Decision Making & Negotiations

We demonstrate the effect of consumers' lay theories of self-control on goal-directed behavior as evidenced by New Year's and other resolutions. Across three studies, we find that individuals who believe that self-control is a malleable but inherently limited (vs. unlimited) resource tend to set fewer resolutions. Using respondents' own idiographic resolutions, this result is shown to hold in general as well as in consumption-specific domains regardless of whether lay theories are measured or manipulated.

We develop a general equilibrium model of a production economy which has a risky production technology as well as a growth option to expand the scale of the productive sector of the economy. We show that when confronted with growth options, the representative consumer may sharply alter consumption rates to improve the likelihood of investment. This reduction in consumption is accompanied by an erosion of the option value of waiting to invest, leading to investment near the zero NPV threshold.

We present a theory of cultural evolution based upon a renormalization group scheme. We consider rational but cognitively limited agents who optimize their decision-making process by iteratively updating and refining the mental representation of their natural and social environment. These representations are built around the most important degrees of freedom of their world. Cultural coherence among agents is defined as the overlap of mental representations and is characterized using an adequate order parameter.

An unanswered question in the debate on public sector inefficiency is whether reforms other than government divestiture can effectively substitute for privatization. Using a 1981–1995 panel dataset of all public and private manufacturing establishments in Indonesia, we analyze whether public sector inefficiency is primarily due to agency-type problems or to the environment in which public sector enterprises operate, as measured by the soft budget constraint and the degree of internal and external competition.

In a year without vaccine shortages, no fewer than 36,000 deaths - twelve times the number of September 11 victims - and 200,000 hospitalizations are attributed to influenza and its complications. In terms of productivity, between $11 and $20 billion is lost. The sudden elimination of one of only two manufacturers and half the national supply was hardly an unforeseeable or rare event, as numerous Senate testimonies and General Accounting Office reports have documented recurring supply problems with this and other critical vaccines.

Most models of how perceivers infer the widespread attitudes and qualities of social groups revolve around either the self (social projection, false consensus) or stereotypes (stereotyping). I suggest people rely on both of these inferential strategies, with perceived general similarity moderating their use, leading to increased levels of projection and decreased levels of stereotyping.

In this paper, we examine how people evaluate unusual objects and how they intuit whether others will like those objects. We focus on two predictions. First, we believe that an object's uniqueness is susceptible to framing by drawing attention toward or away from the object's unusualness. We expect such "uniqueness framing" interacts with needs for uniqueness (NFU): high NFU perceivers will like the same objects (e.g., neckties, names) more when asked to dwell on the object's uniqueness vs. typicality while low NFU perceivers will like them less.

Sometimes multiple tools may be used simultaneously or in succession in everyday mindreading. Yet surely we rely on somoe tools at some times more than others. The central question I wish to address here, and that I suggest is not well answered, is "Which tool is used when?" More complex and elegant answers to this question await us, but in the meantime I develop several claims in this chapter about which-tool-when contingencies.