Would people pay for useless information?

Abstract

The purpose of this paper is to highlight the differences between traditional Economic model and modern Economic model by proposing a method that distinguishes the behavior of people, whether they are rational or irrational in thinking.

In this paper, we carried out two experiments specifically the Fair Coin Tossing and the Sports Betting Game. Our main focus is on the second one as we considered it to be an advanced game of the first questionnaire.

From the two experiments, although we agreed with what has been explained in both Economics and Behavioral Economics and we also expect the participants to behave typically in the way which Behavioral Economics explains, yet the outcome proved otherwise. Besides that, the outcomes for these two experiments are against each other. The first experiment showed that our participants behaved in a seemingly irrational way when they were answering the questionnaire. On the other hand, for the second experiment, most of our participants behaved rationally throughout the course of the game.

We have divided this paper into four sections where the first section is an introduction that draws out some differences between the traditional and modern Economic models. Questionnaire of Fair Coin Tossing and Sports Betting Game are explained in the second and third section respectively. The last part would then be a summary of our findings for both experiments.