Econ 277A Winter 2011
Problem Set 2
Problem 1
Arne, Barack, and Christy are four regressions away from completing their doctoral dissertations, and they have four days in which to nish. If one of them spends ht hours running
regressions on day t, her util
Econ 277A Winter 2011
Problem Set 1
Due no later than 1/27
Problem 1
Suppose Kory is going to live for two periods. His lifetime utility is the sum of his period 1
and 2 utility,
ln(1 + c1 r1 ) + ln(1 + c2 r2 ).
His budget constraint is c1 + c2 1. He is b
Recap
Modeling Reference-Dependence
Modeling Reference-Dependent Preferences
(Part I)
January 6, 2011
Example
Recap
Modeling Reference-Dependence
Example
Risk Aversion Schizophrenia
Suppose u (w ) = e .0000166w (CARA).
Attitude towards any gamble involvi
Overview
Loss Aversion
Diminishing Sensitivity
Non-linear Probability Weighting
Modeling Reference-dependent Utility
Introduction to Prospect Theory
January 6, 2011
Overview
Loss Aversion
Diminishing Sensitivity
Non-linear Probability Weighting
Modeling R
Overview
Loss Aversion
Diminishing Sensitivity
Non-linear Probability Weighting
Modeling Reference-dependent Utility
Introduction to Prospect Theory
January 6, 2011
Overview
Loss Aversion
Diminishing Sensitivity
Non-linear Probability Weighting
Modeling R
Intro
DU model
Beta-Delta Model
Present-Biased Preferences
January 20, 2011
Self-Awareness
Intro
DU model
Beta-Delta Model
Today
Ryan and Mads on cab drivers
Intertemporal choice: background
Discounted utility anomalies & present bias
Quasi-hyperbolic
Motivation & Introduction
Model
Reference-Dependent Preferences with
Expectations as the Reference Point
January 11, 2011
Risk Attitudes
Motivation & Introduction
Model
Risk Attitudes
Today
The Kszegi/Rabin model of reference-dependent preferences. . .
o
Motivation & Introduction
Model
Reference-Dependent Preferences with
Expectations as the Reference Point
January 11, 2011
Risk Attitudes
Motivation & Introduction
Model
Risk Attitudes
Today
The Kszegi/Rabin model of reference-dependent preferences. . .
o
Course Information
Overview
Econ 277A Behavioral Economics (Theory)
a.k.a. Psychology & Economics
Introduction
Your host: Zack Grossman
UCSB
Winter 2011
Course Information
Overview
Class Information
Web:
http:/econ.ucsb.edu/~grossman/Econ277AW11.html
In