The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Economics of Information

Trust: The Social Virtues and the Creation of Prosperity

NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

The Social Psychology of Groups. J. W Thibaut & H. H. Kelley. New York: alley, 1959. The team of Thibaut and Kelley goes back to 1946 when, after serving in different units of the armed services psychology program, the authors joined the Research Center for Group Dynamics, first at M.LT and then at the University of Michigan. Their continued association eventuated in appointments as fellows at the Center for Advanced Study in the Behavioral Sciences, 19561957. It is during these years that their collaboration resulted in the publication of The Social Psychology of Groups. The book was designed to "bring order and coherence to present-day research in interpersonal relations and group functioning." To accomplish this aim, the authors introduced, defined, and illustrated basic concepts in an effort to explain the simplest of social phenomena, the two-person relationship. These basic principles and concepts were then employed to illuminate larger problems and more complex social relationships and to examine the significance of such concepts as roles, norm, power, group cohesiveness, and status. The lasting legacy of this book is derived from the fact that the concepts and principles discussed therein serve as a foundation for one of the dominant conceptual frameworks in the field of family studies today-the social exchange framework. Specifically, much of our contemporary thinking about the process of interpersonal attraction and about how individuals evaluate their close relationships has been influenced by the theory and concepts introduced in The Social Psychology of Groups. Today, as a result of Thibaut and Kelley, we think of interpersonal attraction as resulting from the unique valence of driving and restraining forces, rewards and costs, subjectively thought to be available from a specific relationship and its competing alternatives. We understand, as well, that relationships are evaluated through complex and subjectively based comparative processes. As a result, when we think about assessing the degree to which individuals are satisfied with their relationships, we take into consideration the fact that individuals differ in terms of the importance they attribute to different aspects of a relationship (e.g., financial security, sexual fulfillment, companionship). We also take into consideration the fact that individuals differ in terms of the levels of rewards and costs that they believe are realistically obtainable and deserved from a relationship. In addition, as a result of Thibaut and Kelley's theoretical focus on the concept of dependence and the interrelationship between attraction and dependence, there has evolved within the field of family studies a deeper appreciation for the complexities and variability found within relationships. Individuals are dependent on their relationships, according to Thibaut and Kelley, when the outcomes derived from the existing relationship exceed those perceived to be available in competing alternatives. Individuals who are highly dependent on their relationships are less likely to act to end their relationships. This dependence and the stability it engenders may or may not be voluntary, depending on the degree to which individuals are attracted to and satisfied with their relationships. When individuals are both attracted to and dependent on their relationships, they can be thought of as voluntarily participating in their relationship. That is, they are likely to commit themselves to the partner and relationship and actively work for its continuance. Thibaut and Kelley termed those relationships characterized by low levels of satisfaction and high levels of dependence "nonvoluntary relationships. …

The Social Psychology of Groups

Foundations Of Statistics

Narrow self-interest is often used as a simplifying assumption when studying people making decisions in social contexts. Nonetheless, people exhibit a wide range of different motivations when choosing unilaterally among interdependent outcomes. Measuring the magnitude of the concern people have for others, sometimes called Social Value Orientation (SVO), has been an interest of many social scientists for decades and several different measurement methods have been developed so far. Here we introduce a new measure of SVO that has several advantages over existent methods. A detailed description of the new measurement method is presented, along with norming data that provide evidence of its solid psychometric properties. We conclude with a brief discussion of the research streams that would benefit from a more sensitive and higher resolution measure of SVO, and extend an invitation to others to use this new measure which is freely available

/pdf/measuring-social-value-orientation-3iel13jkko.pdf

Measuring Social Value Orientation

Using Skin Conductance in Judgment and Decision Making Research

What motivates people when they make decisions and how those motivations are potentially entangled with concerns for others are central topics for the social, cognitive, and behavioral sciences. According to the postulate of narrow self-interest, decision makers have the goal of maximizing personal payoffs and are wholly indifferent to the consequences for others. The postulate of narrow self-interest-which has been influential in economics, psychology, and sociology-is precise and powerful but is often simply wrong. Its inadequacy is well known and efforts have been made to develop reliable and valid measurement methods to quantify the more nuanced social preferences that people really have. In this paper, we report on the emergence and development of the predominant conceptualization of social preferences in psychology: social value orientation (SVO). Second, we discuss the relationship between measurement and theory development of the SVO construct. We then provide an overview of the literature regarding measurement methods that have been used to assess individual variations in social preferences. We conclude with a comparative evaluation of the various measures and provide suggestions regarding the measures' constructive use in building psychologically realistic theories of people's social preferences.

Social Value Orientation Theoretical and Measurement Issues in the Study of Social Preferences

OBJECTIVES. The purpose of this study was to explore the effect of information framing on parental decisions about resuscitation of extremely premature infants. Secondary outcomes focused on elucidating the impact of other variables on treatment choices and determining whether those effects would take precedence over any framing effects. METHODS. This confidential survey study was administered to adult volunteers via the Internet. The surveys depicted a hypothetical vignette of a threatened delivery at gestational age of 23 weeks, with prognostic outcome information framed as either survival with lack of disability (positive frame) or chance of dying and likelihood of disability among survivors (negative frame). Participants were randomly assigned to receive either the positively or negatively framed vignette. They were then asked to choose whether they would prefer resuscitation or comfort care. After completing the survey vignette, participants were directed to a questionnaire designed to test the secondary hypothesis and to explore possible factors associated with treatment decisions. RESULTS. A total of 146 subjects received prognostic information framed as survival data and 146 subjects received prognostic information framed as mortality data. Overall, 24% of the sample population chose comfort care and 76% chose resuscitation. A strong trend was detected toward a framing effect on treatment preference; respondents for whom prognosis was framed as survival data were more likely to elect resuscitation. This framing effect was significant in a multivariate analysis controlling for religiousness, parental status, and beliefs regarding the sanctity of life. Of these covariates, only religiousness modified susceptibility to framing; participants who were not highly religious were significantly more likely to be influenced to opt for resuscitation by the positive frame than were participants who were highly religious. CONCLUSIONS. Framing bias may compromise efforts to approach prenatal counseling in a nondirective manner. This is especially true for subsets of participants who are not highly religious.

Message framing and perinatal decisions.

We consider a class of sequential observation and selection decision problems in which applicants are interviewed one at a time, decision makers only learn the applicant's quality relative to the applicants that have been interviewed and rejected, only a single applicant is selected, and payoffs increase in the absolute quality of the selected applicant. Compared to the optimal decision policy, which we compute numerically, results from two experiments show that subjects terminated their search too early. We competitively test three behavioral decision rules and find that a multithreshold rule, which has the same form as the optimal decision policy but is parameterized differently, best accounts for the data. Results from a probability estimation task show that subjects tend to overestimate the absolute quality of early applicants and give insufficient consideration to the yet-to-be-seen applicants.

/pdf/sequential-observation-and-selection-with-rank-dependent-f85l9quj38.pdf

Ryan O. Murphy

Papers

Measuring Social Value Orientation

Using Skin Conductance in Judgment and Decision Making Research

Social Value Orientation Theoretical and Measurement Issues in the Study of Social Preferences

Message framing and perinatal decisions.

Sequential Observation and Selection with Rank-Dependent Payoffs: An Experimental Study