This thesis explores the impact of individual decision making on the functioning of firms and markets. The first chapter examines how deviations from strict rationality by individuals impact the market for consumer goods. A growing body of evidence documents individual behavior that is difficult to reconcile with standard models of rational choice, and firm behavior difficult to reconcile with rational markets. In this paper I present a boundedly rational model of choice that reconciles several behavioral anomalies pay for someone to write your papers, and provides micro-foundational support for some puzzling empirical regularities in firm behavior. If the evaluation of an alternative is costly 3 point thesis examples, individuals may find it inefficient to compare all available alternatives. Instead, when faced with an unfeasibly large choice set, some individuals may compare groups of alternatives (i.e. categories) to reduce the choice set into a more manageable set of relevant alternatives. I call these individuals categorical considerers and develop a model in which these decision makers sequentially apply a single well-behaved preference relation at different levels of aggregation. I explore the implications of this model for both individual behavior and equilibrium firm behavior in market settings. Under certain conditions, the existence of categorical considerers in a market causes firms to utilize strategies different from what would be optimal in a market of fully rational consumers. This simple model generates predictions about behavior consistent with several new field experiments, and offers possible explanations for excess spatial product differentiation, brand name premiums example it cover letter for resume, and product branding.(cont.) The second chapter, written jointly with Mireille Jacobson, explores the question of what exactly not-for-profit hospitals maximize. While theories of not-for-profit hospital behavior abound, most are general statements of preferences and do not yield empirically testable (differentiable) predictions. To address this shortcoming we use a unified theoretical framework to model three popular theories of not-for profit hospital behavior: (1) "for-profits in disguise," (2) social welfare maximizers and (3) perquisite maximizers. We develop testable implications of a hospital's response to a fixed cost shock under each of these theories. We then examine the effect of a recent un-funded mandate in California that requires hospitals to retrofit or rebuild in order to comply with modern seismic safety standards. Since the majority of hospitals in the State were built between 1940 and 1970, well before a sophisticated understanding of seismic safety, a hospital's compliance cost is plausibly exogenously predetermined by its underlying geologic risk. We present evidence that within counties seismic risk is uncorrelated with a host of hospital characteristics, including ownership type. We show that hospitals with higher seismic risk experience larger increases in the category of spending that should be affected by retrofitting and that hospitals facing higher compliance costs are more likely to shut down, irrespective of ownership type. In contrast, private not-for-profits alone increase their mix of profitable services such as neonatal intensive care days and MRI minutes.(cont.) Government hospitals respond by decreasing the provision of charity care. As expected, for-profit hospitals do not change their service mix in response to this shock. These results are most consistent with the theory of not-for-profit hospitals as perquisite maximizers and allow us to reject two of the leading theories of not-for-profit hospital behavior - "for-profits in disguise" and "pure altruism." These results also imply that government owned hospitals have welfare as their maximand. More work is needed to determine the overall welfare implications of these different ownership structures. The third chapter, written jointly with Antoinette Schoar, examines the impact of individual judges on the disposition and long run success of firms seeking Chapter 11 bankruptcy protection. Using case information on Chapter 11 filings for almost 5000 private companies across five district courts in the US between 1989 and 2004, we first establish that within districts cases are assigned randomly to judges, which allows us to estimate judge specific fixed effects in their Chapter 11 rulings. We find very strong and economically significant differences across judges in the propensity to grant or deny specific motions. Specifically some judges appear to rule persistently more favorably towards creditors or debtors. Based on the judge fixed effects we created an aggregate index to measure the pro-debtor (pro-creditor) friendliness of each judge. We show that a pro-debtor bias leads to increased rates of re-filing and firm shutdown as well as lower post-bankruptcy credit ratings and lower annual sales growth up to five years after the original bankruptcy filing. Description The three essays in this dissertation examine individual decision making from a behavioral economics perspective. The first two essays report the results of an experiment that examine bidding behavior and belief formation in market-like environments with common values. In the first essay, using elicited beliefs of bidders on the value of the object at different stages of bidding, I examine whether information cascades and rational herding can be credited for the occurrence of the 'winners' curse' I find that the role of information cascades in the occurrence of the winner's curse is marginal and bidders tend to give more weight to private information in making the bidding decisions. The winner's curse is caused primarily by herding due to disconfirmation bias and conservatism in updating beliefs. After assessing your decision making style, find someone with an opposite style with whom you can establish a system of checks and balances. Also, do not forget to analyze the impact of your decision before hand, something which people fail to do. One needs to assess the impact not only on the basis of money and resources, but also what happens if that particular decision is not taken. In doing so it would be important to maintain your objectivity. The sad truth is that people, even at the highest level cars cause a lot of air pollution, simply do not like to make good choices as every decision involves a certain amount of risk. It would be pertinent to keep in mind that a decision-making process means repeatedly proving your ability. So, have a clear understanding of your individual decision-making style. Keep in mind, when it comes to decisions, the best one can do is hope to make more good decisions than bad ones. And it is equally true that nobody is very good in taking all types of decisions. Since every decision involves a risk, it is necessary to minimize it by trying to make sure the information on which you are basing it on is good informatics n. Make sure whatever specific information you have makes sense. Do not take anything for granted or think it to be accurate without checking it out yourself. While explaining your decision to a patient listener, if you experience a lot of discomfort, probably you are less sure of your decision. Feeling fairly comfortable about your decision is an indicator of your faith in the decision. Another important reason that causes people to make bad decisions is a lack of confidence in themselves and in their decision-making ability. It is natural that an ambivalent or cognitive conflict arises when we start to decide about something. Hence, it would be advisable to check the effectiveness of your decisions. One way of doing it is by pretending that you are giving advice to someone else who is making the decision. I think that people tend to forget about or ignore the freedom that they have to make choices for themselves and decide what kind of life they wish to live. People let society tell them what they should be and what they should do, but it shouldn’t be this way. We all have hopes, wishes, and dreams, and we are entitled to achieve them. Think of our very own United States Constitution; freedom of speech, freedom of religion writing tutoring, and hundreds of other freedoms that we as Americans and human beings have. The choices are ours to make, and we as a civilization have to be strong enough to stand up for what we believe in and make the choices that best suit us personally instead of making our choices solely to make others happy. I can say from experience that I have made plenty of choices based on what I thought other people wanted, and I can honestly say those are the decisions I regret the most. I resent living with regrets based off of choices I made to satisfy other people, I now realize that I have the freedom and right to make choices for myself. I realize that my choices are my own who am i essay format, and I realize that the consequences of my decisions will also be my own, and I will live with those consequences with no regret, and because of this, I will be happy with my choices. The work of This I Believe is made possible by individuals like you. Please consider making your tax-deductible contribution today. We receive up to 10% of every purchase you make on Amazon through this link. So do all your shopping here and help support This I Believe! In rare situations in person’s life. he/she face difficult decisions that could be change his/her life for better or worse depend on kind of the decision. For example getting to high school personal statement essay examples law school,choosing a major of study ,traveling for scholarship ,and getting married. All these cases people should take their time to think deeply and eventually make forethought decisions. In contrast build quick decisions in these situations may be make person regret for the rest of his/her life. To conclude, decisions making depend on the situation that we confront. That is mean. Daily and easy cases there is no need to wide thinking ;serious conditions that we do not have time to think. we should think quickly and build fast decision. Finally, serious decisions that we have time to think before make them and actually we have to spend time to reach forethought decisions .therefore we should know what condition we face and what the best decision we should make. Decision making
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