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Economists, political philosophers, and others have often characterized social preferences regarding inequality by imagining a hypothetical choice of distributions behind "a veil of ignorance". Recent behavioral economics work has shown that subjects care about equality of outcomes, and are willing to sacrifice, in experimental contexts, some amount of personal gain

Economists, political philosophers, and others have often characterized social preferences regarding inequality by imagining a hypothetical choice of distributions behind "a veil of ignorance". Recent behavioral economics work has shown that subjects care about equality of outcomes, and are willing to sacrifice, in experimental contexts, some amount of personal gain in order to achieve greater equality. We review some of this literature and then conduct an experiment of our own, comparing subjects' choices in two risky situations, one being a choice for a purely individualized lottery for themselves, and the other a choice among possible distributions to members of a randomly selected group. We find that choosing in the group situation makes subjects significantly more risk averse than when choosing an individual lottery. This supports the hypothesis that an additional preference for equality exists alongside ordinary risk aversion, and that in a hypothetical "veil of ignorance" scenario, such preferences may make subjects significantly more averse to unequal distributions of rewards than can be explained by risk aversion alone.
ContributorsTheisen, Alexander Scott (Co-author) / McMullin, Caitlin (Co-author) / Li, Marilyn (Co-author) / DeSerpa, Allan (Thesis director) / Schlee, Edward (Committee member) / Baldwin, Marjorie (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Economics Program in CLAS (Contributor) / School of Historical, Philosophical and Religious Studies (Contributor)
Created2014-05
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I began this thesis because I was confused about economics. I wondered why there were so many different models. I didn't understand how they fit together. I was also confused by the assumptions being made. For instance, the assumption that humans are rational utility-maximizers did not seem to agree with

I began this thesis because I was confused about economics. I wondered why there were so many different models. I didn't understand how they fit together. I was also confused by the assumptions being made. For instance, the assumption that humans are rational utility-maximizers did not seem to agree with my own experiences. With my director Dr. Edward Schlee's help, my thesis has become an inquiry into the state of economic methodology, both in theory and in practice. The questions that drive this paper are: How do economists choose between theories? What is the purpose of economic theory? What is the role of empirical data in assessing models? What role do assumptions play in theory evaluation, and should assumptions make sense? Part I: Methodology is the theoretical portion of the paper. I summarize the essential arguments of the two main schools of thought in economic methodology, and argue for an updated methodology. In Part II: A case study: The expected utility hypothesis, I examine methodology in practice by assessing a handful of studies that seek to test the expected utility hypothesis. Interestingly, I find that there is a different between what economists say they are doing, and what they actually seem to be doing. Throughout this paper, I restrict my analysis to microeconomic theory, simply because this is the area with which I am more familiar. I intend this paper to be a guide for my fellow students and rising economists, as well as for already practicing economists. I hope it helps the reader better understand methodology and improve her own practice.
ContributorsKang, Dominique (Author) / Schlee, Edward (Thesis director) / Schoellman, Todd (Committee member) / Boerner, Rochus (Committee member) / Barrett, The Honors College (Contributor)
Created2013-05
Description
There has been an ongoing debate between the relative deterrent power of certainty and severity on deceptive and criminal activity, certainty being the likelihood of capture and severity being the magnitude of the potential punishment. This paper is a review of the current body of research regarding risk assessment and

There has been an ongoing debate between the relative deterrent power of certainty and severity on deceptive and criminal activity, certainty being the likelihood of capture and severity being the magnitude of the potential punishment. This paper is a review of the current body of research regarding risk assessment and deception in games, specifically regarding certainty and severity. The topics of game theoretical foundations, balance, and design were covered, as were heuristics and individual differences in deceptive behavior. Using this background knowledge, this study implemented a methodology through which the risk assessments of certainty and severity can be compared behaviorally in a repeated conflict context. It was found that certainty had a significant effect on a person’s likelihood to lie, while severity did not. Exploratory data was collected using the dark triad personality quiz, though it did not ultimately show a pattern.
ContributorsDay, Nicholas C (Author) / Chiou, Erin (Thesis advisor) / Cooke, Nancy J. (Committee member) / Becker, Vaughn (Committee member) / Arizona State University (Publisher)
Created2019