[VCEE Seminar] VCEE Seminar 24.1.2020

Mailing list of the VCEE seminar series vcee-seminar at lists.univie.ac.at
Thu Jan 23 15:35:19 CET 2020

Dear all,

You are cordially invited to attend the VCEE seminar on *Friday, Jan 24 
^from 10:00-12:00* (SR 1, Ground floor). We have two speakers: Dotan 
Persitz (U Tel Aviv) and

Gönül Dogan (U Köln)

*10:00-11:00 Dotan Persitz *(U Tel Aviv)
Titel: *Design Invariance in the Classic Consumer Choice Problem*


*11:00-12:00 Gönül Dogan *(U Köln)
Titel: *Pyramid Schemes*
with Kenan Kalaycı and Priscilla Man
Ponzi and pyramid schemes promise a large return for investors with 
limited risk. In reality, most investors lose money when such schemes 
collapse due to a lack of new entrants. In an online experiment without 
deception, we invite participants to invest their endowment in a 
pyramid-like investment scheme with a negative expected return. We find 
that more than half of the subjects are willing to invest in the scheme 
regardless of their age, gender, years of schooling, trust levels, and 
income. Complexity of the decision-making in the pyramid scheme plays an 
important role in investment; the size of the group, difficulty of 
calculating average payoff outcomes as well as the percentage of losers 
contribute to complexity. Risk tolerance and preference for positively 
skewed outcomes partially explain investment decisions. Our findings 
suggest that pyramid schemes can be attractive even in the absence of 
deceptive recruitment efforts by scheme founders.

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