This thesis takes three different perspectives, using theoretical and experimental techniques, on time-inconsistent preferences and how the existence of multiple selves can affect both consumer behaviour and policy design. Across domains such as retirement saving, health, and educational achievement, intertemporal choice presents a challenge for both individuals and policymakers. The first paper, 'Choosing When to Nudge: Designing Behavioural Policy around Decision-Making Costs,' considers how behavioural policy, which has proven increasingly popular with policymakers, affects welfare. I find that for present-biased consumers, behavioural policies help some consumers but can inefficiently discourage others from optimizing. Such policies therefore have an ambiguous effect on welfare, and similar to traditional policies, can impose equity-efficiency tradeoffs. Monopolies may increase welfare given their incentive to simplify consumer decisions instead of exploit switching costs. The second paper, 'Virtue and Vice with Endogenous Preferences,' considers behaviour when preferences are affected by consumer decisions. I introduce agents whose temptation to consume in the present is affected by how much they choose to save for the future. I find that differences between agents can trap them in divergent paths of self-improvement -- saving more, they value the future more, making saving optimal -- or binging -- consuming more makes them indifferent to future costs, making consumption optimal. At the extreme, it is frequently an optimum for a consumer to consume their entire wealth. The final paper, 'Bet You Can't Eat Just One: Consumption Complementarity and 'Self'-Control' considers an intrapersonal game between a moderate cold self and a hot self that wants to indulge. In equilibrium, sophisticated selves best respond to each other's behaviour: the cold self over-abstains and the hot self over-indulges to avoid inducing the other state. I test these ideas in the lab, and find that subjects on a diet who were induced to consume a piece of chocolate before the experiment indulge more in chocolate during the experiment, even when the initial indulgence was imposed by the experimenter. Eating a piece of chocolate, this suggests, can induce a period during which chocolate is more appealing.

This work is mainly focused on the environment of stock markets. It aims to identify some psychological and sociological factors relating to investors' behaviour which may help to justify occurrence of excessive movements in stock market prices resulting in price "bubbles" and stock market crashes. It emphasizes that the assumptions for the validity of the Efficient Markets Hypothesis based on dominant position of rational investors in stock markets have been empirically undermined by number of experiments and observations. As one of the most vigorous alternative challenging the Efficient Market Hypothesis is now considered the theory of behavioural finance stressing some imperfections of human behaviour which may substantially influence dynamics of stock market prices in both directions.

This thesis is an investigation of how subjects behave in an individual binary choice decision task with the option to purchase or observe for free additional information before reaching a decision. In part 1 of this thesis, an investigative study is conducted with the intent to sharpen the view to literature concerning corresponding psychology and economics experiments designed to test decision tasks that involve purchasing and observing information from an imperfect message prior to taking a terminal action choice. This investigative study identifies areas of research that warrant further investigation as well as provides enhancements for execution in the subsequent experiment conducted in Part 2 & 3 of this thesis. In Part 2 & 3, I conduct an experiment to test how subjects behave in an individual binary choice decision task with the option to purchase or observe for free additional information before reaching a final decision. I find that subjects’ behaviour over time converges toward optimal decisions prior to observing an imperfect information signal. However, when subjects observe an imperfect information signal prior to their terminal choice there is greater deviation from optimal behaviour. I find in addition to behaviour that is reflective of a risk-neutral BEU maximizer, status quo bias, over-weighing the informational value of the message received and past statistically independent outcomes influencing future choices. The subjects’ willingness to pay (WTP) to use the additional information gathered from an imperfect message service when making a final decision was on average less than the risk neutral BEU willingness to pay benchmark. Moreover, as the informative value of the message increased, causing the BEU valuation to increase, subjects under-estimated the value of the message signal to a greater degree. Although risk attitudes may have influenced the subjects’ WTP decisions, it does not account for the increased conservative WTP behaviour when information became more valuable. Additionally, the findings from this study suggest that individuals adopt different decision rules depending on both personal attributes (i.e. skillset, gender, experience) and on the context and environment in which the decision task is conducted. / SSHRC grant: Social Sciences and Humanities Research Council via Dr. Bram Cadsby Professor Department of Economics, University of Guelph

Abstract Modern life has increasingly become intertwined with technology, and recent years have witnessed a growth in technologies that support people in, for instance, leading healthier and more sustainable lifestyles. At the centre of this growth has been persuasive systems design, which has been shown to have a positive effect on individuals’ behaviour and their use of systems. This dissertation consists of five studies, encompassing a literature review, two quantitative studies with a total of 227 respondents, and two constructive studies that address the central research question of the dissertation: How can integrating judgment and decision-making processes and persuasive software design patterns enhance the development of behaviour change support systems? The primary theoretical framework for the research is the Persuasive Systems Design model. This is a model that outlines the key requirements for developing persuasive systems, consisting of the theoretical underpinnings, persuasion context analysis, and four feature categories. In recent years, improving the design of persuasive systems to better achieve their intended objectives has been an important topic. This dissertation, in addition to examining the role of persuasive software features in influencing behaviour, also integrates behavioural economics and software design patterns into the design of persuasive systems. Additionally, the interplay between the categories and other constructs such as perceived competence is investigated through statistical analyses. Overall, results reveal that persuasive system features have an impact on the efficacy of behaviour change support systems. Additionally, integrating behavioural economics concepts that explain the reasons why individuals deviate from expected behaviour and software design patterns can help improve the development of persuasive systems and further enhance their efficacy. / Tiivistelmä Teknologia on yhä tiukemmin osa nykyelämää. Viime vuosina on tapahtunut kasvua ja kehitystä teknologioissa, jotka tukevat ihmisiä esimerkiksi elämään terveellisemmin ja ympäristöä säästäen. Tämän kasvun keskiössä on ollut vakuuttavien järjestelmien suunnittelu, jonka on osoitettu vaikuttavan positiivisesti sekä ihmisten käyttäytymiseen että järjestelmien käyttöön. Tämä väitöskirja käsittää viisi tutkimusta, sisältäen kirjallisuuskatsauksen, kaksi kvantitatiivista tutkimusta yhteensä 227 vastaajalla, ja kaksi konstruktiivista tutkimusta, jotka yhdessä vastaavat väitöskirjan päätutkimuskysymykseen: Kuinka arviointi- ja päätöksentekoprosessit sekä vakuuttavien järjestelmien suunnittelumallit yhdistämällä voidaan edistää käyttäytymisen muutosta tukevien järjestelmien kehitystä? Ensisijainen teoreettinen viitekehys tutkimukselle on vakuuttavien järjestelmien suunnittelumalli (Persuasive Systems Design model). Kyseinen malli määrittää keskeiset vaatimukset vakuuttavien järjestelmien kehittämiselle. Tärkeänä aiheena on ollut vakuuttavien järjestelmien suunnittelemisen edistäminen, jotta niillä voitaisiin paremmin saavuttaa aiotut päämäärät. Vakuuttavien järjestelmien ohjelmisto-ominaisuuksien vaikutuksesta käyttäytymiseen tutkimisen lisäksi väitöskirja yhdistää myös behavioristisen taloustieteen ja ohjelmistosuunnittelumallit vakuuttavien järjestelmien suunnitteluun. Lisäksi kategorioiden ja muiden käsitteiden, kuten koetun pätevyyden, vuorovaikutusta on tutkittu tilastollisen analyysin keinoin. Kaiken kaikkiaan tulokset paljastavat vakuuttavien järjestelmien ominaisuuksilla olevan vaikutusta käyttäytymisen muutosta tukevien järjestelmien vaikuttavuuteen. Lisäksi integroimalla behavioristisen taloustieteen konsepteja, jotka selittävät syitä, joiden vuoksi yksilöt käyttäytyvät odotetusta poikkeavasti, ohjelmistosuunnittelumalleihin, voidaan auttaa edistämään vakuuttavien järjestelmien kehittämistä ja parantaa niiden vaikuttavuutta.

This thesis addresses three themes relating to climate change. The first is which types of fossil fuel to leave in the ground when they can differ in both their extraction cost and emissions rate. The analysis shows that without resource constraints there will always be use of at least one fossil fuel in the steady-state. With exhaustion constraints, any fossil fuel that has a lower extraction cost than the marginal cost of the backstop will be extracted in finite time regardless of the emissions rate. The only environmental consideration is the timing of extraction rather than leaving fossil fuel stock in the ground forever. The second theme is how altruistic concern of individuals for the well-being of others influences the socially optimal consumption levels and optimal emissions tax in a global context. If individuals have altruistic concern but believe that their consumption is negligible, they will not change their behaviour. However, non-cooperative governments maximising domestic welfare will internalise some of the damage inflicted on other countries depending on the level of altruistic concern individuals have and the cooperative optimum also changes as altruism leads individuals to effectively experience damage in other countries as well as the direct damage to them. Still, for behaviour to change, individuals need to make their decisions in a different way. The third chapter develops a new theory of moral behaviour whereby individuals balance the cost of not acting in their own self-interest against the hypothetical moral value of adopting a Kantian form of behaviour, asking what would happen if everyone else acted in the same way as they did. If individuals behave this way, then altruism matters and it may induce individuals to cut back their consumption. But nevertheless the optimal environmental tax is exactly the same as the standard Pigovian tax.

The goal of the PhD thesis is to investigate the role of behavioural economics considerations for the performance of conservation auctions. The findings of the three scientific articles suggest that behavioural economics considerations like social (distributional) preferences and reference-dependent preferences may affect the attractiveness and economic performance of conservation auctions, respectively. The results of the first and second articles are based on laboratory experiments conducted with university students, in Germany. The third article implements a field experiment to measure farmers’ preferences over Payments for Ecosystem Services (PES) allocation mechanisms and the role of fairness therein, in the context of agrobiodiversity loss in Benin.

Konsumtionsbeteende är idag en viktig undersökningspunkt för att med säkerhet kunna genomföra implementeringar av nya policys inom konsumentpolitiken. Både klassiska nationalekonomiska teorier och beteendeekonomiska teorier används för att beskriva och förutsäga dessa beteenden, men det saknas undersökningar på deras faktiska kopplingar till olika typer av prissättning. Denna uppsats har gjort ett försök till att undersöka vilken påverkan en förändring i pris genom en förändring i paketstorlek har på efterfrågan. Den har även försökt ge en analys till om de förändringar som noteras är kopplade till beteendeekonomi eller klassisk nationalekonomisk teori. Med hjälp av en vanlig tidstrendsanalys tillsammans med en interrupted-time-series-analysis har försäljningstrenderna för försäljning i KG för två substituerande produkter skapats och jämförts. Dessa fastställer att förändringens påverkan framförallt stämmer överens med teorier gällande beteendeekonomi men att sambandet mellan en förändring i försäljningsnivå och en förändring i paketstorlek inte är säkerställt. Analyserna gjorda i denna studie blir därför inte fastställda och möjligtvis otillräckliga för att besvara den fråga som ställts. Jag som författare vill därför uppmana till att flera utvecklande studier inom ämnet bör utföras för att säkerställa möjliga resultat. / Consumer behaviour is today an important aspect of making quality decisions regarding policies on the consumer market. Both classical economical models and behavioural economical models are used to describe and predict these kinds of behaviours. Although todays studies on their connections to different methods of pricing are lacking. This paper tries to investigate what kind of impact a change in price by changing the size of the good has on demand. It also tries to produce an analysis on if this impact is connected with bevioural or classical economic theories. Based on a classical time-trend analysis together with an interrupted-time-series-analysis different trends for sales in KG regarding two substitutional products have been created. These determine that the effects on demand are most likely connected to behavioural economics but that the effects aren’t statistically significant. The analysis done in this paper therefore cannot be statistically determined and indicates that further studies on the subject need to be done to answer these questions with more certainty.

This study examines the claim that individuals misinterpret the mean of a dataset (displayed as a scatterplot) more when the convex hull of the dataset is less representative of the data. In addition, this study also tests whether outliers in the data can predict the magnitude of error that individuals make in interpreting the mean of the dataset. Lastly, the study investigates whether individuals’ interpretations are predicted better by the mean of the convex hull than by the full dataset’s mean. The method used to conduct these investigations is through a survey, followed by several linear regression analyses. Applications of this study include improving the communication of data in economic policy and business contexts, along with broader applications in extending models that heavily rely on agents’ interpretations of information: especially bounded rationality and social norm-based models. The results show that convex hull unrepresentativeness correlates positively with error in mean interpretation; however, that the convex hull mean is not predictive of the interpretations’ direction. Overall, the study contributes to the field of visual information interpretation by investigating the effect of data structure on its interpretation – an unexplored area of research. This is done while initiating the concretization of bounded rationality in economics, by exploring the idea that individuals perceive a general shape of the information presented to them rather than a detailed, full picture. This can lead to misinterpretations whenever the general shape (convex hull) is not representative of the dataset.

<p dir="ltr">This dissertation investigates strategic decision-making under conditions of environmental inequality. The three chapters explore various forms of inequality across different decision contexts</p><p dir="ltr">The first chapter examines the impact of income inequality on individuals' participation in multiple public goods investments. Specifically, it analyzes how a global club good opportunity influences local public goods provision in indefinitely repeated interactions within a linear public goods game using a voluntary contribution mechanism. The study varies global club entry costs and local community endowment compositions to assess their effects on contributions and welfare. It finds that income inequality does not significantly alter contribution behaviors in single public good settings under indefinitely repeated interactions. With the introduction of a global club good, lower entry costs lead to higher participation rates among subjects, resulting in increased total welfare for both homogeneous and heterogeneous communities. Conversely, higher entry costs reduce participation and overall welfare. Heterogeneous communities discontinue club use sooner than homogeneous ones. Efficiency, measured as realized payoff relative to maximal social benefits, declines across all treatments following the introduction of a global club good. Additionally, counterfactual simulations using an individual evolutionary learning model demonstrate that the welfare benefits of a global club good opportunity hinge on its ability to yield substantial social benefits compared to local public goods.</p><p dir="ltr">The second chapter explores how power inequality influences cooperation in a dynamic game where competition and cooperation evolve over time. This research, conducted as part of a collaborative project with Yaroslav Rosokha, Denis Tverskoi, and Sergey Gavrilets, examines cooperation dynamics in scenarios where cooperation's benefits depend on political power derived from a contest. The study highlights that incumbency advantages in political contests precipitate a rapid breakdown of cooperation within social dilemmas. Furthermore, it investigates behavioral disparities between groups and individuals, leveraging simulations based on the Arifovic and Ledyard (2012) individual evolutionary learning model to shed light on the difference observed in the experiment.</p><p dir="ltr">The third chapter investigates the impact of unequal positions in a directed communication network on individuals' optimal stopping rules and social learning outcomes. The study involves subjects making predictions about uncertain states of the world using private information and social information obtained through a directed network. Theoretical predictions suggest that individuals should wait when the benefit of waiting exceeds the associated cost. Empirical results confirm that subjects indeed wait longer in more connected networks or when waiting costs are low. However, deviations from equilibrium predictions indicate influences of bounded rationality (supported by quantal response equilibrium) and heuristic decision-making, where some subjects consistently wait for a single turn regardless of positional advantage. Importantly, under-waiting at an information aggregator's position has negative externalities on group-wide information acquisition.</p>

<p dir="ltr">The rise of digital media has allowed for unprecedented access to information. In particular, people are able to form beliefs based on information sources that span the full spectrum of reputation, information quality, and motivated biases. Such access is a double-edged sword because “with great power, comes great responsibility” (“Spider-Man”, 2002). Heterogeneity in information quality may be due to a variety of factors, and it is often up to the consumer to consider quality signals when evaluating the quality of information. My research explores this complicated process, and contributes to the understanding of how people demand and utilize information in different environments. I do so over three chapters. The first studies how people respond to signals of information quality in a sequential prediction game. In the second chapter, biased incentives are introduced in a prediction game experiment to test how intrinsic and extrinsic biases affect demand and utilization of information. The third chapter contains a survey in which subjects report their valuations of an X account that varies on political affiliation, occupation credentials, and number of followers.</p><p dir="ltr">My first chapter focuses on how subjects respond to signals of information quality. In it, subjects predict which of two urns was randomly chosen in each of 30 rounds. They observe a private ball drawn from the selected urn each round to help them make their prediction. The color of the ball signals the urn it came from. The subjects then sequentially broadcast their belief about which urn was selected for the session without revealing the color of the observed ball. Future subjects can use the previous broadcasts to infer additional information that may help them accurately predict the urn.</p><p dir="ltr">In the control, subjects exhibit very low utilization of previous predictions when informing their own behavior. While consistent with prior research, behaving in such a manner is suboptimal. To experiment on the malleability of subjects’ beliefs about the rationality of others, I implement two novel treatments. In the first, the subjects’ prediction order in the last 15 rounds is determined by their accrued earnings in the first 15 rounds, with highest earners predicting first. The prediction order is similarly determined in the second treatment, except a quiz on conditional updating ability is used. Subjects who score the highest on the quiz predict first. In both cases, the sorting mechanism is explained to the subjects.</p><p dir="ltr">Sorting on earnings yields a modest increase in valuations of previous subjects’ predictions. A much more significant increase is observed when sorting on ability. Additionally, the subjects who make the fewest irrational predictions (ones against the color of the ball when they do not have additional information to suggest otherwise) are the ones who score the best in the ability sort. Placing them at the beginning of rounds increases the entire round’s average earnings.</p><p dir="ltr">My second chapter uses a similar environment to study the role that bias plays in demanding and utilizing information. In it, participants predict which of two states (red or blue) each of 30 rounds was assigned. To aid them, participants observe two predictions from ‘experts,’ who are informed by a private signal with a known precision. Participants can bid to receive additional information about the state from two sources: a private signal and another independent expert’s prediction. Both sources’ precision is known. This method is the first of its kind, and allows for direct comparison between information types. The bid results are revealed once this process is complete. Participants then predict the state.</p><p dir="ltr">Two innovative treatments are implemented to implement bias into the basic environment exogenously. In the first, participants receive a small bonus each time they predict the state is blue. In the second, experts receive the same bonus each time they predict the state is blue instead of the participants. Surprisingly, participants value the private signal and additional expert’s prediction similarly, except when the experts are biased. This is a departure from most research using similar environments, which assume that some sub-optimal behavior can be attributed to mistrust in others’ ability to understand the environment. That assumption may warrant further and more careful evaluation. The most striking valuation behavior is when participants are biased. Their bids are higher when their existing information set already favors their bias, relative to when it is against it. Doing so is antithetical to the rational equilibrium and inconsistent with prior research on confirmation bias.</p><p dir="ltr">Participants generally utilize information obtained from a successful bid at a lower rate when it is against the initial experts than with it. No difference is detected between information sources. This is expected, albeit inconsistent with rational decision-making. One exception is noted. When participants are biased, they use the newly obtained information at a much higher rate when it is consistent with their bias than against it. Doing so is at odds with bidding behavior, as it implies participants bid more to receive information that they utilize less. Participants generally do a much better job of rationalizing and responding to the experts’ bias than their own in the experiment.</p><p dir="ltr">My third chapter is motivated partly by the findings in my first two chapters, using a more contextualized setting. In it, subjects are presented with a series of X account versions. The versions vary on political affiliation, occupation credentials, and number of followers. Subjects are asked to rate how much they would value information from each account version. Subjects value account versions with an unrevealed political party affiliation more than their analogs which report a party affiliation, regardless of the party or the subject’s beliefs.</p><p dir="ltr">A partisan penalty is uniformly implemented. Additionally, credentials are insufficient to overcome bias concerns. The penalty assessed to an account version aligning with a party is similar when the version has high credentials versus when it does not. Followers are also a valuable resource, regardless of political affiliation or credential levels. The marginal value that followers provide is similar for all account versions, meaning that even relative experts in a field should seek validation if they want to be valued by others.</p><p dir="ltr">Previous research would expect subjects to value versions more when they are congruent with their own beliefs, so these findings are surprising. Two groups are identified as the most likely to deviate and value same-typed account versions more: subjects who believe echo chambers are good and subjects who are concerned they have believed fake news in the past. The former group does not require a significant number of followers to highly value a politically congruent account version. The latter value politically unaffiliated accounts even more, but are more skeptical of opposition account versions and are even more sensitive to the number of followers they have.</p><p dir="ltr">These three chapters explore new avenues for researching how biases and expertise are evaluated and responded to. People are generally much better at considering the potential biases that others have than rationalizing their own biases. I also find good news in an era of heightened concern about eroding trust in experts. In each case, subjects respond to signals of expertise, and demonstrate efforts to exploit the information that experts provide.</p>