Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/196751
Authors: 
Carpenter, Jeffrey P.
Benscheidt, Kevin
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers 12253
Abstract: 
Viewed through the lens of the prominent two-system model of decision making, behavioral economics is seen as studying the tension between impulses (System 1) and rationality (System 2). In this context, two strategies, "de-biasing" informing agents of their biases and "counter-biasing" using "nudges" to activate biases to positively influence choice, have improved the welfare of behavioral agents. We advance the notion of counter-biasing by demonstrating that one bias (present bias) can be pit against another (choking at high stakes) to counteract the ill effects of the second. Our results demonstrate the potential of counter-biasing as an effective policy tool.
Subjects: 
behavioral economics
counter-biasing
present bias
choking
experiment
JEL: 
C91
D91
M52
Document Type: 
Working Paper

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