Experimental Economics

When GABE ENGLANDER, a fourth-year honors student from Cincinnati, declared his major in economics, he had a rather lofty goal in mind: to become an advisor to the President of the United States. And now?

“I just want to do research that matters,” he said.

Englander indeed has a very promising future in research. In fact, he has been awarded three separate grants, totaling $23,000, for his current research project on decision-making in the face of uncertainty. This work has applications that range from climate change to cancer prevention, two subjects Englander is passionate about.

Englander decided to pursue economics after he took a trip his freshman year with his grandmother to the Galapagos Islands.

“Ninety-seven percent of the islands are closed to human settlement and environmental laws are effectively enforced,” said Englander. “The islands provided a compelling example of the power of financial incentives to promote environmental welfare.”

He recognized intuitively a key precept of economics: manipulation of incentives can help lead to environmentally- and socially-beneficial outcomes.

In autumn 2013, Professor PJ Healy recommended Englander for a new, yearlong research-intensive experimental economics course that paired Englander with a PhD student to collaborate on the development, design and implementation of an economics experiment over the course of the year. At the same time, Englander began working with Healy and Professor Katherine Coffman on what would become his senior thesis.

Englander had wondered for several years why, despite increasingly certain and alarming projections about the probability and magnitude of economic losses from climate change, public investment in mitigation and adaptation activities remained well below the socially-efficient level.

One unexamined explanation that captured his interest was that at the local level, future negative climate events are uncertain both in terms of their probability and in terms of their actual magnitude. He designed an economics experiment to test how these two types of uncertainty affect climate change spending.

“After I started working on this project I realized that my experiment could speak to another decision problem in a completely different domain: how uncertainty affects individual willingness to take preventive action against getting cancer,” said Englander.

Englander then applied for and was awarded a Pelotonia Undergraduate Fellowship to expand his senior thesis project to apply the tools of experimental economics to improve the communication of ambiguous prognoses to cancer patients. He also aims to discover the most effective communication strategies for encouraging cancer-reducing behaviors among the general public.

Englander’s honors thesis, “Multi-dimensional Ambiguity and Individual Willingness to Take Preventive Action,” will be submitted for publication later in the year. He expects to graduate in spring 2015 with a BS in economics and minors in math and statistics. He plans to pursue a PhD in economics with the goal of becoming a professor of economics.