This paper studies the implications of unobservable consumer naivete on selection and welfare in a competitive insurance market with moral hazard. We identify two distinct forces of sophistication driving the formation of market equilibriums. One is that sophistication helps individuals internalize the incentive to take high effort by adopting some commitment devices, and hence sophisticates ar...

This paper reports the results of a study aimed at understanding and characterising IT management sophistication in small businesses. A multiple-case study approach was therefore used to explore the IT management practices of small businesses. Data collection involved four small-medium chartered accountancy (CA) firms and three IT firms closely associated with the CA industry. The case results ...

principles and policy preferences is conditional on political sophistication, dominates the study of public opinion. This article argues that the sophistication-interaction theory does not hold to the degree the consensus claims. Specifically, it challenges the proposition that sophistication promotes the use of domain-specific beliefs and values. Analysis of 1984, 1986, 1987, 1988, and 1990 NE...

We document support for the narrow framing effect proposed by Kahneman and Tversky (1981). Our findings that traders in an options market frame complicated investment decisions into the simpler ones support the narrow framing effect. Traders’ professionalism, sophistication and trading experience are negatively related with the degree of narrow framing, implying that these factors help to reduc...

Political sophistication is a concept that encompasses political reasoning, the coherence of people's issue attitudes, and their knowledge of political processes. To what extent is political sophistication affected by genes and environments? Do these distinct but related measures of sophistication share a common genetic structure? We analyze survey data collected from participants in the Minnes...

Diverse computational roles of GABAergic inhibition are often assumed to reflect heterogeneity in the sources of GABA and in the receptors sensing the neurotransmitter. New data suggest that distinct effects on integration of excitatory inputs by cerebellar granule cells might result from different modes of signaling by individual interneurons.

The sophistication of financial decisions varies with age: middle-aged adults borrow at lower interest rates and pay fewer fees compared to both younger and older adults. We document this pattern in ten financial markets. The measured effects can not be explained by observed risk characteristics. The sophistication of financial choices peaks at about age 53 in our cross-sectional data. Our resu...

Theory of Mind (ToM) is the ability to attribute mental states (e.g., beliefs and desires) to other people in order to understand and predict their behaviour. If others are rewarded to compete or cooperate with you, then what they will do depends upon what they believe about you. This is the reason why social interaction induces recursive ToM, of the sort "I think that you think that I think, e...