Research Topic C

Bad decisions in markets

Systematic mistakes in judgments and false beliefs or expectations affect economic decisions. This is true not only for financial markets and markets for consumer goods but also for labor markets and education. Such false beliefs can also manifest themselves as the over- and underconfidence of students applying to universities or searching for a school. This can affect their application and search behavior and thus their success. Gender differences with respect to self-confidence can translate into economic decisions, such as the willingness to compete. In addition, mental health issues can have adverse effects on education decisions and academic performance.

Buser, Thomas/Ranehill, Eva/Veldhuizen, Roel van (2021): “Gender Differences in Willingness to Compete. The Role of Public Observability.” In: Journal of Economic Psychology, Vol. 83, Article 102366, 1-13. 

Han, Yi/Liu, Yiming/Loewenstein, George (2022): “Confusing Context with Character. Correspondence Bias in Economic Interactions.” In: Management Science, 30.03.2022.

Kessel, Dany/Mollerstrom, Johanna/Veldhuizen, Roel van (2021): “Can Simple Advice Eliminate the Gender Gap in Willingness to Compete?” In: European Economic Review, Vol. 138, Article 103777, 1-64.

Ring, Patrick/Probst, Catharina C./Neyse, Levent/Wolff, Stephan/Kaernbach, Christian/Eimeren, Thilo van/Schmidt, Ulrich (2022): “Discounting Behavior in Problem Gambling.” In: Journal of Gambling Studies, Vol. 38(2) 529-543.

Veldhuizen, Roel van (2022): “Gender Differences in Tournament Choices. Risk Preferences, Overconfidence or Competitiveness?” In: Journal of the European Economic Association, advance access, 07.06.2022, online:

Biased decision-making plays an important role in the project ‘Education Decisions, Market Design, and Student Outcomes’ that is part of the DFG-funded CRC TRR 190 ‘Rationality and Competition.’