To avoid problems with copyright, my published work is not available on this website but full references are, of course, detailed in my CV (see also link above). Details of my current working papers follow:

Excess entry - or the high failure rate of market-entry decisions - is often attributed to overconfidence exhibited by entrepreneurs.  Assuming that these decisions depend on assessments of entrepreneurial skill, we model both fully and boundedly rational agents and show analytically that, whereas excess entry is an inevitable consequence of imperfect assessments, it does not necessarily imply overconfidence. Indeed, judgmental fallibility can lead to excess entry even when all entrepreneurs are underconfident. We further demonstrate that individuals who decide to start a new business exhibit more confidence than those who stay out, and that successful entrants are less confident than failures. Our results therefore question general claims that "entrepreneurs are overconfident." We conclude by emphasizing distinctions between different types of overconfidence, the need to understand the role of judgmental fallibility in producing economic outcomes, and implications for both venture capitalists and the training of future entrepreneurs. 

We examine the relations between golf handicaps of CEOs, corporate performance, and CEO compensation. We find that golfers earn more than non-golfers and pay increases with golfing ability. Furthermore golfers perform worse than non- golfers, performance decreases with golfing ability, and when low-ability golfers are appointed as CEOs, there are positive stock price reactions. To overcome illusory correlation, i.e., the use of information in CEO compensation decisions that is irrelevant or, worse, inversely related to shareholders' value maximization, we recommend using explicit, mechanical decision rules to ensure a transparent process.

We study gender differences in exiting competitive environments by exploiting the "naturalistic experiment" of a TV game show where participants were self-selected and there were no gender-specific constraints or discrimination. In multiple rounds, contestants answer general knowledge questions privately. One participant is eliminated or leaves voluntarily at the end of each round. Women earn 40% less than men and exit the game prematurely at a faster rate, but especially when in a minority. This latter result highlights the importance of structural arrangements in organizations that interact with behavior to maintain "glass ceilings" and explains the differential gender-related risk attitudes observed.

How much uncertainty do economists perceive in the outcomes of empirical studies, and thus by extension, the use of statistical methods for both building theories and making decisions?  Does the manner in which results are presented affect inferences?  Noting the predominant role of linear regression analysis in empirical economics, we addressed these issues by examining the ability of economists to make inferences based on outputs of this statistical tool. In a survey, 257 academic economists made probabilistic inferences given different presentations of the outputs of a regression analysis. Questions concerned the distribution of the dependent variable conditional on known values of the independent variable. Results demonstrated considerable underestimation of uncertainty in the format that is standard in the literature. In particular, many respondents failed to take the error term into account. Adding graphs did not improve inferences. Paradoxically, when only graphs were provided (i.e., no regression statistics), respondents were more accurate. The implications of our study suggest, inter alia, the need to reconsider how to present empirical results and the possible provision of easy-to-use simulation tools that would enable readers of empirical papers to make accurate inferences. 

Hogarth, R. M., & Soyer, E. (2010).  Experiencing sequentially simulated outcomes: A guide to improve statistical inference. UPF working paper number 1224.  (Link)

Whereas much literature has documented difficulties in making probabilistic inferences, it has also emphasized the importance of task characteristics in determining judgmental accuracy. Noting that people exhibit remarkable efficiency in encoding frequency information sequentially, we construct tasks that exploit this ability by requiring people to experience the outcomes of sequentially simulated data. We report two experiments. The first involved seven well-known probabilistic inference tasks. Participants differed in statistical sophistication and answered with and without experience obtained through sequentially simulated outcomes in a design that permitted both between- and within-subject analyses. The second experiment involved interpreting the outcomes of a regression analysis when making inferences for investment decisions. In both experiments, even the statistically naïve make accurate probabilistic inferences after experiencing sequentially simulated outcomes and many prefer this presentation format. We conclude by discussing theoretical and practical implications.

We study the risk-taking behavior of stock analysts under varying market conditions. We examine how the risk analysts take by providing bold forecasts that deviate from consensus depends on the degree of uncertainty in the environment as well as the analysts' skill level.  We provide evidence that low-skill analysts become significantly bolder, hence taking more risk, and significantly less accurate when market uncertainty increases. These findings are consistent with previous experimental results that show that skill levels moderate differential attitudes towards uncertainty. We further provide evidence that the difference in an analyst's boldness between times of low and high uncertainty is a signal of the analyst's skill that predicts future forecasting accuracy over and above standard skill measures such as past forecasting accuracy.

Determining what influences mood is important for theories of emotion and research on subjective well-being. We consider three sets of factors: activities in which people are engaged; individual differences; and incidental variables that capture when mood is measured, e.g., time-of-day. These three factors were investigated simultaneously in a study involving 168 part-time students who each responded 30 times in an experience sampling study conducted over 10 working days. Respondents assessed mood on a simple bipolar scale - from 1 (very negative) to 10 (very positive). Activities had significant effects but, with the possible exception of variability in the expression of mood, no systematic individual differences were detected. Diurnal effects, similar to those already reported in the literature, were found as was an overall "Friday effect." However, these effects were small. Lastly, the weather had little or no influence. We conclude that simple measures of overall mood are not greatly affected by incidental variables.

Whereas economists have made extensive studies of the impact of levels of incentives on behavior, they have paid little attention to the effects of regularity and frequency of incentives. We contrasted three ways of rewarding participants in a real-effort experiment in which individuals had to decide when to exit the situation: a continuous reinforcement schedule (all periods paid); a fixed intermittent reinforcement schedule (one out of three periods paid); and a random intermittent reinforcement schedule (one out of three periods paid on a random basis). In all treatments, monetary rewards were withdrawn after the same unknown number of periods. Overall, intermittent reinforcement leads to more persistence and higher total effort, while participants in the continuous condition exit as soon as payment stops or decrease effort dramatically. Randomness increases the dispersion of effort, inducing both early exiting and persistence in behavior; overall, it reduces agents' payoffs. Our interpretation is that, in the presence of regime shifts, both the frequency and the randomness of the reinforcement schedules influence adjustments that participants make across time to their reference points in earnings expectations. This could explain why agents persist in activities although they lose money, such as excess trading in stock markets.

Two questions inspire my research: (1) How do people make decisions? (2) How can you help people make better decisions? I do not limit myself to any particular area of activity (e.g., economic), but look across many domains (e.g., medicine, individual life choices, etc,). I also use different research methods: mathematical models to capture what people are or should be doing; experiments; and observations of actual decisions

Some of these decisions can be quite important; others can be trivial. However, the cumulative consequences of trivial decisions can impact a person's life significantly and thus, I maintain, it is important to understand the processes that people use for both important and trivial decisions.   

My research falls within a field known as "judgment and decision making" that is quite interdisciplinary but draws heavily on psychology (mainly cognitive and social), economics, and statistics.  Indeed, two of its leading researchers have received the Nobel Prize in Economic Sciences (Herbert Simon in 1978 and Daniel Kahneman in 2002) although neither could be described as an "economist" per se.  Simon pioneered the concept of "bounded rationality" and Kahneman (together with the late Amos Tversky) has done fundamental work demonstrating how people make judgments and decisions in ways that deviate systematically from the normative approach followed in economics.  Indeed, this work is at the origin of a field that is now known as behavioral economics.

My publications are listed in my CV in chronological order and touch on different topics and controversies in the decision making literature, for example:

HERE, you will also find a listing of my books and research papers classified (appproximately) by topics.

Educating Intuition (2001)

now in paperback

Research on Judgment and Decision Making (with William M. Goldstein) (1997)

Insights in Decision Making: A Tribute to Hillel J. Einhorn (1990)

Judgment and Choice (1987)

Rational Choice (with Melvin W. Reder) (1987)