nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2005‒07‒18
five papers chosen by
Marco Novarese
Universita del Piemonte Orientale

  1. Actions and Beliefs: Estimating Distribution-Based Preferences Using a Large Scale Experiment with Probability Questions on Expectations By Charles Bellemare; Sabine Kröger; Arthur van Soest
  2. The Welfare Economics of Adaptive Preferences By Carl Christian von Weizsäcker
  3. Conversations between Anthropologists and Economists By Metin Cosgel
  4. Genetic Action Trees A New Concept for Social and Economic Simulation By Thomas Pitz; Thorsten Chmura
  5. New Technologies, Workplace Organisation and the Age Structure of the Workforce: Firm-Level Evidence. By Patrick Aubert; Eve Caroli; Muriel Roger

  1. By: Charles Bellemare (Université Laval, CIRPÉE and IZA Bonn); Sabine Kröger (University of Arizona); Arthur van Soest (RAND Corporation, Tilburg University and IZA Bonn)
    Abstract: We combine the choice data of proposers and responders in the ultimatum game, their expectations elicited in the form of subjective probability questions, and the choice data of proposers ("dictators") in a dictator game to estimate a structural model of decision making under uncertainty. We use a large and representative sample of subjects drawn from the Dutch population. Our results indicate that there is considerable heterogeneity in preferences for equity in the population. Changes in preferences have an important impact on decisions of dictators in the dictator game and responders in the ultimatum game, but a smaller impact on decisions of proposers in the ultimatum game, a result due to proposer’s subjective expectations about responders’ decisions. The model which uses subjective data on expectations has better predictive power and lower noise level than a model which assumes that players have rational expectations.
    Keywords: ultimatum game, inequity aversion, subjective expectations
    JEL: C93 D63 D84
    Date: 2005–07
  2. By: Carl Christian von Weizsäcker (Max Planck Institute for Research on Collective Goods, Bonn, Germany)
    Abstract: In this paper I demonstrate that a reasonable welfare theoretic concept of "progress" can be made consistent with the assumption of endogenously changing preferences as long as these preference changes correspond to the pattern of "adaptive preferences". The main theorem of the paper shows that under certain additional conditions "adaptive preferences" imply the existence of a complete pre-ordering of the consumption space in terms of "improvement paths" which allow endogenous preference changes. It is then shown that welfare economics of "improvement paths" is also possible with interpersonal influences on preferences. A conjecture is developed that results of recent empirical and experimental research into human economic behaviour corroborate the hypothesis of "adaptive preferences".
    Keywords: Welfare Economics, Endogenous Preferences, Adaptive Preferences, Interpersonal Influences on Preferences, Improvement Paths, Bounded Rationality
    Date: 2005–06
  3. By: Metin Cosgel (University of Connecticut)
    Abstract: Interdisciplinary citation patterns and other indicators of the flow and sharing of academic knowledge suggest that economists and anthropologists do not talk to each other. Previous studies of this puzzling trend have typically attributed the problem to methodological differences between the two disciplines. Although there are significant differences between economics and anthropology in behavioral assumptions and modes of inquiry, similar differences exist between them and other disciplines (some with much heavier volumes of cross-citations with economics or anthropology), suggesting that the source of the problem lies elsewhere. This paper considers the problem at a deeper level by examining systematic differences in the preferences, capabilities, and literary cultures of economists and anthropologists. Adopting a rhetorical perspective, I consider not the firms, households, or tribes as the principal objective of analysis in the two disciplines, but the conversations between these units. These conversations (through non-verbal as well as verbal media) can be grouped into two genres, based on the type of problem they aim to solve. Those in the first genre aim to solve the problem of interest--how to align the incentives of the parties involved. Those in the second genre deal with the problem of knowledge--how to align localized, and dispersed information. Economists are interested and capable of dealing with primarily, if not exclusively, the first genre, and anthropologists focus on the second. This difference has far reaching consequences for how economists and anthropologists conduct their own scholarly conversations with their own colleagues, why they are having difficulty talking to each other across disciplinary boundaries, and what can be done to change the patterns of communication.
    Keywords: anthropology, conversation, interest, incentive, knowledge
    JEL: A12 B4 O5 Z1
    Date: 2005–07
  4. By: Thomas Pitz (Laboratory of Experimental Economics University of Bonn); Thorsten Chmura (Laboratory of Experimental Economics University of Bonn)
    Abstract: Multi-Agent Based Simulation is a branch of Distributed Artificial Intelligence that builds the base for computer simulations which connect the micro and macro level of social and economic scenarios. This paper presents a new method of modelling the formation and change of patterns of action in social systems with the help of Multi-Agent Simulations. The approach is based on two scientific concepts: Genetic Algorithms [Goldberg 1989, Holland 1975] and the theory of Action Trees [Goldman 1971]. Genetic Algorithms were developed following the biological mechanisms of evolution. Action Trees are used in analytic philosophy for the structural description of actions. The theory of Action Trees makes use of the observation of linguistic analysis that through the preposition by a semi-order is induced on a set of actions. Through the application of Genetic Algorithms on the attributes of the actions of an Action Tree an intuitively simple algorithm can be developed with which one can describe the learning behaviour of agents and the changes in action spaces. Using the extremely simplified economic action space, in this paper called “SMALLWORLDâ€, it is shown with the aid of this method how simulated agents react to the qualities and changes of their environment. Thus, one manages to endogenously evoke intuitively comprehensible changes in the agents‘ actions. This way, one can observe in these simulations that the agents move from a barter to a monetary economy because of the higher effectiveness or that they change their behaviour towards actions of fraud.
    Keywords: Multi agent system, genetic algorithms, actiontrees, learning, decision making, economic and social behaviour, distributed artificial intelligence
    JEL: C8
    Date: 2005–07–14
  5. By: Patrick Aubert; Eve Caroli; Muriel Roger
    Abstract: This paper investigates the relationships between new technologies, innovative workplace practices and the age structure of the workforce in a sample of French manufacturing firms. We find evidence that the wage-bill share of older workers is lower in innovative firms and that the opposite holds for younger workers. This age bias affects both men and women. It is also evidenced within occupational groups, thus suggesting that skills do not completely protect workers against the labour-market consequences of ageing. More detailed analysis of employment inflows and outflows shows that new technologies essentially affect older workers through reduced hiring opportunities as compared to younger workers. In contrast, organisational innovations mainly affect the probability of exit, which decreases much more for younger than for older workers following reorganisation.
    Date: 2005

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