Monitoring Optimistic Agents

16 Pages Posted: 9 Apr 2011

See all articles by Nicolas Jacquemet

Nicolas Jacquemet

Paris School of Economics (PSE); Université Paris I Panthéon-Sorbonne

Jean-Louis Rulliere

University of Claude Bernard Lyon 1 - Institute of Finance and Insurance Science (ISFA)

Isabelle Vialle

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Date Written: April 7, 2008

Abstract

Monitoring is typically included in economic models of crime thanks to a probability of detection, constant across individuals. We build on recent results in psychology to argue that comparative optimism deeply affects this standard relation. To this matter, we introduce an experiment involving proper incentives that allow a measurement of optimism bias. Our experiments support the relevance of so-called comparative optimism in decision under risk. In the context of illegal activities, our results provide a guide into costless devices to undermine fraud, through well-designed information campaigns.

Keywords: Optimism, Risk aversion, Monitoring design, Illegal activity, Experimental economics

JEL Classification: C91, C92, D82, H21, H26

Suggested Citation

Jacquemet, Nicolas and Rulliere, Jean-Louis and Vialle, Isabelle, Monitoring Optimistic Agents (April 7, 2008). Journal of Economic Psychology, Vol. 29, No. 5, 2008. Available at SSRN: https://ssrn.com/abstract=1805147

Nicolas Jacquemet (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Université Paris I Panthéon-Sorbonne ( email )

17, rue de la Sorbonne
Paris, 75005
France

HOME PAGE: http://www.nicolasjacquemet.com/

Jean-Louis Rulliere

University of Claude Bernard Lyon 1 - Institute of Finance and Insurance Science (ISFA) ( email )

50, Avenue Tony Garnier
Lyon Cedex 07, 69366
France
+33 670 43 60 87 (Phone)

Isabelle Vialle

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

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