2026 General Seminar - Ryan Oprea (Berkeley)

Title: Behavioral Attenuation 

by Ryan Oprea

Abstract:  Multiple empirical regularities in behavioral economics reflect surprisingly small elasticities of decisions to variation in prices, quantities, incentives, probabilities and other fundamentals. We test the hypotheses that these patterns reflect behavioral attenuation---a general link between cognitive uncertainty about which decision is best and  reduced sensitivity to information or payoffs---and that such attenuation is a general feature of behavior rather than a property of a few canonical anomalies. We study this mechanism in more than 30 experiments spanning choice, valuation, belief formation, strategic interaction and generic optimization problems, with applications to investment, savings, effort supply, demand, taxation, externalities, fairness, giving, search, and forecasting. We find evidence of behavioral attenuation in 93% of our experiments. Because attenuation increases in the distance from (pre-registered) simple problems, it also helps explain diminishing sensitivity. Our results suggest that a broad class of behavioral phenomena---both old and new---are linked to uncertainty in the mind. We also identify some conditions under which behavioral attenuation weakens or disappears.