Pictures Flashcards

1
Q

what is the graph showing risk aversion

A

utility from certainty of 50 is greater than gamble of 50% 0 50% 100. Green line is certainty, risk averse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the graph in prospect theory that shows risk aversion

A

concave in gains, convex in losses. From π(p). Origin is the reference point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What does the weighting function look like from prospect theory

A

Thus low probabilities are overweighted, moderate and high probabilities are underweighted and the latter effect is more pronounced than the former. People’s behaviour changes a lot more near certainty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is diminishing sensitivity in terms of utility in prospect theory

A

diminishing returns for gains and losses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is diminishing sensitivity in terms of probability

A

However from the two reference points of 0 and 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Equation for a person’s Intertemporal Utility Function

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the quasi hyperbolic discount factor

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Given picture, what is the bayesian and law of small numbers probabilities that fund is Well

A

over inference about ability of manager

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a more realistic case of picture, but if the investor believes the urn is replenished every 3 periods. What is bayesian and law of small numbers probabilities

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Describe and explain the simple model of projection bias

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the main predictions in the Conlin et al. 2007 clothes ordering experiment

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the main findings for the clothes ordering experiment

A

Conlin et al. (2007)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is the standard theory purchasing decision model and what paper is it from

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the modified version of the initial purchasing decision model from Prelec and Loewenstein (1998)

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the imputed costs at b (purchasing decision model from Prelec and Loewenstein 1998)

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the imputed benefits at c (purchasing decision model from Prelec and Loewenstein 1998)

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the consumption experience at b (purchasing decision model from Prelec and Loewenstein 1998)

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the payment experience at c (purchasing decision model from Prelec and Loewenstein 1998)

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Draw the graph of value against perceived value for the used car experiment (theoretical model not actual data)

A

V^=K-αm^, with m^=floor(m,10000) + (1-θ)mod(m,10000)

20
Q

What paper is picture from

A

Kahneman and Deaton, 2010

21
Q

What are the takeaways from picture

A

The more evaluative the scale is, the more reactive it is to income. The more hedonic the scale (emotion), the less reactive to income.

22
Q

What is picture showing

A

Happiness related to age

23
Q

Explain picture

A

Y is happiness regressed on socioeconomic variables. U shaped pattern with age (negative in linear, positive in square). Men less satisfied than female. Black less. Unemployment lot less

24
Q

What does picture show

A

Relationship between real GDP and life satisfaction

25
What does picture show
Despite doubling of GDP, happiness still flat. Contradicts link between GDP and happiness
26
What is equation for individual utility taking into account reference income (Happiness)
27
Draw the relationship between income and happiness at the individual and aggregate level
You still take into account the income of those around you, if you are less then you get less utility from it
28
Explain picture and what paper is it from
Proto and Rustichini (2015). First part is neoclassical relationship. Behavioural world after 35/40, takes into account what you have compared to what you want to have
29
Given picture what is the effect of a short-run increase
Short term increase larger because y\*t hasn’t adjusted yet
30
derive the first expression into rational and irrational bits
Front-parietal is rational. Limbic is irrational present bias
31
What are the two objective functions that are maximised for the deliberative and affective systems (initial mnodel) and what paper
Loewenstein et al. (2015)
32
in Loewenstein et al. (2015) what determines which system is given the most weight when making decisions given picture
33
In Loewenstein et al. (2015) what is the effort costs
The larger the conflict between heart and head, the higher the costs
34
What is the equation for the deliberative system subject to constraints for Loewenstein et al. (2015)
35
What does the deliberative system look like for intertemporal choice from Loewenstein et al. (2015)
36
What does the affective system look like for intertemporal choice from Loewenstein et al. (2015)
37
How is the deliberative and affective systems from Loewenstein et al. (2015) affected when looking at risky decisions
38
How is the value function (v(xi, a)) from picture affected with loss aversion
39
What does the equation for the deliberative system s.t. constraints look like if it is a risky decision and loss aversion is taken into account, given picture (from Loewenstein et al. (2015))
40
What are some predictions from the equation of deliberative system with constraints given picture
41
How does the deliberative and affective system change when taking into account social preferences
42
What is the overall equation for the decision of deliberative system s.t. constraints when taking into account social preferences
φ: stable weight of other person's payoff (unrelated to feelings), Variable weight a: affective motivation, context-dependent
43
What are the predictions taking into account social preferences input given picture
44
What is the equation for the paper on domestic abuse
Card and Dahl (2011)
45
what is the decision of the deliberative system subject to constraints for the intertemporal choice model