This paper tests two explanations for apparent undersaving in life cycle models: bounded rationality and a preference for immediacy. Each was addressed in a separate experimental study. In the first study, subjects saved too little initially—providing evidence for bounded rationality—but learned to save optimally within four repeated life cycles. In the second study, thirsty subjects who consume beverage sips immediately, rather than with a delay, show greater relative overspending, consistent with quasi-hyperbolic discounting models. The parameter estimates of overspending obtained from the second study, but not the first, are in range of several empirical studies of saving (with an estimated β = 0.6–0.7).

Reinhard Selten and Thorsten Chmura (2008) recently reported laboratory results for completely mixed 2 X 2 games used to compare Nash equilibrium with four other stationary concepts: quantal response equilibrium, action-sampling equilibrium, payoff-sampling equilibrium, and impulse balance equilibrium. We reanalyze their data, correct some errors, and find that Nash clearly fits worst while the four other concepts perform about equally well. We also report new analysis of other previous experiments that illustrate the importance of the loss aversion hardwired into impulse balance equilibrium: when the other non-Nash concepts are augmented with loss aversion, they outperform impulse balance equilibrium.

In economic analyses of asymmetric information, better-informed agents are assumed capable of reproducing the judgments of less-informed agents. We discuss a systematic violation of this assumption that we call the "curse of knowledge." Better-informed agents are unable to ignore private information even when it is in their interest to do so; more information is not always better. Comparing judgments made in individual-level and market experiments, we find that market forces reduce the curse by approximately 50 percent but do not eliminate it. Implications for bargaining, strategic behavior by firms, principal-agent problems, and choice under un-certainty are discussed.

We conducted experiments in Vietnamese villages to determine the predictors of risk and time preferences. In villages with higher mean income, people are less loss-averse and more patient. Household income is correlated with patience but not with risk. We expand measurements of risk and time preferences beyond expected utility and exponential discounting, replacing those models with prospect theory and a three-parameter hyperbolic discounting model. Comparable risk parameter estimates have been found for Chinese farmers, using our method. (C83, D12, O12, P38)

We test for consumption smoothing using bankruptcy data on players in the National Football League (NFL), who typically earn several million dollars during an income spike that lasts a few years. The life-cycle hypothesis predicts that players should save substantially while playing and then have little risk of bankruptcy post-NFL. However, players in our sample begin to file for bankruptcy soon after they stop playing and continue filing at a high rate through at least the first 12 years of retirement. Players' total earnings and career lengths have surprisingly little effect on the risk of bankruptcy.

We report experiments on sender-receiver games with an incentive for senders to exaggerate. Subjects “overcommunicate”—messages are more informative of the true state than they should be, in equilibrium. Eyetracking shows that senders look at payoffs in a way that is consistent with a level-k model. A combination of sender messages and lookup patterns predicts the true state about twice as often as predicted by equilibrium. Using these measures to infer the state would enable receiver subjects to hypothetically earn 16–21 percent more than they actually do, an economic value of 60 percent of the maximum increment. (JEL C72, C91, D82, Z13)

We examine high stakes three-person bargaining in a game show where contestants bargain over a large money amount that is split into three unequal shares. We find that individual behavior and outcomes are strongly influenced by equity concerns: those who contributed more to the jackpot claim larger shares, are less likely to make concessions, and take home larger amounts. Contestants who announce that they will not back down do well relative to others, but they do not secure larger absolute amounts and they harm others. There is no evidence of a first-mover advantage and little evidence that demographic characteristics matter.

We apply a machine-learning algorithm, calibrated using general human vision, to predict the visual salience of prices of stock price charts. We hypothesize that the visual salience of adjacent prices increases the decision weights on returns computed from those prices. We analyze the inferred impact of these weights in two experimental studies that use either historical price charts or simpler artificial sequences. We find that decision weights derived from visual salience are associated with experimental investments. The predictability is not subsumed by statistical features and goes beyond established models. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

We study decisions that involve choosing between different numbers of options under time pressure using eye-tracking to monitor the search process of the subjects. We find that subjects are quite adept at optimizing within the set of items that they see, that the initial search process is random in value, that subjects use a stopping rule to terminate the search process that combines features of optimal search and satisficing, and that subjects search more often in certain focal regions of the display, which leads to choice biases. (JEL C91, D12, M31)

This paper describes a series of laboratory experiments studying whether the form in which items are displayed at the time of decision affects the dollar value that subjects place on them. Using a Becker-DeGroot auction under three different conditions—(i) text displays, (ii) image displays, and (iii) displays of the actual items—we find that subjects' willingness-to-pay is 40–61 percent larger in the real than in the image and text displays. Furthermore, follow-up experiments suggest the presence of the real item triggers preprogrammed consummatory Pavlovian processes that promote behaviors that lead to contact with appetitive items whenever they are available. (JEL C91, D03, D12, D87)