nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2006‒07‒15
seven papers chosen by
Marco Novarese
Universita del Piemonte Orientale

  1. The Scarcity Bias: Some Theoretical Notes By Luigi Mittone; Ivan Soraperra
  2. A New Type of Preference Reversal By Han Bleichrodt; Jose Luis Pinto-Prades
  3. Learning to Forecast the Exchange Rate: Two Competing Approaches. By Paul De Grauwe
  4. Behavioral Consistent Market Equilibria under Procedural Rationality By Mikhail Anufriev; Giulio Bottazzi
  5. Economic, Neurobiological and Behavioral Perspectives on Building America's Future Workforce By Eric I. Knudsen; James J. Heckman; Judy L. Cameron; Jack P. Shonkoff
  6. Linking job motivating potential to frontline employee attitudes and performance: testing the mediating role of psychological empowerment By Dewettinck, K.; Buyens, D.
  7. Is Fertility Related to Religiosity? Evidence from Spain By Pablo Brañas-Garza; Shoshana Neuman

  1. By: Luigi Mittone; Ivan Soraperra
    Abstract: The bias generated by the subjective perception of scarcity on the consumer's choice is discussed from a theoretical perspective. The core idea here discussed is that scarcity is an Lancasterian attribute of the goods which is not endogenously built in the goods, like many physical attributes, color, weight, etc. but which is dependent from the context where the good is consumed. The exogenously nature of scarcity requires a specific theoretical treatment which is here attempted
    Date: 2006
  2. By: Han Bleichrodt (Erasmus University, Rotterdam); Jose Luis Pinto-Prades (Department of Economics, Universidad Pablo de Olavide)
    Abstract: The classic preference reversal phenomenon arises in a comparison between a choice and a matching task. We present a new type of preference reversal which is entirely choice-based. Because choice is the basic primitive of economics, the preference reversal we observe is more troubling for economics. The preference reversal was observed in two experiments, both involving large representative samples from the Spanish population. The data were collected by professional interviewers in face-to-face interviews. Possible explanations for the preference reversal are the anticipation of disappointment and elation in risky choice and the impact of ethical considerations.
    Keywords: Preference reversal, Choice behavior, Stochastic dominance, Disappointment and elation, Health
    JEL: I10
    Date: 2006–07
  3. By: Paul De Grauwe (KULeuven)
    Keywords: Exchange Rate Economics, Adaptive Learning, Behavioral Finance
    JEL: F31 F41
    Date: 2006–07–04
  4. By: Mikhail Anufriev (CeNDEF University of Amsterdam); Giulio Bottazzi (LEM Sant'Anna School of Advanced Studies, Pisa)
    Keywords: Asset Pricing Model, Procedural Rationality,, Heterogeneous Agents, CRRA Framework, Equilibrium Market Line,, Stability Analysis, Multiple Equilibria.
    JEL: G12 D83
    Date: 2006–07–04
  5. By: Eric I. Knudsen (Stanford University School of Medicine); James J. Heckman (University of Chicago and IZA Bonn); Judy L. Cameron (University of Pittsburgh); Jack P. Shonkoff (Brandeis University)
    Abstract: A growing proportion of the U.S. workforce will have been raised in disadvantaged environments that are associated with relatively high proportions of individuals with diminished cognitive and social skills. A cross-disciplinary examination of research in economics, developmental psychology, and neurobiology reveals a striking convergence on a set of common principles that account for the potent effects of early environment on the capacity for human skill development. Central to these principles are the findings that early experiences have a uniquely powerful influence on the development of cognitive and social skills, as well as on brain architecture and neurochemistry; that both skill development and brain maturation are hierarchical processes in which higher level functions depend on, and build on, lower level functions; and that the capacity for change in the foundations of human skill development and neural circuitry is highest earlier in life and decreases over time. These findings lead to the conclusion that the most efficient strategy for strengthening the future workforce, both economically and neurobiologically, and for improving its quality of life is to invest in the environments of disadvantaged children during the early childhood years.
    Keywords: child development, early experience, economic productivity, critical and sensitive periods, brain development
    JEL: H43 I28 J13
    Date: 2006–07
  6. By: Dewettinck, K.; Buyens, D.
    Abstract: In this study, we relate job motivating potential to frontline employee job satisfaction, affective commitment and performance levels and test the mediating role of psychological empowerment. Based on a sample of 1129 employee – supervisor dyads, we found that employee psychological empowerment fully mediates the relationship between job motivating potential and the outcome variables. Our findings confirm the importance of job design approaches to empowering employees. Next to proposing potential avenues for further research, we discuss some suggestions on how to put job redesign strategies into practice.
    Keywords: empowerment, job motivating potential, employee performance, mediation
    Date: 2006–07–07
  7. By: Pablo Brañas-Garza (Universidad de Granada); Shoshana Neuman (Bar-Ilan University, CEPR and IZA Bonn)
    Abstract: The paper explores the relationship between religiosity and fertility among Catholics in Spain, thereby answering the question whether the two parallel trends of dramatic drops in fertility and in religiosity are inter-related. It looks at current religiosity as well as exposure to religiosity during childhood. A unique, rich, data set is employed. It includes various dimensions of religiosity: respondent’s religious affiliation; if he is Catholic- his current mass attendance (six levels) and his current prayer habits (eleven levels); spouse’s religious affiliation; parental (maternal and paternal) and respondent's mass attendance when the respondent was a child (nine levels); Catholic education during childhood (yes/no). The multifacet data on religiosity (rather than a single dichotomous variable) facilitates a sophisticated analysis with rigorous conclusions. The sample is restricted to married Catholic (female and male) respondents who were raised by Catholic parents, and are married to a Catholic spouse, in order to have a homogenous sample and to focus on the effect of the level (intensity) of religiosity (rather than religious affiliation) on fertility. Fertility is related to the various dimensions of religiosity- first using cross-tabulation and then using OLS regression. We find that fertility is not related to current intensity of religiosity. Exposure to religious activities during childhood has a significant effect on fertility of women (but not men): interestingly a father who was actively attending mass services has a positive effect on his daughter’s future fertility (increasing the number of kids by about 0.8) while the mother’s active mass participation has a reverse negative effect (leading to a decrease of one kid). Own participation in mass services during childhood has a positive effect on fertility- leading to an increase of 0.6 kids if the girl attended mass services intensively This study indicates the significance of childhood experience in shaping the 'taste for children'. It also suggests that there is no direct link between the fast secularization in Spain and the decline in birth rates.
    Keywords: fertility, religion, Catholic, church attendance, prayer, parental religiosity, taste for children, Spain
    JEL: Z12 J12 J13 D13
    Date: 2006–07

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