Economics

Much of economic analysis is based on the idea that economic agents respond to incentives and that they will increase their effort to understand the consequences of their actions in order to make the right decisions. This research project will use laboratory experiments to test whether increasing the size of reward or punishment (stakes henceforth) while considering how others will react affect the effort one puts into studying the environment before s/he makes the decision. The research will answer the following questions: (i) does the size of stakes affect people?s choices and beliefs?

This award funds research in economic theory. The research team seeks to use tools from game theory to model and analyze situations in which persuasion, credibility, and information design are important. In many different kinds of economic (and social) interactions, one or more parties provides information to others, but also has an interest in the outcome. For example, a firm marketing a new product provides information about the product's features and benefits to possible buyers, but obviously the firm also wants to make the sale.