My dissertation focuses on changes in health-related behavior in react to information-based intervention. The first chapter analyzes the results of a field experiment to investigate the effects of comparative information on the daily number of steps taken of adults. The second chapter further explores the effects using qualitative analysis. The third chapter intends to offer explanations in the mechanisms of the results from the first chapter. My first chapter uncovers how patterns in the daily number of steps of adults are affected by information that compares one with unknown peers. I conducted a field experiment that used fitness trackers to collect daily and minute-by-minute data on the total number of steps an individual takes in a day. Participants were randomized into a group that was provided with comparison information and a group that did not receive such information. I examined whether individuals in the two groups behaved differently during and after the intervention period. I find no clear evidence of an aggregate impact of social norms on the daily number of steps taken. However, I find individuals who are not overweight or nor married or cohabiting are more likely to be influenced by social norms. Greater treatment effects are found among individuals whose number of steps that are at the tails of the distribution curve. My second chapter reports the results of the textual data from the survey in the field experiment. I present dominant themes that emerged from answers to the open-ended essay questions in the survey. The results support that health concern, body image, appearance, psychological factors, peers and friends are major motives for being physically active. For participation in the study specifically, text messages that contain comparative information produced some improvement of the exercise level. However, participants also requested more interactions with peers, additional information provision, rewards for reaching goals. The results imply external incentives play a smaller role in promoting daily number of steps. In the third chapter, I conduct a survey experimentation to test the effectiveness of informing descriptive social norms and types of text messages in predictions about health-related behaviors. First, I investigate if errors in beliefs about activity levels exist and I find no evidence of over- or under-confidence in one’s own activity levels. Further analysis provide preliminary evidence of negative effects of informedness in predictions about one’s own behavior. However, the intention-to-treat effects of comparative information are unclear. The data provide evidence in favor of the correlation between first-order personal beliefs, not higher-order normative beliefs, in predicting an increase number of steps taken in response to intervention with text messages.

A basic problem for a rational choice theory of mass political action is to explain why average citizens would participate in such behavior, since they have nothing to gain by participating (they won’t receive compensation for participating but will receive the public good if they participate or not) but much to lose (it can be costly and harmful to participate). According to the rational theory, the incentive to participate must come from the expectation of receiving selective benefits; but since average citizens in a general case cannot expect substantial private material rewards, the relevant benefits must be psychological in nature. A public goods model is proposed stating that the value of revolution in terms of public goods can be a relevant incentive for participation. Using data from surveys conducted in Egypt, we investigate the relationship between participation in mass political action and measures of the incentives of public goods. Hypotheses of the public goods model are supported.

In the summer of 2003, David Cutler, Edward Glaeser, and Jesse Shapiro published the paper, “Why Have Americans Become More Obese?”1 In the paper, the authors explore changing trends in American weight and caloric intake over time and hypothesize as to the potential causes of these changes. In performing our tests, we hope to both replicate their results and update any analysis for the present.

Many findings in cognitive psychology suggest that many decisions and judgments rely on processes that are unconscious, that these processes can be disrupted by conscious input, leading to poor decision making. A commonly paradigm has shown that decision makers who are distracted while deciding make better to make quick decisions. The distraction is thought to facilitate spontaneous unconscious processing, called the “deliberation without attention effect”, that lead to better decisions when the question is later revisited. This effect was tested in three studies on diagnostic judgments in a multiple cue probability learning paradigm. In three studies, the effect of rushed decision making, forced deliberation, and distraction were tested on probability judgments, and on choices and confidence judgments. Evidence suggested that subjects in the immediate decision were less accurate than the other conditions, in decisions and judgments, despite higher levels of confidence, but equaled performance in other conditions when given make-work tasks in between decisions, which may have primed more careful or more deliberate thinking. The results did not make any strong theoretical implications for the deliberation without attention effect.

Many findings in cognitive psychology suggest that many decisions and judgments rely on processes that are unconscious, that these processes can be disrupted by conscious input, leading to poor decision making. A commonly paradigm has shown that decision makers who are distracted while deciding make better to make quick decisions. The distraction is thought to facilitate spontaneous unconscious processing, called the “deliberation without attention effect”, that lead to better decisions when the question is later revisited. This effect was tested in three studies on diagnostic judgments in a multiple cue probability learning paradigm. In three studies, the effect of rushed decision making, forced deliberation, and distraction were tested on probability judgments, and on choices and confidence judgments. Evidence suggested that subjects in the immediate decision were less accurate than the other conditions, in decisions and judgments, despite higher levels of confidence, but equaled performance in other conditions when given make-work tasks in between decisions, which may have primed more careful or more deliberate thinking. The results did not make any strong theoretical implications for the deliberation without attention effect.

Risky intertemporal choice is a fairly new topic in the realm of behavioral economics that involves examining the interactions between individuals’ time and risk preferences. Previous research has looked at the gains and mixed domain, but little to no research has been done in the loss domain. This study aims to fill this gap by examining how people respond to risky gambles in the loss domain given real world time delays. The thesis focuses on changes in attitudes towards risk caused by temporal distance rather than how people discount risky prospects. Based on Construal Level Theory we predict that there will be a greater focus on outcomes over probabilities in delayed gambles compared to immediate ones, and hence, individuals will become more risk-averse for delayed gambles that are in the loss domain. We conducted two experiments to test this prediction. Results revealed that while subjects in the immediate resolution group were significantly more risk-seeking than future resolution groups in both experiments, the difference in risk attitudes between two delayed resolutions depend on how big the difference between two delays is.

<p> People make many decisions with consequences that are delayed, rather than immediate. Of particular interest are decisions in which long-term gains must be balanced against short-term costs. Such time trade-offs can be advantageous or deleterious to the decision-maker: the decision to abstain from immediately entering the labor force and instead pursuing a lengthy education benefits the educated in the long-term although their short-term wages are lowered. In contrast, the decision to overeat increases the short-term enjoyment of food but decreases long-term health. A large body of research in psychology has shown that the ability to delay gratification and elect long-term over short-term gains leads to superior life outcomes. </p><p> Expanding on this tradition, my thesis examines time-tradeoffs in two domains: first, I examine the resolution of time-tradeoffs in settings in which people are asked to explicitly decide between short-term and long-term gains. This line of work is closely connected to economic models of decision-making that account for the role of time in shaping decisions. I then transition to examining the resolution of time-tradeoffs in settings in which time trade-offs are implicit. Specifically, I examine the way in which people explore unfamiliar environments in order to maximize information. Maximizing information represents a time-tradeoff because the goal of obtaining information generally requires the decision-maker to eschew known sources of short-term rewards in order to explore new options whose benefits will be reaped only in the long-term. </p><p> Collectively, I describe a large body of experiments that examine these two classes of decision-making and put forward two new models of decision-making, the ITCH model of intertemporal choice and the MaxInfo model of exploratory decision-making, that account for the data from these experiments and extend the state of the art.</p>

<p> A longstanding controversy in financial economics is whether investors' rational forces or their emotional responses govern the asset pricing of the financial markets. Some psychology researchers use dual- process models to understand peoples' information processing. The problem is that some investors allow cognitive biases which operate quickly and automatically in the <i> System 1</i> domain, to affect their decisions rather than respond deliberatively and rationally which are ascribed to the <i>System 2</i> domain. The purpose of this study was to explore how and why investors, when faced with extreme stress impelled during the 2008 Financial Crisis, yielded to either <i>System 1</i> or <i>System 2</i> axis decision-making. Without evaluating the role that cognitive biases play in information processing, investors will not understand why they make inauspicious automatic decisions or grasp the steps that could help avoid realized losses in their stock portfolio. This qualitative research consisted of a multiple-case study that included in-depth semi-structured interviews of 12 investors who had at least $1 million invested in stocks and bonds and triangulation data analysis. The research findings indicated that <i>stock market literacy</i> and risk profiling are foundations for sound investing. When faced with a financial crisis, some investors displayed cognitive biases such as nervousness, worry, and fear that led to myopic loss aversion that caused them to sell their entire stock portfolio or reallocated into more conservative, less risky bonds. Some investors with no emotions and higher <i>stock market literacy </i> considered the financial crisis as a blip in the long-term upward trend performance of stocks and viewed the financial crisis as an opportunity to buy more stocks. For those investors that displayed emotions because of the financial crisis, emotion regulation strategies helped them make more controlled and deliberative investment decisions. Nevertheless, the decisions made by investors may be satisficing because of peoples' bounded rationality, the inherent information processing limitation of the human mind. The specific role of emotion in the duality of information processing was undetermined because the crisis evolved over time rather than a singular event. It is possible that quantitative determination of <i>stock market literacy</i> and the application of Epstein's Rational-Experiential Questionnaire and personality tests including satisfaction questions could shed further information on the dual-process mechanisms.</p>

<p> Modern portfolio theory states that investments with greater beta, a common measure of risk, require greater returns from investors in order to compensate them for taking greater risk. Therefore, under the premise that market participants act rationally and therefore markets run efficiently, investments with higher beta should generate higher returns vis-&agrave;-vis investments with lower beta over the long run. In fact, many studies suggest that investments with lower beta actually generate equal to or higher returns relative to investments with higher beta. In looking at data for the S&P; 500 going back 22 years between 1990 and 2012, this study found that there was very low correlation between beta and returns. In fact, portfolios with very low risk generated commensurate to better returns versus portfolios with very high beta. Therefore, we find that beta appears to be a poor measure of risk as it relates to the stock market. In addition to beta and returns, this study looked at the fundamental characteristics of each company specifically corporate profitability and balance sheet leverage which are commonly used by investors in assessing the underlying quality of a company. We find that companies with higher levels of return on equity combined with lower levels of balance sheet leverage tend to outperform companies with lower levels of profitability and higher balance sheet leverage. As a result, we find a high correlation between balance sheet leverage, ROE and stock returns. This paper suggests that in fact, fundamental factors such as leverage and ROE tend to be better measures of risk vis-&agrave;-vis beta. One important final observation is the fact that while in general, companies with high ROEs and low leverage tend to outperform companies with low profitability and high leverage, portfolios of those companies with the highest ROE and lowest leverage and portfolios of those companies with the lowest ROE and highest leverage actually underperform on the whole other portfolios. In other words, portfolios of companies that exhibit the most extreme of characteristics in terms of ROE and leverage underperform portfolios of companies with more moderate characteristics. One plausible explanation for these observations is rooted in behavioral economic theory known as the favorite long shot bias and the opposite favorite long shot bias. The opposite favorite long shot bias suggests that market participants tend to "over-bet" an asset and/or an investment with high probability of a payoff but low overall return if the payoff occurs (ie the sure bet). In fact, market participants go so far to secure a payoff that they actually place a higher bet on the probability of success than the actual odds would suggest. In stock market terms, investors will tend to over-value the least-riskiest stocks to the point where risk and return is no longer favorable. Similar phenomenon can be observed in horse race betting and sports drafts. The favorite long shot bias is the inverse of the opposite favorite longshot bias. This theory suggests that market participants actually "over bet" an asset and/or an investment with the lowest probability of a payoff but with significant overall returns if the payoff occurs. Similar phenomenon takes place in the purchase of insurance to insure against large potential losses with small probabilities as well as lottery ticket purchases. We see the most striking evidence of this when looking at the returns of stocks with the highest ROEs and the lowest levels of debt/capital as of 1990. In that year, investors would have based their investments in stocks using current attributes at that time. We can see that stocks with the highest ROEs and lowest levels of debt/capital garner higher valuations relative to the broad stock market. We also see that stocks with the lowest ROEs and highest debt/capital also command premium valuations to the market as a whole. Therefore, risk-averse investors will tend to overvalue companies with the least risky prospects while risk loving investors will tend to overvalue companies with the riskiest prospects at the same time. As a result, we can see from looking at the future returns that companies that exhibit extreme characteristics in terms of ROE and debt/capital tend to underperform the broad market. Similar to high profile athletes and horse track betting, we find that investors tend to over-bet sure shot investments while simultaneously over-betting long shot investments.</p>

Risky intertemporal choice is a fairly new topic in the realm of behavioral economics that involves examining the interactions between individuals’ time and risk preferences. Previous research has looked at the gains and mixed domain, but little to no research has been done in the loss domain. This study aims to fill this gap by examining how people respond to risky gambles in the loss domain given real world time delays. The thesis focuses on changes in attitudes towards risk caused by temporal distance rather than how people discount risky prospects. Based on Construal Level Theory we predict that there will be a greater focus on outcomes over probabilities in delayed gambles compared to immediate ones, and hence, individuals will become more risk-averse for delayed gambles that are in the loss domain. We conducted two experiments to test this prediction. Results revealed that while subjects in the immediate resolution group were significantly more risk-seeking than future resolution groups in both experiments, the difference in risk attitudes between two delayed resolutions depend on how big the difference between two delays is.