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Behavioral Economics and Institutions Seminar

Speaker Name: Chew Soo Hong
Speaker Bio:

Chew Soo Hong is a Professor at the National University of Singapore (NUS) and an Adjunct Professor at the Hong Kong University of Science and Technology (HKUST), and has previously taught at the University of California, Irvine, Johns Hopkins University and University of Arizona. 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 directed HKUST’s center for Experimental Business Research, inaugurated by Vernon Smith in 1998, and 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. Chew has published in well regarded journals such as Econometrica, Journal of Economic Theory, and Review of Economic Studies as well as more biology-oriented ones including PRSB, Neuron, and PLoS ONE.

Chew received his PhD in Interdisciplinary Studies from the University of British Columbia. More importantly he received his Bachelors from Harvey Mudd College and his MA in Mathematics from Claremont Graduate School.

Chew Soo Hong

Talk Title:

Haze and Decision Making: A Natural Laboratory Experiment

Talk Description:

The adverse impact of haze on health and its association with a range of economic outcomes has received increasing attention in the literature. A natural laboratory experiment involving more than 600 subjects enables a first attempt at investigating the causal effect of haze proxied by Particulate Matters 2.5 (PM2.5) directly on decision making. This study was conducted in Beijing over five days with highly varying levels of PM2.5 in October 2012, before this measure became commonly known in China the next year. We observe several effects of an increase in PM2.5. In individual decision making, we find an increase in aversion to risk and to ambiguity over gains and in risk tolerance over losses together with greater impatience when discounting over a remote comparison. In other-regarding behavior, subjects become less prosocial: giving less in a dictator game, contributing less in a public goods game, reciprocating less in a sequential prisoners’ dilemma, and demanding more as responders in an ultimatum game. In strategic thinking, there are greater deviations from dominant-strategy bidding behavior in a second-price auction and from equilibrium behavior in a p-beauty game. Taken together, our results provide a preferential foundation to several recent papers linking short term variations in air quality to real-world economic variables including the performance of stock markets, worker productivity, consumption and entertainment, and criminal activities.