nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2005‒01‒02
nine papers chosen by
Marco Novarese
Università del Piemonte Orientale

  1. Organizational Routines: A Sceptical Look By Teppo Felin; Nicolai J. Foss
  2. Can a Work Organization Have An Attitude Problem? The Impact of Workplaces on Employee Attitude and Economic Outcomes By Ann Bartel; Richard Freeman; Casey Ichniowski; Morris Kleiner
  3. Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level By M Patterson; P Warr; M West
  4. The Network Economy and Models of the Employment Contract: Psychological, Economic and Legal By David Marsden
  5. Inequality and Public Good Provision: An Experimental Analysis By Lisa R. Anderson; Jennifer M. Mellor; Jeffrey Milyo
  6. Do Liberals Play Nice? The Effects of Party and Political Ideology in Public Goods and Trust Games By Jeffrey Milyo; Jennifer M. Mellor; Lisa Anderson
  7. Confidence-Enhanced Performance By Olivier Compte; Andrew Postlewaite
  8. The writing processes and learning strategies of initial users of speech recognition By Leijten M.; Van Waes L.
  9. The Production of Cognitive Achievement in Children: Home, School and Racial Test Score Gaps By Petra E. Todd; Kenneth I. Wolpin

  1. By: Teppo Felin; Nicolai J. Foss
    Abstract: Organizational routines and capabilities have become key constructs not only in evolutionary economics, but more recently also in business administration, specifically strategic management. In this chapter we explicate some of the underlying theoretical problems of these concepts, and discuss the need for micro-foundations. Specifically, we focus on some of the explanatory problems of collective-level theorizing, and what we think are tenuous assumptions about human beings. We argue that individual-level considerations deserve significantly more consideration, and that evolutionary economics and strategic management would be well served by building on methodological individualism.
    JEL: D2 L2 M1
    Date: 2004
  2. By: Ann Bartel; Richard Freeman; Casey Ichniowski; Morris Kleiner
    Abstract: In this study we examine whether a workplace can induce good or bad attitudes among its employees andwhether any such ¿workplace attitudes¿ affect economic outcomes. This study analyzes responses ofthousands of employees working in nearly two hundred branches to the emp loyee opinion survey of amajor US bank in 1994 and 1996. The results document the existence and persistence of a genuineworkplace effect in how workers view their jobs and organizations. Employee attitudes differ significantlyacross branches in ways that cannot be explained by branches randomly drawing workers from adistribution of workers with different innate attitudes. Furthermore, newly hired workers adopt thefavourable or unfavourable attitudes that the branches exhibited before they arrived. These workplaceattitudes also have significant effects on economic outcomes. Branches with less favourable attitudes havehigher turnover, lower levels of sales, and lower rates of sales growth than branches where workers havemore favourable attitudes. Less favourable branch attitudes are also a significant predictor of subsequentbranch closings. The study¿s results show that there are happy and unhappy workplaces, as well as happyand unhappy workers, with very different patterns of turnover and productivity in these workplaces.
    Keywords: work motivation, workplace attitudes, organization, performance
    JEL: J0 J2
    Date: 2004–05
  3. By: M Patterson; P Warr; M West
    Abstract: Consistent with a growing number of models about affect and behaviour and with arecognition that perception alone provides no impetus for action, it was predicted thatassociations between company climate and productivity would be mediated by average levelof job satisfaction. In a study of 42 manufacturing companies, subsequent productivity wassignificantly correlated in controlled analyses with eight aspects of organizational climate(e.g. skill development and concern for employee welfare) and also with average jobsatisfaction. The mediation hypothesis was supported in hierarchical multiple regressions forseparate aspects of climate. In addition, an overall analysis showed that companyproductivity was more strongly correlated with those aspects of climate that had strongersatisfaction loadings. A second prediction, that managers¿ perceptions of climate would bemore closely linked to company productivity than would those of non-managers, was notsupported. However, managers¿ assessments of most aspects of their company¿s climatewere significantly more positive than those of non-managers.
    Keywords: Organizational structure, organizational climate, employee welfare, manager,productivity.
    JEL: M11 M12 J5 J24
    Date: 2004–04
  4. By: David Marsden
    Abstract: The emergence of the so-called ¿network economy¿ and the development of project-basedwork pose a fundamental challenge to established methods of regulating the employmentrelationship. There appears to be an unsatisfied demand for its greater use, especially amongemployers, and it is argued that this may be blocked by the lack of suitable contractual forms,such as those that have underpinned the established open-ended employment relationship.Project-based work seeks to retain some of the open-ended flexibility of the standardemployment relationship in relation to its task content but not its duration. The paper arguesthe success of the standard employment relationship owes much to the articulation of itspsychological, economic/incentive, and legal aspects. As yet, this appears to be lacking formore transient forms of relationship.
    Keywords: Network economy, Labor Contracting, Labor Law, Labor-Management Relations
    JEL: M55 K31 J44 J53
    Date: 2004–02
  5. By: Lisa R. Anderson (Department of Economics, College of William and Mary); Jennifer M. Mellor (Department of Economics, College of William and Mary); Jeffrey Milyo (Department of Economics and Truman School of Public Affairs, University of Missouri)
    Abstract: Recent studies report that economic inequality is associated with reduced government expenditures on social programs. Several prominent social scientists, including Putnam [2000], attribute this relationship to the detrimental Òpsychosocial effectsÓ of group heterogeneity on cooperation. We test the hypothesis that inequality within a group reduces individual contributions in a canonical public goods experiment. Unlike previous examinations of inequality and public good provision, our design introduces inequality by manipulating the levels and distributions of fixed payments given to subjects for participating in the experiment. When made salient through public information about each individualÕs standing within the group, inequality in the distribution of fixed payments reduces contributions to the public good for all group members.
    Keywords: Inequality, Heterogeneity, Cooperation, Public goods, Experiments
    JEL: C9 H4
    Date: 2004–12–15
  6. By: Jeffrey Milyo (Department of Economics, University of Missouri-Columbia); Jennifer M. Mellor; Lisa Anderson
    Abstract: We test the conventional wisdom that political ideology is associated with generosity or compassion by comparing the behavior of experimental subjects in public goods or trust games. We find that self-described liberals and those identifying more closely with the Democrat party are just as likely to free-ride as conservatives or Republican-leaners; likewise, political ideology is unrelated to observed trusting behavior or trustworthiness in a bilateral trust game.
    JEL: D63 H41
    Date: 2004–12–27
  7. By: Olivier Compte (Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS)); Andrew Postlewaite (Department of Economics, University of Pennsylvania)
    Abstract: There is ample evidence that emotions affect performance. Positive emotions can improve performance, while negative ones may diminish it. For example, the fears induced by the possibility of failure or of negative evaluations have physiological consequences (shaking, loss of concentration) that may impair performance in sports, on stage or at school. There is also ample evidence that individuals have distorted recollection of past events, and distorted attributions of the causes of successes of failures. Recollection of good events or successes is typically easier than recollection of bad ones or failures. Successes tend to be attributed to intrinsic aptitudes or own effort, while failures are attributed to bad luck. In addition, these attributions are often reversed when judging the performance of others. The objective of this paper is to incorporate the first phenomenon above into an otherwise standard decision theoretic model, and show that in a world where performance depends on emotions, biases in information processing enhance welfare.
    Keywords: Confidence, Perception, Psychology
    JEL: D8
    Date: 2001–05–01
  8. By: Leijten M.; Van Waes L.
    Abstract: This paper describes the adaptation and learning process of writers who have started using speech recognition systems for writing business texts. To gather the process data for this study we have chosen complementary research methods. First the participants were asked to fill in a questionnaire, then they received instruction in the speech recognition system, they were observed five times using the speech recognition system during their day-to-day work and filled in a logging questionnaire after each task. The data from these sessions were used to describe the adaptation strategies during the learning process by revealing the planning, formulating and reviewing behaviour of the writers. This article focuses on (1) the effect of speech recognition on cognitive processes of writers; (2) the learning strategies of initial users; (3) the description of a research method, categorization model and notation model to answer research questions as extensively as possible. To illustrate the possibilities of the categorization model we describe a case study in which we show the learning and writing process of two experienced dictators. Both writers have a comparable experience in professional writing, word processing and classical dictating. However, they do differ in learning style (cf. Kolb 1984). The case study shows that this difference in learning style is decisive in the adaptation process and because of this it also shows that the used method enabled us to describe these kind of writing process data adequately.
    Date: 2003–09
  9. By: Petra E. Todd (Department of Economics, University of Pennsylvania); Kenneth I. Wolpin (Department of Economics, University of Pennsylvania)
    Abstract: This paper studies the determinants of children’s scores on tests of cognitive achievement in math and reading. Using rich longitudinal data on test scores, home environments, and schools, we implement alternative specifications for the production function for achievement and test their assumptions. We do not find support for commonly used restrictive models that assume test scores depend only on contemporaneous inputs or that assume conditioning in a lagged score captures the effects of all past inputs. Instead, the results show that both contemporaneous and lagged inputs matter in the production of current achievement and that it is important to allow for unobserved child-specific endowment effects and endogeneity of inputs. Using a specification that incorporates these features, we analyze sources of test score gaps between black, white and Hispanic children. The estimated model captures key patterns in the data, such as the widening of minority-white test score gaps with age, which is most pronounced for black children.
    Keywords: Education production function, racial test score gaps, school quality, child development and cognitive achievement
    JEL: J24 J15 I20
    Date: 2004–04–26

This nep-cbe issue is ©2005 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.