Bounded Rationality and Beyond

If you dropped a dozen human toddlers on a beautiful Polynesian island with shelter and enough to eat, but no computers, no cell phones,…

HOW TO GET INTO THE AMA JOB MARKET
First, at least a couple months before the conference, find where it will be. It’s called the American Marketing Association Summer Educator’s Conference. Strange name, we know. Insiders just call it “The AMA”. Get yourself a room in the conference hotel, preferably on the floor where the express elevator meets the local elevator for the upper floors. You’ll be hanging out on this floor waiting to change elevators anyway, so you might as well start there. Next, create a list of schools at which you would like a job. You can find the top 100 schools ranked by journal publications at: http://jindal.utdallas.edu/the-utd-top-100-business-school-research-rankings . Next, apply to each one you’d go to. In the past, this involved physically mailing application packets, but these days nearly everything is electronic. Some schools have online application portals, and others will take applications by email. How do you find out which one? Hopefully, the school you are applying to will have posted a job at ELMAR (see http://ama-academics.communityzero.com/elmar; and subscribe to their mailing list) or elsewhere, which will specify how to submit your application. Other times, you’ll need to get in touch with a department administrator to find out how to apply. It’s a good idea to apply to schools you like even if they say they aren’t hiring. Sometimes things change suddenly (a tenured faculty member unexpectedly moves to another school), and the only thing you risk is your time.

Despite numerous studies attemptin to link volatility to changing fundamentals, research shows that investor emotions are the root cause of the vast majority of these price changes, according to C........

Particularly germane to implementing behavioral portfolio management is understanding Howard’s views on emotions and volatility, and how he handles them when managing money. Recall that Howard is professor emeritus at Daniels College of Business, University of Denver, and co-founder of AthenaInvest, whose Athena Pure Valuation is one of the top performing portfolios in recent years.

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MacArthur winner Sendhil Mullainathan uses the lens of behavioral economics to study a tricky set of social problems -- those we know how to solve, but don't.

As a physician who conducts research on decision-making, I have been asked many times: What does behavioral economics teach us about the role of living wills in medical care?

Abstract

Economic experiments are increasingly being used in a number of research areas and are a major source of data guiding the debate surrounding the nature of human prosociality. The degree to which experiment behavior accurately reflects external behavior, however, has long been debated. A number of recent studies have revealed just how remarkably sensitive participants are to cues of a lack of anonymity. Similarly, others have suggested that the very structure of the experimental context induces participants to choose prosocial options. In order to truly create anonymous conditions and to eliminate the effects of experimental contexts, participants must not be aware of their participation. Here, I present the results of a natural-field Dictator Game in which participants are presented with a believable endowment and provided an opportunity to divide the endowment with a stranger without knowing that they are taking part in an experiment. No participants gave any portion of the endowment to the stranger. Baseline frequencies of prosocial behaviors exhibited under experimental contexts might therefore be substantially inflated compared to those exhibited under natural contexts.

People search for information that confirms their view of the world and ignore what doesn't fit.

In an uncertain world, people love to be right because it helps us make sense of things. Indeed some psychologists think it's akin to a basic drive.

One of the ways they strive to be correct is by looking for evidence that confirms they are correct, sometimes with depressing or comic results:

A woman hires a worker that turns out to be incompetent. She doesn't notice that everyone else is doing his work for him because she is so impressed that he shows up every day, right on time.A sports fan who believes his team is the best only seems to remember the matches they won and none of the embarrassing defeats to inferior opponents.A man who loves the country life, but has to move to the city for a new job, ignores the flight-path he lives under and noisy-neighbours-from-hell and tells you how much he enjoys the farmer's market and tending his window box.

We do it automatically, usually without realising. We do it partly because it's easier to see where new pieces fit into the picture-puzzle we are working on, rather than imagining a new picture. It also helps shore up our vision of ourselves as accurate, right-thinking, consistent people who know what's what.

Psychologists call it the confirmation bias and it creeps into all sorts of areas of our lives. Here are a few examples:

Three factors that can transform work into play.

Roughly speaking there are only two reasons you do anything in life:

Because you want to.Because someone else wants you to.

The first category of internally motivated activities might include things like eating, socialising, hobbies and going on holiday. The second category of externally motivated activities might include working a job, studying, or loading the dishwasher.

The reason I say 'roughly speaking' and 'might include' is because the two types of motivation can be difficult to disentangle. Yes, you enjoy your work, but would you do it for less money or for free? Maybe, maybe not. Yes, my wife wants me to load the dishwasher, but maybe I'd do it anyway. Or maybe not.

People struggle to save enough for retirement, but a redesign of the pension plan can help. Save More Tomorrow is the classic financial nudge.

As modern portfolio theory fades in reputation from intense pressure from behavioral finance, many researchers are seeking to fill the void with behavioral finance applications. Behavioral portfoli..Seeking to bridge the divide between modern portfolio theory and behavioral finance, is C. Thomas Howard’s“Behavioral Portfolio Management.” Howard is professor emeritus at Daniels College of Business, University of Denver, and co-founder of AthenaInvest. Application of his behavioral portfolio management has resulted in Athena’s longest running portfolio, Athena Pure Valuation, generating a return over 11 years of 26.1%. Compare that to the Russell 2000 benchmark, which returned 10.6%. Further, Athena Pure is the top performing portfolio in the country over this time period when compared to the active equity mutual fund universe.

How exactly does the brain -- a 3-pound snarl of nervous tissue -- create inspired inventions, the feeling of hunger, the experience of beauty, the sense of self?

“For the past five years we’ve been running the largest behavioral science experiment in the world,” says Alex Laskey in today’s TED Talk, given at this year’s 2013 conference in Long Beach. “And, it’s working.”

Alex Laskey: How behavioral science can lower your energy billLaskey’s company Opower partners with utility companies to deliver personalized home energy reports, all based off the insight that people are more inclined to take action on an issue when they think other people are doing better than they are. People’s energy consumption changes for the better after receiving these reports — either in the mail or through their app and website — and the effects appear to be long-lasting. This year, Laskey says, Opower expects to inspire 2 terawatt hours (TWh) in saved electricity. That’s enough to power a city of more than a quarter million people for a year.

Many dynamical networks, such as the ones that produce the collective behavior of social insects, operate without any central control, instead arising from local interactions among individuals. A well-studied example is the formation of recruitment trails in ant colonies, but many ant species do not use pheromone trails. We present a model of the regulation of foraging by harvester ant (Pogonomyrmex barbatus) colonies. This species forages for scattered seeds that one ant can retrieve on its own, so there is no need for spatial information such as pheromone trails that lead ants to specific locations. Previous work shows that colony foraging activity, the rate at which ants go out to search individually for seeds, is regulated in response to current food availability throughout the colony's foraging area. Ants use the rate of brief antennal contacts inside the nest between foragers returning with food and outgoing foragers available to leave the nest on the next foraging trip. Here we present a feedback-based algorithm that captures the main features of data from field experiments in which the rate of returning foragers was manipulated. The algorithm draws on our finding that the distribution of intervals between successive ants returning to the nest is a Poisson process. We fitted the parameter that estimates the effect of each returning forager on the rate at which outgoing foragers leave the nest. We found that correlations between observed rates of returning foragers and simulated rates of outgoing foragers, using our model, were similar to those in the data. Our simple stochastic model shows how the regulation of ant colony foraging can operate without spatial information, describing a process at the level of individual ants that predicts the overall foraging activity of the colony.