Incomplete Preferences. The typical assumption in economics is that choices follow a preference relation that is complete, stable over time, and that satisfies various normative properties (e.g. Expected Utility). However, this assumption has been criticized both empirically and conceptually. Empirically, by documenting a large number of “biases” incompatible with these postulates (e.g. the Willingness to Pay/Accept gap, or Stochastic Choice). Conceptually, a large literature in economics and psychology has criticized the assumption that preferences are complete, arguing that instead often subjects may not know what they prefer and may need to use a heuristic to make a choice in this case. The projects in this area study incomplete preferences formally and introduce models of behavior in which subjects may need to “resolve” this incompleteness in some way, leading to some of the well-known biases documented empirically. We also introduce projects to experimentally test the presence of incomplete preferences and the implications of these models.
Neuroeconomics. The field of neuroeconomics aims to understand the neurological basis of economic choice. An understanding of the processes and constraints that underlie choice behavior may help in the design of future models. Our work in this area has focused on the mechanics of learning and belief formation, and specifically the role of the neurotransmitter dopamine, which has been of interest to neuroeconomists due to its apparent role in transmitting information about beliefs and preferences. It has been hypothesized that dopamine encodes `reward prediction error’, or the difference between the expected and realized rewards associated with an event. Much of our work has involved using theoretical techniques from economics to design experimental tests of the reward prediction hypothesis.
Equity, Inclusion, and Diversity. We use insights from behavioral science to promote organizational health, in particular, as it relates to equality, diversity, and inclusion. Getting and staying healthy includes preventing undesirable events from happening, detecting issues when they arise and mitigating against the consequences as they occur. To promote healthy behaviors, organizations typically rely on “soft” instruments such as awareness-raising and appeals through training programs and information sharing, or “hard” instruments such as command-and-control through rules, carrots, and sticks. We believe that behavioral design or “nudges” offer a middle ground to establish healthy behaviors, often more powerful than awareness-raising and less costly than shoves. In working with organizations across the sectors, we will design nudges promoting desired behaviors regarding effective talent management, and organizational design that levels the playing field for all and inclusive culture.
We treat lack of diversity and inclusion as a “want-should” dilemmas, where people know what they should be doing but then, do not get around to doing it. Behavioral design helps people bridge this intention-action gap. Our work emphasizes evidence-based reasoning. We establish how to diagnose the “behavioral health” of an organization, design potential treatments for what is broken, and rigorously evaluate their impact, using big data analytics and experimentation. Our behavioral experts partner with an organization— tech start-up having developed behaviorally inspired software to help organizations address these issues or an organization (company, government or International Organization) interested in advancing equality, diversity and inclusion through the use of behavioral design. Behavioral Economics and HR People may be the heart of our organizations, but HR practices are often based on outdated ideas of human psychology and organizational design. When it comes to hiring decisions, employee motivation, and helping workers make better choices, behavioral insights and evidence-based practices can drive a new generation of HR strategies.
We spend more time working than doing anything else in life. It’s not right that the experience of work, even at some of the best employers, should be so demotivating and dehumanizing.
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