The TIBER 2017 Symposium on Psychology and Economics took place on August 25, 2017 in Tilburg [full program, my tweets from that day]. Interesting day, and good to see some people from the financial industry (ING, Rabobank).
Keynote Ralph Hertwig (from the Gigerenzer-school) kicked off with a talk on Preferential Heuristics, Uncertainty and the Structure of the Environment.
He started by quoting a 1967 paper Man as an intuitive statistician where Peterson and Beach argue that “Man gambles well”. But the Tversky and Kahneman-paradigm a couple of years later proved more influential, puzzling Hertwig.
Description vs. Experience
Tversky and Kahneman were influential with tasks where risks where described, instead of uncertainty experienced.
Hertwig shows figures from A meta-analytic review of two modes of learning and the description-experience gap (2016) DU Wulff, M Mergenthaler Canesco, R Hertwig.
Especially with low, true probabilities, there are large effects between answers to a choice formulated descriptively, versus the choice made after experiencing pay-offs. (DU = discrete underweighting). From Wikipedia: “in experienced prospects, people tend to underweight the probability of the extreme outcomes and therefore judge them as being even less likely to occur.”
Adaptive decision maker has to make a trade-off between accuracy-effort. So heuristics can be effective, says Hertwig.
Hertwig on risk communication:
And research methods (why do adults score worse than babies or chimps?)
First, I went to Ozan Isler; Honesty, Cooperation & Social Influence, who:
we present a new mind-game that is powerful enough to measure honesty at the
individual level and fast enough to be implemented online. The game consists of forty rounds. In each round, the participant is first asked to think of a number between 0 and 9, then shown a single-digit random number, and finally asked to report whether the two numbers match.
Then I saw a talk about changing faces with FaceGen on a trustworthiness scale and playing a dictator game. The cool thing was the stopping rule: they started with N=30 participants, and would add N=5 until BayesFactor was either > 3 or < 1/3.
Next, I saw Tony Evans: The reputational consequences of generalized trust
Final morning talk: Stefan Trautmann – Implementing Fair Procedures? “We find that unfair outcomes are acceptable for the agents if procedures are perceived as fair. However, with opaque allocation decisions, it may be difficult to commit to fair allocation procedures. Indeed, we find a very high degree of favoritism by the decision
makers when they are forced to allocate unequal outcomes, and have no fair (random) procedure available”
During lunch I read two interesting posters, one by my DNB-colleague Carin van der Cruijsen on DNB Working Paper No. 563: Payments data: do consumers want to keep them in a safe or turn them into gold?
And a poster by a collaborator of Stefan Zeisberger (Nijmegen), whom we’ll also collaborate with. Basically, people do trade on their beliefs if they are in the plus (have gained), but not/less so when they are in the red.
I attended this talk because it used Bayesian statistics, but the unfortunately did not feature very much in the presentation: Peer effects on risky decision making from early adolescence to young adulthood: Specificity and boundary conditions.
Then Less Likely Outcomes Are Valued Less by Gabriele Paolacci (who is male, incidentally): “We found that people value the gift card less when its availability is uncertain.” Somewhat interesting, not very applicable. This effect might counter the scarcity-argument in marketing a bit, but doesn’t seem likely.
Final talk was Jan Stoop with a replication of The Rich Drive Differently, a Study Suggests (2013). Stoop et al found nothing, across wide range of settings and with 2.5x N of original study.
First up: Financial Incentives Beat Social Norms: A Field Experiment on Retirement Information Search [Netspar presentation, SSRN). Presentation by Inka Eberhardt. I had seen this work before, then presented by co-author Paul Smeets. It is a really big RCT (N=250,000) RCT, sending letters to get them to sign in to their personal webpage at their pension fund. Q&A was a bit disappointing, I didn’t think the answers were particularly strong.
Pollmann’s talk Let’s talk about money: Attachment style, financial communication, and
financial conflict concluded with a suggestion to Nibud for a web tool Let’s talk about money.
Final talk was Diffusion of culpability in reparations behavior. Results for a novel task were presented, fMRI results are forthcoming.
TIBER 2017 was concluded by Bertil Tungodden’s keynote: Fairness and Redistribution: Experimental Evidence.
Tungodden presented on a paper that is nicely summarized in this HBR article: Is It OK to Get Paid More for Being Lucky?