THESIS
2014
Abstract
A large amount of evidence from psychology and economics shows that individuals'
behaviors systematically deviate from the standard economic theory which assumes full
consciousness. In order to study the limitations in consciousness, I investigate human
cognition and consciousness theoretically and experimentally in the four chapters of this
thesis. In the first chapter, building on the works of Carrillo and Mariotti (2000) and Benabou
and Tirole (2002), I formulate an intra-person, multiple-self model of how motivated memory
including amnesia and delusion may relate to the individual's degree of present bias. I posit
the notion of (non-)conscious choice in which the individual habituates into being forgetful or
delusional to enhance the motivation for one's future selves. In eq...[
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A large amount of evidence from psychology and economics shows that individuals'
behaviors systematically deviate from the standard economic theory which assumes full
consciousness. In order to study the limitations in consciousness, I investigate human
cognition and consciousness theoretically and experimentally in the four chapters of this
thesis. In the first chapter, building on the works of Carrillo and Mariotti (2000) and Benabou
and Tirole (2002), I formulate an intra-person, multiple-self model of how motivated memory
including amnesia and delusion may relate to the individual's degree of present bias. I posit
the notion of (non-)conscious choice in which the individual habituates into being forgetful or
delusional to enhance the motivation for one's future selves. In equilibrium, the model
endogenizes the individual's state of motivated memory and particularly delusion resulting
from a high level of present bias. In chapter two, I extend Benabou and Tirole (2002)'s model
by incorporating the possibility of interaction between players on cooperation to study the
relation between memory bias, self-confidence and social behavior. In the third chapter, I
design a controlled incentivized experiment using the Ravens IQ test to test the theory
introduced in the first chapter. I find overall support for its implications except for the
significant incidence of positive confabulation. This leads me to extend my basic model to
capture this possibility as an equilibrium outcome. In the last chapter, I conduct experiment to
study different measures of cognitive ability, compare the culture and gender difference in
cognition, and test the relations between cognitive ability and some other decision making
traits, like time preference, risk preference, etc.
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