The conventional model of Homo Economicus is based on assumptions of selfish preferences where utility depends only on personal payoffs, and full rationality where people have complete self-control when making decisions. In the real world, however, the fact that people are bound by rationality (i.e. limited by cognitive and emotional abilities) is well established. People engage in behaviours to help others although this is costly, engage in unfavourable gambles and postpone costly events to enjoy benefits today.
Intuitive and reflective modes of thinking have been proposed to account for many of the anomalies observed in the real world. Kahneman (2011) proposed that people use two ways of thinking - intuition (“System 1”) and reflection (“System 2”), and our behaviour is a consequence of how these two systems interact. Although dual-process models of thinking have received much attention, knowledge is currently lacking on the circumstances under which decisions are driven by intuitive and reflective thinking, respectively. Few studies have conducted experiments that exogenously induce processing modes before people make incentivised decisions.
In my current research I seek to systematically fill this research gap by employing experimental manipulations to induce intuitive and reflective modes of thinking; The overall objective is to document how different modes of thinking influence basic economic decision-making that is central to understanding a wide variety of everyday decisions: 1) prosocial choices 2) risky choices 3) intertemporal choices and 4) moral judgements.
Applying a dual-process framework to economic decisions raises a series of questions that this project will seek to answer: Do individuals act more or less selfishly when making intuitive as opposed to reflective decisions? Do individuals become more or less risk averse when making intuitive decisions? Do individuals become more or less present-oriented when making intuitive decisions? What biological, psychological and neural factors at the individual level mediate observed behaviours?
Much of my previous (and ongoing) research has been applied to resource allocation in the context of health care. The technical and moral complexities involved in health care priority setting (at both bedside and policy level) mean that decision makers are likely to rely on heuristics or intuitive approaches to simplify the difficult decisions at hand. In this process, important information or values are likely to be ignored, contributing to decisions and policies that are likely to be both inefficient and unfair. In my research on health care priority setting I seek to put some empirical flesh on some of the economic and philosophical bones that form the basis for health policy. Thereby providing increased understanding of the fundamentals concerning the motivation and underlying psychological mechanisms of decision makers when balancing, when allocating resources. Such insight is essential if health-care policies are to be properly designed and implemented in order to achieve an appropriate balance between different values.
My research is funded by the Ragnar Söderbergs Fellowship, the Marianne and Marcus Wallenberg Foundation and the insurance company Länsförsäkringar.
Current research projects
- Deciding, fast and slow: How intuitive and reflective thinking influence economic decision-making
- Enhancing Individual, Organizational, and Societal Cooperation (ENCOOPER)
- Health care priority setting of orphan diseases