We investigate the design of incentives for people subject to self-control problems in the form of a time-inconsistent taste for immediate gratification. Because such present-biased people may not...
Forthcoming, Quarterly Journal of Economics (2008)
We develop a model of reference-dependent preferences and loss aversion where "gainloss utility" is derived from standard "consumption utility" and the reference point is...
Procrastination on Long-Term Projects (2007)
Previous papers on time-inconsistent procrastination assume projects are completed once begun. We develop a model in which a person chooses whether and when to complete each stage of a long-term...
Forthcoming, European Economic Review A Perspective on Psychology and Economics (2007)
Matthew Rabin, Over The Years, Amos Tversky, Dick Thaler
Abstract: This essay provides a perspective on the trend towards integrating psychology into economics. Some topics are discussed, and arguments are provided for why movement towards greater...
Though economists assume that intertemporal preferences are time-consistent, evidence suggests that a person's relative preference for well-being at an earlier moment over a later moment...
Onthesurvivalofstrictlydominatedstrategiesinlarge populations (2007)
Alan Kirman, Paul Pezanis-christou, Matthew Rabin, Luca Rigotti, Joszef Sakovics, Karl Schlag
Economic Association Meeting 1996 for helpful comments. The usual disclaimer applies.
Narrow bracketing and dominated choices (2007)
Rabin, Matthew, Weizsacker, Georg
An experiment by Tversky and Kahneman (1981) illustrates that people's tendency to evaluate risky decisions separately can lead them to choose combinations of choices that are first-order...
Narrow bracketing and dominated choices (2007)
Rabin, Matthew, Weizsacker, Georg
An experiment by Tversky and Kahneman (1981) illustrates that people's tendency to evaluate risky decisions separately can lead them to choose combinations of choices that are first-order...
The gambler's and hot-hand fallacies: theory and applications (2007)
Rabin, Matthew, Vayanos, Dimitri
We develop a model of the gambler's fallacy { the mistaken belief that random sequences should exhibit systematic reversals. We show that an individual who holds this belief and observes a sequence...
Consistency and Heterogeneity of Individual Behavior under Uncertainty ∗ (2007)
Syngjoo Choi, Raymond Fisman, Shachar Kariv, Jim Andreoni, Dan Ariely, Liran Einav, ...
NYU ∗ Some of the results reported here were previously distributed in a paper titled “Substantive
verse We investigate “sin taxes ” on unhealthy items, such as fatty foods, that people may (by their own reckoning) consume too much of. We employ a standard optimal-taxation framework, but...
Neuroeconomics: How Neuroscience Can Inform Economics (2005)
Colin Camerer, George Loewenstein, Drazen Prelec, David Laibson, Read Montague, Charlie Plott, ...
Who knows what I want to do? Who knows what anyone wants to do? How can you be sure about something like that? Isn't it all a question of brain chemistry, signals going back and forth,...
The Gambler's and Hot-Hand Fallacies (2005)
Matthew Rabin, Dimitri Vayanos
We develop a model of belief in the gambler's fallacy, and explore the link with the seemingly opposite hot-hand fallacy. We show that individuals who observe a sequence of signals and are...
Expressed Preferences and Behavior in Experimental Games (2004)
Charness, Gary B, Rabin, Matthew
Participants in experimental games typically can only choose actions, without making comments about other participants' future actions. In sequential two-person games, we allow first movers to...
A Model of Reference-Dependent Preferences (2004)
Koszegi, Botond, Rabin, Matthew
We develop a model that fleshes out, extends, and modifies existing models of reference dependent preferences and loss aversion while accomodating most of the evidence motivating these models. Our...
Expressed Preferences and Behavior in Experimental Games (2004)
Charness, Gary, Rabin, Matthew
It is traditional in experimental games to allow participants to choose only actions or possibly communicate intended play. In sequential two-person games, we require first movers to express a...
There is evidence that people do not fully take into account how other people's actions are contingent on these others' information. This paper defines and applies a new equilibrium concept in games...
Understanding Social Preferences with Simple Tests (2002)
Charness, Gary, Rabin, Matthew
Departures from self-interest in economic experiments have recently inspired models of "social preferences". We design a range of simple experimental games that test these theories more directly than...
Procrastination on Long-Term Projects (2002)
O'Donoghue, Ted, Rabin, Matthew
Previous papers on time-inconsistent procrastination assume projects are completed once begun. We develop a model in which a person chooses whether and when to complete each stage of a long-term...
A Perspective on Psychology and Economics (2002)
This essay provides a perspective on the trend towards integrating psychology into economics. Some topics are discussed, and arguments are provided for why movement towards greater psychological...
Addiction and Present-Biased Preferences (2002)
O'Donoghue, Ted, Rabin, Matthew
We investigate the role that self-control problems -- modeled as time-inconsistent, present-biased preferences --and a person's awareness of those problems might play in leading people to develop and...
Comparative Statics by Adaptive Dynamics and The Correspondence Principle (2002)
Federico Echenique, Juan Dubra, Néstor G, López Córdova, Marcelo Moreira, ...
This paper formalizes the relation between comparative statics and the out-of-equilibrium explanation for how a system evolves after a change in parameters. The paper has two main results. First, an...
UNDERSTANDING SOCIAL PREFERENCES WITH SIMPLE TESTS (2001)
Charness, Gary B, Rabin, Matthew
Departures from self-interest in economic experiments have recently inspired models of "social preferences". We design a range of simple experimental games that test these theories more directly than...
Self awareness and self control (2001)
People have self-control problems: From a prior perspective, they want to behave relatively patiently, but as the moment of action approaches, they want to behave relatively impatiently. Recently...
Diminishing Marginal Utility of Wealth Cannot Explain Risk Aversion (2000)
Arrow (1971) shows that an expected-utility maximizer with a differentiable utility function will always want to take a sufficiently small stake in any positive-expected-value bet. That is,...
Risky Behavior Among Youths: Some Issues from Behavioral Economics (2000)
O'Donoghue, Ted, Rabin, Matthew
This paper explores some of the ways that economists can incorporate insights from recent research combining psychology and economics to help understand risky behavior by adolescents.
Projection Bias in Predicting Future Utility (2000)
Loewenstein, George, O'Donoghue, Ted, Rabin, Matthew
People underappreciate how their own behavior and exogenous factors affect their future utility, and thus exaggerate the degree to which their future preferences resemble their current preferences....
Social Preferences: Some Simple Tests and a New Model (2000)
Charness, Gary, Rabin, Matthew
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary...
Inference by Believers in the Law of Small Numbers (2000)
Many people believe in the "Law of Small Numbers," exaggerating the degree to which a small sample resembles the population from which it is drawn. To model this, I assume that a person exaggerates...
Choice and Procrastination (2000)
O'Donoghue, Ted, Rabin, Matthew
Recent models of procrastination due to self-control problems assume that a procrastinator considers just one option and is unaware of her self-control problems. We develop a model where a person...
Risk Aversion and Expected-Utility Theory: A Calibration Theorem (2000)
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
Risk aversion and expected-utility theory: A calibration theorem (2000)
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
Choice and Procrastination (2000)
Recent models of procrastination due to self-control problems assume that a procrastinator considers just one option and is unaware of her self-control problems. We develop a model where a person...
Comparative Statics by Adaptive Dynamics and The Correspondence Principle (2000)
Federico Echenique, Juan Dubra, Néstor G, López Córdova, Marcelo Moreira, ...
This paper formalizes the relation between comparative statics and the out-of-equilibrium explanation for how a system evolves after a change in parameters. The paper has two main results. First, an...
Projection Bias in Predicting Future Utility (2000)
George Loewenstein, Ted O'Donoghue, Matthew Rabin
People underappreciate how their own behavior and exogenous factors affect their future utility, and thus exaggerate the degree to which their future preferences resemble their current preferences....
Some Simple Tests, Gary Charness, Matthew Rabin
: Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with...
Risky Behavior Among Youths: Some Issues from Behavioral Economics (2000)
This paper explores some of the ways that economists can incorporate insights from recent research combining psychology and economics to help understand risky behavior by adolescents....
Diminishing Marginal Utility of Wealth Cannot Explain Risk Aversion (2000)
this article closely match those in Rabin (forthcoming).
Inference by Believers in the Law of Small Numbers (2000)
Many people believe in the "Law of Small Numbers," exaggerating the degree to which a small sample resembles the population from which it is drawn. To model this, I assume that a person...
Social Preferences: Some Simple Tests and a New Model (1999)
Charness, Gary, Rabin, Matthew
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary...
Risk Aversion and Expected-Utility Theory: A Calibration Theorem (1999)
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
Incentives for Procrastinators (1999)
Ted O'Donoghue, Matthew Rabin, Erik Eyster
People procrastinate. Psychological research and common intuition suggest that this propensity reflects a time inconsistency: People often put off unpleasant tasks because they pursue immediate...
Addiction and Self Control (1999)
We explore the implications of self-control problems -- formalized as a time-inconsistent taste for immediate gratification -- for the consumption of harmful addictive products. We also examine the...
Addiction and Present-Biased Preferences (1998)
We investigate the role that self-control problems — modeled as time-inconsistent, presentbiased preferences — and a person’s awareness of those problems might play in leading people to develop...
Procrastination in Preparing for Retirement (1998)
Investing for retirement is one of the most important tasks of a person's life, and yet many people do a very poor job. This paper argues that a plausibly important source of poor performance is...
Addiction and Present-Biased Preferences (1998)
We investigate the role that self-control problems --- modeled as time-inconsistent, present-biased preferences --- and a person's awareness of those problems might play in leading people to...
A Theory Of Sequential Reciprocity* (1998)
Martin Dufwenberg Georg, Georg Kirchsteiger, Jel Codes A, Manfred Nermuth, Muriel Niederle, Matthew Rabin, ...
Many experimental studies indicate that people are motivated by reciprocity. Rabin (1993) develops techniques for incorporating such concerns into game theory and economics. His theory is developed...
Bargaining Structure, Fairness and Efficiency (1997)
Experiments with the ultimatum game -- where one party can make a take-it-or-leave-it offer to a second party on how to split a pie -- illustrate that conventional game theory has been wrong in its...
A Model of Persuasion { With Implications for Financial Markets (1997)
Peter M. Demarzo, Dimitri Vayanos, Je Rey Zwiebel, Simon Gervais, Ken Judd, David Kreps, ...
We propose a model of the phenomenon of persuasion. We argue that individual beliefs evolve inaway that overweights the opinions and information of individuals whom they \listen to "...
The Economics of Immediate Gratification (1997)
People have self-control problems: We pursue immediate gratification in a way that we ourselves do not appreciate in the long run. Only recently have economists begun to focus on the behavioral and...
Though economists assume that intertemporal preferences are time-consistent, evidence suggests that a person 's relative preference for well-being at an earlier moment over a later moment...
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
Bargaining Structure, Fairness, And Efficiency (1997)
: Experiments with the ultimatum game---where one party can make a take-it-or-leave-it offer to a second party on how to split a pie---illustrate that conventional game theory has been wrong in its...
Addiction and Self Control (1997)
The essence of harmful addictive products is that current consumption decreases your future well being but at the same time increases your future desire for those products. In this paper, we explore...
Psychology And Economics (1996)
: Because psychology systematically explores human judgment, behavior, and well-being, it can teach us important facts about how humans differ from traditional economic assumptions. In this essay I...
First Impressions Matter: A Model of Confirmatory Bias (1996)
Matthew Rabin, Joel Schrag, Francis Bacon
: Psychological research indicates that people have a cognitive bias that leads them to misinterpret new information as supporting previously held hypotheses. We model such confirmatory bias in a...
The Gambler's and Hot-Hand Fallacies: Theory and Applications
Rabin, Matthew, Vayanos, Dimitri
We develop a model of the gambler's fallacy -- the mistaken belief that random sequences should exhibit systematic reversals. We show that an individual who holds this belief and observes a sequence...
Social Preferences: Some Simple Tests and a New Model
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary...
The Gambler's and Hot-Hand Fallacies:Theory and Applications
Matthew Rabin, Dimitri Vayanos
We develop a model of the gambler's fallacy - the mistaken belief that random sequences should exhibit systematic reversals. We show that an individual who holds this belief and observes a sequence...
Incorporating Fairness into Game Theory and Economics.
People like to help those who are helping them and to hurt those who are hurting them. Outcomes rejecting such motivations are called fairness equilibria. Outcomes are mutual-max when each person...
Because psychology systematically explores human judgment, behavior, and well-being, it can teach us important lessons about how humans differ from the way they are traditionally described by...
Read, Daniel, Loewenstein, George, Rabin, Matthew
When making many choices, a person can broadly bracket them by assessing the consequences of all of them taken together. or narrowly bracket them by making each choice in isolation. We integrate...
Narrow Bracketing and Dominated Choices
Matthew Rabin, Georg Weizsäcker
An experiment by Tversky and Kahneman (1981) illustrates that people's tendency to evaluate risky decisions separately can lead them to choose combinations of choices that are first-order...
Reference-Dependent Risk Attitudes
We use Koszegi and Rabin's (2006) model of reference-dependent utility, and an extension of it that applies to decisions with delayed consequences, to study preferences over monetary risk. Because...
Social Preferences: Some Simple Tests and a New Model
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary...
There is evidence that people do not fully take into account how other people's actions depend on these other people's information. This paper defines and applies a new equilibrium concept in games...
The authors examine self-control problems--modeled as time-inconsistent, present-biased preferences--in a model where a person must do an activity exactly once. They emphasize two distinctions: do...
Matthew Rabin, Richard H. Thaler
Economists ubiquitously employ a simple and elegant explanation for risk aversion: It derives from the concavity of the utility-of-wealth function within the expected-utility framework. We show that...
Farrell, Joseph, Rabin, Matthew
Economists often ask how private information is shared through markets, costly signaling, and other mechanisms. Yet most information sharing is done through ordinary, informal talk. Economists are...
Diminishing Marginal Utility of Wealth Cannot Explain Risk Aversion
Arrow (1971) shows that an expected-utility maximizer with a differentiable utility function will always want to take a sufficiently small stake in any positive-expected-value bet. That is, expected-...
Addiction and Present-Biased Preferences
We investigate the role that self-control problems modeled as time-inconsistent, present-biased preferences and a person's awareness of those problems might play in leading people to develop and...
Bargaining Structure, Fairness and Efficiency
Experiments with the ultimatum game -- where one party can make a take-it-or-leave-it offer to a second party on how to split a pie -- illustrate that conventional game theory has been wrong in its...
Social Preferences: Some Simple Tests and a New Model
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary...
Projection Bias in Predicting Future Utility
George Loewenstein, Ted O'Donoghue, Matthew Rabin
People underappreciate how their own behavior and exogenous factors affect their future utility, and thus exaggerate the degree to which their future preferences resemble their current preferences....
Understanding Social Preferences with Simple Tests
Departures from self-interest in economic experiments have recently inspired models of "social preferences". We design a range of simple experimental games that test these theories more directly than...
A Perspective on Psychology and Economics
This essay provides a perspective on the trend towards integrating psychology into economics. Some topics are discussed, and arguments are provided for why movement towards greater psychological...
Expressed Preferences and Behavior in Experimental Games
It is traditional in experimental games to allow participants to choose only actions or possibly communicate intended play. In sequential two-person games, we require first movers to express a...
Risk Aversion and Expected-Utility Theory: A Calibration Theorem
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
Inference by Believers in the Law of Small Numbers
Many people believe in the "Law of Small Numbers," exaggerating the degree to which a small sample resembles the population from which it is drawn. To model this, I assume that a person exaggerates...
Procrastination on Long-Term Projects
Previous papers on time-inconsistent procrastination assume projects are completed once begun. We develop a model in which a person chooses whether and when to complete each stage of a long-term...
A Model of Reference-Dependent Preferences
We develop a model that fleshes out, extends, and modifies existing models of reference dependent preferences and loss aversion while accommodating most of the evidence motivating these models. Our...
Ted O' Donoghue, Matthew Rabin
Recent models of procrastination due to self-control problems assume that a procrastinator considers just one option and is unaware of her self-control problems. We develop a model where a person...
Loss aversion in a consumption/savings model
David Bowman, Deborah Minehart, Matthew Rabin
Consumption (Economics) ; Saving and investment
A Model of Reference-Dependent Preferences
We develop a model that fleshes out, extends, and modifies existing models of reference dependent preferences and loss aversion while accomodating most of the evidence motivating these models. Our...
Expressed Preferences and Behavior in Experimental Games
It is traditional in experimental games to allow participants to choose only actions or possibly communicate intended play. In sequential two-person games, we require first movers to express a...
There is evidence that people do not fully take into account how other people's actions are contingent on these others' information. This paper defines and applies a new equilibrium concept in games...
Understanding Social Preferences with Simple Tests
Departures from self-interest in economic experiments have recently inspired models of "social preferences". We design a range of simple experimental games that test these theories more directly than...
Procrastination on Long-Term Projects
Previous papers on time-inconsistent procrastination assume projects are completed once begun. We develop a model in which a person chooses whether and when to complete each stage of a long-term...
A Perspective on Psychology and Economics
This essay provides a perspective on the trend towards integrating psychology into economics. Some topics are discussed, and arguments are provided for why movement towards greater psychological...
Addiction and Present-Biased Preferences
We investigate the role that self-control problems modeled as time-inconsistent, present-biased preferences and a person's awareness of those problems might play in leading people to develop and...
Diminishing Marginal Utility of Wealth Cannot Explain Risk Aversion
Arrow (1971) shows that an expected-utility maximizer with a differentiable utility function will always want to take a sufficiently small stake in any positive-expected-value bet. That is,...
Risky Behavior Among Youths: Some Issues from Behavioral Economics
This paper explores some of the ways that economists can incorporate insights from recent research combining psychology and economics to help understand risky behavior by adolescents.
Projection Bias in Predicting Future Utility
George Loewenstein, Ted O'Donoghue, Matthew Rabin
People underappreciate how their own behavior and exogenous factors affect their future utility, and thus exaggerate the degree to which their future preferences resemble their current preferences....
Social Preferences: Some Simple Tests and a New Model
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary...
Inference by Believers in the Law of Small Numbers
Many people believe in the "Law of Small Numbers," exaggerating the degree to which a small sample resembles the population from which it is drawn. To model this, I assume that a person exaggerates...
Recent models of procrastination due to self-control problems assume that a procrastinator considers just one option and is unaware of her self-control problems. We develop a model where a person...
Risk Aversion and Expected-Utility Theory: A Calibration Theorem
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
Bargaining Structure, Fairness and Efficiency
Experiments with the ultimatum game -- where one party can make a take-it-or-leave-it offer to a second party on how to split a pie -- illustrate that conventional game theory has been wrong in its...
Inference by Believers in the Law of Small Numbers.
JEL#: B49 Keywords: Bayesian Inference, the gambler' fallacy, law of large numbers, law of small numbers, over-inference Many people believe in the "Law of Small Numbers," exaggerating the degree to...
Bargaining Structure, Fairness and Efficiency.
JEL#: A12, A13, B49, C70, D63 Keywords: Bargaining, Efficiency, Fairness, Inefficiency, Inequality, Ultimatum Game Experiments with the ultimatum game--where one party can make a take-it-or-leave-it...
Risk Aversion and Expected-Utility Theory: A Calibration Theorem.
Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is...
In addition to pursuing their material self-interest, people are motivated to help those who are kind to them, and to hurt those who are mean to them. Such social preferences influence behavior most...
Because psychology systematically explores human judgment, behavior, and well-being, it can teach us important facts about how humans differ from traditional economic assumptions. In this essay I...
Moral Preferences, Moral Constraints, and Self-Serving Biases.
Economists have formally modeled moral dispositions by directly incorporating into utility analysis concern for the well-being of others. But sometimes moral dispositions are not preferences, as...
Projection Bias In Predicting Future Utility
George Loewenstein, Ted O'Donoghue, Matthew Rabin
People exaggerate the degree to which their future tastes will resemble their current tastes. We present evidence from a variety of domains which demonstrates the prevalence of such projection bias,...
Inference By Believers In The Law Of Small Numbers
People exaggerate the degree to which small samples resemble the population from which they are drawn. To model this belief in the "Law of Small Numbers," I assume that a person exaggerates the...
Understanding Social Preferences With Simple Tests
Departures from self-interest in economic experiments have recently inspired models of "social preferences." We design a range of simple experimental games that test these theories more directly than...
Recent models of procrastination due to self-control problems assume that a procrastinator considers just one option and is unaware of her self-control problems. We develop a model where a person...
Incentives For Procrastinators
We examine how principals should design incentives to induce time-inconsistent procrastinating agents to complete tasks efficiently. Delay is costly to the principal, but the agent faces stochastic...
A Model of Reference-Dependent Preferences
We develop a model of reference-dependent preferences and loss aversion where "gain-loss utility" is derived from standard "consumption utility" and the reference point is determined endogenously by...
Procrastination on Long-Term Projects
O'Donoghue, Ted, Rabin, Matthew
Previous papers on time-inconsistent procrastination assume projects are completed once begun. We develop a model in which a person chooses whether and when to complete each stage of a long-term...
Addiction and Present-Biased Preferences
O'Donoghue, Ted, Rabin, Matthew
We investigate the role that self-control problems--modeled as time-inconsistent, present-biased preferences--and a person's awareness of those problems might play in leading people to develop and...
Projection Bias in Predicting Future Utility
Loewenstein, George, O'Donoghue, Ted, Rabin, Matthew
People exaggerate the degree to which their future tastes will resemble their current tastes. We present evidence from a variety of domains which demonstrates the prevalence of such projection bias,...
Procrastination on long-term projects
O'Donoghue, Ted, Rabin, Matthew
We investigate naive procrastination on projects with multiple stages. In addition to classic procrastination in starting projects, naive people might undertake costly effort to begin projects but...
Choices, situations, and happiness
Koszegi, Botond, Rabin, Matthew
This article explores some conceptual issues in the study of well-being using the traditional economic approach of inferring preferences solely from choice behavior. We argue that choice behavior...
Expressed Preferences and Behavior in Experimental Games
Participants in experimental games typically can only choose actions, without making comments about other participants' future actions. In sequential two-person games, we allow first movers to...
UNDERSTANDING SOCIAL PREFERENCES WITH SIMPLE TESTS
Departures from self-interest in economic experiments have recently inspired models of "social preferences". We design a range of simple experimental games that test these theories more directly than...
In social-learning environments, we investigate implications of the assumption that people naively believe that each previous person's action reflects solely that person's private information,...
Reference-Dependent Consumption Plans
We develop a rational dynamic model in which people are loss averse over changes in beliefs about present and future consumption. Because changes in wealth are news about future consumption,...
Narrow Bracketing and Dominated Choices
Matthew Rabin, Georg Weizsacker
We show that any decision maker who "narrowly brackets" (evaluates decisions separately) and does not have constant-absolute-risk-averse preferences will make a first-order stochastically dominated...