Although experimental studies have documented systematic decision errors, many leading scholars believe that experience, competition, and large stakes will reliably extinguish biases. We test for the presence of a fundamental bias, loss aversion, in a high-stakes context: professional golfers' performance on the PGA Tour Golf provides a natural setting to test for loss aversion because golfers are rewarded for the total number of strokes they take during a tournament, yet each individual hole has a salient reference point, par. We analyze over 2.5 million putts using precise laser measurements and find evidence that even the best golfers - including Tiger Woods - show evidence of loss aversion. (JEL D03, D81, L83)

/pdf/is-tiger-woods-loss-averse-persistent-bias-in-the-face-of-4b9b7egkc4.pdf

Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes

Policies increasingly come in complex packages and understanding the nature of design criteria for such portfolios is increasingly important. However, existing studies of policy mixes fail to carefully define the dependent variable of the inquiry. As a result, theorization of policy design has lagged, the cumulative impact of empirical studies has not been great and understanding of the phenomena, despite many observations of its significance in policy studies, has not improved significantly over the past three decades. This paper aims to revitalize this important aspect of policy design work and policy studies by distinguishing between mix types and their impact on policy formulation. It defines key types and subtypes of mixes based on the complexity of design variables such as the number of goals, the number of policies and the number of levels of government and sectors involved in the design of a policy bundle. The taxonomy is then used to assess the validity and applicability of oft-cited but under-examined portfolio design principles and precepts

The parameters of policy portfolios: verticality and horizontality in design spaces and their consequences for policy mix formulation

Multifaceted problems such as sustainable development typically involve complex arrangements of institutions and instruments and the subject of how best to design and operate such ‘mixes’, ‘bundles’ or ‘portfolios’ of policy tools is an ongoing issue in this area. One aspect of this question is that some mixes are more difficult to design and operate than others. The paper argues that, ceteris paribus , complex policy-making faces substantial risks of failure when horizontal or vertical dimensions of policy-making are not well integrated. The paper outlines a model of policy mix types which highlights the design problems associated with more complex arrangements and presents two case studies of similarly structured mixes in the areas of marine parks in Australia and coastal zone management in Europe—one a failure and the other a successful case of integration—to illustrate how such mixes can be better designed and managed more effectively.

/pdf/policy-integration-and-multi-level-governance-dealing-with-2aop2fs8sf.pdf

Policy Integration and Multi-Level Governance: Dealing with the Vertical Dimension of Policy Mix Designs

The responsiveness to societal demands is both the key virtue and the key problem of modern democracies. On the one hand, responsiveness is a central cornerstone of democratic legitimacy. On the other hand, responsiveness inevitably entails policy accumulation. While policy accumulation often positively reflects modernisation and human progress, it also undermines democratic government in three main ways. First, policy accumulation renders policy content increasingly complex, which crowds out policy substance from public debates and leads to an increasingly unhealthy discursive prioritisation of politics over policy. Secondly, policy accumulation comes with aggravating implementation deficits, as it produces administrative backlogs and incentivises selective implementation. Finally, policy accumulation undermines the pursuit of evidence-based public policy, because it threatens our ability to evaluate the increasingly complex interactions within growing policy mixes. The authors argue that the stability of democratic systems will crucially depend on their ability to make policy accumulation more sustainable.

Policy Accumulation and the Democratic Responsiveness Trap

Recent studies of policy design have grappled with such issues as policy tool use, overcoming historical policy legacies, the nature of policy mixes and issues around policy formulation and...

The criteria for effective policy design: character and context in policy instrument choice

Policies that would create net benefits for society but would also involve costs frequently lack the necessary support to be enacted because losses loom larger than gains psychologically. To reduce this harmful consequence of loss aversion, we propose a new type of policy bundling technique in which related bills that have both costs and benefits are combined. Using a laboratory study, we confirm across a set of four legislative domains that this bundling technique increases support for bills that have both costs and benefits. We also demonstrate that this effect is due to changes in the psychology of decision making, rather than voters’ willingness to compromise and support a bill they weakly oppose when that bill is bundled with one they strongly support.

/pdf/policy-bundling-to-overcome-loss-aversion-a-method-for-3aex9enl78.pdf

Policy Bundling to Overcome Loss Aversion: A Method for Improving Legislative Outcomes

https://repository.upenn.edu/cgi/viewcontent.cgi?article=1023&context=mgmt_papers

Policy bundling to overcome loss aversion: A method for improving legislative outcomes

Policies that would create net benefits for society but would also involve costs frequently lack the necessary support to be enacted because losses loom larger than gains psychologically. To reduce the harmful consequence of loss aversion, we propose a new type of policy bundling technique in which related bills that have both costs and benefits are combined. In our first laboratory study, we confirm across a set of four legislative domains that this bundling technique increases support for bills that have both costs and benefits. We also show in a second study that this effect stems from a diminished focus on losses and heightened focus on gains when policies are evaluated in bundled form.

Mary Carol Mazza

Papers

Policy Bundling to Overcome Loss Aversion: A Method for Improving Legislative Outcomes

Policy bundling to overcome loss aversion: A method for improving legislative outcomes

Policy Bundling to Overcome Loss Aversion: A Method for Improving Legislative Outcomes