Modelling refugee migration under cognitive biases: Experimental evidence and policy

Géraldine Bocquého, Marc Deschamps, Jenny Helstroffer, Julien Jacob and Majlinda Joxhe

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2023, vol. 103, issue C

Abstract: In this paper, we develop a model for refugee migration. As refugees’ migration choices are made in a risk-laden environment, we compare two different theoretical frameworks of decision making under risk, namely Expected Utility Theory (EUT) and Cumulative Prospect Theory (CPT). This last framework accounts for a reference point, loss aversion, and probability distortion. We estimate refugees’ risk and time preference parameters using field experimental data and show CPT better explains refugees’ risk behaviour on average. We also investigate policy implications based on simulations. We show that, under CPT, compared to standard EUT, the value of migrating is consistently lower and the migration decision is more sensitive to policy changes. Our results suggest refugees may self-select based on their risk preferences, those exhibiting more loss aversion or less probability sensitivity being more likely to renounce migration as a reaction to migration policies.

Keywords: Refugee migration; Risk preferences; Experimental economics; Cumulative Prospect Theory (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 F22 K37 K42 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Working Paper: Modelling refugee migration under cognitive biases: Experimental evidence and policy (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:103:y:2023:i:c:s2214804322001392

DOI: 10.1016/j.socec.2022.101969

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