First Midterm, Behavioral Economics 115
You have 50 minutes to 40 multiple choice questions. Good luck.
1. Standard normative economic models include
(A) utility maximization; (B) prospect theory; (C) satiscing procedure;
above.
Answer: A
(D) all of the
2
Midterm Exam
You have 50 minutes to answer 40 questions. Good luck!
1. Standard economic models
(A) prescribe how rational people should make their choices;
(B) assert utility maximization;
(C) assert that agents probabilistic beliefs should comply with c
Second Midterm Exam
You have 50 minutes to answer 36 questions. Good luck!
1. Neuroeconomics has found that cooperation and altruistic behaviors increase together with
(A) the prefrontal cortex activity;
(B) oxytocin levels;
(C) education levels;
(D) none
Homework 1
1. Standard economic models
(A) prescribe how rational people should make their choices;
(B) accurately describe how people make choices in experiments;
(C) assert that people should be altruistic;
(D) all of the above.
2. Behavioral economic m
Second Midterm, Behavioral Economics 115
You have 50 minutes to 26 multiple choice questions. Good luck.
1. The probability of which event is hardest to dene?
(A) The numbers 1, 2, 3, 4, 5, 6 will win the next Mega Millions lottery;
(B) A card randomly dr
Second Midterm
You have 80 minutes to answer 41 questions. Good luck!
1. Choices under uncertainty may rely on
(A) objective probabilities;
(B) monetary payos; (C) subjective probabilities;
(D) all of
the above. Answer: D
2. To apply Bayesian formula, peo
Homework 6
1. Angners book 8.5, 8.9, 9.3, 9.10
2. Consider a person who has discounted utility
U (c0 , c1 , c2 ) = u(c0 ) + u(c1 ) + 2 u(c2 ).
Suppose that he is indierent between the two proles c0 = c1 = c2 = 10 and
c0 = 9, c1 = 10, c2 = 12.
(a) Let u(c)
Second Midterm
You have 50 minutes to answer 36 questions. Good luck!
1. Experimental evidence shows that
(A) social norms can motivate people better than money;
(B) social norms motivate people especially well when they are used together with monetary in
Final Exam
You have two hours to answer 54 questions. Good luck!
1. Standard normative economic models include
(A) utility maximization;
(B) expected utility; (C) discounted utility; (D) all of the above. Answer:
D
2. Behavioral economic models include
(A
First Midterm Exam
Wed Oct 28
multiple choice, 40 questions, 50 minutes
one page of handwritten notes, two sides
no cooperation!
review lecture on Friday
Monday material is not on the test
Extra Credit Essays
Combine a list of sales techniques that
Second Midterm
You have 80 minutes to answer 41 questions. Good luck!
1. For which of the following events probability can be computed via symmetry or frequency?
(A) A random unemployed American person will nd a job within a month;
(B) Lakers will win the
Homework 8
1. Angners book 8.5, 8.9, 9.3, 9.10
2. Consider a person who has discounted utility
U (c0 , c1 , c2 ) = u(c0 ) + u(c1 ) + 2 u(c2 ).
Suppose that he is indierent between the two profiles c0 = c1 = c2 = 10 and
c0 = 9, c1 = 10, c2 = 12.
(a) Let u(
Midterm 1
You have 80 minutes to answer 45 questions.
1. Standard economic models
(A) prescribe how rational people should make their choices;
(B) accurately describe how people make choices in experiments;
(C) assert that people should be altruistic;
(D)
Second Midterm, Behavioral Economics 115
You have 50 minutes to 37 multiple choice questions. Good luck.
1. Which of the following models require numerical probabilities?
(A) expected value; (B) prospect theory; (C) risk aversion; (D) all of the above.
An
Homework and Discussions
The first homework is posted. Some problems are
multiple choice and taken from previous tests.
I also posted the last year first midterm with the answer
key.
Discussions start next week!
Menus, Choices and Preferences
Let X be som
Decisions under Uncertainty
Examples:
Buy full insurance on your vehicle or not?
Play a lottery or not?
Buy extra warranty protection on a new laptop or not?
Invest in the stock market or not?
Which college to choose out of several offers?
Reserve a ski t
Homework and Discussions
Discussions start this week!
Jonathan Servas - Mon 1-1:50 and Tu 10:00-10:50
Paul Stroik
- Th 10-10:50 and Th 1-1:50
Kai Yoshioka F 4-4:50
You can attend any discussion(s) you like.
Homeworks need not be submitted, except for the
General SEM: Utility Maximization
People make choices that maximize their decision utility.
Given any menu B, the agent must choose x in B such
that
U(x) U(y)
for all alternatives y in B.
Utility function U should also represent the preference
relation so
Standard Economic Models (SEM)
Agents have preferences, indifference curves, and maximize utility.
Agents are selfish and do not care about fairness.
If payoffs are obtained in the future, then agents have time
preferences consistent with the discounte
The Most Important Graph in Behavioral
Economics
Value
The value function in the
prospect theory combines
several behavioral features:
Risk aversion for gains,
concavity of the graph for
gains,
Risk loving for losses,
convexity of the graph for
losses
Los
Behavioral Economics: Class Materials
No discussions until Week 2
Oct 5 Oct 9
I will post all files - syllabus, slides, homeworks, exams, notes, at
the class webpage
https:/eee.uci.edu/15f/62130
Grading
First Midterm (October 28) 30%
Second Midterm (Novem
Standard Expected Utility + Risk
Aversion
The utility for money is concave and unaffected by
the reference point.
The Most Important Graph in Behavioral
Economics
Value
The value function in the
prospect theory combines
several behavioral features:
Risk a
Standard Model: Probabilities
Two objective ways to compute probabilities
based on symmetry (classical)
Probability(event A) =
(# states where A occurs)/(# possible states)
Examples: casino games, card games, physics
based on data and observations (freq
Standard Models: Expected Value,
Expected Utility, Risk Attitudes
Consider a gamble f that delivers several monetary payoffs
x1, x2, ., xn with probabilities p1, p2 , . pn respectively.
Then the expected value of f is
EV(f) = p1 x1 + p2 x2 + pn xn
Expecte
Decisions under Uncertainty
Four types of decision problems:
Type I: Numerical probabilities and monetary payoffs
Type II: Numerical probabilities and general payoffs
Type III: Verbal states and monetary payoffs
Type IV: Verbal states and general payoffs.
Econ 115 Midterm Lecture 1-13
Ch.1
What is Behavioral Economics about
o Economics means that observed choices have material rewards and can affect
other people
o Behavioral means that people deviate from the basic rationality principles used
ion normative
Empirical evidence: Reference
Dependence
Gains and losses matter. Kahneman and Tversky (79) identify two
broad effects.
Loss aversion. Losses have a stronger impact on decisions than
gains. Benartzi and Thaler (95): people are roughly twice as
sensitive
First Midterm Exam
Oct 26
multiple choice, 38 questions, 50 minutes
scantron F-288-PAR-L
one page of handwritten notes, two sides
no cooperation!
calculators are allowed, but no other devices.
Selfishness and Social Preferences
Standard Economic Mod
Homework5
Submit via Moblab.
1.
Ann has a utility function U(p) = p(1 p) over the gambles that pay an apple with probability p and an
orange with probability 1-p. This function complies with
(A) expected utility;(B) prospect theory;
(C) expected value;
(D
Final Exam
You have two hours to answer 51 questions. Good luck!
Questions like 2124 are not going to be on the test in 2016.
1. Utility maximization model can accommodate
(A) commitment; (B) procrastination; (C) preproperation; (D) all of the above. Answ
Homework 8
It should be submitted on a separate scantron together with your second midterm.
1. Altruistic behaviors are observed in
(A) dictator games; (B) trust games; (C) public good games; (D) all of the above. Answer: D
2. Spiteful behaviors are obser
Behavioral Economics
Homework 6
1. Exercise 10.5 from Angners book
2. Recall the parking game, where the parking fee is $5, the fine is $50, and the cost
of checking is $1. Suppose that both the driver and the parking authority maximize
expected value. De
Homework 2
1. Angners book: 6.5, 6.6, 6.11, 6.15, 6.19, 6.24
2. Calculate the expected utility of a person who has wealth W = $10000, faces a
potential loss of C = $5000 with probability and has a utility index u(x) over
money:
(i) = 0.01 and u(x) = x2 ;