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.

Remote Sensing and Field Assessment of Tsunami Effects on Coastal Pond Aquaculture in Northern Sumatra

An attempt was made to conduct spatial assessment of the pattern and extent of damage to coastal aquaculture ponds along the east coast of Aceh province in Sumatra, Indonesia, resulting from the tsunami event of 26 December 2004. High-resolution satellite imagery, i.e., SPOT-5 multispectral scenes covering the 700 km stretch of the coast, acquired before and after the tsunami, were digitally enhanced and visually interpreted to delineate pockets of aquaculture ponds that were discerned to be damaged and relatively intact. Field checks were conducted at 87 sites in the four eastern coastal districts. The results indicate that SPOT-5 multispectral imagery was minimally sufficient to detect areas of damaged and relatively intact aquaculture ponds, but the 10-m spatial resolution poses limitations to evaluating the extent of pond damage. Nevertheless, the 60 km swath of the imagery makes it reasonably affordable for large-area assessment to identify pockets of severe damage for targeting more detailed assessments. The image maps produced from a mosaic of the SPOT-5 scenes can also serve as base maps for spatial planning in the challenging task of reconstruction and rehabilitation of the disrupted livelihoods of the coastal communities.

Remote sensing and field assessment of tsunami effects on coastal pond aquaculture in northern Sumatra

An attempt was made to conduct spatial assessment of the pattern and extent of damage to coastal aquaculture ponds along the east coast of Aceh province in Sumatra, Indonesia, resulting from the tsunami event of 26 December 2004. High-resolution satellite imagery, i.e., SPOT-5 multispectral scenes covering the 700 km stretch of the coast, acquired before and after the tsunami, were digitally enhanced and visually interpreted to delineate pockets of aquaculture ponds that were discerned to be damaged and relatively intact. Field checks were conducted at 87 sites in the four eastern coastal districts. The results indicate that SPOT-5 multispectral imagery was minimally sufficient to detect areas of damaged and relatively intact aquaculture ponds, but the 10-m spatial resolution poses limitations to evaluating the extent of pond damage. Nevertheless, the 60 km swath of the imagery makes it reasonably affordable for large-area assessment to identify pockets of severe damage for targeting more detailed assessments. The image maps produced from a mosaic of the SPOT-5 scenes can also serve as base maps for spatial planning in the challenging task of reconstruction and rehabilitation of the disrupted livelihoods of the coastal communities.

Staging ovaries of Haddock (Melanogrammus aeglefinus): implications for maturity indices and field sampling practices

We build on recent efforts to standardize maturation staging methods through the development of a field-proof macroscopic ovarian maturity index for Haddock (Melanogrammus aeglefinus) for studies on diel spawning periodicity. A comparison of field and histological observations helped us to improve the field index and methods, and provided useful insight into the reproductive biology of Haddock and other boreal determinate fecundity species. We found reasonable agreement between field and histological methods, except for the regressing and regenerating stages (however, differentiation of these 2 stages is the least important distinction for determination of maturity or reproductive dynamics). The staging of developing ovaries was problematic for both methods partly because of asynchronous oocyte hydration during the early stage of oocyte maturation. Although staging on the basis of histology in a laboratory is generally more accurate than macroscopic staging methods in the field, we found that field observations can uncover errors in laboratory staging that result from bias in sampling unrepresentative portions of ovaries. For 2 specimens, immature ovaries observed during histological examination were incorrectly assigned as regenerating during macroscopic staging. This type of error can lead to miscalculation of length at maturity and of spawning stock biomass, metrics that are used to characterize the state of a fish population. The revised field index includes 3 new macroscopic stages that represent final oocyte maturation in a batch of oocytes and were found to be reliable for staging spawning readiness in the field. The index was found to be suitable for studies of diel spawning periodicity and conforms to recent standardization guidelines.

Axial stiffness of journal bearings in zero-field and field-cooled modes

Superconducting journal bearings have been investigated for use in flywheel systems. We report on the zero-field cooled and field-cooled stiffness of these bearings. They are made up of radial magnet rings with alternating polarities, a pole pitch of 11 mm and a surface field of 0.1 T. Field-cooled stiffness of the journal bearings increased four times over the zero-field-cooled stiffness. © 2005 IEEE.

Non-ohmic contact resistance and field-effect mobility in nanocrystalline silicon thin film transistors

Contact resistance has a significant impact on the electrical characteristics of thin film transistors. It limits their maximum on-current and affects their subsequent behavior with bias. This distorts the extracted device parameters, in particular, the field-effect mobility. This letter presents a method capable of accounting for both the non-ohmic (nonlinear) and ohmic (linear) contact resistance effects solely based upon terminal I-V measurements. Applying our analysis to a nanocrystalline silicon thin film transistor, we demonstrate that contact resistance effects can lead to a twofold underestimation of the field-effect mobility. © 2008 American Institute of Physics.

Experimental and field studies of Mesocyclops notius (Copepoda : Cyclopoida) from a subtropical Chinese lake, Lake Donghu

This paper reports experimental and field studies on the cyclopoid Mesocyclops notius from subtropical Lake Donghu close to the Yangtze river. Mesocyclops notius, a dominant crustacean Zooplankter throughout tropical Australia, was previously considered to be endemic to Australia, but recently, Mesocyclops leuckarti in Lake Donghu was re-identified as M. notius. Laboratory culture experiments were conducted to reveal the effect of temperature (15, 20, 25 and 30 degreesC) on the development, growth and reproduction of M. notius. Temperature was inversely related to development times of eggs, nauplii and copepodites, body length and physiological longevity of adults, and brood size. Body length and physiological longevity of females were greater than those of males at the same temperature. No reproduction took place at 15 degreesC. Production and seasonal cycles of M. notius during 1980-1982 were studied at two sampling stations of Lake Donghu. At the mid-lake station, the annual production and production/biomass (P/B) ratio of M. notius varied between 6.0 and 18.0 g dry wt m(-2) year(-1) and 74.6 and 95.5, respectively. Mesocyclops notius reached their highest density peaks in the warm months (July-October), with a maximum density of 1256 individuals l(-1) at a littoral site. No reproduction and recruitment by AL notius took place during the cold months (December March) when the temperature of the lake water was < 15 degreesC. Mesocyclops notius were more abundant at a littoral station than at a pelagic station, possibly due to different food availability. The higher male:female sex ratio of M. notius at the littoral station was most likely caused by size-selective fish predation on larger females.

The role of plants in channel-dyke and field irrigation systems for domestic wastewater treatment in an integrated eco-engineering system

Eight kinds of plants were tested in channel-dyke and field irrigation systems. The removal rates of TP, phosphate, TN, ammonia, CODcr and BOD, in the channel-dyke system with napiergrass (Pennisetum purpurem Schumach, x Pennisetum alopecuroides (L.) Spreng American) were 83.2, 82.3, 76.3, 96.2, 73.5 and 85.8%, respectively. The field irrigation systems with rice I-yuanyou No.1(88-132) (Oryza sativa L.) and rice II- suakoko8 (Oryza glaberrima) had high efficiency for N removal; the removal rate were 84.7 and 84.3%, respectively. The mass balance data revealed that napiergrass, rice I and II were the most important nutrient sinks, assimilating more than 50% of TP and TN. Plant uptake of N and P as percentage of total removal from wastewater correlated with biomass yield of and planting mode. (C) 2000 Elsevier Science B.V. All rights reserved.

Structural, photoluminescence, and field emission properties of vertically well-aligned ZnO nanorod arrays

The self-assembled growth of vertically well-aligned ZnO nanorod arrays with uniform length and diameter on Si substrate has been demonstrated via thermal evaporation and vapor-phase transport. The structural, photoluminescence (PL), and field emission properties of the as-prepared nanorod arrays were investigated. The PL spectrum at 10 K shows a strong and sharp near-band gap emission (NBE) peak ( full width at half-maximum (FWHM) = 4.7 meV) and a weak neglectable deep-level emission (DL) peak (I-NBE/I-DL= 220), which implies its good crystallinity and high optical quality. The room-temperature NBE peak was deduced to the composition of free exciton and its first-order replicas emissions by temperature-dependent PL spectra. The field emission measurements indicate that, with a vacuum gap of 400 Am, the turn-on field and threshold field is as low as 2.3 and 4.2 V/mu m. The field enhancement factor beta and vacuum gap d follows a universal equation.