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Tue, 07 Mar 2017
Haze and decision making: A natural laboratory experiment

Time: 11.00 AM - 12.00 PM

Venue: Cysteine, Level 7 (30 Biopolis Street, Matrix)

Speaker: Prof. Chew Soo Hong, Department of Economics, National University of Singapore


The adverse impact of haze on health and related socioeconomic outcomes has received increasing attention in the media. Recent biological studies point to a short-term impact of haze on brain functions and that it can cause mental disorder in the long term. This paper is a first attempt at investigating the causal effect of haze directly on decision making in a natural laboratory experiment in Beijing over five days in October 2012 with highly varying levels of Particulate Matters 2.5, before this measure became commonly used in China the next year. An increase in the level of haze increases the degree of risk aversion elicited from a portfolio choice task and the degree of ambiguity aversion when facing gain oriented uncertainty as well as the degree of risk seeking behavior for even-chance risk over losses. This in turn implies a greater tendency towards the disposition effect in investor behavior. Additionally, subjects exhibit more selfishness in the dictator game, greater inequity aversion in the ultimatum game, and less cooperativeness in the prisoner dilemma game together with a greater departure from equilibrium behavior in the p-Beauty game and a diminished winning motive in the second-price auction. Overall, our results point to a haze-brain-decision pathway as foundation for several recent findings linking haze to short-term economic outcomes including movie attendance, worker productivity, violent crime, and stock market performance.

About The Speaker
Chew Soo Hong is professor at the National University of Singapore (NUS). He received his Ph.D. in interdisciplinary studies from the University of British Columbia and has previously taught at the Hong Kong University of Science and Technology, University of California, Irvine, Johns Hopkins University and University of Arizona. Chew is co-director of NUS' lab for Behavioral x Biological Economics and the Social Sciences which aims to bring together genomics, neuroscience, decision theory, and behavioural and experimental economics to seek a deeper understanding of decision making at the neural and molecular levels. He is among the pioneers in axiomatic non-expected utility models and is a fellow of the Econometric Society which awarded him the Leonard J. Savage thesis prize. Chew has published in well regarded journals in economics such as Econometrica, Review of Economic Studies, Journal of Economic Theory as well as biology-oriented ones including PRSB, Neuron, and PLoS.

Dr. Samuel Gan, Assistant Principal Investigator

Note : This talk will be relevant to environmentalists, psychologists, neuroscientists, biologists, and scientists of any discipline interested in cross-discipline research.

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