It is a widely held belief that those who are attractive generally experience an easier life; that the door to success is opened by perfect bone structure and a sparkling white smile. However, this might not be the case. Attractiveness might play a far lesser role in individual’s achieving their objectives than has previously been thought. Is it possible that an individual’s qualifications may have a greater influence regarding the perceptions of managers who question the suitability of a candidate to fill the position of a Knowledge Worker? The main purpose of this research was not only to identify the existence of the so-called Beauty Premium in the Knowledge Economy but, to determine that if it does indeed exist, how to explore the influence of this aspect regarding the hiring decisions for which managers are responsible. A two-phased experimental design was followed that investigated the existence and strength of the Beauty Premium amongst a group of managers who were provided with fictitious resumes coupled with photographs of the applicants. These managers were requested to make a hiring decision based on the information in front of them. The results revealed the existence of a Beauty Premium but that is was relatively weak and that the qualification of an individual had a far greater influence on a manager’s perception of the suitability of a candidate to fill a position of a Knowledge Worker. / Dissertation (MBA)--University of Pretoria, 2014. / zkgibs2015 / Gordon Institute of Business Science (GIBS) / Unrestricted

This dissertation presents several empirical tests to measure the relative abilities of alternative models in capturing the unobservable process by which economic individuals may form expectations of future inflation. Three empirical representations of the inflation expectations process are tested: an autoregressive model which uses only past inflation data; a rational expectations model which utilizes the structural economic relationships in the economy (excluding past inflation); and a general model which exploits both the information sets just described. These competing approaches are each subjected to tests for rationality and predictive accuracy. The rationality tests employed in this study are the breakpoint test suggested by Sargent and the incorporation of each model's inflation predictions into an analysis of the Fisher equation. To gauge the predictive accuracy of each model, post-sample extrapolations were generated and compared by means of the root-mean-squared error and Theil inequality coefficient. The outcome of these various tests provides support to the contention that, for an individual attempting to obtain optimal (error minimizing) forecasts of future inflation would select the relatively simple autoregressive model over the rational expectations or general approaches. In three out of four tests presented, the autoregressive model performed as well if not better than its more informational intensive competitors. / Ph. D.

There is a popular lay-belief that consumers always strive to repair their negative mood. However, one can think of contrary instances where people seek out melancholic music when they feel sad, or choose to remain miserable when something frustrates them. My dissertation proposes that people vary considerably in the degree to which they need to feel better when they experience negative feelings. Specifically, my dissertation advances current understanding of why certain individuals do not engage in mood repair. It also allows us to decipher when people would form judgments and decisions in a mood-congruent versus mood-incongruent manner, thereby accounting for the lack of robustness of mood repair effects. To this end, I advance a construct called the "Need to Feel Better" (NFB), and propose four distinct facets of NFB that individuals differ on: 1) behavioral tendency to repair bad moods, 2) aversion to negative feelings, 3) pleasure derived from negative feelings, and 4) tendency to reflect on negative feelings. I also propose a scale that measures this construct and the four facets it encompasses. My dissertation shows that NFB is associated with stronger preference for common mood repair activities such as leisure shopping and exercise. It is also associated with certain demographics (e.g., age and gender), personality traits (e.g., extraversion and agreeableness), and self-regulation constructs (e.g., promotion-focus). NFB also predicts people's tendency to engage in mood repair when they experience negative moods and their attitudes towards mood lifting appeals. From a managerial standpoint, this work provides insights for the marketing of "feel-good" products (e.g., aromatherapy and vacation packages) and the use of mood repair appeals (e.g., Volkswagen's "Get Happy" Super Bowl commercial and the "Look Good Feel Better" campaign for women with cancer by the cosmetics industry).

Cognitive and emotional factors have played a larger role in economists' understanding of the world in the last decades. While earlier work has focused on experimental and theoretical results, a larger number of recent contributions have tested ideas from the field of Psychology using econometric methods for causal identification on field data. This line of research seeks to analyze market situations in which specific psychological factors can be identified to cause observed economic behavior. My dissertation, at the intersection of Behavioral and Applied Microeconomics, offers examples of behavior in which cognitive aspects are shown to play a central role and is unified across the three chapters by a common methodological approach. The first chapter, based on joint work with Kareem Haggag, reports evidence from tipping behavior of New York city taxicab customers. For credit card payments, the payment screen in the car displays suggested tip amounts. In particular, for one of the main companies, the suggested amounts are $2, $3, $4 for fares below $15, and 20, 25 or 30 percent above $15. Using this variation, the chapter shows that suggestions play an important role in tipping behavior of customers: comparing rides below and above $15 using regression discontinuity methods, it is possible to show a large local causal effect of the suggestions on average tips. Moreover, a backlash effect is observed, as more customers decide not to tip on a credit card at all. These findings contribute to our understanding of default effects beyond the area of tipping, for instance in savings. An even broader lesson is that these findings isolate a case in which cognitive and emotional responses are likely to mediate the relationship between preferences and choice. The second chapter, based on a joint work with Kareem Haggag, presents field evidence on cheating behavior. During the two years 2008-2010, several taxi drivers cheated customers by charging a higher fare amount that is allowed only for rides outside the city even for rides in the city. The choice of whether to cheat a customer on a individual ride is shown to be affected by loss aversion. The estimates can be effectively reconciled by models of reference-dependent preferences that take drivers' expectation as reference points: drivers are more likely to cheat on those rides within a shift in which they are below expectations. The results highlight the role played by a classic decision-making bias in shaping unethical behavior in a market. These findings suggests that cognitive and emotional aspects of the valuation of benefits are relevant to our economic understanding of ethical problems. The third chapter presents regression-discontinuity evidence on an investment-incentive program. The methodology, which compares firms who received the award with those that marginally lost it, allows for a cleaner identification of the effect of the policy. In this last essay, the conceptual tools from Applied Microeconomics used in the first chapter are put to work in the context of firms' behavior. The tool allows one to show in a straightforward manner the main outcomes of the policy.

This dissertation focuses on sequential games of imperfect information. I study settings in which not only do agents face imperfect information in the traditional sense of not possessing all payoff-relevant information, but they also face uncertainty about their position of movement in the sequence. I have utilized this framework to study financial investment decisions by individuals, production decisions by firms, and implications on information aggregation in observational learning. In order to study production decisions by firms I utilize a Stackelberg oligopoly model with a stochastic consumer demand. In this setting firms do not know their position of movement, and as a result of the stochastic demand they cannot infer from the prevailing price if another firm has yet entered the market. I find that as a result of uncertainty firms produce a higher quantity than they otherwise would have, resulting in a more competitive outcome. In fact, as the number of firms in the market increases, with positional uncertainty the equilibrium quantity actually exceeds the perfectly competitive quantity. I then investigate the impact of positional uncertainty when agents must choose levels of investment in a financial asset. Investors receive a signal about the value of the asset but are not necessarily aware of their position in the sequence of investors. As a result, they are unsure to what extent the signal they receive represents profit-relevant information, or if the signal is “stale” in the sense that the information has been incorporated into the price by other investors. This results in more cautious levels of investment, and an asset price that does not represent the true underlying value. To study the behavioral aspects of financial investment, I introduce in this model a notion of confidence. While much work in the area of behavioral finance has studied the role of confidence over the accuracy of information, my interest is in confidence over the timing of information. I define an agent as overconfident if they believe they are more likely to have received the signal earlier than other agents, and are thus more likely to be early investors. The effect of overconfidence can overwhelm the cautious nature of positionally uncertain investors, even potentially leading to an overreaction to information. This effect can explain overvaluation of assets and volatility of prices in response to information. In a model of observational learning, limited information about the history of actions slows the integration of information. However, I show that in the limit, even in the presence of limited histories complete learning occurs. In the environment of limited access to historical information I introduce uncertainty over position of action. This uncertainty even further dampens the process of learning from a welfare standpoint, but as the number of agents grows large complete learning still obtains in the limit for all levels of uncertainty. The common finding in all these settings is that uncertainty about the order of action causes agents to be cautious about exploiting profitable opportunities. In the case of oligopoly this leads to more competitive outcomes, whereas in the cases of investment and social learning uncertainty leads to less effective information aggregation.

University of Macau / Faculty of Social Sciences and Humanities / Department of Psychology

I consider the influence of foreign environmental policy on domestic manufacturing activity using theory and empirics. A tractable three-country spatial model yields a theory of locational com- parative advantage in the production of pollution-intensive manufactured goods: greater market access to countries with stringent environmental policy encourages output in the polluting sector. Operationalizing the model empirically, I find robust evidence that high market access to countries with stringent environmental policy increases manufacturing value added. Both the theoretical and empirical analyses suggest that estimates of the Pollution Haven Effect that ignore third country environmental policy - yet make the stable unit treatment value assumption - can be misleading. Chapter Two We investigate the impact of short-term weather and long-term climate on self-reported life satisfaction using panel data. We find robust evidence that day-to-day weather variation impacts life satisfaction by a similar magnitude to acquiring a mild disability. Utilizing two sources of variation in the cognitive complexity of satisfaction questions, we present evidence that weather bias arises because of the cognitive challenge of reporting life satisfaction. Consistent with past studies, we detect a relationship between long-term climate and life satisfaction without individual fixed effects. This relationship is not robust to individual fixed effects, suggesting climate does not directly influence life satisfaction. Chapter Three This chapter considers the related policy challenges of deindustrialisation and 'leakage' which can arise when environmental regulation is differentiated across regions. A dynamic two-region 'New Economic Geography' (NEG) model is adopted in which agglomeration forces may make firms tolerant of regulatory disadvantage. Each region ratifies an international environmental agreement (IEA) requiring it to tax transboundary pollution created by local firms. In contrast to previous NEG studies, the model adopted is considerably more tractable, enabling comparative static analysis to be conducted analytically rather than through computer simulation. The model is extended to consider the relationship between the prescribed tax rates and deindustrialisation caused by the relocation of firms. Firm relocation in response to a given tax differential depends crucially on trade costs and the initial location (configuration) of industry. For some industry configurations, agglomeration forces are strong and a set of tax differentials exist which cause no international relocation of polluting firms. For other initial industry configurations in which agglomeration forces are weaker, the same set of tax differentials may cause complete inter-national relocation to the less stringently regulated region. Trade liberalization can actually make industry less likely to relocate in response to a regulatory disadvantage. The model is further extended to consider the issue of carbon leakage, which arises in the regulation of greenhouse gas (GHG) emissions. For relatively low tax differentials, agglomeration forces create rents which tend to anchor industry in the higher taxing region, avoiding carbon leakage. If the tax differential is too great, however, agglomeration forces cause all firms to relocate to the lower taxing region where they optimally emit more GHGs. Environmental outcomes may therefore be improved by reducing the tax rate in the higher taxing region in order to discourage industry relocation. When industry is diversified between regions, firms respond to higher (lower) relative domestic taxes by increasing (decreasing) output and polluting more (less).

Orientador: David Dequech Filho / Dissertação (mestrado) - Universidade Estadual de Campinas, Instituto de Economia / Made available in DSpace on 2018-08-24T23:37:38Z (GMT). No. of bitstreams: 1 Castro_AlexSandroRodriguesde_M.pdf: 1168475 bytes, checksum: a7f14f5d1eb57f403f8eb1afefa019e5 (MD5) Previous issue date: 2014 / Resumo: Esta dissertação busca apresentar e discutir as principais características da economia comportamental, identificando suas diferentes abordagens e comparando-as com a economia neoclássica. A intenção é apresentar as propostas e a estrutura conceitual das abordagens psicológicas e realçar os elementos de ruptura e continuidade em relação à economia neoclássica. Os conceitos básicos e as principais descobertas da economia comportamental são apresentados particularmente com base nos trabalhos de Kahneman e Tversky. Ao final, a dissertação destaca as objeções de Gerd Gigerenzer ao programa de pesquisa de Kahneman e Tversky e faz comentários críticos ao individualismo das abordagens psicológicas que penetraram a economia mainstream / Abstract: This dissertation is concerned with defining the characteristics of behavioral economics, identifying its different approaches and comparing them to neoclassical economics. The intention is to present the proposals and conceptual framework of psychological approaches and highlight the elements of departure from, and continuity with, the neoclassical economy. The basic concepts and major findings of behavioral economics are presented particularly based on the work of Kahneman and Tversky. Finally, the dissertation highlights the objections of Gerd Gigerenzer to Kahneman and Tversky research program and makes critical commentaries to the individualism of psychological approaches that have penetrated mainstream economics / Mestrado / Teoria Economica / Mestre em Ciências Econômicas

Traditionally economics is based on very narrow presumptions about human behavior, namely selfishness. In the last 20 years, however, experimental research has accumulated overwhelming evidence that is at odds with these classical assumptions. It has been shown that people very often care about the distributional consequences of their actions and intentions.<p>Against this background, in this thesis the impact of broader models of human behavior on decision making and human interactions is studied, for example the impact of indirect reciprocity on human relationships. If educational expenditures of parents into children depend on grandparents' investments into the parent’s education, then private educational spending is inefficiently low and should be supported by the state. This finding stands in contrast to earlier results that show that parents might invest optimally into the education of their children out of pure altruism or strategic transfer motives.<p> / Doctorat en Sciences politiques et sociales / info:eu-repo/semantics/nonPublished

Orientador: David Dequech Filho / Tese (doutorado) - Universidade Estadual de Campinas, Instituto de Economia / Made available in DSpace on 2018-08-18T17:26:16Z (GMT). No. of bitstreams: 1 SilvaFilho_EdisonBeneditoda_D.pdf: 3736529 bytes, checksum: 25154339449bd3db611b623d6387a348 (MD5) Previous issue date: 2011 / Resumo: Este estudo consiste numa abordagem exploratória que visa descrever os processos pelos quais os modelos mentais são compartilhados em sociedade e exercem sua influência sobre a ação dos agentes econômicos, tomando como objeto de análise o fenômeno da conformidade institucional do comportamento humano. Para atingir este propósito, buscamos, em primeiro lugar, mapear e sistematizar a literatura do institucionalismo econômico com ênfase em suas principais vertentes contemporâneas, demonstrando haver um consenso quanto à relevância atribuída às instituições informais, notadamente na forma de modelos mentais socialmente compartilhados, para a explicação de diversos fenômenos econômicos até então pouco compreendidos ou mesmo negligenciados pela teoria neoclássica. A seguir, apresentamos uma síntese dos principais elementos de análise das modernas teorias da cognição, de modo a avançar na direção de uma compreensão mais aprofundada da dimensão cognitiva da influência institucional sobre a ação individual. Por fim, argumentamos que a forma como os modelos mentais são internalizados pelos agentes condiciona a conformidade de seu comportamento para com as instituições a que se vinculam, enquanto membros de um determinado grupo social. O trabalho é concluído enfatizando a relevância da dimensão cognitiva para a agenda de pesquisa econômica, bem como apontando caminhos para uma possível convergência do pensamento institucionalista a partir de uma melhor compreensão do funcionamento das regras informais e dos mecanismos de enforcement, tendo por base o estudo dos modelos mentais socialmente compartilhados / Abstract: This study is an exploratory approach that aims to describe the processes by which mental models are shared in society and exert their influence over the actions of economic agents, taking as object of analysis the phenomenon of institutional conformity of human behavior. To achieve this goal, we seek, first, to map and systematize the literature of economic institutionalism with emphasis on its main contemporary lines, showing that there is a consensus on the importance given to informal institutions, notably in the form of socially shared mental models, for explanation of economic phenomena hitherto little understood or even overlooked by neoclassical theory. The following is a summary of the main elements of analysis of modern theories of cognition, in order to move toward a deeper understanding of the cognitive dimension of institutional influence on individual action. Finally, we argue that the way mental models are internalized by the agents affects the conformity of their conduct to the institutions to which they bind, as members of a particular social group. The work is concluded by emphasizing the relevance of the cognitive dimension to the agenda of economic research, as well as pointing to a possible convergence paths of thought from an institutionalist understanding of the functioning of informal rules and enforcement mechanisms, based on the study of shared mental models / Doutorado / Teoria Economica / Doutor em Ciências Econômicas