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on Cognitive and Behavioural Economics |
| By: | Frank Beckenbach (Department of Economics, University of Kassel) |
| Abstract: | Novelty creating processes have been mainly analysed in a 'post-revelation' situation and by taking a meso (or even macro) level perspective. One reason for this might be a methodological caveat according to which firstly the novelty creating process (henceforth: ncp) is totally conjectural without anything to generalize and secondly the results of a ncp can not be anticipated leaving only room for some after-the-fact-analysis on a more or less aggregated level. Without denying these assumptions the following considerations assume that it is worthwhile to analyse the ncp from a microeconomic perspective including 'prerevelation' situations. The subject matter of such an analysis is constituted by the following components: - the triggering conditions for ncps, - the constraints for ncps, - the expectations of agents/agencies promoting ncps, - the heuristics for ncps and finally - the processing of the ncps themselves. In this article I will deal with these topics by proceeding in the following manner: (1) I discuss the shortcomings of the usual analysis of ncp in evolutionary economics and pick up some hints of the cognitive sciences to overcome these conceptual shortcomings (section II). (2) I try to combine stylised facts of the microeconomic analysis of ncps with conceptual ideas about a cognitive architecture of agents and knowledge networks for getting a modelling framework. (3) I will present some preliminary simulation results for parts of this simulation model (section III). |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:kas:wpaper:2005-75&r=cbe |
| By: | Thomas Dohmen (IZA Bonn); Armin Falk (IZA Bonn and University of Bonn); David Huffman (IZA Bonn); Uwe Sunde (IZA Bonn and University of Bonn); Jürgen Schupp (DIW Berlin and IZA Bonn); Gert G. Wagner (DIW Berlin, Berlin University of Technology, Cornell University and IZA Bonn) |
| Abstract: | This paper presents new evidence on the distribution of risk attitudes in the population, using a novel set of survey questions and a representative sample of roughly 22,000 individuals living in Germany. Using a question that asks about willingness to take risks on an 11-point scale, we find evidence of heterogeneity across individuals, and show that willingness to take risks is negatively related to age and being female, and positively related to height and parental education. We test the behavioral relevance of this survey measure by conducting a complementary field experiment, based on a representative sample of 450 subjects, and find that the measure is a good predictor of actual risk-taking behavior. We then use a more standard lottery question to measure risk preference, and find similar results regarding heterogeneity and determinants of risk preferences. The lottery question makes it possible to estimate the coefficient of relative risk aversion for each individual in the sample. Using five questions about willingness to take risks in specific domains - car driving, financial matters, sports and leisure, career, and health - the paper also studies the impact of context on risk attitudes, finding a strong but imperfect correlation across contexts. Using data on a collection of risky behaviors from different contexts, including traffic offenses, portfolio choice, smoking, occupational choice, participation in sports, and migration, the paper compares the predictive power of all of the risk measures. Strikingly, the general risk question predicts all behaviors whereas the standard lottery measure does not. The best overall predictor for any specific behavior is typically the corresponding context-specific measure. These findings call into the question the current preoccupation with lottery measures of risk preference, and point to variation in risk perceptions as an understudied determinant of risky behavior. |
| Keywords: | risk preferences, preference stability, experimental validation, field experiment, SOEP, gender differences, age, height, subjective well-being |
| JEL: | D0 D1 D80 D81 C91 C93 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1730&r=cbe |
| By: | Chakravarty Sujoy; Harrison Glenn W; Haruvy Ernan E; Rutstrom Elisabet E |
| Abstract: | Abstract. Decisions with uncertain outcomes are often made by one party in settingswhere another party bears the consequences. Whenever an agent is delegated tomake decisions that affect others, such as in the typical corporate structure, does theagent make decisions that reflect the risk preferences of the principal? We examinethis question in the simplest possible setting using controlled laboratory experiments.We find a remarkable result: when an individual makes a decision for an anonymousstranger, he tends to exhibit less risk aversion. This reduction is relative to his ownpreferences, and also relative to his belief about the other’s preferences. This resulthas significant implications for the design of contracts between principals and agents. |
| Date: | 2005–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2005-08-04&r=cbe |
| By: | Parikh Indira J; Kollan Bharti |
| Abstract: | The paper 'New Economy - The behavioral Issues' focuses on the impact of the Information Technology. The IT virtually has sipped into the very existing structure of the mankind, be it a kitchen or a corporate office. The paper contains a description of some of the main characteristics of New Economy, as well as its terminology. The fundamental role of Information and Communication Technology is highlighted. Today, the organization is at the cross roads as it is going through a transition period by shedding the baggage of traditional mode of working and accepting as well as trying to absorb the fast pace changing environment of the IT world. The paper explores the various plethora of New Economy, which is becoming as an octopus. It talks about the presence of IT in the global world, society as well as its grip on organization. The paper also provides a glimpse of how it affects on the very life of human being. Overall, the paper gives an indication not only of the importance of 'New Economy' but also of how it inter-linkages with our behavioral pattern. |
| Date: | 2005–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2005-08-08&r=cbe |