their beliefs explicitly, recipients do not believe that higher cost promises are more likely to be trustworthy. This presents a potential challenge to our understanding of trust between economic decision makers. If effort increases trust without altering receivers' beliefs, receivers must be concerned with factors other than their own payoff maximization. We conclude by presenting a follow-up experiment where varying effort cost cannot convey the sender's intentions, however, the results are inconclusive. / Doctor of Philosophy / This dissertation presents three projects in which we examine how human decision makers' choices differ from those predicted by standard economic theory. The experiments we conduct cover two broad topics: the way humans estimate the probability of random events and how communication leads to greater cooperation between agents with potentially conflicting monetary interests. It is well established that humans often hold distorted beliefs about probability. Depending on the direction of their bias, these beliefs are consistent with either the Hot Hand or Gambler's Fallacy. In Chapter 2, we examine the factors which may cause people to change the direction of their bias. Subjects exhibit the Gambler's Fallacy when predicting single outcomes, but favor the Hot Hand when asked explicitly to estimate probabilities. Chapters 3 and 4 study cheap talk communication between decision makers — messages which carry with them no commitment mechanism. It is no surprise to the average person that communication may enhance cooperation and trust between people. Experimental economists have verified this intuition in laboratory experiments and found that free-form communication is particularly effective. However, the precise mechanism through which free-form communication enhances cooperation is unclear. In Chapter 3, we collect a large dataset of free-form messages transmitted between players of an investment game. We then employ Natural Language Processing tools, novel to the Economics laboratory, to parse the unstructured data and identify message features associated with changes in trust and trustworthiness. Chapter 4 continues to examine communication, investigating whether the effort required to a promise affects its perceived or actual trustworthiness. We find that higher effort promises lead to greater trust, but find no corresponding increase in trustworthiness.

This thesis is composed of two essays that study behavioral economics to motivate health-promoting behaviors. The first paper, "Does Nutrition Education Reduce Delay Discounting?," studies delay discounting, or delayed gratification, which is an important research topic because it plays a role in producing numerous health outcomes, such as obesity. It is important to understand how the delay discounting process relates to unhealthy diets. People who discount the value of future outcomes prefer immediate rewards (e.g., enjoyment/taste) even though a larger reward from delaying exists (e.g., good health status). In this paper, we aim to provide evidence over whether nutrition education reduces delay discounting. Our analysis, therefore, provides guidance for designing more effective interventions to help increase overall health. The second paper, "Are We Reaching Those Most In Need?: Motivation Profiles and Willingness-to-Participate," explores the potentially negative psychological spillover effects (i.e., "crowding out" effects), which can complicate incentives' effectiveness because it can make targeted behavior (i.e., the aim to improve one's health) less desirable. To understand this "crowding out" effect, our paper examines how different types of motivations (i.e., intrinsic and extrinsic motivations) influence people's willingness-to-participate in a weight control program with and without incentives. This analysis provides further guidance for designing more effective interventions by considering different recruitment strategies to target different individuals, which can minimize the negative spillover of incentives. / Master of Science / This thesis is composed of two essays that study the behavioral economics to motivate health-promoting behaviors. The first paper, “Does Nutrition Education Reduce Delay Discounting?,” studies delay discounting, or delayed gratification, which is an important research topic because it plays a role in producing numerous health outcomes, such as obesity. It is important to understand how the delay discounting process relates to unhealthy diets. People who discount the value of future outcomes prefer immediate rewards (e.g., enjoyment/taste) even though a larger reward from delaying exists (e.g., good health status). In this paper, we aim to provide evidence over whether nutrition education reduces delay discounting. Our analysis, therefore, provides guidance for designing more effective interventions to help increase overall health. The second paper, “Are We Reaching Those Most In Need?: Motivation Profiles and Willingness-to-Participate,” explores the potentially negative psychological spillover effects (i.e., ‘crowding out’ effects), which can complicate incentives’ effectiveness because it can make targeted behavior (i.e., the aim to improve one’s health) less desirable. To understand this ‘crowding out’ effect, our paper examines how different types of motivations (i.e., intrinsic and extrinsic motivations) influence people’s willingness-to-participate in a weight control program with and without incentives. This analysis provides further guidance for designing more effective interventions by considering different recruitment strategies to target different individuals, which can minimize the negative spillover of incentives.

This study examines the relationship between company management guidance, and ex-ante crash risk over the duration of 2008(Jan 2006-Dec 2009) financial crisis using the implied volatility skew, which is based upon ex-ante volatility implied by the pricing model developed by Black-Scholes (1973). The study finds that over the duration of this crisis period, management guidance decreases with a rise in ex-ante crash risk. Further, the study provides evidence on the relationship of management guidance and earnings volatility, and how that is affected by a firm's industry product concentration based on the Herfindahl-Hirschman Index (HHI) score.

De par leur nature scientifique, les sciences économiques visent, entre autre, à observer, qualifier, ainsi que quantifier des phénomènes économiques afin de pouvoir en dégager diverses prévisions. Ce mémoire se penche sur ces prévisions et, plus particulièrement, sur les facteurs pouvant biaiser les prévisionnistes au niveau comportemental en référant à l’effet d’ancrage, un biais propre à l’économie comportementale – une sous-discipline des sciences économiques. Il sera donc question de comprendre, par une analyse selon la discipline que représente l’économie comportementale, ce qui peut les affecter, avec un accent mis sur l’effet d’ancrage plus précisément. L’idée générale de ce dernier est qu’un agent peut être biaisé inconsciemment par la simple connaissance d’une valeur précédente lorsqu’il est demandé de faire une estimation ultérieure. De cette façon, une analyse des salaires des joueurs de la Ligne Nationale de Hockey (NHL) selon leurs performances passées et leurs caractéristiques personnelles, de 2007 à 2016, a été réalisée dans ce travail afin d’en dégager de possibles effets d’ancrage. Il est alors possible de constater que les directeurs généraux des équipes de la ligue agissent généralement de façon sensible et rationnelle lorsque vient le temps d’octroyer des contrats à des joueurs mais, néanmoins, une anomalie persiste lorsqu’on porte attention au rang auquel un joueur a été repêché. Dans un tel contexte, il semble pertinent de se référer à l’économie comportementale afin d’expliquer pourquoi le rang au repêchage reste une variable significative huit ans après l’entrée d’un joueur dans la NHL et qu’elle se comporte à l’inverse de ce que prévoit la théorie à ce sujet. / Economic analysis, by its nature, involves observing, qualifying and quantifying economic data with the ultimate goal of making forecasts. In this masters thesis, I am interested in factors that could bias a forecaster's behavior – with special focus on phenomena, like the anchoring effect, that have been proposed in behavioral economics. At a fundamental level, the anchoring effect states that an agent's ability to accurately forecast may be affected by placing unwarranted emphasis on certain economic variables. To study this effect, I analyze how the salaries of National Hockey League (NHL) players are determined by the players' characteristics and past performance. From the results, it would appear that NHL general managers are generally sensible and rational when it comes to using historical data to make decisions about player salaries. However, there is a persistent anomaly regarding the draft position of a player. Although one would not expect the draft position to be very important after eight years of experience in the NHL, the analysis shows that it is remains a significant determinant of player salary. Behavioral economics and more specifically, the anchoring effect, helps explain why this might be so.

Cette thèse étudie la trajectoire historique des enquêtes psychologiques produites au Survey Research Center de l’Université du Michigan à l’initiative de George Katona. Aujourd’hui, on ne retient de ces enquêtes que les indicateurs de confiance produits chaque mois par plus de cinquante pays pour analyser la conjoncture. Pourquoi continue-t-on à produire et à utiliser ces enquêtes et ces indicateurs alors qu’un consensus s’est produit en macroéconomie et en microéconomie autour d’un ensemble de modèles qui n’en font pas l’usage ? Pour répondre à cette question, on étudie plusieurs controverses qui se sont produites autour des enquêtes du Michigan entre 1944 et 1960. On montre que l’époque est caractérisée de décisions au sein des gouvernements et du monde des affaires. La thèse montre que si ces débats sont peu connus des économistes aujourd’hui, c’est parce qu’ils se sont poursuivis dans des champs disciplinaires périphériques à l’économie. Ces disciplines sont concernées par des problèmes pratiques dont les économistes théoriciens se sont progressivement détournés. En proposant une analyse des liens entre la théorie économique et sa mise en pratique, cette thèse offre une nouvelle manière d’appréhender l’histoire de la macroéconomie récente et de l’économie comportementale. L’histoire des dynamiques intellectuelles d’après-guerre ne se résume ni à des innovations théoriques, ni à un nouveau rapport entre la théorie et l’empirie. En effet, ces dynamiques reposent aussi sur la redéfinition des frontières entre la science et son art ; entre d’un côté l’économie et de l’autre le marketing et la conjoncture. / This dissertation looks at the historical development of George Kantona's psychological surveys at the Survey Research Center at the University of Michigan. The main legacy of this work has been the widespread adoption of confidence indicators. They are used each month by more than fifty countries and widely implemented by business managers and forecasters. How do we explain the widespread usage of these indicators despite a prevalent consensus in macroeconomics and microeconomics that does not consider them as important tools? In order to answer this question, we study several controversies that occurred around Michigan surveys between 1944 and 1960. It is shown that this era is characterized by many interdisciplinary exchanges guided by the practical needs of decision-makers in governments and private companies. I show that if economists know little about these debates, it is because they were maintained in disciplinary fields on the periphery of economics. These fields are centered on practical problems that theoretical economists progressively abandoned. This thesis offers a new way of understanding the history of recent macroeconomics and behavioral economics by proposing an analysis of the links between economic theory and its application in practice. For instance, the history of post-war intellectual dynamics cannot be reduced to theoretical innovations or to a new relationship between theory and empiricism. Indeed, these dynamics rely also on the transformation of the boundaries between the science and its art; between the economy on the one hand and marketing and forecasting on the other.

Bakgrund: Det finns ett starkt intresse kring klimat- och hållbarhetsrelaterade frågor idag vilket speglar sig i allmän opinion och i politiska debatter. Den rationella investeraren antas placera sina pengar med hänsyn tagen till beslutskriterier som risk och avkastning. Men frågan är om etiska och hållbara ställningstaganden kommer till uttryck i människors val av placeringar? Syfte: Syftet med denna uppsats är att testa ifall individer tenderar att välja socialt hållbara investeringar i större utsträckning då de reflekterar över sina attityder och värderingar kring etik och hållbarhet i samband med ett placeringsval. Teori: Studien grundar sig i en deduktiv ansats, där vi utifrån rådande teorier inom ekonomi och beteendevetenskap skapat ett antagande om människan. Antagandet är att människan investerar utifrån beslutskriterierna risk och avkastning, men att denne även har etiska värderingar och attityder som tenderar att falla bort vid placeringsvalet p.g.a. bristande rationalitet och kognitiv bias. Det uppstår därmed en dissonans mellan människans beteende och dess attityder och värderingar. Denna dissonansen ska reduceras genom en system 2 nudge som låter investeraren reflektera över sina värderingar och attityder rörande hållbarhet och etik innan placeringsvalet. Detta för att se om det kan leda till en högre andel placeringar i socialt hållbara investeringar. Empirisk metod: Den empiriska metoden bestod av ett enkätexperiment där två grupper av respondenter fick göra ett hypotetiskt placeringsval, men där experimentgruppens enkät innehöll en system 2 nudge innan valet. Resultat: Vår nudge fick ingen signifikant påverkan på respondenternas placeringsval. Detta kan delvis förklaras av ett felaktig antagande om människan som redan placerade mer hållbart än förväntat samt bristande effektivitet av vår system 2 nudge i kontexten av denna studie. / Background: Climate- and sustainable related questions are strong topics in today’s society and are highly debated by decision-makers. The rational investor is supposed make investments based on risk and return. But the question is if the concerns about sustainability and ethics really influence the decision of the investor? Purpose: The purpose of this study is to test if individuals tend to invest more in SRI (Socially responsible investments) if they have a moment of reflection regarding ethics and sustainability before an investment decision. Theory: We apply a deductive approach, by creating an assumption of how humans function according to economics and behavioral science. Due to theory, humans can be seen as rational investors who solely make investment decision based on risk and return. But they can also have strong attitudes and values regarding social responsibility, which because of bounded rationality and cognitive bias tend not to be included as criteria in investment decisions. This creates a dissonance between the person's values and attitudes and their investment decisions. To make people invest more in consonance with their values and attitudes we construct a system 2 nudge that let them reflect about their view of ethics and sustainability before an investment decision. This can lead to increased investments in SRI. Empirical method: The empirical method consisted of a survey experiment in which the participants were asked to make a hypothetical investment decision. The treatment survey contained a system 2 nudge before the investment decision, while the control survey remained neutral. Results: The nudge, or the reflection of attitudes and values by the investor, had no significant effect on their investment decision. This can partly be explained by a wrong assumption of the rational investor who already invested according to their values and attitudes, and by a lack of effectiveness of our system 2 nudge in the context of this study.

Diese Dissertation erforscht, auf welchen unterschiedlichen Wegen Informationsverarbeitung Investitionsentscheidungen beeinflusst. Auf der Basis kontrollierter Laborexperimente wird untersucht, wie Entscheidungen mit der Art der Information sowie mit dem Entscheidungskontext variieren. Im ersten Kapitel legt ein Experiment die Schwierigkeit mit hypothetischem Denken bzw. mit dem Lernen aus hypothetischen Ereignissen offen. Im Kapitel Zwei untersucht ein anderes Experiment, wie Informationsverarbeitung die Reaktionen der Investoren auf Ambiguität verändert, denn ein eindeutiges, optimales Lernverhalten gibt es unter Ambiguität nicht. Das letzte Kapitel stellt anhand desselben Experiments die Unabhängigkeit zwischen dem Lernprozess und den Risikopräferenzen in Frage. / This dissertation investigates various channels through which information processing affects investment decisions. Controlled laboratory experiments allow for studying how subjects’ decisions vary with the type of information and the decision-context. The experiment in the first chapter discloses the difficulty with contingent reasoning, i.e. learning from hypothetical events. A different experiment in Chapter Two analyzes how information processing changes investors’ reactions to ambiguity—an environment with multiple rational learning rules. Using the same experiment, the last chapter questions the independence between belief updating and risk preferences.