Nattavudh Powdthavee & Yohanes Riyanto Review of Economics and Statistics,
May 2015, Pages 257-272
Standard economic models assume that the demand for expert predictions arises only under the conditions in which individuals are uncertain about the underlying process generating the data and there is a strong belief that past performances predict future performances. We set up the strongest possible test of these assumptions. In contrast to the theoretical suggestions made in the literature, people are willing to pay for predictions of truly random outcomes after witnessing only a short streak of accurate predictions live in the lab. We discuss potential explanations and implications of such irrational learning in the contexts of economics and finance.
Had some very nice dinner, and then a brief (by London standards; it was three hours, which was enough for jet-lagged MM) pub crawl with the Skarbeki and two lads from ASI.
And played "Seinfeld episode," because the two ASI-ers reminded me so much of George and Kramer. Let's call them "Sam" (the George K clone) and "Ben" (the Kramer clone). Because those are their names. They were kind enough to act out parts of the dialogue. I wish we had had a camera. Natural vaudevillians, Sam and Ben.
Here are the proposed Seinfeld episodes that I remember (and, yes, several of these apparently actually happened to Sam and Ben, in different ways):
1. George has a date with an Asian woman he doesn't really want to go out with. To get rid of her, he takes her to a very Americanized "Chinese" restaurant and then orders sweet and sour pork. She says things in Chinese that are impolite, but the waiter agrees with her and kicks George out.
2. Kramer decides that he is going to estimate a DSGE model for policy simulations for the New York area. The gang is skeptical, with George whining about the Lucas critique. But Kramer is insistent: "Jerry...it's DYNAMIC! And NONLINEAR!"
3. George decides to buy a new cell phone, but drives everyone crazy by dithering over the decision. Eventually he decides to test five of them at the same time. But he keeps running out of battery, and has to plug them in everywhere he goes. Eventually, he wears a utility belt with five large back-up chargers strapped to it, and then tries to go through airport security....
4. Jerry becomes obsessed with the Elgin Marbles, claiming they should be returned to Greece. George and Elaine are scornful, saying that England should keep them, because otherwise they would have been lost or destroyed, and it's "only right." Everybody is doing research on the internet, and then saying "Did you know...?" about some obscure fact. Kramer goes around driving everyone crazy, peeking in doorways and shouting, "Greece has lost its marbles!" and then closing the door again.
5. Jerry works on a routine that is based on telling jokes. But Kramer has heard them all, and he can't help but shout out the punchline. Jerry tries to hide, but Kramer can't help himself and keeps finding him. Worst of all, Kramer always follows up the punchline shouting by guffawing, "HA! Premature e-joke-ulation!" Kramer never tires of this joke, but everyone else does.