Efficient methods for empirical tests of behavioral economics theories in laboratory and field experiments

In the quest for a descriptive theory of decision-making, the rational actor model in economics imposes rather unrealistic expectations and abilities on human decision makers. The further we move from idealized scenarios, such as perfectly competitive markets, and ambitiously extend the reach of the theory to describe everyday decision making situations, the less sense these assumptions make. Behavioural economics has instead proposed models based on assumptions that are more psychologically realistic, with the aim of gaining more precision and descriptive power. Increased psychological realism, however, comes at the cost of a greater number of parameters and model complexity. Now there are a plethora of models, based on different assumptions, applicable in differing contextual settings, and selecting the right model to use tends to be an ad-hoc process. In this thesis, we develop optimal experimental design methods and evaluate different behavioral theories against evidence from lab and field experiments.

We look at evidence from controlled laboratory experiments. Subjects are presented with choices between monetary gambles or lotteries. Different decision-making theories evaluate the choices differently and would make distinct predictions about the subjects' choices. Theories whose predictions are inconsistent with the actual choices can be systematically eliminated. Behavioural theories can have multiple parameters requiring complex experimental designs with a very large number of possible choice tests. This imposes computational and economic constraints on using classical experimental design methods. We develop a methodology of adaptive tests: Bayesian Rapid Optimal Adaptive Designs (BROAD) that sequentially chooses the "most informative" test at each stage, and based on the response updates its posterior beliefs over the theories, which informs the next most informative test to run. BROAD utilizes the Equivalent Class Edge Cutting (EC²) criteria to select tests. We prove that the EC² criteria is adaptively submodular, which allows us to prove theoretical guarantees against the Bayes-optimal testing sequence even in the presence of noisy responses. In simulated ground-truth experiments, we find that the EC² criteria recovers the true hypotheses with significantly fewer tests than more widely used criteria such as Information Gain and Generalized Binary Search. We show, theoretically as well as experimentally, that surprisingly these popular criteria can perform poorly in the presence of noise, or subject errors. Furthermore, we use the adaptive submodular property of EC² to implement an accelerated greedy version of BROAD which leads to orders of magnitude speedup over other methods.

We use BROAD to perform two experiments. First, we compare the main classes of theories for decision-making under risk, namely: expected value, prospect theory, constant relative risk aversion (CRRA) and moments models. Subjects are given an initial endowment, and sequentially presented choices between two lotteries, with the possibility of losses. The lotteries are selected using BROAD, and 57 subjects from Caltech and UCLA are incentivized by randomly realizing one of the lotteries chosen. Aggregate posterior probabilities over the theories show limited evidence in favour of CRRA and moments' models. Classifying the subjects into types showed that most subjects are described by prospect theory, followed by expected value. Adaptive experimental design raises the possibility that subjects could engage in strategic manipulation, i.e. subjects could mask their true preferences and choose differently in order to obtain more favourable tests in later rounds thereby increasing their payoffs. We pay close attention to this problem; strategic manipulation is ruled out since it is infeasible in practice, and also since we do not find any signatures of it in our data.

In the second experiment, we compare the main theories of time preference: exponential discounting, hyperbolic discounting, "present bias" models: quasi-hyperbolic (α, β) discounting and fixed cost discounting, and generalized-hyperbolic discounting. 40 subjects from UCLA were given choices between 2 options: a smaller but more immediate payoff versus a larger but later payoff. We found very limited evidence for present bias models and hyperbolic discounting, and most subjects were classified as generalized hyperbolic discounting types, followed by exponential discounting.

In these models the passage of time is linear. We instead consider a psychological model where the perception of time is subjective. We prove that when the biological (subjective) time is positively dependent, it gives rise to hyperbolic discounting and temporal choice inconsistency.

We also test the predictions of behavioral theories in the "wild". We pay attention to prospect theory, which emerged as the dominant theory in our lab experiments of risky choice. Loss aversion and reference dependence predicts that consumers will behave in a uniquely distinct way than the standard rational model predicts. Specifically, loss aversion predicts that when an item is being offered at a discount, the demand for it will be greater than that explained by its price elasticity. Even more importantly, when the item is no longer discounted, demand for its close substitute would increase excessively. We tested this prediction using a discrete choice model with loss-averse utility function on data from a large eCommerce retailer. Not only did we identify loss aversion, but we also found that the effect decreased with consumers' experience. We outline the policy implications that consumer loss aversion entails, and strategies for competitive pricing.

In future work, BROAD can be widely applicable for testing different behavioural models, e.g. in social preference and game theory, and in different contextual settings. Additional measurements beyond choice data, including biological measurements such as skin conductance, can be used to more rapidly eliminate hypothesis and speed up model comparison. Discrete choice models also provide a framework for testing behavioural models with field data, and encourage combined lab-field experiments.

Tests of some specific effect substances in duck nutrition. Translation from: Biologisace a chemisaze vyzivy svirat 5, 43-48, 1969.]

There is a constantly increasing collection of manufactured substances, whose effectiveness in the sustenance of ducks is under investigation. The author examines the effects of some substances already previously tested and also there were examined substances which had not hitherto been studied. The use of different supplements for late autumn fattening is studied through various experiments.

Efeito da Suplementação com L-arginina em subpopulações linfocitárias de ratos submetidos a esplenectomia total isolada ou combinada com autoimplante esplênico

A L-arginina é reconhecida como um nutriente de fundamental importância na resposta imune, apesar de seus efeitos serem, por vezes, considerados inconstantes. O autoimplante esplênico tem sido proposto como alternativa à esplenectomia total isolada, mas existem preocupações quanto à eficácia do restabelecimento da resposta imune, haja vista que o paciente pode permanecer com risco aumentado de desenvolvimento de infecção fulminante pós esplenectomia, mesmo após a regeneração morfológica do órgão. O objetivo deste estudo foi avaliar a participação da suplementação dietética com L-arginina em subpopulações linfocitárias no sangue, no baço e nos autoimplantes esplênicos de ratos submetidos a esplenectomia isolada ou combinada com autoimplante esplênico. Foram utilizados 42 ratos Sprague-Dawley machos, randomicamente distribuídos em seis grupos: 1 Controle operação simulada; 2 esplenectomia total; 3 esplenectomia total combinada com autoimplante esplênico; 4 Controle operação simulada, com suplementação de L-arginina; 5 esplenectomia total, com suplementação de L-arginina; e 6 esplenectomia total combinada com autoimplante esplênico, com suplementação de L-arginina. Os animais dos grupos 4, 5 e 6 receberam suplementação de L-arginina, uma vez ao dia, durante 15 dias anteriores a coleta sangüínea realizada imediatamente antes dos procedimentos operatórios (semanas 0 e 12). A dose utilizada foi de 1,0 g/kg/dia, administrada por via intragástrica em bolus. As avaliações foram realizadas por meio de hemograma e citometria de fluxo. A análise estatística utilizou testes paramétricos e nãoparamétricos, sendo p<0,05 considerado para a rejeição da hipótese nula. A suplementação com L-arginina acarretou elevação da contagem relativa e absoluta de neutrófilos periféricos, 12 semanas após a realização de esplenectomia total combinada com autoimplante esplênico. A esplenectomia total ocasionou diminuição da contagem relativa de linfócitos T totais, T CD4+ e T CD8β no sangue, mas a suplementação dietética com L-arginina evitou a diminuição do percentual de células T totais e T CD8β no sangue dos animais submetidos a autoimplante esplênico. Tanto a realização de autoimplante esplênico como a suplementação de L-arginina previnem a diminuição da subpopulação de linfócitos T CD4+ no sangue periférico, fato que usualmente ocorre após realização de esplenectomia total. Houve maior proliferação de células brancas / g de tecido nos autoimplante esplênico dos animais suplementados, porém a suplementação não influenciou a contagem de linfócitos T, T CD4+ e B de zona marginal de baço. A suplementação do aminoácido L-arginina após a realização de esplenectomia total combinada com autoimplante esplênico em ratos foi capaz de reverter alterações observadas em algumas das subpopulações linfocitárias, ocasionadas pela esplenectomia.

Judgmental-analytical procedures for adapting tests: Adaptation to Spanish of the Reasoning Tests Battery

Adapting a test between cultures or languages requires taking into account legal, linguistic, metric, and use-related considerations. Significantly more attention has been paid to the methodological aspects involved in the study of metric equivalence than to judgmental-analytical procedures prior to the empirical confirmation stage. However, considering the latter is crucial in the adaptation process. Along these lines, this paper seeks to describe and focus on the relevance of the previous stages, thereby offering a systematization process that comprises ten sections. This approach contributes to ensuring the construction of a test adapted and equivalent in as much as possible to the original. This process is exemplified by means of a Spanish language adaptation of a cognitive test originally designed in Portuguese for the Portuguese population, the Reasoning Test Battery. Copyright (C) 2013, Konrad Lorenz University Foundation. Published by Elsevier Espana, S.L.U.