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on Cognitive and Behavioural Economics |
| By: | Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson |
| Abstract: | Contemporary theories of entrepreneurship generally focus on the decision-making context of the individual. The recognition of opportunities and the decision to commercialize them is the focal concern. While the prevalent view in the entrepreneurship literature is that opportunities are exogenous, the most prevalent theory of innovation in the economics literature suggests that opportunities are endogenous. This paper bridges the gap between the entrepreneurship and economic literature on opportunity by developing a knowledge spillover theory of entrepreneurship. The basic argument is that knowledge created endogenously via R&D results in knowledge spillovers. Such spillovers give rise to opportunities to be identified and exploited by entrepreneurs. Our results show that there is a strong relationship between knowledge spillovers and new venture creation. |
| Keywords: | Opportunity, knowledge, entrepreneurship, management science |
| JEL: | O3 R1 J24 M13 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2005-27&r=cbe |
| By: | W. Ruprecht |
| Abstract: | A characteristic feature of economic development is the ever changing structure of consumption patterns. Reducing the explanation of this phenomenon to changing prices, finally caused by changes in the availability of goods (or characteristics), would neglect a major force driving this change, i.e. the variation of consumer wants and consumer knowledge. The present paper aims at sketching an evolutionary framework for the analysis of consumer behaviour that takes account of these features. For this purpose, Carl Menger's theory of goods is taken as a starting point. Whereas economists after the 'marginalistic revolution' were almost exclusively concerned with the determinants of exchange value and developing price theory, Menger puts as much emphasis on the user value as on the exchange value. Regarding the way of how user value changes a connection between Menger’s 19th century theory of goods and 20th century learning theories is established. The problem of how to get from individual learning processes to aggregate consumption patterns is approached by recollecting the genetic underpinnings of human learning and its contingency on certain physical and social conditions. Taking into account that these conditions are dynamic, the presented approach allows interpreting collective learning processes as historical events and makes them fruitful for the analysis of economic change. |
| Keywords: | Austrian economics, evolutionary economics, consumer theory, learning |
| JEL: | A12 B25 B52 B53 D11 D83 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2005-11&r=cbe |
| By: | Luigi Mittone; Lucia Savadori |
| Abstract: | The bias generated by the subjective perception of scarcity on the consumer's choice is investigated using two separated experiments. The first experiment is aimed to define the prevailing preferences towards a set of commodities, the second experiment checked the effects produced by the perception that a given good is "scarce". The results shown a preference reversal phenomenon when scarcity is introduced in the experimental design. The results are coherent with a previous experiment (Mittone, Savadori, Rumiati, 2005) based on a developmental explanation of the basic scarcity bias and carried on a sample of children as participants. |
| Keywords: | Scarcity, Decision-making, Economic behavior |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:0505&r=cbe |
| By: | Manfred Königstein (University of Erfurt and IZA Bonn); Marie-Claire Villeval (GATE (CNRS, University Lumière Lyon 2, Ecole Normale Supérieure LSH) and IZA Bonn) |
| Abstract: | The labor economics literature has shown that the "efficient bargaining" model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient "right-to-manage" model, in which wage is determined via bargaining and employment determined subsequently and unilaterally by the firm. This paper reports an experiment in which the choice of the bargaining agenda is endogenous within a noncooperative game. We find that participants show a preference for decision authority and choose single-issue bargaining in most cases even though efficiency is lower than in multiissue bargaining. Furthermore, multi-issue bargaining induces unions to offer smaller payoff shares and leads to a higher conflict rate than in a single-issue bargaining. |
| Keywords: | bargaining agenda, efficient contracts, right-to-manage, decision authority, experiments |
| JEL: | C72 C78 C91 J51 J53 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1762&r=cbe |
| By: | Bernd Irlenbusch (London School of Economics and IZA Bonn); Dirk Sliwka (University of Cologne and IZA Bonn) |
| Abstract: | A simple principal agent problem is experimentally investigated in which a principal repeatedly sets a wage and an agent responds by choosing an effort level. The principal's payoff is determined by the agent's effort. In a first setting the principal can only set a fixed wage in each period. In a second setting the principal has the possibility to supplement the fixed wage with a piece rate. Surprisingly, efforts are lower in the case where piece rates can be paid. Furthermore, switching in the same treatment from a setting where piece rates are available to one where only fixed wages can be paid tends to lead to even lower effort levels. Based on our findings we suggest a new explanation for motivation crowding out by arguing that the use of piece rates considerably alters the principals’ and agents’ perception of the situation. |
| Keywords: | incentives, crowding-out, reciprocity, reputation, experiment |
| JEL: | C91 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1758&r=cbe |
| By: | Nicola Dimitri |
| Abstract: | In the economic literature the most widely used type of additive time discounting is Exponential Discounting. Recent work however casts doubts on its ability in explaining how individuals effectively choose. In particular a more general form of discounting that gained importance, in both applied and theoretical work, is Hyperbolic Discounting which captures well phenomena such as procrastination and addiction. An important issue related to the additive form assumed for discounting is that time consistent preferences are the case only with Exponential Discounting. This paper shows that forms of Hyperbolic Discounting, in particular close to the so called Quasi-Hyperbolic model, could also be characterized in terms of dynamically consistent choices when individuals discount the welfare of future selves as well as their payoffs. |
| JEL: | D90 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:456&r=cbe |
| By: | Marcello Basili; Carlo Zappia |
| Abstract: | This paper argues that Ellsberg’s and Shackle’s frameworks for discussing the limits of the (subjective) probabilistic approach to decision theory are not as different as they may appear. To stress the common elements in their theories Keynes’s Treatise on Probability provides an essential starting point. Keynes’s rejection of well-defined probability functions, and of maximisation as a guide to human conduct, is shown to imply a reconsideration of what probability theory can encompass, that is in the same vein of Ellsberg’s and Shackle’s concern in the years of the consolidation of Savage’s new probabilistic mainstream. The parallel between Keynes and the two decision theorists is drawn by means of a particular assessment of Shackle’s theory of decision, namely, it is interpreted in the light of Ellsberg’s doctoral dissertation. In this thesis, published only as late as 2001, Ellsberg developed the details and devised the philosophical background of his criticism of Savage as first put forward in the famed 1961 QJE article. The paper discusses the grounds on which the ambiguity surrounding the decision maker in Ellsberg’s urn experiment can be deemed analogous to the uncertainty faced by Shackle’s entrepreneur taking “unique decisions.” The paper argues also that the insights at the basis of the work of both Shackle and Ellsberg, as well as the criteria for decision under uncertainty they put forward, are relevant to understand the development of modern decision theory. |
| Keywords: | uncertainty, weight of argument, non-additive probability |
| JEL: | B21 D21 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:460&r=cbe |
| By: | Radosveta Ivanova-Stenzel (Humboldt University Berlin); Dorothea Kübler (Technical University Berlin and IZA Bonn) |
| Abstract: | Does gender play a role in the context of team work? Our results based on a real-effort experiment suggest that performance depends on the composition of the team. We find that female and male performance differ most in mixed teams with revenue sharing between the team members, as men put in significantly more effort than women. The data also indicate that women perform best when competing in pure female teams against male teams whereas men perform best when women are present or in a competitive environment. |
| Keywords: | team incentives, gender, tournaments |
| JEL: | C72 C73 C91 D82 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1768&r=cbe |
| By: | K. Vela Velupillai |
| Abstract: | It is shown that Paul Romer’s suggestion to model algorithmically the use and production of ideas in an endogenous growth model is formally feasible. Such a modelling exercise imparts a natural evolutionary flavour to growth models. However, it is also shown that the policy implications are formally indeterminate in a precise and effective sense. |
| Keywords: | endogenous growth,algorithmic ideas,computable growth |
| JEL: | C63 D24 E10 O41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:0516&r=cbe |
| By: | Tesfatsion, Leigh S. |
| Abstract: | Agent-based Computational Economics (ACE) is the computational study of economic processes modeled as dynamic systems of interacting agents. This essay discusses the potential use of ACE modeling tools for the study of macroeconomic systems. Points are illustrated using an ACE model of a two-sector decentralized market economy. |
| Keywords: | Agent-based computational economics; Complex adaptive systems; Macroeconomics; Microfoundations; |
| JEL: | B4 C6 C7 D4 D5 D6 D8 L1 |
| Date: | 2005–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12402&r=cbe |
| By: | Fabrizio Cafaggi |
| Abstract: | This paper makes the two following claims: 1) The legal dimension of loyalty within organizations goes beyond duties. The governance design aimed at ensuring loyalty may strongly affect standards that characterize each layer of the organization. The interaction between standards of duty and the governance dimension of loyalty should, therefore, be more tailored to specific legal forms and their functional correlation with ownership and financing. 2) There is a greater divergence than has so far been acknowledged between the function of loyalty in vertically integrated firms and in networks of small firms. This difference, created by the relationship between the duty and the governance dimensions, should have repercussions on the definitions of legal standards. In particular, it should reflect the different relationships between hierarchy, monitoring, and loyalty and the choice between prohibitory, authorization-based, and compensatory rules. The analysis concentrates on the key variables that may affect the choice between vertical and horizontal monitoring to ensure compliance with loyal behavior in two polar models: hierarchical firms and networks of small firms. It reveals the importance of considering the governance design when defining duties of loyalty and related standards to evaluate party-related transactions in both cases but, at the same time, the necessity of using different interpretive categories |
| Date: | 2005–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0021&r=cbe |