Dissertation Defense: “Three Studies in Experimental Economics”, Dario Trujano Ochoa
Speaker
Dario Trujano Ochoa, PhD Candidate, University of California, Santa Barbara
Biography
Dario Trujano Ochoa is a PhD candidate in Economics at the University of California, Santa Barbara. His research explores how individuals process information, form beliefs, and make decisions under uncertainty, focusing on misinformation and risk preferences. He uses experimental methods and theoretical modeling to study higher-order beliefs, feedback mechanisms, and the value placed on information.
Event Details
Join us to hear Dario’s dissertation defense. He will be presenting his dissertation titled, “Three Studies in Experimental Economics”. To access a copy of the dissertation, you must have an active UCSB NetID and password.
Abstract
The three chapters of this dissertation present experiments that explore the demand for verification in the context of misinformation, how experience affects risk attitudes, and citizens’ decision to become candidates in elections. The variety of topics covered in the present dissertation attests to the flexibility and applicability of experimental methods in economics and the insights we can gain from them.
In the first chapter, participants had to classify if a headline was accurate or contains false information and report their willingness to pay (WTP) to verify it. This experiment controls for the payoff participants for a correct classification, the accuracy of the verification process, and the prior probability of observing misinformation. All these variables are relevant in the decision-making process to verify headlines. However, these variables are impossible to control and often challenging to measure in the field. This experiment, conducted in Mexico, used real headlines and monetary incentives to measure the demand for verification, accuracy rates, and confidence. Participants had a larger WTP, accuracy rate, and confidence when they classified political headlines. Prior headline classification as true strongly affected the WTP. Classifying a headline initially as true also increased the WTP and accuracy among political headlines. Finally, a negative interaction effect was found between headlines favoring the government and the participant’s
criticism of the government.
In the second chapter, the question was: Do people know their own risk preferences, or do risk choices change with experience and observation? A straightforward test in the laboratory is provided. People make an initial decision concerning a lottery choice and then experience 24 unpaid practice periods in which they roll the dice, record the outcome, and record the would-be payoff. They then make a final decision for the lottery choice; one of the first and last periods is randomly chosen for payment. The primary hypothesis was that people will become less risk-averse by having made and experienced the practice rolls. People are significantly more likely to become less risk-averse than more risk-averse over time. This move towards assuming increased risk goes in the opposite direction from what is at least arguably predicted by loss aversion and reference dependence. Also, it was found that women’s preferences changed much less than men’s. We feel that our hands-on approach ensures a degree of engagement that helps to accelerate the learning process. It is argued that measures obtained after people have had experience with a mechanism are more meaningful, and this principle might extend more generally to other elicitation tasks.
In chapter 3, the findings were reported from a study that explores candidate participation in a context where citizens can become candidates under both plurality and run-o↵ voting systems. The study also considers the influence of entry costs and different platforms of potential candidates. While the findings align with the expected outcomes of the citizen-candidate model, there is a notable over-participation by candidates from less favorable electoral positions. These entry patterns adjusted well to the QRE. This research adds to the existing body of knowledge about what motivates candidates to enter races under different voting systems and analyzes the behavior of candidates in extreme positions.
JEL Codes: B49, C81, C91, C92, C93, D70, D72, D81, D83, D91, C93
