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.

Pathways for the uptake of dissolved organic matter (DOM) by aquatic animals

In this article, pathways from freshwater and marine environments are described. DOM is defined operationally as all the organic compounds which pass through a filter of pore size 0.45 microm., those retained on the surface of the filter being particulate organic matter (POM). DOM can be taken up directly by animals by transfer across the body wall, but more commonly DOM is obtained from ingested food. Once ingested POM from food particles are broken down in the gut, small molecules of DOM are released for transfer across the gut wall. Some ingested particles are attacked by micro-organisms living in the gut, thereby making the DOM available to the host animal. The importance of the microbial loop is discussed, as well as aggregation processes between the fractions of DOM which are more obviously particulate in nature. (DBO)

Densidade, genética e saúde populacional como ferramentas para propor um plano de controle e erradicação de invasão biológica: o caso de Callithrix aurita (Primates) no Parque Nacional da Serra dos Órgãos, RJ, Brasil

A introdução de espécies em locais fora de sua distribuição natural é uma preocupação importante na conservação da biodiversidade. A espécie Callithrix aurita é endêmica das regiões de floresta de altitude da Mata Atlântica do Sudeste do Brasil. Os critérios mais relevantes que a enquadram como espécie ameaçada de extinção são: destruição do habitat, incapacidade de adaptação a florestas secundárias degradadas, declínio populacional, distribuição restrita e introdução de espécies exóticas invasoras. Estes critérios, aliados à evidente raridade, explicam a sua inclusão na Lista Oficial de Espécies da Fauna Brasileira Ameaçadas de Extinção. Os objetivos do trabalho são: estimar o tamanho populacional de C. aurita, C. penicillata e seus híbridos no Parque Nacional da Serra dos Órgãos, avaliar a hibridação entre as espécies por caracteres morfológicos e laboratoriais, verificar o estado de saúde e confirmar a participação de C. aurita na paternidade dos animais capturados, propor um plano de erradicação e de controle de invasão de C. penicillata no Parque. Os tamanhos populacionais das duas espécies de primatas foram estimados através do método Distance Sampling. Um total de sete sagüis foi capturado com armadilhas de captura viva para a contenção física e química e posterior realização dos procedimentos. Para o hemograma, as dosagens bioquímicas e as análises genéticas, o sangue foi recolhido em um tubo de ensaio contendo anticoagulante e mantido em temperatura de refrigeração até o momento da manipulação / processamento das amostras. Callithrix aurita parece estar bem preservada apenas na área do Parque correspondente ao trecho situado no município de Petrópolis. As análises citogenéticas e moleculares dos híbridos são uma ferramenta útil para confirmar se há ou não hibridação, identificando as espécies envolvidas e verificando se há tendência nos retrocruzamentos. Pode-se sugerir que existe uma tendência à diferenciação das espécies e identificação de indivíduos híbridos pelo padrão hematológico e bioquímico, a ser confirmada com uma amostragem maior de animais da espécie C. aurita, preferencialmente da mesma localidade e nas mesmas condições. No caso de C. aurita, as principais recomendações para sua conservação incluem pesquisas para o registro de outras populações em áreas de distribuição livres de invasão, para que se possa avaliar as chances de recuperação populacional e sobrevivência da espécie. A criação de novas Unidades de Conservação deve ser estimulada, assim como estudos mais aprofundados sobre a espécie nos locais já conhecidos de ocorrência, além de um programa seguro de criação em cativeiro.

A. An investigation of the relation between the tensile strength and (Brinell) hardness of non-ferrous alloys. B. A design of a fatigue testing machine for a college laboratory

[no abstract]

Temporary ponds in the UK; a critical biodiversity resource for freshwater plants and animals

The importance of ponds for biodiversity in Britain has been demonstrated by a number of studies. However, most of the research and interest has been directed at permanent waterbodies, and temporary ponds have been largely neglected. In this article the author present some preliminary findings from a project which aims to fill some of the many gaps in our knowledge of temporary ponds in Britain. The project, which runs for three years until the end of 2001, aims specifically to investigate the ecology of temporary ponds in England and Wales by describing (i) their wetland plant and macroinvertebrate communities, (ii) their physico-chemical characteristics, and (iii) their value as a biodiversity resource. The article focuses on the assessment of temporary ponds as a biodiversity resource and briefly considers aspects of species richness, rarity and distinctiveness. Where possible, temporary ponds are compared with other waterbody types, mainly permanent ponds from the National Pond Survey (NPS), to give the results a broader context.

Production of the chironomids of the Uchinsk Reservoir. [Translation of: Methods for the estimation of production of aquatic animals. (Handbook and papers) (ed. G. G. Vinberg) p226-239. Minsk, Vysheishaya Shkola, 1968]

The method of E.V. Borutski was used for determining the production of chironomids, that is, the dynamics of the number and biomass of the larvae were analysed, their death, a calculation of emergence and the number of deposited egg layings was carried out. In addition to the method of Borutski, the authors also calculated the seasonal dynamics of the number of larvae of the younger age stages in the microbenthos.

Rhythms of division of some algae in situ and in laboratory culture. [Translation from: Studii Cerc.Biol.(Bot.) 21, 61-65, 1969. ]

The rhythm of division of 9 species belonging to different groups of algae were analysed in situ and in the laboratory. The research which developed in different environmental conditions attempted to establish the capacity for multiplication and assimilation of chlorophyll on the part of the algae under study with a view to placing them in a culture. The results obtained showed that the green multicellular algae (eg. Ulothrix) and the blue algae (eg. Lyngbya, Oscillatoria) are able to produce an appreciable quantity of dry matter, just as the unicellular algae. At the same time it arises that amongst the numerous factors of the environment, temperature plays one of the most important roles in the process of multiplication.

Growth and reproduction of Moina rectirostris (Leydig) and Ceriodaphnia quadrangula (O. F. Muller) with feeding on detritus. [Translation from: Sbornik po prudovomu rybovodstvu, 79-89. Moscow, VNIRO, 1969.]

The significance of detritus in the nutrition of aquatic animals, especially of the small representatives of the zooplankton, has been studied very slightly. Research so far has established that in M. rectirostris with feeding on protococcal and single-celled green algae and bacteria the beginning of formation of eggs takes place in 2 - 4 days. The young appear in 4 - 6 days. In this study M. rectirostris and C. quadrangula are fed on detritus of natural origin in laboratory conditions. In order to determine the assimilability and productive: effect of detritus, the author set up experiments, permitting to characterize the rate of growth, speed of maturing and fertility of M. rectirostris and C. quadrangula with feeding of them on detritus of different composition and age.

The transport of aquatic animals by birds. [Translation from: Binnengewaesser 18, 156-159, 1950.]

A great deal has been written on the part which birds play in the dispersal of freshwater fauna. This article summarises literature on the dispersal of aquatic animals by birds and aquatic insects.

Investigation of Fundamental Processes Governing Secondary Organic Aerosol Formation in Laboratory Chambers

Our understanding of the processes and mechanisms by which secondary organic aerosol (SOA) is formed is derived from laboratory chamber studies. In the atmosphere, SOA formation is primarily driven by progressive photooxidation of SOA precursors, coupled with their gas-particle partitioning. In the chamber environment, SOA-forming vapors undergo multiple chemical and physical processes that involve production and removal via gas-phase reactions; partitioning onto suspended particles vs. particles deposited on the chamber wall; and direct deposition on the chamber wall. The main focus of this dissertation is to characterize the interactions of organic vapors with suspended particles and the chamber wall and explore how these intertwined processes in laboratory chambers govern SOA formation and evolution.

A Functional Group Oxidation Model (FGOM) that represents SOA formation and evolution in terms of the competition between functionalization and fragmentation, the extent of oxygen atom addition, and the change of volatility, is developed. The FGOM contains a set of parameters that are to be determined by fitting of the model to laboratory chamber data. The sensitivity of the model prediction to variation of the adjustable parameters allows one to assess the relative importance of various pathways involved in SOA formation.

A critical aspect of the environmental chamber is the presence of the wall, which can induce deposition of SOA-forming vapors and promote heterogeneous reactions. An experimental protocol and model framework are first developed to constrain the vapor-wall interactions. By optimal fitting the model predictions to the observed wall-induced decay profiles of 25 oxidized organic compounds, the dominant parameter governing the extent of wall deposition of a compound is identified, i.e., wall accommodation coefficient. By correlating this parameter with the molecular properties of a compound via its volatility, the wall-induced deposition rate of an organic compound can be predicted based on its carbon and oxygen numbers in the molecule.

Heterogeneous transformation of δ-hydroxycarbonyl, a major first-generation product from long-chain alkane photochemistry, is observed on the surface of particles and walls. The uniqueness of this reaction scheme is the production of substituted dihydrofuran, which is highly reactive towards ozone, OH, and NO3, thereby opening a reaction pathway that is not usually accessible to alkanes. A spectrum of highly-oxygenated products with carboxylic acid, ester, and ether functional groups is produced from the substituted dihydrofuran chemistry, thereby affecting the average oxidation state of the alkane-derived SOA.

The vapor wall loss correction is applied to several chamber-derived SOA systems generated from both anthropogenic and biogenic sources. Experimental and modeling approaches are employed to constrain the partitioning behavior of SOA-forming vapors onto suspended particles vs. chamber walls. It is demonstrated that deposition of SOA-forming vapors to the chamber wall during photooxidation experiments can lead to substantial and systematic underestimation of SOA. Therefore, it is likely that a lack of proper accounting for vapor wall losses that suppress chamber-derived SOA yields contribute substantially to the underprediction of ambient SOA concentrations in atmospheric models.

The effects of temperature on growth and metabolism of flowing water cold-stenotherms [Translation from: Archiv fur Hydrobiologie 74(4) 479-495, 516-522, 1974]

A small stream in the French Alps was sampled at regular intervals to determine the size distribution of animals for growth studies. The temperature was also measured. The results obtained for Gammarus fossarum were compared with laboratory cultures and the laboratory animals were physiologically and chemically analysed. Chemical analysis was also carried out on field animals.

Plasma loop and strapping field dynamics: reproducing solar eruptions in the laboratory

Coronal mass ejections (CMEs) are dramatic eruptions of large, plasma structures from the Sun. These eruptions are important because they can harm astronauts, damage electrical infrastructure, and cause auroras. A mysterious feature of these eruptions is that plasma-filled solar flux tubes first evolve slowly, but then suddenly erupt. One model, torus instability, predicts an explosive-like transition from slow expansion to fast acceleration, if the spatial decay of the ambient magnetic field exceeds a threshold.

We create arched, plasma filled, magnetic flux ropes similar to CMEs. Small, independently-powered auxiliary coils placed inside the vacuum chamber produce magnetic fields above the decay threshold that are strong enough to act on the plasma. When the strapping field is not too strong and not too weak, expansion force build up while the flux rope is in the strapping field region. When the flux rope moves to a critical height, the plasma accelerates quickly, corresponding to the observed slow-rise to fast-acceleration of most solar eruptions. This behavior is in agreement with the predictions of torus instability.

Historically, eruptions have been separated into gradual CMEs and impulsive CMEs, depending on the acceleration profile. Recent numerical studies question this separation. One study varies the strapping field profile to produce gradual eruptions and impulsive eruptions, while another study varies the temporal profile of the voltage applied to the flux tube footpoints to produce the two eruption types. Our experiment reproduced these different eruptions by changing the strapping field magnitude, and the temporal profile of the current trace. This suggests that the same physics underlies both types of CME and that the separation between impulsive and gradual classes of eruption is artificial.