Date of Award

Spring 5-19-2017

Degree Type

Dissertation-Restricted

Degree Name

Ph.D.

Degree Program

Financial Economics

Department

Business Administration

Major Professor

Dr. Neal Maroney

Second Advisor

Dr. Walter J. Lane

Third Advisor

Dr. Mohammad Kabir Hassan

Fourth Advisor

Dr. Duygu Zirek

Fifth Advisor

Dr. Matthew Zingoni

Abstract

The endowment and the framing effect are widely examined cognitive biases. The experimental economics literature, using choice data gathered through an elicitation device, commonly finds evidence of these biases. Recent work by Cason & Plott (2014) shows that the interpretation of choice data as consistent with biases related non-standard preference theory could also be consistent with confusion or misconception of the game type used to elucidate preferences. I use the Cason and Plott card auction framework to analyze offers of buyers and sellers in an experimental setting with subjects from the University of New Orleans simulating 97 sellers and 90 buyers. The two games have symmetric payoffs in order to examine cognitive biases given subjects’ misconception of the game form. Subjects of both games display misconception of game form that explains both endowment and framing effects by rational confused choice; however, buyers display a much greater dispersion of offers than sellers. I estimate card implied valuation of sellers and buyers given game form misconception and find no statistical endowment effect, but I do find valuation is more uncertain in the buyer’s game. The theory of Rational Inattention predicts this lack of offer symmetry is due to the additional cognitive steps necessary in calculating buyer offers.

Rights

The University of New Orleans and its agents retain the non-exclusive license to archive and make accessible this dissertation or thesis in whole or in part in all forms of media, now or hereafter known. The author retains all other ownership rights to the copyright of the thesis or dissertation.

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