Strategic Behaviour in Games. John von Neumann’s minimax solution (1928) and its generalisation to mixed-strategy Nash (1950) equilibrium are the cornerstones of modern game theory, the mathematical framework for the study of decision making when the actions of different decision makers interact. This project studies human behaviour in situations where decision makers have an incentive to be unpredictable. The proposed research will shed light on the sources of the failure of the theory in the l ....Strategic Behaviour in Games. John von Neumann’s minimax solution (1928) and its generalisation to mixed-strategy Nash (1950) equilibrium are the cornerstones of modern game theory, the mathematical framework for the study of decision making when the actions of different decision makers interact. This project studies human behaviour in situations where decision makers have an incentive to be unpredictable. The proposed research will shed light on the sources of the failure of the theory in the lab, and assesses the practical significance of the statistical tests used to evaluate laboratory data on mixed-strategy play.Read moreRead less
Neuroeconomic foundations of probability and value perception. This project aims to investigate well-known behavioural “biases” in probability and value perception through the lens of neurobiology. This project will generate new knowledge on how the value of rewards, and the likelihood of receiving them, are incorporated in the decision-making process. Using an interdisciplinary approach, this project will be of interest to researchers from several domains of social science, which focus on how a ....Neuroeconomic foundations of probability and value perception. This project aims to investigate well-known behavioural “biases” in probability and value perception through the lens of neurobiology. This project will generate new knowledge on how the value of rewards, and the likelihood of receiving them, are incorporated in the decision-making process. Using an interdisciplinary approach, this project will be of interest to researchers from several domains of social science, which focus on how and why people make their decisions and how we could improve people’s wellbeing by improving their choices. The findings will provide insights into effective, behaviour-related policy design that aims to improve peoples’ well-being.Read moreRead less
Rank-dependent choice equilibrium. This project aims to develop and test a new statistical theory of games, Rank-Dependent Choice Equilibrium (RDCE), which has the potential to unify and improve on existing approaches where the extreme reliance on perfect decision making and perfect foresight has raised doubts about their empirical relevance. The project intends to develop the theoretical foundations of RDCE, explore its relation with various parametric approaches, and evaluate RDCE via meta stu ....Rank-dependent choice equilibrium. This project aims to develop and test a new statistical theory of games, Rank-Dependent Choice Equilibrium (RDCE), which has the potential to unify and improve on existing approaches where the extreme reliance on perfect decision making and perfect foresight has raised doubts about their empirical relevance. The project intends to develop the theoretical foundations of RDCE, explore its relation with various parametric approaches, and evaluate RDCE via meta studies and stress tests. Expected outcomes of RDCE include a paradigm shift in game theory, resulting in broader acceptance and adoption of statistical game theory and to more robust policy recommendations.Read moreRead less
Designing Efficient and Equitable Voting Mechanisms. The most commonly used method for collective decision making, majority voting, is generally not efficient as it does not allow voters to express the intensity of their preferences. In addition, majority voting suffers from the tyranny of the majority, i.e. the risk of repeatedly excluding minority groups from representation. A final downside of majority voting is its winner-take-all nature, i.e. it provides no compensation for losing voters. T ....Designing Efficient and Equitable Voting Mechanisms. The most commonly used method for collective decision making, majority voting, is generally not efficient as it does not allow voters to express the intensity of their preferences. In addition, majority voting suffers from the tyranny of the majority, i.e. the risk of repeatedly excluding minority groups from representation. A final downside of majority voting is its winner-take-all nature, i.e. it provides no compensation for losing voters. This project concerns the design of alternative mechanisms that avoid these shortcomings and robustly deliver efficient and equitable outcomes. The project develops the theory underlying these novel mechanisms, tests them in a range of environments, and delivers an implementation for practical use.
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Introspection, Learning, and Equilibrium in Games: Theory and Experiment. Game theory is increasingly being used in the social sciences, but the extreme reliance on perfect decision making and perfect foresight has raised doubts about its empirical relevance. This scepticism is reinforced by laboratory evidence showing behaviour patterns that are systematically biased away from game-theoretic predictions. This project concerns the development and testing of models more descriptive of actual huma ....Introspection, Learning, and Equilibrium in Games: Theory and Experiment. Game theory is increasingly being used in the social sciences, but the extreme reliance on perfect decision making and perfect foresight has raised doubts about its empirical relevance. This scepticism is reinforced by laboratory evidence showing behaviour patterns that are systematically biased away from game-theoretic predictions. This project concerns the development and testing of models more descriptive of actual human behaviour. One aim is to deliver hybrid models able to reproduce interesting patterns of first-period play (introspection), time-series data in repeated games (learning), and systematic departures from static equilibrium. Another aim is to apply a successful hybrid to improve the design of economic and social institutions.Read moreRead less
The rate of time preference in choice experiments: A systematic re-analysis. This project intends to re-analyse data from over 20 years of past research to understand when and why people sometimes make short-sighted choices. Time preference is a core concept in both theoretical and applied economics and a key input in public policy, yet empirical understanding of it is poor. Almost all important decisions of households, businesses and government involve benefits and costs that unfold over time. ....The rate of time preference in choice experiments: A systematic re-analysis. This project intends to re-analyse data from over 20 years of past research to understand when and why people sometimes make short-sighted choices. Time preference is a core concept in both theoretical and applied economics and a key input in public policy, yet empirical understanding of it is poor. Almost all important decisions of households, businesses and government involve benefits and costs that unfold over time. Many economists have used decision-making experiments to study how people value the future and make trade-offs over time, but these have not reached any clear consensus. This project plans to systematically re-analyse primary data using state-of-the-art estimation techniques to generate new estimates of the discount rate for each study. These will then be analysed in a meta-regression analysis to identify the factors that cause discount rates to vary between studies.Read moreRead less
Self-control in Economic Behaviour. This project aims to use new Australian data to study the way that people’s self-control affects their economic behaviour. This project expects to advance science by testing two new ways of identifying whether people understand their own self-control issues and conducting an innovative program of research that links people’s self-control to their life chances. Expected outcomes include an understanding of i) the factors driving the capacity for self-control; i ....Self-control in Economic Behaviour. This project aims to use new Australian data to study the way that people’s self-control affects their economic behaviour. This project expects to advance science by testing two new ways of identifying whether people understand their own self-control issues and conducting an innovative program of research that links people’s self-control to their life chances. Expected outcomes include an understanding of i) the factors driving the capacity for self-control; ii) the role of self-control in promoting wellbeing; and iii) policy options for improving outcomes through better self-control. This should provide significant benefits in supporting policy agendas such as the Government’s Priority Investment Approach and behavioural economics teams. Read moreRead less
Using behavioural economic insights to overcome student procrastination. This project aims to study the relations between present-biased time preference, procrastination, and achievement at school, using economic experiments. Investment in human capital generates economic benefits for students, families, employers, and society, but its benefits are realised far into the future. Because of these immediate costs and delayed benefits, behavioural economic theory predicts that students will procrast ....Using behavioural economic insights to overcome student procrastination. This project aims to study the relations between present-biased time preference, procrastination, and achievement at school, using economic experiments. Investment in human capital generates economic benefits for students, families, employers, and society, but its benefits are realised far into the future. Because of these immediate costs and delayed benefits, behavioural economic theory predicts that students will procrastinate. This project will identify the characteristics of students at greatest risk of procrastination, evaluate practical strategies to overcome it, and examine whether it is associated with poorer outcomes. This should help schools and policy makers reduce educational inequalities, and yield long-term benefits over students’ lives.Read moreRead less
Multidisciplinary analysis of financial reference points and wellbeing. The aim is to find how to improve financial decisions (i) during unexpected economic shocks, and (ii) by the socially disadvantaged. The project will produce the first large-scale evidence on heterogeneity in benchmarks (reference points) against which people evaluate financial alternatives and the role of such benchmarks in financial risk-taking and in creating and perpetuating economic inequality. The expected outcomes inc ....Multidisciplinary analysis of financial reference points and wellbeing. The aim is to find how to improve financial decisions (i) during unexpected economic shocks, and (ii) by the socially disadvantaged. The project will produce the first large-scale evidence on heterogeneity in benchmarks (reference points) against which people evaluate financial alternatives and the role of such benchmarks in financial risk-taking and in creating and perpetuating economic inequality. The expected outcomes include transformed interdisciplinary understanding of financial decisions and significantly greater capacity for multidisciplinary collaboration. The findings will inform policy on promoting financial wellbeing and to mitigate the devastating effects of sudden economic shocks such as that of COVID-19.Read moreRead less
Understanding and overcoming confusion in consumer financial decisions. This project aims to develop consumer-centred approaches to reducing the harmful effects of confusion in financial decisions by studying superannuation investment and home loan decisions where confused choices are individually and collectively costly. The project intends to develop comprehensive models to capture the full complexity of financial products and the diverse preferences and capability of consumers, then to use ad ....Understanding and overcoming confusion in consumer financial decisions. This project aims to develop consumer-centred approaches to reducing the harmful effects of confusion in financial decisions by studying superannuation investment and home loan decisions where confused choices are individually and collectively costly. The project intends to develop comprehensive models to capture the full complexity of financial products and the diverse preferences and capability of consumers, then to use advanced statistical methods to estimate the benefits of clearer decision-making. The outcomes of this project includes new models of complex financial decisions, and a better understanding of where confusion arises and the effects it may have. Decreased confusion will raise financial well-being and help communities become more resilient to financial shocks.Read moreRead less