| Author | : Yufei Ren |
| File Size | : 43,6 Mb |
| Publisher | : Unknown |
| Language | : English |
| Release Date | : 02 May 2024 |
| ISBN | : OCLC:703458989 |
| Pages | : 222 pages |
Biased Decisions by Yufei Ren Book PDF Summary
My dissertation includes three essays that investigate the effects of cognitive biases on individual decisions and institutional design. I use both theoretical and empirical (experimental) analysis to better understand the impact of biases on behavior. In my first essay, I theoretically investigate the impact of one specific bias, overconfidence, in an inventory decision problem (the newsvendor problem). I model the overconfident (overprecise) manager as one with an accurate belief of the mean of the demand distribution he faces, but with a biased belief about its variance. This research proposes and demonstrates how overconfidence can provide a consistent explanation for observed decisions.