Experimental and Behavioural Economics
Experimental and Behavioural Economics
The Experimental and Behavioural Economics Research Group (EBERG) draws its membership from economists based at the Economics Department at Warwick who work in the fields of Experimental Economics, Behavioural Economics and/or Subjective Wellbeing (“Happiness Economics”). Experimental methods are used in many fields of economics, including behavioural economics, public economics, labour economics, political economy, game theory, and financial economics. Behavioural economics is an attempt to understand decision-making in the context of the many psychological, cognitive and emotional factors that influence behaviour. Behavioural economists typically build on traditional economic models with insights from psychology or neuroscience. Since behavioural economics concerns the underlying motivations for behaviour it can be hard (though not impossible) to find data to support or develop behavioural theories without the use of experimental methods which explains the close relationship between the two fields.
Experimental and behavioural research are fundamentally interdisciplinary and this is reflected in the fact that the group is linked to other similar groups across the University of Warwick and beyond. DR@W is the overarching interdisciplinary group of all behavioural scientists in Warwick which, together with EBERG, also takes members from the Behavioural Science Group at Warwick Business School and behavioural and experimental psychologists based in the Psychology Department, and hosts a weekly seminar, the DR@W Forum. Many members of EBERG are also affiliated with Bridges, an interdisciplinary centre that includes behavioural and experimental work in its remit that also hosts regular seminars and workshops. Behaviour, Brain and Society is one of the University of Warwick’s global research priorities (GRPs) and the co-ordinator of EBERG sits on the board of the GRP. Several group members are actively involved in the ESRC CAGE centre. Theme 3 of CAGE is led by the co-ordinator of EBERG and has a special focus on subjective wellbeing.
People
Academics
Academics associated with the Reseach Group Name research group are:
Research Students
Events
DR@W Forum: Kamil Fulawka (MPI, Berlin)
I will present a novel approach to understanding the subjective reasons underlying risky decision-making, enabled by large language models (LLM). Traditional models of risky choice often assume that decision-making relies on a single, stable reason or process, regardless of context. This simplification overlooks the variability in reasoning that may occur depending on the situation. To address these limitations, we developed an LLM-based approach that utilizes free-text reports to reveal the subjective reasons behind decisions, and we implemented a proof-of-concept in three stages. First, we extracted a comprehensive set of nearly 50 decision reasons from formal models, heuristics, and basic motivations. Second, we collected free-text retrospective verbal reports from 86 participants after each of 20 risky choices they made. Third, we employed advanced prompt engineering techniques with a state-of-the-art LLM to identify the reasons mentioned in these reports.
Our results provide strong evidence that decision reasons vary systematically across different choice problems but less across individuals. Furthermore, a simple predictive model based on the identified reasons achieves an out-of-sample accuracy of about 92%, validating the approach. Our results suggest that combining verbal reports and an LLM-based analysis with a large sample and comprehensive set of choice problems can uncover how people make risky decisions, including intricate relationships between decision reasons and types of choice problems.