This study presents an eye-tracking experiment to investigate consumer responses toward local Texas honey. Honey adulteration news was used as a treatment along with product attributes, such as a certified Texas honey seal, price, organic, and product reviews. The eye-tracking technology was applied to examine the effect of attribute-non-attendance to measure the treatment effects more robustly. The results show that honey adulteration information increases consumers’ willingness to pay (WTP) for some quality-related attributes. The results also show that negative product reviews have a much larger reduction in the magnitude of WTP than the increase produced by positive product reviews.

Is it possible to exploit cognitive biases so that a non-professional taster prefers one wine to several other absolutely identical wines? To address this question, three complementary experiments were carried out. Each time, five wines were tasted blind in a tasting laboratory by 24 to 34 tasters. Converging evidence from the experiments shows that participants were not capable of identifying that some of the wines they were tasting were absolutely identical. Moreover, the results show that by providing information about the wines’ ratings, prices, or reputation, tasters’ expectations can be modified, and, as a result, their evaluations of the wines can be altered. Specifically, we show that it is possible to modify the ranking between different wines and to get tasters to prefer a wine over other absolutely identical wines. Finally, a surprising finding was that experienced tasters express stronger opinions and adapt their evaluations more strongly after being given manipulative information on the wines they taste.

Produce that does not meet sellers’ esthetic standards may be redirected to alternative uses or wasted, but consumer trends indicate potential marketability of blemished produce. We conduct a nonhypothetical experimental auction to elicit consumer willingness-to-pay (WTP) for produce of varying degrees of blemish and test whether valuations are affected by (1) information on food waste resulting from grocery stores’ esthetic standards and (2) additional information on the environmental impacts of food waste. WTP for blemished produce increases as consumers become informed, but the information effects vary by blemishing degree. Market simulations indicate that introducing blemished produce can increase retailer revenue.

The aim of this article is to better understand how judgements about nudge acceptability are formed and whether they can be manipulated. We conducted a randomized experiment with N = 171 participants to test whether acceptability judgements could be (1) more favourable when the decision to implement the nudges was made following a consultation with the targeted population and (2) influenced by the joint framing of the nudge's purpose and effectiveness (in terms of an increase in desirable behaviour versus decrease in undesirable behaviour). We tested these hypotheses on various nudge scenarios and obtained mixed results that do not clearly support our hypotheses for all nudge scenarios. A surprising result that calls for further work is that by mentioning that a nudge had been implemented through a consultation with the targeted population its acceptability could be lowered.

We present an experiment that sets up a context of production of a common output obtained by using production means that are randomly and unequally distributed. Before the production phase, subjects must choose a distributive principle for the output division, under ignorance of the allocation of the production means. Subsequently, they make a distributive choice fully aware of their luck and performance. The aim of the experiment is to test, first, whether ordinary subjects in an impartial situation are capable of converging on a fair principle of distribution – able of redressing the arbitrariness of the initial production means allocation; and second, whether these same ordinary subjects are capable of actually following that principle in a real distributive choice that excludes coercion, reputation effects and other forms of social pressures. The main finding is that a distributive rule that redresses initial inequalities is both accepted ex-ante and actually applied ex-post by most individuals. Our conclusion is relevant for the issue of realism of normative theories of justice and the possibility of institution design aimed at implementing distributive justice principles and policies.

In a previously published article, I reported some tests of prospect theory's reflection effect over outcomes defined by money and life years gained from treatment. Those results suggested qualified support for the reflection effect over money outcomes and strong support over longevity outcomes. This article reruns those tests while accounting for the intensity of individual risk attitudes, and, overall, show consistency with the reflection effect. However, I argue that these results do not necessarily offer support for the explanatory power of prospect theory. Rather, the results may be driven by evolved responses to circumstances that provoke perceptions of scarcity and abundance. Therefore, from an ecological perspective, behavioral patterns such as those that are consistent with the reflection effect, which, by extension, tend to be considered as erroneous or biased by most behavioral economists because they conflict with the postulates of rational choice theory, may not be unreasonable. Recognizing as such is important when considering how behavioral insights ought to inform public policy design and implementation.

In a novel experimental design, we investigate the impact of exogenous variation in economic growth and inequality on trusting behaviour. In addition to a control with uniform endowment, three treatments were implemented where the initial endowment is exogenously changed to produce inequality and three growth scenarios where average endowments increase (boom), decrease (recession) or remain unaltered (steady state). We find that aggregate trust and trustworthiness both decrease due to the induced heterogeneity in endowments. Also, trust (but not trustworthiness) decreases (increases) due to recessions (booms). The impact of inequality on trust is greatest in a recession and absent in a boom. These aggregate effects are driven mainly by the reactions of those who, after treatment, end up at the bottom of the endowment distribution. These findings are close in sign and in the order of magnitude to those reported in observational studies on the relationship between growth, inequality and trust.

In all legal systems, possession and property are inextricably linked. Game theory captures this relationship in the Hawk–Dove game: players competing for an asset are better off when the possessor plays Hawk and the intruder plays Dove (the bourgeois strategy) so that property can emerge as a spontaneous convention. This theory has been supported by large experimental evidence with animals. This paper presents a lab experiment where possession is manipulated to study the emergence of the property convention with human subjects. We show that the highest coordination emerges when possession is achieved meritoriously and that possession induces only bourgeois coordination (never antibourgeois).

With the aid of a lab experiment, we explored how imperfect monitoring and punishment networks impacted appropriation, punishment and beliefs in a common pool resource appropriation dilemma. We studied the differences between the complete network (with perfect monitoring and punishment, in which everyone can observe and punish everyone else) and two ‘imperfect’ networks (that systematically reduce the number of subjects who could monitor and punish others): the directed and undirected circle networks. We found that free riders were punished in all treatments, but the network topology impacted the type of punishment: the undirected circle induced more severe punishment and prosocial punishment compared to the other two networks. Both imperfect networks were more efficient because the larger punishment capacity available in the complete network elicited higher punishment amount.

Floriculture value exceeds $5.8 billion in the United States. Environmental challenges, market trends, and diseases complicate breeding priorities. To inform breeders’ and geneticists’ research efforts, we set out to gather consumers’ preferences in the form of willingness to pay (WTP) for different rose attributes in a discrete choice experiment. The responses are modeled in WTP space, using polynomials to account for heterogeneity. Consumer preferences indicate that heat and disease tolerance were the most important aspects for subjects in the sample, followed by drought resistance. To the best of our knowledge, this is the first study to identify breeding priorities in rosaceous plants from a consumer perspective.

Individuals are increasingly asked to take responsibility for preparing for retirement and available financial products to do so are growing in sophistication. A better understanding of how non-cognitive skills influence financial capability and retirement preparation could help effective policy design. This area of research has been hampered by the struggle to find reliable measures of these skills. I argue that questionnaires themselves can be seen as performance tasks, such that measures of survey effort could lead to meaningful measures of non-cognitive skills. I exploit the fact that I observe respondents taking multiple survey modules covering different topics in different moments of time to build survey effort measures in a nationally representative internet panel. I use survey effort measures along with self-reports to study the role of non-cognitive skills on retirement preparation and financial capability. My results show that non-cognitive skills can have a significant role, beyond the role of cognitive ability.

This paper investigates whether exposure to explanatory diagrams can affect a major financial decision. In a controlled experiment, participants were given Pension Benefit Statements with or without one or two diagrams, before answering incentivised questions that measured recall, comprehension and choice of contribution rate. The diagrams had at best a marginal influence on recall or comprehension. Nevertheless, a diagram relating contributions to income projections prompted more participants to advocate higher contributions, while both diagrams influenced the rationale participants gave for decisions. The implication is that although pension products remain hard to understand, diagrams may alter decisions by reinforcing relevant causal thinking.

Whereas many others have scrutinized the Allais paradox from a theoretical angle, we study the paradox from an historical perspective and link our findings to a suggestion as to how decision theory could make use of it today. We emphasize that Allais proposed the paradox as a normative argument, concerned with ‘the rational man’ and not the ‘real man’, to use his words. Moreover, and more subtly, we argue that Allais had an unusual sense of the normative, being concerned not so much with the rationality of choices as with the rationality of the agent as a person. These two claims are buttressed by a detailed investigation – the first of its kind – of the 1952 Paris conference on risk, which set the context for the invention of the paradox, and a detailed reconstruction – also the first of its kind – of Allais’s specific normative argument from his numerous but allusive writings. The paper contrasts these interpretations of what the paradox historically represented, with how it generally came to function within decision theory from the late 1970s onwards: that is, as an empirical refutation of the expected utility hypothesis, and more specifically of the condition of von Neumann–Morgenstern independence that underlies that hypothesis. While not denying that this use of the paradox was fruitful in many ways, we propose another use that turns out also to be compatible with an experimental perspective. Following Allais’s hints on ‘the experimental definition of rationality’, this new use consists in letting the experiment itself speak of the rationality or otherwise of the subjects. In the 1970s, a short sequence of papers inspired by Allais implemented original ways of eliciting the reasons guiding the subjects’ choices, and claimed to be able to draw relevant normative consequences from this information. We end by reviewing this forgotten experimental avenue not simply historically, but with a view to recommending it for possible use by decision theorists today.

We study the combined effects of financial incentives and information provision on retirement behavior. To elicit preferences for retirement timing in the laboratory, we ask subjects to make retirement choices under different payoff schemes that introduce variation in financial incentives. Testing ceteris paribus conditions of the financial incentive alone shows a considerable delay of retirement once early retirement becomes financially less attractive. However, varying available information as another treatment parameter reveals considerable heterogeneity in the functioning of these incentives. Subjects who are explicitly informed about the expected pension wealth respond more strongly to financial incentives compared with those who only know their pension annuity. Being informed about a forward-looking measure of pension benefits makes the financial consequences of retirement choices more salient to the decision maker.

Companies that manage mandatory pension funds are frequently accused of excessive fee taking. International analyses have found that in countries with legal caps, commissions remain within these caps; hence, market competition does not function. Surprisingly, there are few international cases where local regulators implement mechanisms to facilitate competition. The variety of auction mechanisms available raises the question of whether an optimal solution exists for this purpose. Therefore, in this study, we present evidence, based on a controlled regulatory experiment, on the fee-reduction potential of reverse auctions.

The roots and uses of economic experiments in problem solving and hypothesis testing are explored in the present article. The literature suggests that the primary advantage of economics experiments is the ability to use controlled stimuli to test economic hypotheses. Other literature also suggests that experiments are useful in problem solving settings. The advantages and disadvantages of experiments are discussed.

Environmental and consumer groups have called for mandatory labeling ofgenetically engineered (GE) food products in the United States, stating thatconsumers have the “right to know.” Herein, we use a nonhypothetical fieldexperiment to examine the willingness to pay for GE-labeled products, usingthe only second-generation GE product currently on the U.S. market—GEcigarettes. Our results suggest consumers pay less for GE-labeled cigaretteswhen marketing information is absent. But, when presented with marketinginformation on the attributes of the cigarette, we find no evidence thatconsumers pay less for GE-labeled cigarettes.

Preferences for pomegranates, including some novel pomegranate varieties, were evaluated using an experimental auction and nonhypothetical preference ranking mechanism. Additional information on the taste and health benefits of the products was provided to mimic the information-gathering process on novel products. Product familiarity, product information, and reference prices were key factors in explaining willingness to pay for the included novel products. Results from the auction and nonhypothetical preference ranking procedures were divergent. Furthermore, interactions were detected between information treatments and product characteristics.

Solving the exploration/exploitation trade-off is a fundamental issue for an organism living in an uncertain and changing environment. This review describes how a stream of cognitive neuroscience studies linked exploratory behaviour to structures in the human prefrontal cortex, then identified the brain mechanisms involved in the online adaptation of behaviour relatively to reward changes, and finally revealed fundamental limitations in the processing of information at the prefrontal level. The experiments and the results we present could particularly be of interest to economists who want to understand how cognitive neuroscience identify key processes in the human brain and shapes our understanding of decision-making.

The model of memory process we propose is based on two assumptions. First, spatial or adresses network models in economics can be easily adapted to describe a significative part of the episodic memory mechanism as defined by Tulving (1983). Second, brain viewed as a network behaves as a decision-maker who arbitrates between two economic dimensions of recollection: the reward—i.e., the satisfaction for recovering old informations located in mnesic traces—and the cost—i.e., the price for stimulating the traces network. Indeed, the two results exhibited in the paper—and devoted to a formal and appealing characterization of true and false recollections—are directly derived from the idea of a rational brain. Finally, this paper aims at showing that it could be relevant to model memory processes in a pure symbolic way—contrary to most of the neuroeconomics contributions which are generally experimental—and also that such an attempt for an abstract and analogical representation of the episodic memory process based on a spatial microeconomics methodology seems to be specially efficient and illustrative of Hintzman (1986) and recent Doeller et al. (2010) intuitions and features.