The Statistical Distribution of Irrationality
(2012) NEKH01 20121Department of Economics
- Abstract (Swedish)
- This paper investigates whether the shape of a probability
distribution of a given problem has any predictable effect on the
shape of the distribution of people's associated irrational choices.
Focus is especially on the skewness of distributions. Based on
previous research in psychology and behavioral economics, a
theory of the causes of skewness of choice distributions is
presented. Hypothesis tests on the effect of skewness of probability
space in a card game on the skewness of associated choice
distributions lead to the conclusion that the two are independent.
This finding is consistent with the developed theory, suggesting
that the pervasiveness and nature of ineffective heuristics are more
important determinants of... (More) - This paper investigates whether the shape of a probability
distribution of a given problem has any predictable effect on the
shape of the distribution of people's associated irrational choices.
Focus is especially on the skewness of distributions. Based on
previous research in psychology and behavioral economics, a
theory of the causes of skewness of choice distributions is
presented. Hypothesis tests on the effect of skewness of probability
space in a card game on the skewness of associated choice
distributions lead to the conclusion that the two are independent.
This finding is consistent with the developed theory, suggesting
that the pervasiveness and nature of ineffective heuristics are more
important determinants of skewness in the distribution of choices.
The results are applied to the valuation of goods in a free market. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/2628532
- author
- Bågfelt, Thimmy LU
- supervisor
- organization
- course
- NEKH01 20121
- year
- 2012
- type
- M2 - Bachelor Degree
- subject
- keywords
- statistical distribution, skewness, irrationality, behavioral economics, choice
- language
- English
- id
- 2628532
- date added to LUP
- 2012-06-15 12:45:38
- date last changed
- 2012-06-15 12:45:38
@misc{2628532, abstract = {{This paper investigates whether the shape of a probability distribution of a given problem has any predictable effect on the shape of the distribution of people's associated irrational choices. Focus is especially on the skewness of distributions. Based on previous research in psychology and behavioral economics, a theory of the causes of skewness of choice distributions is presented. Hypothesis tests on the effect of skewness of probability space in a card game on the skewness of associated choice distributions lead to the conclusion that the two are independent. This finding is consistent with the developed theory, suggesting that the pervasiveness and nature of ineffective heuristics are more important determinants of skewness in the distribution of choices. The results are applied to the valuation of goods in a free market.}}, author = {{Bågfelt, Thimmy}}, language = {{eng}}, note = {{Student Paper}}, title = {{The Statistical Distribution of Irrationality}}, year = {{2012}}, }