Dissertation Defense: “Essays in Behavioral and Experimental Economics”, Sonal Barve, University of California, Santa Barbara
Speaker
Sonal Barve, University of California, Santa Barbara
Biography
Sonal is a PhD candidate in Economics at the University of California, Santa Barbara. Her research uses experimental and applied methods to investigate how people make decisions under cognitive limitations, uncertainty, and imperfect knowledge, and how these shape institutional effectiveness and social welfare.
Before her PhD program, she worked at the Reserve Bank of India in Mumbai, focusing on credit culture and information asymmetries among lenders. She holds a Bachelor’s in Electronics and Communication Engineering from PICT, University of Pune, and a Master’s in Environmental Economics from the Madras School of Economics, India, where she researched climate change and weather impacts on Indian agriculture and farmer suicides. In her spare time, she enjoys reading and discussing history, and watching comedy.
Title
“Essays in Behavioral and Experimental Economics”
Abstract
The quality of economic decisions depends on which decision strategy people adopt, how effectively they apply it, and how they represent the structure of the decision problem. My dissertation studies these related aspects across three experiments.
The first chapter examines binary decisions under piecewise-linear tax schedules that vary in complexity. Failures in marginal reasoning are partly linked to failures in representing the decision problem, as most subjects lack basic knowledge of the correct decision rule. However, a large share of mean choice error persists even among subjects who represent the problem correctly, suggesting that failures in marginal reasoning also reflect difficulty in applying the rule effectively. Implementation failures increase with schedule complexity, indicating that challenges in both representation and implementation of the correct strategy shape behavior under complex incentive schedules.
The second chapter examines the procedural structure of decision strategies under the same incentive environment. Subjects provide incentivized free-text explanations of their strategies, which I code for the number of task-relevant information-processing operations. Slope complexity, specifically the number of piecewise changes in the marginal tax rate relevant to a given decision, increases the number of operations subjects report. Subjects who report correct decision strategies also report higher operation counts, suggesting that normatively accurate strategies are procedurally more demanding.
The third chapter examines how prior experience of growing awareness of possible outcomes affects later attitudes toward ambiguity. Subjects who discovered the outcome space gradually exhibit weaker ambiguity aversion for frequently encountered outcomes and stronger ambiguity aversion for rarely encountered outcomes, relative to subjects who knew the full outcome space from the start. This pattern persists after accounting for elicited beliefs, suggesting that awareness history shapes ambiguity attitudes through a mechanism not captured by beliefs alone.
Together, the chapters show that the quality of economic decisions is shaped not only by the information available and the beliefs decision-makers hold, but also by how they represent the structure of the problem they face and how well they can act on it.
JEL Codes: D03, C91, H21, D81, D83, D84
Event Details
Join us for Sonal’s dissertation defense, where she will present her research titled “Essays in Behavioral and Experimental Economics” We invite you to attend this important academic milestone and learn more about her work in the field. To access a copy of the dissertation here, you must have an active UCSB NetID and password.
