nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2007‒03‒17
ten papers chosen by
Marco Novarese
University of the Piemonte Orientale

  1. Conditional cooperation on three continents By Martin G. Kocher; Todd L. Cherry; Stephan Kroll; Robert J. Netzer; Matthias Sutter
  2. Cooperation in Symmetric and Asymmetric Prisoner's Dilemma Games By Martin Beckenkamp; Heike Hennig-Schmidt; Frank P. Maier-Rigaud
  3. Social capabilities in Alzheimer’s patients By Antoni Bosch-Domènech; Rosemarie Nagel; Juan Vicente Sánchez-Andrés; Jaume Morera
  4. Cooperation without Coordination: Signaling, Types and Tacit Collusion in Laboratory Oligopolies By Douglas D. Davis; Korenok Oleg; Robert Reilly
  5. Cooperating if one?s Goals are Collective-Based: Social Identification Effects in Social Dilemmas as a Function of Goal-Transformation By Cremer, D. de; Knippenberg, D.L. van; Dijk, E. van; Leeuwen, E. van
  6. The Scope of Cooperation: Norms and Incentives By Guido Tabellini
  7. Do repeated game players detect patterns in opponents? Revisiting the Nyarko & Schotter belief elicitation experiment By Spiliopoulos, Leonidas
  8. Humans versus computer algorithms in repeated mixed strategy games By Spiliopoulos, Leonidas
  9. The Neuroscience of Consumer Decision-Making By Pirouz, Dante
  10. Heuristic Twists and Ontological Creeds - Road Map for Evolutionary Economics By U. Witt

  1. By: Martin G. Kocher; Todd L. Cherry; Stephan Kroll; Robert J. Netzer; Matthias Sutter
    Abstract: We show in a public goods experiment on three continents that conditional cooperation is a universal behavioral regularity. Yet, the number of conditional cooperators and the extent of conditional cooperation are much higher in the U.S.A. than anywhere else.
    Keywords: conditional cooperation, public goods, experiment
    JEL: C72 C91 H41
  2. By: Martin Beckenkamp (Max Planck Institute for Research on Collective Goods, Bonn); Heike Hennig-Schmidt (Laboratory for Experimental Economics, University of Bonn); Frank P. Maier-Rigaud (Laboratory for Experimental Economics, University of Bonn, Max Planck Institute for Research on Collective Goods)
    Abstract: We experimentally study the effect of asymmetry on cooperation in a 40 period prisoner's dilemma game in fixed partner design. We distinguish between a high and low payoff symmetric prisoner's dilemma and an asymmetric game combined out of both symmetric ones. Asymmetry significantly decreases cooperation, as low-type players are more likely to defect after mutual cooperation while high-type players initiate cooperation more often than the former. Asymmetry also has a significant negative effect on the stability of cooperation rendering long sequences of mutual cooperation extremely rare.
    Keywords: Symmetry, Asymmetry, Prisoner's Dilemma, Experiments
    JEL: C81 D70 C91
    Date: 2007–03
  3. By: Antoni Bosch-Domènech; Rosemarie Nagel; Juan Vicente Sánchez-Andrés; Jaume Morera
    Abstract: Patients with stage-I (very mild and mild) Alzheimer’s disease were asked to participate in a Dictator Game, a type of game in which a subject has to decide how to allocate a certain amount of money between himself and another person. The game enables the experimenter to examine the influence of social norms and social preferences on the decision-making process. When the results of treatments involving Alzheimer’s disease patients were compared with those of identical treatments involving patients with mild cognitive impairment or healthy control subjects, with similar ages and social backgrounds, no statistically significant difference was found. This finding suggests that stage-I Alzheimer’s disease patients may be as capable of making decisions involving social norms and preferences as other individuals of their age. Whatever brain structures are affected by the disease, they do not appear to influence, at this early stage, the neural basis for cooperation-enhancing social interactions.
    Keywords: Alzheimer patients, social behavior, dictator games
  4. By: Douglas D. Davis (Department of Economics, VCU School of Business); Korenok Oleg (Department of Economics, VCU School of Business); Robert Reilly (Department of Economics, VCU School of Business)
    Abstract: This paper reports an experiment conducted to examine tacit collusion in posted offer markets. In addition to a baseline treatment, we study a ‘forecasting’ treatment, which allows an improved identification of intended signals, and a ‘types’ treatment, which examines pricing outcomes among cohorts of homogeneously ‘cooperative’ or ‘competitive’ subjects. Results indicate that while signals tend to affect subsequent pricing decisions, signaling does not affect long term transaction prices. On the other hand ‘types’ are stable across sessions and powerfully affect results. Markets comprised of ‘cooperative’ types tend to generate persistently higher transaction prices than do markets comprised of ‘competitive’ types.
    Keywords: Experiments, Tacit Collusion, Price Signaling, Types
    JEL: C9 L11 L13
    Date: 2007–03
  5. By: Cremer, D. de; Knippenberg, D.L. van; Dijk, E. van; Leeuwen, E. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Prior studies of the effect of group identification on cooperation in social dilemmas have advanced two competing accounts of this effect, the goal-transformation hypothesis, which holds that identification implies a sense of collective self, which makes personal and collective goals interchangeable, and the goal-amplification hypothesis, which states that identification induces positive expectations about others? cooperative behavior. These prior studies have, however, neglected to assess the process measures necessary to pit the one account against the other. Following prior research, the present study showed that the effect of identification was moderated by participants? social value orientation (i.e., individual differences in evaluating the importance of outcomes for self and other) in such a way that identification influenced proselfs? cooperation more than prosocials? cooperation. This suggests that the consequence of group identification is that collective goals become personal goals. Extending earlier recent research, mediational analyses showed that the effect of our identification manipulation was mediated by participants? sense of collective self and not by their expectations. Taken together, these results provide strong support in favor of the goal-transformation hypothesis.
    Keywords: Goal-transformation hypothesis;Goal-amplification hypothesis;
    Date: 2007–02–05
  6. By: Guido Tabellini
    Date: 2007–03–14
  7. By: Spiliopoulos, Leonidas
    Abstract: The purpose of this paper is to reexamine the seminal belief elicitation experiment by Nyarko & Schotter (2002) under the prism of pattern recog- nition. Instead of modeling elicited beliefs by a simple weighted fictitious play model this paper proposes a generalized variant of fictitious play that is able to detect two period patterns in opponents’ behavior. Evidence is presented that these generalized pattern detection models provide a better fit than standard weighted fictitious play player. Heterogeneity amongst individuals was found as to the complexity of patterns that were detected and utilized in belief formation - a large percentage of players demon- strated the ability to detect two-period patterns in opponents’ play. For players using a variant of the weighted ficititious play belief formation rule without pattern detection it was found that the memory decay parameter was not significantly di
    Keywords: learning; game theory; behavioral game theory; fictitious play; repeated games; mixed strategy; non-cooperative games; pattern recognition; pattern detection; experimental economics; beliefs; belief elicitation; strategic
    JEL: C63 C72 C73
    Date: 2007–03–11
  8. By: Spiliopoulos, Leonidas
    Abstract: This paper addresses the question of strategic change in humans’ be- havior conditional on opponents’ play. In order to implement this e
    Keywords: learning; artifical intelligence; mixed strategy; game theory; repeated games; behavioral game theory; ewa; reinforcement learning; fictitious play; simulations; experimental economics; computational economics; non-cooperative games
    JEL: C91 C72 C73
    Date: 2007–03–11
  9. By: Pirouz, Dante
    Abstract: While there is an extensive history of neuroscience, only recently has the theory and the methods of this discipline been applied to answer questions about decision making, choice, preference, risk and happiness. This new area of research, coined neuroeconomics, seeks to reveal more about the neural functioning and associated implications for economic and consumer behavior. In this paper are some of the key developments in neuroeconomics research as they relate to consumer decision-making, culminating with a discussion of possible future research areas in marketing where this type of research could be applied with important managerial, policy and academic implications.
    Keywords: Consumer behavior; neuroscience; neuroeconomics; decision-making; trust
    JEL: M31
    Date: 2004
  10. By: U. Witt
    Abstract: What is special about the evolutionary approach? This question is given quite different, and partly incommensurable, answers in evolutionary economics. The present paper shows how the different answers correspond with, on the one hand, the particular heuristic twists by which the corresponding authors arrive at their hypotheses (e.g. by borrowing analogies from evolutionary biology). On the other hand, the answers hinge on different ontological assumption (i.e. on whether or not evolution in nature and in the economy are viewed as belonging to the same sphere of reality and, hence, as mutually dependent processes). By distinguishing these two dimensions a road map for evolutionary economics is drawn up that helps to better understand where, and why, the competing interpretations differ. In order to assess their achievements and their potential for future research, some results of an opinion poll among evolutionary economists are presented and discussed.
    Keywords: Length 28 pages
    Date: 2007–03

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