I combine theory and methodology from economics, psychology, and neuroscience to understand how people decide, why they make wrong decisions, and how to make them better choosers. My research focused on how economic preferences change over the lifespan and contexts, including how thirst, being observed, outdoor luminance, as well as the structure of current and past choice affect behavior.
I have been awarded over $33 million in grants as a Chief Investigator, including ARC Centre of Excellence, DECRA, Discovery, and Linkage grants. In 2017 I received the Award from the Society for Neuroeconomics for my contributions to our understanding of decision-making. I was among ten female scientists from Australia and New Zealand shortlisted for 2014 L’OREAL Women in Science Fellowship.
Published papers
Weinrabe A., Chung H., Tymula A., Tranand J., Hickie I. (2020) Economic Rationality in Young People with Emerging Mood Disorder, Journal of Neuroscience, Economics, and Psychology
Tymula (2019) Adolescents are more impatient and inconsistent, not more risk-taking when observed by peers – a comprehensive study of adolescent behavior under peer observation, Journal of Economic Behavior and Organisation, 166:735-750
Chung, H., Glimcher. P.W., Tymula, A. (2019) An Experimental Comparison of Risky and Riskless Choice – Limitations of Prospect Theory and Expected Utility Theory, American Economic Journal: Micro, 11(3):34-67
Rosato A. and Tymula A. (2019) Loss Aversion and Competition in Vickrey Auctions: Money Ain’t No Good, Games and Economic Behavior, 115: 188-208
Published book chapters
Tymula A. (2019). Brain Morphometry for Economists: How do Brain Volume Constraints Affect Our Choices? in Biophysical Measurement in Experimental Social Science Research, Foster (Eds.), ELSEVIER
Other writing
Tymula A. (2016) Financial gamble? My brain made me do it. The Conversation
- featured on Scientific American Blog Network
- written for the Young Minds of the 2014 USA Science and Engineering Festival
Tymula A. (2014) Explainer: neuroeconomics, where science and economics meet. The Conversation
Book review of After Phrenology: Neural Reuse and the Interactive Brain, Michael L. Anderson. The MIT Press, Cambridge, MA, USA (2014) in Journal of Economic Psychology, Volume 51, December 2015, p. 279–280
Working papers under review
We present a descriptive model of choice with normative foundations based on how the brain is thought to represent value. An individual’s behavior is fully described by two primitives: an individual’s expectation and one free parameter we call “predisposition’. The model captures the same apparent preference phenomena illustrated by Prospect Theory but unlike Prospect Theory accounts for individual heterogeneity in parameters, employs far fewer parameters than full prospect theory, and retains neurobiological plausibility as a causal model of the choice process. Additionally, our theory makes a series of novel predictions amenable to future testing and includes an alternative explanation for endowment effect.
Based on recent discoveries in economics, neuroscience, and psychology, we hypothesize that pure exposure to high-value or low-value rewards can change people’s valuation of gambles and confirm this hypothesis in a laboratory experiment. In particular, the same participants within the same experimental session provide higher valuations for the same gambles after they have been exposed to low-value rewards than after they have been exposed to high-value rewards. These results are consistent with the current understanding of how the nervous system encodes rewards and imply that even brief experiences that do not change wealth can impact an individual’s valuations.
We investigate how people choose to spend money on the Sydney Opera House (SOH) in an online experiment with over 1,000 participants. Being a not-for-profit organisation, the SOH not only sells tickets but also collects charitable donations for its maintenance and accessibility. Our research aims to find out what impacts the relationship between sales and donations, i.e. the cross-price elasticity of demand. Our results reveal that changing the donation recipient from the SOH to an unrelated recipient does not affect the relationship between sales and donations. However, raising awareness that a portion of profits from ticket sales is used for the same purpose as the donations significantly decreases substitution effects (i.e., the cross- price elasticity of donation demand falls) but does not affect the cross-price elasticity of product demand. Our results thus suggest that ticket price rebates may positively affect both ticket purchases and donations.
Tymula A. and Wang X. (2020) Increased risk-taking, not loss tolerance, drives adolescents’ propensity to gamble more under peer observation, revision requested from the Journal of Economic Behaviour and Organization
Relative to adults, adolescents make more welfare-decreasing decisions, especially in the presence of peers. The consequences of these decisions result in substantial individual and societal losses in terms of lives lost, injury, hospitalization costs, and foregone opportunities. In this paper, we used a laboratory experiment with 12- to 24-year-old participants to identify which economic preference is affected by peer observation in adolescence — risk attitudes in gains, risk attitudes in losses, and/or loss aversion. We found that older adolescents (18-24 years old) while observed by peers become more risk-tolerant both in gains and in losses but more loss averse. We discuss potential mechanisms driving the result and its implications for policy.
Economists model self-control problems through time-inconsistent preferences. Empirical tests of these preferences largely rely on experimental elicitation methods using monetary rewards, with several recent studies failing to find present bias for money. In this paper, we compare estimates of present bias for money with estimates for healthy and unhealthy foods. In a within-subjects longitudinal experiment with 697 low-income Chinese high school students we find strong present bias for both money and food, and that individual measures of present bias are moderately correlated across reward types. Our experimental measures of time preferences over money predict field behaviours better than preferences elicited over foods.
We present a neuroeconomic model for risky choice that species a utility function that is context-dependent. We demonstrate how and under what conditions the model generates choice (but not preference) reversals. In a laboratory experiment, we test the predictions of our model and compare it against other popular models of context-dependent choice. We nd that divisive normalization captures violations of the independence of irrelevant alternatives that cannot be otherwise explained with salience theory, range normalization, or attraction eect theories. Moreover, we identify a new setting in which the well-established attraction effects do not occur.
Berger A. and Tymula A. (2019) Controlling ambiguity: The illusion of control in decision-making under risk and ambiguity [supplement]
The finding that individuals are ambiguity averse in the domain of medium likelihood gains is robust across laboratory studies. We conducted a laboratory experiment to examine whether we can lower this aversion to ambiguity by giving participants an illusion of control over the probability of winning by allowing them to choose the winning color in what objectively are 50-50 gambles. We found that while our illusion of control manipulation does not increase participants’ preference for risky gambles with known probability of winning, it does increase participants’ tolerance for ambiguous gambles with unknown probability of winning. When the illusion of control is absent, the structural model estimates of ambiguity tolerance are 29% lower. Our results highlight the importance of considering the illusion of control in the estimation of ambiguity attitudes.
We estimate whether risk preferences are affected by traumatic events by using a unique survey of Sri Lankan twins which contains information on individual’s exposure to the 2004 Indian Ocean Tsunami, participation as a combatant in the civil war, validated measures of mental health and risk preferences, and a rich set of control variables. Our estimation strategy utilises variation in experiences within twin pairs and allows us to explore wealth shocks and/or changes in mental health as mechanisms. We find that both events lead to less risk aversion, a result that is not driven by mental health or wealth changes.
We use an incentivized experiment to measure the risk and time preferences of truant adolescents and their parents. We find that adolescent preferences do not predict school attendance and that a unique police-school partnership program targeting school absences was most effective in reducing the truancy of adolescents with relatively risk-averse parents.
Non – traditional research output
Decision-making and ageing exhibit at the Museum of the National Academy of Sciences in Washington, DC (part of the Life Lab exhibit)
- on display May 2012 – September 2018