Andreas Gotfredsen defends his PhD thesis at the Department of Economics
Candidate: Andreas Gotfredsen
Title
"Essays in Behavioral and Experimental Economics"
Time and venue
21 March 2019 at 13:00. University of Copenhagen, Centre for Health and Society, Øster Farimagsgade 5, 1353 Copenhagen K, building 35, CSS 35.3.12
Assessment committee
Associate professor Marco Piovesan, Department of Economics, University of Copenhagen, Denmark (chairman)
Associate Professor Erik Wengström, Lund University, Sweden
Associate Professor Sibilla di Guida, University of Southern Denmark, Denmark
Abstract
The four chapters of this thesis contribute to two distinct topics in behavioral and experimental economics. Each chapter is self-contained and can be read independently. The first three chapters studies how the psychological mechanisms of attention and limited cognitive resources affect individual economic choice and market outcomes. The final chapter studies the economic consequences of overconfidence.
In chapter 1, we present results from an eye-tracking experiment, where we demonstrate that consumers' choices are tilted toward purchasing goods with higher quality/price ratios, as predicted by salience theory of Bordalo et al. (2013). Still, the eye-tracking data indicate that this behavior may not be driven by visual attention as hypothesized.
In chapter 2, we present another experiment demonstrating that people's perceptual limitations cause their valuations of experimental goods to become more similar as they become harder to visually distinguish. Yet we do not see sellers attempt to exploit this in a market setting.
In chapter 3, I examine how order effects influence the way that people retrospectively self-evaluate their performance on a work task. For the task I use in my experiment, I find that the participants tend to overweight the final, most salient part in their self-evaluations.
The final chapter deals with overconfidence: The tendency for people to overestimate their abilities, blamed for over-investment, excess entry into markets and wars. In my final experiment, I study the link between overconfidence and aggressive behavior, and the economic consequences thereof. I find that people who publicly appear the most self-confident are also the most aggressive towards their competitors, and that the threat of aggression deter others from choosing to compete.