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Behavioral and Experimental Economics are new exciting fields in the Economics space. Developed countries like the U.K., U.S. and Australia have already started experiencing the benefits of behavioural interventions in public policy schemes related to areas as diverse as retirement planning, unemployment, healthcare, education and promoting charitable behavior. Corporations across the world have begun to use behavioural economics to improve employee productivity and hiring and promotion policies, increase efficiency of marketing strategies and assist investors in optimizing returns on savings.
Behavioral Economics incorporates insights from other social sciences like psychology and sociology to enhance our understanding of how and why individuals make decisions that, from the perspective of standard economic theory, appear irrational. These insights can improve predictions about behaviour and therefore help authorities to nudge people in the desired direction.
Experimental Economics is a widely-used research method to explore the validity of standard economic theories. Results of carefully designed and scientifically conducted experiments has played a critical role in contributing to advancement mainly in development and behavioural economics.
Symbiosis School for Economics (SSE) strives to be at the forefront of empirical and collaborative research with local and national level Government bodies as well as private organizations. As part of our endeavour to achieve this objective SSE has established the Centre for Experimental and Behavioral Economics.
The Centre for Experimental and Behavioral Economics (CEBE) has been created to provide a platform to faculty and student researchers interested in investigating behavior patterns and decision-making process by conducting experimental & behavioural study. The Centre aims to cater to the needs of students and researchers with respect to understanding concepts of Behavioral and Experimental Economics by organizing workshops as well as to enable researchers to administer experiments through training programmes mainly in laboratory experiments. The Centre also aspires to undertake and collaborate for research projects in the areas of consumer preferences, identity & institutional economics, public policy and development and gender economics.
To ensure that all experiments are conducted as per international standards, the Centre has an Ethical Committee to preapprove all experimental research activity conducted here.
The differences in bidding strategies and aggressiveness affects one’s capacity to leverage financial instruments to one’s advantage and accumulate large amounts of wealth. Earlier research has indicated some differences between genders in these behaviors. This paper studies the gender differences in bidding behavior in terms of regret and learning speed. These factors affect how aggressively one bids and how fast that person either learns the bidding strategies or develops his own. The experiment was conducted on 36 participants a subgroup of whom underwent the winners’ regret treatment. Female participants who underwent the treatment lowered their average bids as the auction proceeded by assimilating the information that was being provided to them. Female participants who were in the control group hadn’t changed their bids significantly over the number of auctions and thus they behaved as expected. Males who underwent the treatment too behaved as expected by lowering their average bids as the auctions proceeded. However, the males in the control group were found to be an exception as their average bids increased over the number of auctions conducted. Thus, out of the seven hypotheses that were being studied in this paper, only one was substantially proved false. This however is only a limitation that can be overcome with more participants thus allowing for the Law of Large Numbers to take its effectEffect of Reciprocity and Fairness on Consumer Behaviour Analysis on Restaurant Industry
Fairness and reciprocity are deeply rooted behavioural traits that are known to influence decision making in a variety of contexts. The consumption behaviour of customers of service sector industries is one context that reflects fairness and reciprocity, directly as well as indirectly. The norms of reciprocity and fairness have gained importance due to their extensive use in product marketing, consumer base enhancement and brand loyalty strategies. The research undertaken focuses on the relationship between experiences of service, food, restaurant ambience and ‘value for money’ by a customer, the perceived fairness of these experiences and the reciprocal behaviour shown by the customer in the form of feedback or review. An analysis was conducted using data extracted from a popular online food outlet search app. 120 reviews of a variety of restaurants in the Pune area were used to conduct the analysis. The results of the analysis indicated that the highest correlation was between service and positive customer ratings and feedback, from the selected variables. This finding indicates that fair treatment of customers by restaurant staff is critical for garnering new customers. Findings from this study can be used by investors to channel funds into areas that have a direct impact on sales, like staff training and education.Online Shopping: A Study of Factors Influencing Consumers to Shop Online with Focus on Apparels
The objective of this research is to identify and examine the factors that influence online shopping with a specific focus on apparel. The e-tail industry is highly competitive and must also compete with ‘brick and mortar’ stores and malls. Survival in such market conditions depends on increasing and maintaining the customer base. Thus, it is imperative that retailers go beyond the basic discount models and use other strategies to capture market share. The research was conducted with the help of primary data collected through questionnaires, from 60 college students aged between 17-25 years. Results obtained show that website design, quality and features are more important factors than
customer service, time saving and convenience in purchasing decisions of apparels online. The inferences made from this research can provide a guideline to online apparel retailers on where to invest funds so as to maximise returns, for eg. the study indicates that for online apparel purchasing decisions the customers interface experience holds more decision weight than time saving as a decision factor. This implies that online retailers could benefit more from better technology rather than faster delivery.How to manipulate people’s decision making process, even under various cognitive biases?
The existence of complex influences of psychological factors in the decision making process of individuals, has been established. The Framing effect can be used to manipulate people’s choices in everyday routine choices. The presentation of choices, whether in a positive or a negative frame, plays a dominant role in the choice that they make. It is seen that decision making is not only affected by the framing effect but also can lead to biases in decision making. The current study examines whether framing effect would work in a scenario where people are exposed to three major cognitive biases: morality bias, representative bias, and discounting bias. An analysis was conducted using a sample size of around 156 individuals consisting of college students as well as the working youth. Thought experiments were used and responses of participants were collected with the help of a systematically formulated questionnaire. The study results indicate that manipulating the frame of the possible choices can change decisions revealing their biases. Findings from this research can be used extensively in the field of marketing, to influence decisions makers purchases.Fairness in Management: A Study on Employee’s Perception
Fairness is one key to the challenge confronted by every organization: motivating its employees.
Research shows that employees are motivated when treated fairly, organizational resources are allocated fairly and when organizational decisions are made in a fair manner, thereby unlocking efficient performance of employees. When fairness is ensured at work employees develop close bonds of trust and are motivated to strive collaboratively for a long term to achieve the goals of the firm. Employee recognition being a parameter to judge fairness in management reinforces and rewards the most important outcomes that people create for any organization. This focus of this research is employee perceptions regarding the recognition they receive at work.
Primary data was collected with the help of a questionnaire from respondents belonging to two IT companies. The respondents were expected to answer questions, on a linear scale, pertaining to recognition of work and performance appraisal. The sample size was taken to be 80 considering 40 respondents from each company. Findings from this research emphasized on the fact that receiving informal recognition, guidance from superiors, receiving recognition for team accomplishments, etc. were not in compliance with the company claims. This implies that on these parameters the company management is perceived unfair and must take measures towards employee recognition to ensure enhancement in work performances, commitment and motivation in striving towards achieving company goals.
Dr. Savita KulkarniDr. Kulkarni is a full-time faculty at Symbiosis School of Economics since November 2014. She has completed her doctoral research in development economics using laboratory experiments from University of Mumbai, Maharashtra, India in 2014. She was also awarded a four-year fellowship of Centre for Computational Social Sciences at University of Mumbai, funded by University Grants Commission (UGC), India. She won second prize in the “National Research Student Convention: Anveshan 2013” organized by the Association of Indian Universities, New Delhi for research work based on a trust experiment in Gender economics. She has been part of the local team for numerous laboratory experiments conducted by various international researcher scholars from University of Warwick, Yale University and University of Nottingham. She has also done an experimental market study for a Mumbai-based media agency. She is a member of Policy for Economic Partnership (PEP), an international research network promoting experimental evaluative studies through RCTs. Her research has been published in the esteemed magazine Economic & Political Weekly. Her interest areas include development economics, behavioral economics, experimental economics, identity and institutional economics.
Ashlesha Khedekar-SwaminathanAshlesha is an Adjunct Faculty at Symbiosis School of Economics since June 2014. She is pursuing her doctoral research in behavioural economics at Symbiosis International University. Ashlesha has more than 11 years of work experience in the Treasury departments of HDFC Bank and ABN AMRO Bank handling trading, hedging products and client advisory. She has worked closely with organization behaviour experts for more than three years at FLAME University conducting interventions and training programs for Indian and multinational companies. Ashlesha regularly consults for various organizations on behavioural design interventions in areas like rewards and recognition and employer branding, client risk assessment for investment advisors, strategies for marketing luxury goods and investment art. She contributes articles on investor behaviour to www.investorsareidiots.com. Her interest areas include Behavioral economics and finance, Identity and Gender Economics.