The Allais Paradox is one of the most enduring violations of expected utility theory, a hallmark theory of economics. Professor Mike Shor and coauthor Mark Schneider (a recent UConn PhD) have had their paper “The Common Ratio Effect in Choice, Pricing, and Happiness Tasks” accepted by the Journal of Behavioral Decision Making.
In the paper, Professor Shor elicits preferences for the Allais paradox choice alternatives using three different methods: traditional choice, monetary valuation, and subjective happiness ratings. He finds that both the consistency and distribution of responses differs systematically across different elicitation methods, with modal choices replicating the Allais preference pattern, modal happiness ratings exhibiting consistent risk aversion, and modal valuations maximizing expected value. The paper finds support for a dual process framework in which people use either a “logical” or an “intuitive” thinking process depending on the task.
In a recent workshop for nineteen University of Connecticut Early College Experience Instructors, Professors Mike Shor, Steve Lanza, Delia Furtado and Bill Alpert presented the principles instructors with current economic thinking concerning game theory, the law and economics, effects of immigration on the domestic labor market, and monetary/macroeconomics for principles level students.
The Early College Experience (ECE) program is a concurrent enrollment program that allows motivated high school students to take UConn courses at their high schools for both high school and college credit. Every course taken through UConn ECE is equivalent to the same course at the University of Connecticut. Students benefit by taking college courses in a setting that is both familiar and conducive to learning. High school instructors who have been certified through the University of Connecticut serve as adjunct faculty members and teach UConn ECE courses.
Established in 1955, UConn Early College Experience is the nation’s longest running concurrent enrollment program and is accredited by The National Alliance of Concurrent Enrollment Partnerships. In the last decade, the Economics Program has grown from two instructors in two Connecticut high schools to almost 40 instructors in 30 Connecticut high schools offering the Principles of Economics classes and Economics 1000.
The Provost’s office at the University of Connecticut regularly recognizes faculty members with excellent teaching evaluations commending them as achieving “excellence in teaching”.
A number of faculty members in the economics department have received this recognition in the past year: Professors Talia Bar, Ken Couch, Delia Furtado, Paul Hallwood, Olivier Morand, Susan Randolph, Kathy Segerson, Mikhael Shor, Owen Svalestad, and Jackie Zhao.
Congratulations to these economics faculty for their important contributions to the educational mission of UConn!
Last Thursday, eighty Hartford-area residents met at NIXS in Hartford for cocktails and a discussion of climate change, part of UConn’s ongoing Science Salon series.
Professor Shor discussed his latest research about how people process (and ignore) scientific evidence in favor of preconceived notions. One audience member (failing to appreciate the irony) told the entire panel of scientists that he does not believe a word of what they are saying but their “so called facts” conflict with his prior view.
On October 30 Professors William Alpert and Mikhael Shor presented a workshop to 20 members of the Early College Experience faculty.
Early College Experience (ECE) is an opportunity for students to take UConn courses while still in high school. Every UConn ECE course is equivalent to the same course at the University of Connecticut. There are approximately fifty courses in over twenty disciplines made available to partner high schools. Courses are taught on the high school campus by high school instructors who have been certified as adjunct faculty members by the University of Connecticut.
The Economics Department now offers Connecticut High School students three introductory economics classes at almost 30 high schools throughout the state. The workshop highlighted Professor Shor introducing the teachers to current thinking about behavioral economics and included discussions of best practices of integrating the political landscape into economic study, the economics of migration and immigration, the distributions of income and wealth, and current thinking about macroeconomics and money.
During the last decade ECE has grown to over 11,000 FTE students and from 2 economics instructors to 25. Professor Alpert is the ECE Economics Department Coordinator.
The brief article compares an independent supplier and retailer who each forecast consumer demand with a jointly-profit-maximizing supplier and retailer who share their forecasts of consumer demand. The move from non-collaborative to collaborative forecasting can have the unexpected impact of decreasing demand forecast accuracy while still increasing profit. Therefore, collaborating firms should maintain a focus on profits, not forecast accuracy, as the appropriate measure of success.
As other graduate students battle the winter snow, PhD student Sining Wang will be spending a week in January in Southern California. Sining has been selected to participate in IFREE’s Twentieth Annual Visiting Graduate Student Workshop in Experimental Economics. IFREE is the International Foundation for Research in Experimental Economics and was established in 1997 by Vernon L. Smith, a Nobel Prize winner for his pioneering research bringing experimental methods to economics. The workshop will be held at Chapman University, Vernon Smith’s academic home. In the week-long session, Sining will participate in experiments, learn about experimental results and techniques, and have a chance to present his own research to leading faculty in experimental economics.
Professor Mike Shor has had his paper, “Reducing Choice Overload without Reducing Choices,” accepted for publication by the Review of Economics and Statistics. The paper is coauthored with Tibor Besedeš, Cary Deck, and Sudipta Sarangi, co-PIs on Professor Shor’s NIH grant that supported the research.
Previous studies have demonstrated that a multitude of options can lead to choice overload, reducing decision quality. Through controlled experiments, we examine sequential choice architectures that enable the choice set to remain large while potentially reducing the effect of choice overload. A specific tournament-style architecture achieves this goal. An alternate architecture in which subjects compare each subset of options to the most preferred option encountered thus far fails to improve performance due to the status quo bias. Subject preferences over different choice architectures are negatively correlated with performance, suggesting that providing choice over architectures might reduce the quality of decisions.
The Board of Trustees has promoted Prof. Mike Shor to tenured Associated Professor of Economics.
Professor Shor’s research to date has focused on industrial organization and experimental investigations of decision-making. His work has been published in the Review of Economics and Statistics, Economic Theory, Health Economics, Games and Economic Behavior, as well as journals in marketing, accounting, and psychology.
In addition to research, Prof. Shor has been teaching game theory and behavioral economics at both the undergraduate and PhD levels at UConn.