| This dissertation consists of three essays in behavioral and experimental economics, with a focus on macroeconomic and financial fluctuations (essay 1) and decisionmaking in individual and group contexts (essays 2 and 3).;The first essay investigates theoretically the behavior of an economy in which (1) fundamentals are hump-shaped, exhibiting momentum in the short run and partial mean reversion in the long run, and (2) agents do not know that fundamentals are hump-shaped and base their beliefs on parsimonious models that they fit to the data. We find that a class of parsimonious models engenders qualitatively similar biases and generates empirically observed patterns in asset prices and macroeconomic dynamics.;The second essay studies reference-dependent preferences, and in particular the determination of individuals' reference points. We conduct two experiments that show that reference points are determined, at least in part, by expectations. In an exchange experiment, subjects that have a lower exogenous probability of being able to trade their item (and who therefore expect to keep it) are less likely to choose to trade when such an opportunity arises. In a valuation experiment, subjects with a higher exogenous probability of obtaining an item assign it a higher monetary valuation.;The third essay investigates experimentally how private incentives interact with norm enforcement in fostering contributions to public goods. Norm enforcement through peer punishment has been shown to be effective in raising contributions by itself. We find that private incentives for contributors can reduce the effectiveness of the norm enforcement mechanism: free riders are punished less harshly in the experimental treatment with incentives, and as a consequence, average contributions to the public good are no higher than without incentives. |
