Essays in Behavioral Economics

Abstract

Good economic decision-making hinges on whether agents appropriately respond to the incentives they face. Mistaken beliefs about those incentives, or inattention to important consequences of choices, can therefore distort decisions and harm well-being. When, and why, do mistaken beliefs arise, and what determines how agents allocate attention? This dissertation addresses these questions. The first chapter documents that undergraduate students hold systematically mistaken beliefs about the labor market consequences of their choice of what to study while in college. The second chapter describes experiments showing that people inappropriately discount information when it comes from others, rather than as a result of their own actions or experiences. The third chapter studies how mistaken beliefs and systematic inattention can bias revealed preference estimates, and how information provision can distort attention in addition to shifting beliefs.