Publications

Meta-Analysis of Present-Bias Estimation using Convex Time Budgets
Taisuke Imai, Tom A. Rutter, and Colin F. Camerer
The Economic Journal (2021)

Meta-analysis collects all available data measuring an experimental treatment effect or parameter value and synthesizes what all those data say. This paper meta-analyzed a method for deriving how much people "discount" or down-weight future rewards compared to current rewards, using 220 estimates of the strength of immediacy preference (aka present bias) from 31 studies using the Convex Time Budget method. The main conclusion is that immediate rewards are weighted about 5% more than later rewards, although the estimates are close to 1 for studies using money and lower, around .88, for non-monetary effort studies.

Evaluating replicability of laboratory experiments in economics
Colin F. Camerer, Anna Dreber, Eskil Forsell, Teck-Hua Ho, Jürgen Huber, Magnus Johannesson, Michael Kirchler, Johan Almenberg, Adam Altmejd, Taizan Chan, Emma Heikensten, Felix Holzmeister, Taisuke Imai, Siri Isaksson, Gideon Nave, Thomas Pfeiffer, Michael Razen, and Hang Wu
Science (2016)

In the mid-2010's evidence emerged that many findings in disparate fields, ranging from medicine to social psychology, were not replicating well. When the same experiment was repeated under conditions as similar as possible to the original experimens, the results were not the same—almost always in the direction of failing to replicate a surprising and interesting finding. Our team, lead by Anna Dreber and Magnus Johannesson, replicated 18 different experiments in economics to see if this poor replication record (mostly in medicine and psychology) also extended to lab experiment in economics. The replication rate was better than in other fields but still disappointing (around 60%). Our study was in the middle wave of several complicated studies that have now contributed hundreds of replications and led to a Reproducibility Reboot. Scientific practices are now more solid and knowledge will accumulate better than ever.

Bankruptcy Rates among NFL Players with Short-Lived Income Spikes
Kyle Carlson, Joshua Kim, Annamaria Lusardi, and Colin F. Camerer
American Economic Review (2015)

If people are earning a lot of money for a short time they should save like crazy to insure against big drops in income. Behavioral economics suggests they might be optimistic about how long they'll earn a lot, or will succumb to temptation and spend too much right away. We put together the first clear data from a census of drafted NFL players, who typically fit this profile of high-income earners with careers that can end quickly (mostly due to injuries). They do go bankrupt at higher rates—10 years after retirement, about 15% of players have declared bankruptcy.

Chimpanzee choice rates in competitive games match equilibrium game theory predictions
Christopher Flynn Martin, Rahul Bhui, Peter Bossaerts, Tetsuro Matsuzawa, and Colin Camerer
Scientific Reports (2014)

This study compared how chimpanzees (pan troglodyte) and humans play simple competitive games. Using game theory (Nash equilibrium) as a benchmark, we found that chimpanzees chose strategies that very closely matched the theory's predictions, even adjusting as payoffs changed. Surprisingly, chimpanzees were much closer to Nash equilibrium than humans. Our interpretation is consistent with the "cognitive tradeoff hypothesis", and idea of our coauthor Tetsuro Matsuzawa, a famous Japanese primatologist. The idea is that chimpanzees may retain sharper skills for quick, strategic responses—possibly linked to their social need for competition in hider-seeker games—while humans rely more on language and cooperation. The results hint that some cognitive abilities for competition might be stronger in chimpanzees, shaped by evolution and longer periods of practice. This finding shows that strategic thinking can develop differently in humans and other primates.

Irrational exuberance and neural crash warning signals during endogenous experimental market bubbles
Alec Smith, Terry Lohrenz, Justin King, P. Read Montague, and Colin F. Camerer
Proceedings of the National Academy of Sciences of the United States of America (2014)

Stock market bubbles are extended episodes in which trading prices are persistently above an intrinsic (or fundamental) value. To understand how often and why bubbles might occur, we created sixteen groups of traders and created artificial stock-like assets to see if price bubbles would be created, when the intrinsic fundamental asset value was experimentally controlled by us and known to the traders. Bubbles did form, often but not always, and their formation was associated with neural activity in nucleus accumens (a kind of "irrational exuberance") and crashes were forecasted by neural warning signals in insula cortex.

How psychological framing affects economic market prices in the lab and field
Ulrich Sonnemann, Colin F. Camerer, Craig R. Fox, and Thomas Langer
Proceedings of the National Academy of Sciences of the United States of America (2013)

We examine how psychological framing influences economic market prices in both laboratory and real-world settings. The framing is that numerical intervals—such as the number of goals scored in a soccer match—can be divided into categorical "partitions" (such as 0-3, 4-6 goals, etc.) in different ways. We found that people intuitively begin with a "1/N bias" in which each of N partitions is given the same subjective likelihoods. Then the likelihoods are adjusted given probably differences, but only partially. This study is unique because there are data from a short lab experiment, a multi-week field experiment, an internal market at a large corporation for bets on economic statistics, and a sample of millions of horse racing bets. All of them show framing effects.

To Review or Not to Review? Limited Strategic Thinking at the Movie Box Office
Alexander L. Brown, Colin F. Camerer, and Dan Lovallo
American Economic Journal: Microeconomics (2012)

This paper examines why movie studios sometimes release films without letting critics see them first—a practice called "cold opening." Analyzing over 850 films, the authors find that cold opening typically boosts opening weekend ticket sales by about 15%, suggesting that some moviegoers don't realize a lack of reviews often signals low quality. Using models of limited strategic thinking, they show that moviegoers do only about one or two steps of reasoning when guessing movie quality, while studios wrongly assume audiences are more sophisticated. The effect disappears in foreign and later markets, where more information is available, supporting the idea that people overestimate the quality of cold opened movies. The study highlights how imperfect reasoning shapes real-world business strategies.

Testing Game Theory in the Field: Swedish LUPI Lottery Games
Robert Östling, Joseph Tao-yi Wang, Eileen Y. Chou, and Colin F. Camerer
American Economic Journal: Microeconomics (2011)

Game theory is usually difficult to test in the field because predictions typically depend sensitively on features that are not controlled or observed. We conduct one such test using both laboratory and field data from the Swedish lowest unique positive integer (LUPI) game. In this game, players pick positive integers; whoever chooses the lowest unique number wins. Equilibrium predictions are derived assuming Poisson distributed number of players (this is the first test of the Poisson-Nash concept.) The field and lab data show similar patterns. Despite various deviations from equilibrium, there is a surprising degree of convergence toward equilibrium across seven weeks of play in Sweden. Deviations in early weeks can be explained well by a cognitive hierarchy model of steps of thinking.

The Wick in the Candle of Learning: Epistemic Curiosity Activates Reward Circuitry and Enhances Memory
Min Jeong Kang, Ming Hsu, Ian M. Krajbich, George Loewenstein, Samuel M. McClure, Joseph Tao-yi Wang, and Colin F. Camerer
Psychological Science (2009)

Curiosity is a basic human drive which underlies a lot of human progress—science, geographical exploration, and more. This was the first study to explore where "epistemic curiosity" about the world (trivia questions) is encoded in the brain, and what that means. We discovered that responses to learning when curious—from wrong answers—activated parahippocampal regions; this suggests people are searing in memories of new facts. More data we collected showed that epistemic curiosity is clearly encoded in pupillary responses visible in the eyes, and also enhances later memory for wrong-answer facts 1-2 weeks later.

When Does "Economic Man" Dominate Social Behavior?
Colin F. Camerer and Ernst Fehr
Science (2006)

This paper explores when the "Economic Man" model (rational, self-interested) predicts aggregate social behavior, when levels of rationality and preferences are not the same. The aggregate result depends on whether the strategic structure incentives people to match what others do ("strategic complementarity") or to do the opposite of what others do ("strategic substitution"). When there is complementarity, irrational behavior is amplified, as in asset price bubbles and the "beauty contest game". When there is substitution, as in n-responder games, irrational behavior is diminished.

Getting to Know You: Reputation and Trust in a Two-Person Economic Exchange
Brooks King-Casas, Damon Tomlin, Cedric Anen, Colin F. Camerer, Steven R. Quartz, and P. Read Montague
Science (2005)

Using a multiround version of an economic exchange (trust game), we report that reciprocity expressed by one player strongly predicts future trust expressed by their partner—a behavioral finding mirrored by neural responses in the dorsal striatum. Here, analyses within and between brains revealed two signals—one encoded by response magnitude, and the other by response timing. Response magnitude correlated with the "intention to trust" on the next play of the game, and the peak of these "intention to trust" responses shifted its time of occurrence by 14 seconds as player reputations developed. This temporal transfer resembles a similar shift of reward prediction errors common to reinforcement learning models, but in the context of a social exchange. These data extend previous model-based functional magnetic resonance imaging studies into the social domain and broaden our view of the spectrum of functions implemented by the dorsal striatum.

Neural Systems Responding to Degrees of Uncertainty in Human Decision-Making
Ming Hsu, Meghana Bhatt, Ralph Adolphs, Daniel Tranel, and Colin F. Camerer
Science (2005)

This was our team's first important paper using fMRI. We locate neural encoding of unknown probability ("ambiguity") compared to known probability ("risk") in lateral prefrontal cortex and amygdala. Human patients with lesions in the lateral PFC did not exhibit the typical aversion to choosing when risks are ambiguous. The lesion differences from neurotypicals therefore corroborates what was learned from the fMRI. This combination of fMRI and lesion behavior pointing to the same conclusion in one paper was rare at the time, and still is.

Selected Publications