CentER

Uri Gneezy

Abstract:
Neoclassical economics is based on a model of a rational decision maker who maximizes his utility. However, a growing body of empirical evidence show that the rational decision making model fails to describe how real people behave. The question economists face is whether the empirical facts should be allowed to spoil the good story. I think they should.

A relatively new area of research in economics, which can be called "behavioral economics", is aimed at closing that gap by improving the descriptive power of models. While normative models are typically based on a set of "rational" assumptions, the descriptive models are based on assumptions which are motivated by observed behavior.

The first step in building better descriptive models is finding the relevant behavioral regularities. For that purpose economists adopted a tool, which psychologists have been using for a very long time: Experiments.

This thesis contains a collection of papers which form my first steps into this world.