Drazen Prelec

{{Short description|American economist (born 1955)}}

Drazen Prelec (born 1955 in Yugoslavia{{cite web|url=http://www.croatia.org/crown/articles/10595/1/Drazen-Prelec-distinguished-Croatian-expert-for-Neuroeconomics-and-professor-at-MIT-USA.html|title=Drazen Prelec distinguished Croatian expert for Neuroeconomics and professor at MIT, USA}}) is a professor of management science and economics in the MIT Sloan School of Management,{{cite web| url=http://mitsloan.mit.edu/faculty/detail.php?in_spseqno=106&co_list=F| title=Faculty & Research: Drazen Prelec| publisher=MIT Sloan School of Management| access-date=2015-08-03}} and holds appointments in the Department of Economics and in the Department of Brain and Cognitive Sciences at MIT as well.{{cite web| url=https://mitsloan.mit.edu/faculty/directory/drazen-prelec| title=Drazen Prelec MIT Sloan| publisher=MIT Sloan School of Management| access-date=2022-01-22}} He is a pioneer in the field of neuroeconomics.{{cite journal| title=The crazy logic of a successful sale| url=http://www.businessweek.com/smallbiz/content/jun2004/sb2004064_6038_sb034.htm| journal=Business Week| date=June 4, 2004| first=Michelle| last=Nichols| url-status=dead| archive-url=https://web.archive.org/web/20080926021703/http://www.businessweek.com/smallbiz/content/jun2004/sb2004064_6038_sb034.htm| archive-date=September 26, 2008}}.

Prelec studied applied mathematics as an undergraduate at Harvard University, and went on to earn a Ph.D. from Harvard in experimental psychology, supervised by Richard Herrnstein and Duncan Luce. He was a Junior Fellow of the Harvard Society of Fellows and was a Guggenheim Fellow.{{cite web| url=https://csap.yale.edu/event/harvard-game-market-setting-drazen-prelec-mit| title=The Harvard Game in a Market Setting| publisher=Yale Center for the Study of American Politics| access-date=2022-01-22}} He joined the MIT faculty in 1991.

Prelec has made seminal contributions to theories of intertemporal choice, in particular the generalized theory of hyperbolic discounting,{{cite journal |last1=Loewenstein |first1=George |last2=Prelec |first2=Drazen |title=Anomalies in Intertemporal Choice: Evidence and an Interpretation* |journal=The Quarterly Journal of Economics |date=1 May 1992 |volume=107 |issue=2 |pages=573–597 |doi=10.2307/2118482 |jstor=2118482|s2cid=15959172 }} as well as to non-expected utility theories, in particular probability weighting functions.{{cite journal |last1=Prelec |first1=Drazen |title=The Probability Weighting Function |journal=Econometrica |date=1998 |volume=66 |issue=3 |pages=497–527 |doi=10.2307/2998573 |jstor=2998573}} He is also responsible for developing the theory of self-signaling.{{cite journal |last1=Mijović-Prelec |first1=Danica |last2=Prelec |first2=Draz̆en |title=Self-deception as self-signalling: a model and experimental evidence |journal=Philosophical Transactions of the Royal Society B: Biological Sciences |date=27 January 2010 |volume=365 |issue=1538 |pages=227–240 |doi=10.1098/rstb.2009.0218 |pmid=20026461 |pmc=2827460}}

A study by Prelec and Duncan Simester showed that people buying tickets to sporting events would be willing to pay significantly higher prices using credit cards than they would for cash purchases.{{cite news| title=Don't leave home with it| newspaper=The Washington Post| date=February 17, 2002| first=Richard| last=Morin| url=https://www.proquest.com/docview/409214379| page=B5|url-access=subscription}}{{cite news|title=Life without plastic |publisher=CNN |first=Donna |last=Rosato |date=June 17, 2008 |url=https://money.cnn.com/2008/06/16/pf/without_plastic.moneymag/ |url-status=dead |archive-url=https://web.archive.org/web/20091223034901/https://money.cnn.com/2008/06/16/pf/without_plastic.moneymag/ |archive-date=December 23, 2009}}{{cite journal| title=Your Brain on Credit| journal=Forbes| date=March 19, 2009| first=Tim| last=Harford| url=https://www.forbes.com/2009/03/19/credit-poor-judgement-markets-tim-harford.html}} Working in the area of Wisdom of the crowd, Prelec also devised a system, the "Bayesian Truth Serum", for eliciting more truthful answers to polls based on paired questions in which one question of each pair asks about the respondent's own opinion and the other asks the respondent to estimate others' opinions.{{cite journal| title=Mathematical "truth serum" promotes honesty |date=October 14, 2004| first=Maggie| last=McKee| journal=New Scientist| url=https://www.newscientist.com/article/dn6535-mathematical-truth-serum-promotes-honesty.html}}

Prelec is of Croatian descent.