0:00:00alexander myers i'm an economics major and i'm from san diego cal
0:00:05the title of my honours thesis is exploring the stability of race preferences over different
0:00:11scale
0:00:13the thesis statement is a if an individual experiences more temptation in one period over
0:00:19another specifically the present over the future
0:00:23then they will behave in a more risk averse manner and present them to sort
0:00:28explain what that means that sorta have that step back a second and i realise
0:00:34that individuals are generally assumed to avoid the risk
0:00:38and the reason for that is that we experience what's called the diminishing marginal utility
0:00:42of
0:00:44and the concept is if you're very wealthy one dollar doesn't really give you that
0:00:47let utility but if you very poor it gives you a lot
0:00:51and so one of the one of the things is that even if people or
0:00:54risk averse if they're dealing with really small gambles like a coin flip for a
0:00:59dollar for tensor tail
0:01:02i
0:01:03gambles that compared to their lifetime well for a really small
0:01:06then even though they are risk averse in general for that gamble they will behave
0:01:11as not risking
0:01:12and what recently to really means is that so long as there is a and
0:01:16expected value that's positive for the gamble they will take a or if they're evaluating
0:01:23two different gambles they will refer the one that if they average out the expected
0:01:27winnings would be slightly that's the one that they are
0:01:31if there did in a fifty percent chance of winning a million dollars or losing
0:01:36five hundred thousand dollars even though that has the expectation that they will win some
0:01:41money
0:01:42the loss of five and a thousand dollars or so catastrophic that they wouldn't take
0:01:46it wouldn't take that because you're risk averse and so the issue is that
0:01:51in laboratory experiments we would expect that people even if their risk averse for large
0:01:56k would be risk neutral for the small
0:02:00and so i came up with the theory that explain some anomalous laboratory results of
0:02:07risk aversion over small sticks
0:02:09and the weight explained it is by saying that
0:02:12even though
0:02:13mainstream economic theory assumes that if for example you received an unexpected winning eighty dollars
0:02:20in a period
0:02:22the main economic theory assumes that you would spread that out over your life
0:02:26you would read integrated into your
0:02:28you you're optimal consumption stress and so
0:02:31temptation is sort of a concept that means that you don't you instead of spreading
0:02:35it over a lifetime of periods you might spend it all five period six periods
0:02:40or maybe one pure you might just go out to the store by can you
0:02:43is your company that's the that the concept that i'm that i'm sort of tapping
0:02:47into
0:02:48and so my hypothesis is basically that when people have more
0:02:53a more temptation when
0:02:55they're hungrier and more likely to go
0:02:58you know after the experiment in go get a candy bar
0:03:01that they will behave in a more descriptors that and one way to think about
0:03:04why that would be is that let's say you're sitting in the experiment and you're
0:03:09starving and you have the expectation that you know you're given the choice a fifty
0:03:14percent chance of getting thirty dollars in the fifty percent chance of getting forty dollars
0:03:18or a fifty percent chance of getting seventy dollars
0:03:22and fifty percent chance of getting you know
0:03:24now
0:03:25in terms of
0:03:26the expected value of those two lotteries the same on average you're gonna get thirty
0:03:30five dollars but the point is that if you get zero you can't go get
0:03:34a signal and that's unfortunate for a hungry person participating in the experiment so
0:03:39i guess that's sort of
0:03:41one way of understanding what
0:03:43annotation means and how
0:03:46most economists are interested in modeling real world situations with lots of people or businesses
0:03:53or
0:03:54situations where
0:03:56were it is reasonable to expect people to be rational
0:03:59there are
0:04:00the there are other economists on that
0:04:04are part of the field known as behavioural economics that look at what the people
0:04:08actually do at least in laboratory experiments and how does that relates you what we
0:04:13think they should
0:04:14and so that sort of that the vein that my that my thesis is it
0:04:18it's a an experimental thesis conducted on amherst college students
0:04:23basically it gave them options for boundaries to participate in with different probabilities and payoffs
0:04:31in the last and to choose which one which one do you want
0:04:34and with the cab the art that there's a chance that will actually get the
0:04:38money that you
0:04:39are choosing and so
0:04:41the goal of that obviously was to keep them on its what to their really
0:04:45what and so
0:04:46and that sorta where the
0:04:50why the temptation appears because
0:04:53when you deal with real behaviour real situations you have to account for why didn't
0:04:58they do the prediction well why didn't they behave hyper ration
0:05:03so temptation is one attempt to
0:05:06do there's one professor out what one of by readers a c and that within
0:05:11the other day and the meeting to the total number of being very critical of
0:05:16my work
0:05:16and so i it was sort of sort of an advanced meeting
0:05:19and so he said
0:05:20what i just why you don't know i'm taking the position that a referee for
0:05:24journal with because we're talking about
0:05:26potentially publishing and i said no you know that makes a lot a lot of
0:05:31science
0:05:32you know thank you for giving me the core questions that i would have to
0:05:36explain
0:05:37if someone more were evaluated my work and
0:05:40another propose a common that that's what the pieces differences that's what the questions are
0:05:45through doing my thesis i
0:05:47became really interested in doing research which
0:05:50it's not that i didn't like to before she's i'd never had the opportunity to
0:05:54actually do my own research and so i'm sort of feeling that i'm leaning towards
0:06:00graduate school at some point
0:06:03in the future in terms of short-term colours i'm definitely gonna continue working on my
0:06:09thesis
0:06:10do some more data analysis rewrite it and then see if i can get it
0:06:13published integer
0:06:15i think that a lot of
0:06:16things that were significant about my amherst college experience
0:06:20manifested themselves in my thesis
0:06:22so what specifically
0:06:24i wrote a behavioural economics this is the and that's not really normal or standard
0:06:30for on economics
0:06:32and that sort of has to do with
0:06:34me you know through college figuring out what it is that i that i want
0:06:39what it is that i that i like that i'm interested in and so you
0:06:42know instead of writing i it would be the importance of what i was a
0:06:46self more
0:06:46i wanted to go into investment bank
0:06:48because i thought that's what
0:06:49that's what you do that's what you're supposed to do
0:06:51i have found this field
0:06:54i ran with it i roll my thesis on it and in many ways you
0:06:58know that
0:06:59these soft more version of me wouldn't have done
0:07:03i
0:07:04on another level i think my thesis will be really significant inasmuch as
0:07:08i have a really strong feeling that
0:07:10the process of writing my thesis disorder nudged me on a different track for where
0:07:15i go from here so i that you know in that sense it's almost the
0:07:19most important part of my of my college experience in as much as i think
0:07:24after honing in on what really interest me and what excites me intellectually the thesis
0:07:29really dave maybe answer