We use the 2025 Institute for Replication economics database to examine whether Z-curve estimates based solely on original published test statistics track subsequent re-analysis outcomes. For 4,970 matched original and re-analysis test statistics from 98 papers, Z-curve estimates an expected replication rate of 78 percent using the original results, compared with 76 percent using the re-analysis results. The observed same-direction significance rate is 76 percent. This correspondence is consistent with Z-curve providing a useful benchmark for replicability in this selected sample, although the re-analysis exercises are generally not exact replications and are not randomly selected. We also document substantial heterogeneity across empirical methods and subfields. The results suggest that published test statistics contain information about subsequent replicability, but they do not provide a substitute for direct replication.

We conducted a proof-of-concept analysis to demonstrate that government funding decisions can be studied within a lab experiment: We explore the effects of government funding levels, information level, and various participant characteristics on the demand for elective egg freezing (EEF) and in vitro fertilization (IVF), two types of fertility treatment, and determine price and income elasticities of demand within an incentive-compatible experiment.We recruited 217 female participants without children aged 20-29 years. Participants were assigned to one of three between-subjects experimental treatments that varied income endowment and information provided. Additionally, the experiment consisted of 3 within-subjects conditions corresponding to different levels of government funding for IVF and EEF with 2 decision periods (‘planning period’ and ‘family-formation period’) and participants had to indicate their treatment choice aiming to achieve a live birth.The demand for EEF and IVF were shown to be price-inelastic. We found that the increase in the price for EEF and IVF through restrictions in government funding significantly reduced demand for such treatments. However, demand did not significantly change with income level, suggesting a high value associated with fertility treatment.Overall, our study shows that government funding decisions for medical interventions can be explored within an experimental setting.

Luckman et al. (2018) experimentally tested the conjecture that a single model of risky intertemporal choice can account for both risky and intertemporal choices, and under the conditions of their experiment, found evidence supporting it. Given the existing literature, that is a remarkable result which warrants (conceptual) replication. Following a tradition in psychology, Luckman et al. (2018) had first-year psychology students participate that were rewarded with non-monetary course credits (see also Luckman et al., 2020). Proper incentivisation is a long-standing bone of contention among experimentally working economists and psychologists, last but not least when it comes to the elicitation of preferences of any kind. Another reason to be sceptical is that the experiment was not properly powered up; the no-difference results reported by the authors might be spurious. In our conceptual replication, we find significant differences between the risky and intertemporal choices at both the group and individual level. We find further that there is no significant difference between choices made by participants that are paid a flat incentive and participants that are paid under the random incentive scheme, at the group level. We find that order effects matter for intertemporal choices, but not for risky choices. At the individual level, we find evidence in favour of the model that assumes a common value function, but separate choice functions. This result is robust across our incentive systems, and order of presentation, but sensitive to different prior distributions.

Over the past decades psychological theories have made significant headway into economics, culminating in the 2002 (partially) and 2017 Nobel prizes awarded for work in the field of Behavioral Economics. Many of the insights imported from psychology into economics share a common trait: the presumption that decision makers use shortcuts that lead to deviations from rational behaviour (the Heuristics-and-Biases program). Many economists seem unaware that this viewpoint has long been contested in cognitive psychology. Proponents of an alternative program (the Ecological-Rationality program) argue that heuristics need not be irrational, particularly when judged relative to characteristics of the environment. We sketch out the historical context of the antagonism between these two research programs and then review more recent work in the Ecological-Rationality tradition. While the heuristics-and-biases program is now well-established in (mainstream neo-classical) economics via Behavioral Economics, we show there is considerable scope for the Ecological-Rationality program to interact with economics. In fact, we argue that there are many existing, yet overlooked, bridges between the two, based on independently derived research in economics that can be construed as being aligned with the tradition of the Ecological-Rationality program. We close the paper with a discussion of the open challenges and difficulties of integrating the Ecological Rationality program with economics.

We explore experimentally a cognitive-effort channel through which defaults might influence behavior in an insurance market setting where there is uncertainty in the benefits offered by different potential plans. We find that defaults can strongly influence purchasing behavior when participants can make decisions at their own pace and we document a positive correlation between the time subjects spend making a decision and the probability that they adjust away from the offered default. By contrast, we observe no significant impact of defaults in a treatment where we fix the decision time so that participants must spend 45 seconds on each decision screen without the possibility of moving faster. Our fixed-deliberation time manipulation lowers the opportunity cost of decision time and makes active deliberation less costly. The difference in treatments thus suggests that defaults operate in part by influencing the decisions of individuals who find the cognitive costs of active decision-making prohibitively high.

Game theory is a branch of social sciences that formalizes decision-making in situations where two or more individuals or groups interact, possibly having conflicting interests. In Ortmann & Walraevens (2022) we have reconstructed Smith’s ways of thinking about the social world by analyzing his early work on rhetoric and languages. We document that Smith had an astute understanding of interactive decision-making in all walks of life and of the role persuasion plays in it. Game theory is a natural way to capture this understanding and we showed that Smith used, from the LBRL over the TMS to the WN, what we called reasoning routines that map tightly into eductive and evolutive game theory. The present manuscript is a primer of sorts on our book and the insights that we establish through it. We argue that understanding Smith’s reasoning routines, or conceptual lenses, is a major step towards understanding the deep structure of his oeuvre, and for that matter his universal teachings.

The Allais Paradox, or the common consequence effect, is a well-known behavioral regularity in individual decision-making under risk. Data from 81 experiments reported in 29 studies reveal that the Allais Paradox is a fragile empirical finding. The Allais Paradox is likely to be observed in experiments with high hypothetical payoffs, the medium outcome being close to the highest outcome and when lotteries are presented as a probability distribution (not in a compound form). The Allais Paradox is likely to be reversed in experiments when the probability mass is equally split between the lowest and highest outcomes in risky lotteries. (JEL D44, D81)

Adam Smith’s view of the proper role for government in commercial societies remains a source of debate. Here we sketch out in simple game-theoretic terms the numerous public-goods provision and externalities problems on display in particular in Book V of The Wealth of Nations. Casting these problems in these terms highlights the strategic nature of the thinking that Smith brought to the analysis of these problems. It leads us to claim that Smith -- while he did not use these terms -- understood well the pervasive nature of inter- and externalities, as well as the related issue of reputational enforcement. Our approach allows us to identify Smith as an early (and perhaps the first) analyst of incentive-compatible state intervention. By showing how game theory can be fruitfully applied to Smith's oeuvre, we suggest a methodology that allows an answer to the question: "What would Smith say if he were alive today?" Such an answer is important in determining Smith's stance regarding the proper role of government which is, as Smith emphasized, very different in the different states of society.

The common-ratio effect and the Allais Paradox (common-consequence effect) are the two best‐known violations of Expected Utility Theory. We reexamine data from 39 articles reporting experiments (143 designs/parameterizations, 14,909 observations) and find that the common-ratio effect is systematically affected by experimental design and implementation choices. The common-ratio effect is more likely to be observed in experiments with a low common-ratio factor, a high ratio of middle to highest outcome, when lotteries are presented as simple probability distributions (not in a compound/frequency form), and with high hypothetical incentives.

This book presents a game theoretical interpretation of Adam Smith's work to present new insight on his literature and ideas.

Conceptual lenses, or models (Allison 1969; Ortmann 2008), draw on stable ways of thinking about the world, or “reasoning routines”. We explore the deep structure of Adam Smith’s work, and to what extent it is the result of a set of “reasoning routines” that, at an early stage of his career, in early works such as “History of Astronomy” (Smith 1982, or HA) and Lectures on Rhetoric and Belles Lettres (Smith 1985, or LRBL), Smith developed and later put to good use as moral philosopher, in The Theory of Moral Sentiments (Smith 1982b, or TMS), and as economist, in An Inquiry into the Nature and Causes of the Wealth of Nations (Smith 1981, or WN). We argue that while moving from rhetoric to moral philosophy, Smith looked at the latter through the conceptual lens of the former. While moving from moral philosophy to economics, he looked at the latter through the conceptual lens of the former. By the chain rule, he looked at economics through the conceptual lens of rhetoric. Identifying the HA, his LRBL, TMS, and WN as key products of his personal and academic life, one of our central contentions is that Smith's thinking was throughout his work informed by his insights into the strategic nature of all things rhetorical, moral, and economic. We identify this as one of the reasoning routines – the 2nd one in our classification - and formalize it game-theoretically. Importantly, Smith understood well that strategic interactions often are afflicted by information asymmetries, an insight first on display in LRBL where he paid close attention to the principal-agent nature of some forms of communication, namely acts of persuasion, but an insight prominently also on display in TMS and WN.We argue, furthermore, that Smith’s interest in various subject matters was actually a derived one, and that as such he was, initially at least, an experimental philosopher as well as a cognitive and social psychologist avant la lettre, finely attuned to rhetorical questions and what they reflect. His well-documented “theoretical and conjectural history” strategy (Stewart 1795 in Smith 1982, pp. 292 - 3; see also Smith 2016, pp. 109 - 110), which according to Stewart could be traced throughout his oeuvre, was one manifestation of this interest. In other words, the examination of the ways our thoughts, sentiments and beliefs about the social and natural world come about and how we communicate them, for entertainment and/or persuasion, was in Smith’s view the best method for explaining and illustrating the various powers of the human mind. Understanding how people reasoned and tried to make sense of the natural and social world around them was Smith’s overriding initial interest – a point made before (e.g., Raphael & Skinner, drawing heavily on Smith’s first biographer, Dugald Stewart, in their General Introduction to the EPS, a set of incomplete manuscripts that Smith singled out from being burned a few days before his death; see also Buchan 2016, p. 10, and Smith 2016, p. 90). Of course, life’s circumstances (e.g., Smith’s involvement in policy matters and his work as commissioner of customs for the remaining twelve years of his life) interfered, as is well known, with his research activities. In Ortmann & Walraevens (2018), we have furthermore argued that in the run-up to the publication of the WN, Smith became increasingly obsessed with the American question but he still used his rhetorical insights to try to persuade an audience that would see unfavorably his “very violent critique” of the mercantile system and his project for a new British Empire. Draft 24 December 2021

On the economics of pandemics, (some) economists losing their trade-off marbles, and the dire consequences. Also, what if it happens again?!

OBJECTIVES:To systematically review studies eliciting monetary value of a statistical life (VSL) estimates within, and across, different sectors and other contexts; compare the reported estimates; and critically review the elicitation methods used.METHODS:In June 2019, we searched the following databases to identify methodological and empirical studies: Cochrane Library, Compendex, Embase, Environment Complete, Informit, ProQuest, PubMed, Scopus, and Web of Science. We used the Preferred Reporting Items for Systematic Reviews and Meta-analyses guidelines for reporting and a modified Consolidated Health Economic Evaluation Reporting Standards checklist to assess the quality of included studies.RESULTS:We identified 1455 studies, of which we included 120 in the systematic review. A stated-preference approach was used in 76 articles, with 51%, 41%, and 8% being contingent valuation studies, discrete-choice experiments, or both, respectively. A revealed-preference approach was used in 43 articles, of which 74% were based on compensating-wage differentials. The human capital approach was used in only 1 article. We assessed most publications (87%) as being of high quality. Estimates for VSL varied substantially by context (sector, developed/developing country, socio-economic status, etc), with the median of midpoint purchasing power parity-adjusted estimates of 2019 US$5.7 million ($6.8 million, $8.7 million, and $5.3 million for health, labor market, and transportation safety sectors, respectively).CONCLUSIONS:The large variation observed in published VSLs depends mainly on the context rather than the method used. We found higher median values for labor markets and developed countries. It is important that health economists and policymakers use context-specific VSL estimates. Methodological innovation and standardization are needed to maximize comparability of VSL estimates within, and across, sectors and methods.

We explore experimentally a cognitive-effort channel through which defaults might influence behavior in an environment where the choice architect has misaligned incentives. Our experimental setting is an insurance market where the firm is better informed about the aggregate statistical risk associated with potential buyers of a policy than the buyers themselves. Since buyers’ perceived risk and actuarially fair risk differ, the firm has incentives to exploit buyers’ informational disadvantage. We find that defaults can strongly influence purchasing behavior in this environment. Further, by using a decision-time manipulation that lowers the opportunity cost of decision-making time, we provide channel-specific evidence that defaults operate by influencing decisions of individuals who find the cognitive costs of active decision-making prohibitively high.

We consider a two-layered review system of environmental regulation where a polluting firm periodically self-reports its emissions to a regulatory authority. The system typically requires a third party to verify the firm’s report and, in addition, an official of the regulatory authority to spot-check. If there are potential gains from corruption, both the verifier and the official might be corruptible. Corruption is more likely in repeated-game situations, as suggested by the literature on corruption experiments. Our experimental design is motivated by the risk of under-reporting in emissions trading schemes where both the verifier and the official are corruptible and focuses on a situation with untruthful reporting and lax enforcement. Our test-bed is a three-player bribery game. We study how different types of rotation — a baseline of fixed matching, a complete rotation treatment, and two incomplete rotation treatments — affect untruthful reporting that requires collusion between three participants in a hierarchical structure. Our findings suggest that complete rotation improves significantly firms’ truthful reporting and verifiers’ truthful verification compared to situations where none is rotated, while incomplete rotation does not have such impact. In our experiment, none of the rotation treatments had a significant impact on the behavior of officials.

Standardized information disclosures aim to help people compare complex financial products and make better choices. We investigate the extent to which information shown in a regulator-mandated dashboard helps retirement savers choose between alternative pension plans. We conduct incentivized experiments that collect participants’ repeated choices between two pension plans using the mandatory dashboard, and subsequently test whether an even simpler dashboard improves choices, and by how much. Participants switch quickly from a high- to a low-fee pension plan when they see explicit nominal fees but are significantly more confused by percentage fees and adjust slower. When differences between plan performance arise from gross returns, not fees, we find that complex information formats can seriously hinder participants’ recognition and reactions. We present a Bayesian updating model which estimates the relative noisiness of the signals from fees and gross returns across different treatments and use this model to show how better information presentation raises retirement savings.