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.

Comparing growth rates of natural phytoplankton communities to laboratory culturing experiments

Senior thesis written for Oceanography 445

Phytoplankton Response to Environmental Variables and Organic Pollutants. Laboratory Cultures and Numerical Simulations Experiments

Herbicides are becoming emergent contaminants in Italian surface, coastal and ground waters, due to their intensive use in agriculture. In marine environments herbicides have adverse effects on non-target organisms, as primary producers, resulting in oxygen depletion and decreased primary productivity. Alterations of species composition in algal communities can also occur due to the different sensitivity among the species. In the present thesis the effects of herbicides, widely used in the Northern Adriatic Sea, on different algal species were studied. The main goal of this work was to study the influence of temperature on algal growth in the presence of the triazinic herbicide terbuthylazine (TBA), and the cellular responses adopted to counteract the toxic effects of the pollutant (Chapter 1 and 2). The development of simulation models to be applied in environmental management are needed to organize and track information in a way that would not be possible otherwise and simulate an ecological prospective. The data collected from laboratory experiments were used to simulate algal responses to the TBA exposure at increasing temperature conditions (Chapter 3). Part of the thesis was conducted in foreign countries. The work presented in Chapter 4 was focused on the effect of high light on growth, toxicity and mixotrophy of the ichtyotoxic species Prymnesium parvum. In addition, a mesocosm experiment was conducted in order to study the synergic effect of the pollutant emamectin benzoate with other anthropogenic stressors, such as oil pollution and induced phytoplankton blooms (Chapter 5).

Measurements of velocity-dependent and slip-dependent frictional strength in laboratory friction experiments on natural samples from IODP Expedition 316 and ODP Hole 190-1174B

Slowslip forms part of the spectrum of fault behaviour between stable creep and destructive earthquakes. Slow slip occurs near the boundaries of large earthquake rupture zones and may sometimes trigger fast earthquakes. It is thought to occur in faults comprised of rocks that strengthen under fast slip rates, preventing rupture as a normal earthquake, or on faults that have elevated pore-fluid pressures. However, the processes that control slow rupture and the relationship between slow and normal earthquakes are enigmatic. Here we use laboratory experiments to simulate faulting in natural rock samples taken from shallow parts of the Nankai subduction zone, Japan, where very low-frequency earthquakes - a form of slow slip - have been observed.We find that the fault rocks exhibit decreasing strength over millimetre-scale slip distances rather than weakening due to increasing velocity. However, the sizes of the slip nucleation patches in our laboratory simulations are similar to those expected for the very lowfrequency earthquakes observed in Nankai. We therefore suggest that this type of fault-weakening behaviour may generate slow earthquakes. Owing to the similarity between the expected behaviour of slow earthquakes based on our data, and that of normal earthquakes during nucleation, we suggest that some types of slow slip may represent prematurely arrested earthquakes.

The role of laboratory exercises in modern power engineering education at the University of Queensland

The University of Queensland (UQ) has extensive laboratory facilities associated with each course in the undergraduate electrical engineering program. The laboratories include machines and drives, power systems simulation, power electronics and intelligent equipment diagnostics. A number of postgraduate coursework programs are available at UQ and the courses associated with these programs also use laboratories. The machine laboratory is currently being renovated with i-lab style web based experimental facilities, which could be remotely accessed. Senior level courses use independent projects using laboratory facilities and this is found to be very useful to improve students' learning skill. Laboratory experiments are always an integral part of a course. Most of the experiments are conducted in a group of 2-3 students and thesis projects in BE and major projects in ME are always individual works. Assessment is done in-class for the performance and also for the report and analysis.

Fate and transport of bensulfuron-methyl and imazosulfuron in paddy fields: Experiments and model simulation

Experiments were conducted to determine the fate of bensulfuron-methyl (BSM) and imazosulfuron (IMS) under paddy conditions. Initially, laboratory experiments were conducted and the photolysis half-lives of the two herbicides were found to be much shorter than their hydrolysis half-lives in aqueous solutions. In the aerobic water–soil system, dissipation followed first-order kinetics with water half-lives of 9.1 and 11.0 days and soil half-lives of 12.4 and 18.5 days (first phase) and 35.0 and 44.1 days (second phase) for bensulfuron-methyl and imazosulfuron, respectively. However, the anaerobic soil half-lives were only 12.7 and 9.8 days for BSM and IMS, respectively. The values of K d were determined to be 16.0 and 13.8 for BSM and IMS, respectively. Subsequent field measurements for the two herbicides revealed that dissipation of both herbicides in paddy water involved biphasic first-order kinetics, with the dissipation rates in the first phase being much faster than those in the second phase. The dissipation of bensulfuron-methyl and imazosulfuron in the paddy surface soil were also followed biphasic first-order kinetics. These results were then used as input parameters for the PCPF-1 model to simulate the fate and transport of BSM and IMS in the paddy environment (water and 1-cm surface soil layer). The measured and simulated values agreed well and the mass balance error during the simulation period was −1.2 and 2.8% of applied pesticide, respectively, for BSM and IMS.

Experiments on a plume with off-source heating: Implications for cloud fluid dynamics

We report here on a series of laboratory experiments on plumes, undertaken with the object of simulating the effect of the heat release that occurs in clouds on condensation of water vapor. The experimental technique used for this purpose relies on ohmic heating generated in an electrically conducting plume fluid subjected to a suitable alternating voltage across specified axial stations in the plume flow [Bhat et al., 1989]. The present series of experiments achieves a value of the Richardson number that is toward the lower end of the range that characteristics cumulus clouds. It is found that the buoyancy enhancement due to heating disrupts the eddy structures in the flow and reduces the dilution owing to entrainment of ambient fluid that would otherwise have occurred in the central region of the plume. Heating also reduces the spread rate of the plume, but as it accelerates the flow as well, the overall specific mass flux in the plume does not show a very significant change at the heat input employed in the experiment. However, there is some indication that the entrainment rate (proportional to the streamwise derivative of the mass flux) is slightly higher immediately after heat injection and slightly lower farther downstream. The measurements support a previous proposal for a cloud scenario [Bhat and Narasimha, 1996] and demonstrate how fresh insights into certain aspects of the fluid dynamics of clouds may be derived from the experimental techniques employed here.

Swarm intelligence-based solver for parameter estimation of laboratory through-diffusion transport of contaminants

Theoretical approaches are of fundamental importance to predict the potential impact of waste disposal facilities on ground water contamination. Appropriate design parameters are generally estimated be fitting theoretical models to data gathered from field monitoring or laboratory experiments. Transient through-diffusion tests are generally conducted in the laboratory to estimate the mass transport parameters of the proposed barrier material. Thes parameters are usually estimated either by approximate eye-fitting calibration or by combining the solution of the direct problem with any available gradient-based techniques. In this work, an automated, gradient-free solver is developed to estimate the mass transport parameters of a transient through-diffusion model. The proposed inverse model uses a particle swarm optimization (PSO) algorithm that is based on the social behavior of animals searching for food sources. The finite difference numerical solution of the forward model is integrated with the PSO algorithm to solve the inverse problem of parameter estimation. The working principle of the new solver is demonstrated and mass transport parameters are estimated from laboratory through-diffusion experimental data. An inverse model based on the standard gradient-based technique is formulated to compare with the proposed solver. A detailed comparative study is carried out between conventional methods and the proposed solver. The present automated technique is found to be very efficient and robust. The mass transport parameters are obtained with great precision.

Experiments on homogeneous nucleation and physicochemical properties related to atmospheric new particle formation

Aerosol particles play a role in the earth ecosystem and affect human health. A significant pathway of producing aerosol particles in the atmosphere is new particle formation, where condensable vapours nucleate and these newly formed clusters grow by condensation and coagulation. However, this phenomenon is still not fully understood. This thesis brings an insight to new particle formation from an experimental point of view. Laboratory experiments were conducted both on the nucleation process and physicochemical properties related to new particle formation. Nucleation rate measurements are used to test nucleation theories. These theories, in turn, are used to predict nucleation rates in atmospheric conditions. However, the nucleation rate measurements have proven quite difficult to conduct, as different devices can yield nucleation rates with differences of several orders of magnitude for the same substances. In this thesis, work has been done to have a greater understanding in nucleation measurements, especially those conducted in a laminar flow diffusion chamber. Systematic studies of nucleation were also made for future verification of nucleation theories. Surface tensions and densities of substances related to atmospheric new particle formation were measured. Ternary sulphuric acid + ammonia + water is a proposed candidate to participate in atmospheric nucleation. Surface tensions of an alternative candidate to nucleate in boreal forest areas, sulphuric acid + dimethylamine + water, were also measured. Binary compounds, consisting of organic acids + water are possible candidates to participate in the early growth of freshly nucleated particles. All the measured surface tensions and densities were fitted with equations, thermodynamically consistent if possible, to be easily applied to atmospheric model calculations of nucleation and subsequent evolution of particle size.

Laboratory determination of coefficient of consolidation from pore water pressure measurement

In the recent past, many studies have been carried out on the determination of coefficient of consolidation (c(v)) from the time (t)-deformation (d) data obtained from conventional consolidation tests. Several researchers have also proposed different curve fitting procedures for determining cv from the t-d data. It is anticipated that the cv values obtained from the t-d data may be influenced by initial and secondary compressions. Nevertheless, the pore water pressure data measured during the consolidation process will be independent of initial and secondary compressions. In this study, the conventional Asaoka (1978) method is extended to evaluate cv and end-of-primary (EOP) consolidation from the pore water pressure data measured from laboratory experiments. Laboratory experiments were carried out on the modified one-dimensional consolidation apparatus on different remoulded clay samples measuring pore water pressure during the consolidation process. The cv and EOP computed from the proposed approach have been compared with the results of the t-d data and found to be in good agreement.

Longitudinal dispersion in laboratory and natural streams

This study concerns the longitudinal dispersion of fluid particles which are initially distributed uninformly over one cross section of a uniform, steady, turbulent open channel flow. The primary focus is on developing a method to predict the rate of dispersion in a natural stream.

Taylor's method of determining a dispersion coefficient, previously applied to flow in pipes and two-dimensional open channels, is extended to a class of three-dimensional flows which have large width-to-depth ratios, and in which the velocity varies continuously with lateral cross-sectional position. Most natural streams are included. The dispersion coefficient for a natural stream may be predicted from measurements of the channel cross-sectional geometry, the cross-sectional distribution of velocity, and the overall channel shear velocity. Tracer experiments are not required.

Large values of the dimensionless dispersion coefficient D/rU* are explained by lateral variations in downstream velocity. In effect, the characteristic length of the cross section is shown to be proportional to the width, rather than the hydraulic radius. The dimensionless dispersion coefficient depends approximately on the square of the width to depth ratio.

A numerical program is given which is capable of generating the entire dispersion pattern downstream from an instantaneous point or plane source of pollutant. The program is verified by the theory for two-dimensional flow, and gives results in good agreement with laboratory and field experiments.

Both laboratory and field experiments are described. Twenty-one laboratory experiments were conducted: thirteen in two-dimensional flows, over both smooth and roughened bottoms; and eight in three-dimensional flows, formed by adding extreme side roughness to produce lateral velocity variations. Four field experiments were conducted in the Green-Duwamish River, Washington.

Both laboratory and flume experiments prove that in three-dimensional flow the dominant mechanism for dispersion is lateral velocity variation. For instance, in one laboratory experiment the dimensionless dispersion coefficient D/rU* (where r is the hydraulic radius and U* the shear velocity) was increased by a factory of ten by roughening the channel banks. In three-dimensional laboratory flow, D/rU* varied from 190 to 640, a typical range for natural streams. For each experiment, the measured dispersion coefficient agreed with that predicted by the extension of Taylor's analysis within a maximum error of 15%. For the Green-Duwamish River, the average experimentally measured dispersion coefficient was within 5% of the prediction.

Metal Retention Experiments for the Design of Soil-Mix Technology Permeable Reactive Barriers

Soil-mix technology is effective for the construction of permeable reactive barriers (PRBs) for in situ groundwater treatment. The objective of this study was to perform initial experiments for the design of soil-mix technology PRBs according to (i) sorption isotherm, (ii) reaction kinetics and (iii) mass balance of the contaminants. The four tested reactive systems were: (i) a granular zeolite (clinoptilolite-GZ), (ii) a granular organoclay (GO), (iii) a 1:1-mixture GZ and model sandy clayey soil and (iv) a 1:1:1-mixture of GZ, GO and model soil. The laboratory experiments consisted of batch tests (volume 900mL and sorbent mass 18g) with a multimetal solution of Pb, Cu, Zn, Cd and Ni. For the adsorption experiment, the initial concentrations ranged from 0.01 to 0.5mM (2.5 to 30mg/L). The maximum metal retention was measured in a batch test (300mg/L for each metal, volume 900mL, sorbent mass 90-4.5g). The reactive material efficiency order was found to be GZ>GZ-soil mix>GZ-soil-GO mix>GO. Langmuir isotherms modelled the adsorption, even in presence of a mixed cations solution. Adsorption was energetically favourable and spontaneous in all cases. Metals were removed according to the second order reaction kinetics; GZ and the 1:1-mix were very similar. The maximum retention capacity was 0.1-0.2mmol/g for Pb in the presence of clinoptilolite; for Cu, Zn, Cd and Ni, it was below 0.05mmol/g for the four reactive systems. Mixing granular zeolite, organoclay and model soil increased the chemisorption. Providing that GZ is reactive enough for the specific conditions, GZ can be mixed to obtain the required sorption. Granular clinoptilolite addition to soil is recommended for PRBs for metal contaminated groundwater. The laboratory experiments consisted of batch tests with a multimetal solution of Pb, Cu, Zn, Cd and Ni. The four reactive materials chosen were granular zeolite, clinoptilolite and model sandy clayey soil, granular organoclay and a mix of clinoptilolite, model soil and organoclay. The reactive material efficiency order was found to be granular clinoptilolite>clinoptilolite-soil mix>clinoptilolite-soil-organoclay mix>granular organoclay. © 2011 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim.

Molecular composition of biogenic secondary organic aerosols using ultrahigh resolution mass spectrometry: comparing laboratory and field studies

Numerous laboratory experiments have been performed in an attempt to mimic atmospheric secondary organic aerosol (SOA) formation. However, it is still unclear how close the aerosol particles generated in laboratory experiments resemble atmospheric SOA with respect to their detailed chemical composition. In this study, we generated SOA in a simulation chamber from the ozonolysis of α-pinene and a biogenic volatile organic compound (BVOC) mixture containing α- and β-pinene, Δ3-carene, and isoprene. The detailed molecular composition of laboratory-generated SOA was compared with that of background ambient aerosol collected at a boreal forest site (Hyytiälä, Finland) and an urban location (Cork, Ireland) using direct infusion nanoelectrospray ultrahigh resolution mass spectrometry. Kendrick Mass Defect and Van Krevelen approaches were used to identify and compare compound classes and distributions of the detected species. The laboratory-generated SOA contained a distinguishable group of dimers that was not observed in the ambient samples. The presence of dimers was found to be less pronounced in the SOA from the VOC mixtures when compared to the one component precursor system. The elemental composition of the compounds identified in the monomeric region from the ozonolysis of both α-pinene and VOC mixtures represented the ambient organic composition of particles collected at the boreal forest site reasonably well, with about 70% of common molecular formulae. In contrast, large differences were found between the laboratory-generated BVOC samples and the ambient urban sample. To our knowledge this is the first direct comparison of molecular composition of laboratory-generated SOA from BVOC mixtures and ambient samples.

'Torrey Canyon' pollution and marine life. A report by the Plymouth Laboratory of the Marine Biological Association of the United Kingdom

This report describes the step-by-step development the Marine Biological Association's 10 week survey of the effects of the Torrey Canyon oil spill and discusses the results of field observations and laboratory experiments. It also outlines methods developed for predicting and plotting the movement of oil at sea.

Effectiveness of filters in reducing consolidation time in routine laboratory testing

The research reported here is based on the standard laboratory experiments routinely performed in order to measure various geotechnical parameters. These experiments require consolidation of fine-grained samples in triaxial or stress path apparatus. The time required for the consolidation is dependent on the permeability of the soil and the length of the drainage path. The consolidation time is often of the order of several weeks in large clay-dominated samples. Long testing periods can be problematic, as they can delay decisions on design and construction methods. Acceleration of the consolidation process would require a reduction in effective drainage length and this is usually achieved by placing filter drains around the sample. The purpose of the research reported in this paper is to assess if these filter drains work effectively and, if not, to determine what modifications to the filter drains are needed. The findings have shown that use of a double filter reduces the consolidation time several fold.