Behavioral Insights for Policy Design: Experimental and Empirical Evidence

<p><strong>This thesis comprises three essays that aim to investigate different behavioral aspects through people’s decision making across both experimental settings and real-life scenarios. The findings contribute to existing literature on how behavioral insights might inform policy design and delivery in organizations. The first essay uses a variant of the dictator game in an online experiment to analyze how people behave when they can choose between own decisions and delegating the decisions that increase their own payoff by taking advantage of others. The data suggest a dominance of “illusion of control”, a behavioral preference that would potentially hinder streamlining of process in organizational governance policy in practice. The second essay uses a behavioral game-theoretic model, with a real-life insurance context embedded in the experimental setting. The paper finds evidence that insurance policy holders who invest in prevention might be inclined to engage in loss inflation due to “moral licensing”, although this effect might be countervailed by social preferences. Such findings might be useful for decision makers in the insurance sector to consider for identifying insurance fraud. The third essay examines the ex-post behavior of stakeholders in light of a new regulation, in a particular case of the media industry in Australia following the introduction of the News Media and Digital Platforms Mandatory Bargaining Code in 2021. Using Event Study Methodology, the study shows a collectively positive stock market reaction in the news media industry to the introduction of the Code, although different patterns amongst individual firms and groups by size to the different stages of the Code’s development. Such findings inform the considerations in the policy design process relating to the overall societal impact of a regulation versus sectoral impact on different groups of stakeholders.</strong></p>