nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2008‒01‒19
nine papers chosen by
Marco Novarese
University of the Piemonte Orientale

  1. Emergent Cultural Phenomena and their Cognitive Foundations By C. Cordes
  2. Planning ahead: eliciting intentions and beliefs in a public goods game By Luis G. Gonzalez; M. Vittoria Levati
  3. Inter-Group Conflict and Intra-Group Punishment in an Experimental Contest Game By Klaus Abbink; Jordi Brandts; Benedikt Herrmann; Henrik Orzen
  4. The Effect of Expertise on the Relation between Implicit and Explicit Attitude Measures:An formation Availability/Accessibility Perspective By Czellar, Sandor; Luna, David
  5. Decision making and brand choice by older consumers By Laurent, Gilles
  6. Behavioural Decisions and Welfare By Dalton, Patricio; Ghosal, Sayantan
  7. The Concept of Institution in Economics and Sociology, a Methodological Exposition By Piet Keizer
  8. Humans versus computer algorithms in repeated mixed strategy games By Spiliopoulos, Leonidas
  9. The entrepreneurial decision-making : a complex choice where taste, risk, endowments, necessity, opportunity, personals traits and behaviour matter By Jean Bonnet (CREM-CNRS-University of Caen); Thomas Brau (CREM-CNRS-University of Caen); Pascal Cussy (CREM-CNRS-University of Caen)Stéphane Auray (GREMARS - University of Lille 3)

  1. By: C. Cordes
    Abstract: To explain emergent cultural phenomena, this paper argues, it is inevitable to understand the evolution of complex human cognitive adaptations and their links to the population-level dynamics of cultural variation. On the one hand, the process of cultural transmission is influenced and constrained by humans’ evolved psychology; people tend to acquire some cultural variants rather than others. On the other hand, the cultural environment provides cultural variants that are transmitted to or adopted by individuals via processes of social learning. To gain insights into this recursive relationship between individual cognitive dispositions at the micro level and cultural phenomena at the macro level, the theory of gene-culture coevolution is applied. Moreover, a model of cultural evolution demonstrates the dissemination of novelty within a population via biased social learning processes. As a result, some unique facets of human behavior and cumulative cultural evolution are identified.
    Keywords: Cultural Evolution, Social Learning, Diffusion Dynamics, Coevolution, Evolutionary Economics Length 22 pages
    Date: 2007–12
  2. By: Luis G. Gonzalez (Max Planck Institute of Economics, Jena, Germany); M. Vittoria Levati (Max Planck Institute of Economics, Jena, Germany)
    Abstract: In a two-person ï¬nitely repeated public goods experiment, we use intentions data to interpret individual behavior. Based on a random-utility model speciï¬cation, we develop a relationship between a player's beliefs about others' behavior and his contributions' plans, and use this relationship to identify the player's most likely preference "type". Our estimation analysis indicates that players are heterogeneous in their preferences also at the intentional level. Moreover, our data show that deviations from intended actions are positively related to changes in beliefs, thereby suggesting that people are able to plan.
    Keywords: Public goods games, Experiments, Latent-class logit, Conditional cooperation
    JEL: C70 C72 C92 H41
    Date: 2007–12–20
  3. By: Klaus Abbink; Jordi Brandts; Benedikt Herrmann; Henrik Orzen
    Abstract: We study how conflict in a contest game is influenced by rival parties being groups and by group members being able to punish each other. Our main motivation stems from the analysis of socio-political conflict. The relevant theoretical prediction in our setting is that conflict expenditures are independent of group size and independent of whether punishment is available or not. We find, first, that our results contradict the independence of group-size prediction: conflict expenditures of groups are substantially larger than those of individuals, and both are substantially above equilibrium. Towards the end of the experiment material losses in groups are 257% of the predicted level. There is, however, substantial heterogeneity in the investment behaviour of individual group members. Second, allowing group members to punish each other after individual contributions to the contest effort are revealed leads to even larger conflict expenditures. Now material losses are 869% of the equilibrium level and there is much less heterogeneity in individual group members? investments. These results contrast strongly with those from public goods experiments where punishment enhances efficiency and leads to higher material payoffs.
    Keywords: Laboratory experiments, Rent-seeking, Conflict, Group competitiveness
    JEL: C90 D72 D74 F51 H41
    Date: 2008–01–15
  4. By: Czellar, Sandor; Luna, David
    Abstract: In this paper, three experiments investigate the role of expertise as a moderator of the relationship between implicit and explicit measures of attitudes
    Keywords: object knowledge and expertise; attitude measurement; implicit measures of attitudes; Implicit Association Test
    JEL: M31
    Date: 2007–11–10
  5. By: Laurent, Gilles
    Abstract: Older adults constitute a rapidly growing demographic segment, but stereotypes persist about their consumer behavior. Thus, a more considered understanding of age-associated changes in decision making and choices is required. The authors's underlying theoretical model suggests that age-associated changes in cognition, affect, and goals interact to differentiate older consumers’ decision-making processes, brand choices, and habits from those of younger adults. They first review literature on stereotypes about the elderly and then turn to an analysis of age differences in the inputs (cognition, affect, and goals) and outputs (decisions, brand choices, and habits) of the choice process.
    Keywords: older consumers; decision making; choice
    JEL: D11 M31
    Date: 2007–10–01
  6. By: Dalton, Patricio (Department of Economics, University of Warwick); Ghosal, Sayantan (Department of Economics, University of Warwick)
    Abstract: We study decision problems where (a) preference parameters are defined to include psychological/moral considerations and (b) there is a feedback effect from chosen actions to preference parameters. In a standard decision problem the chosen action is required to be optimal when the feedback effect from actions to preference parameters is fully taken into account. In a behavioural decision problem the chosen action is optimal taking preference parameters as given although chosen actions and preference parameters are required to be mutually consistent. Our framework unifes seemingly disconnected papers in the literature. We characterize the conditions under which behavioural and standard decisions problems are indistinguishable : in smooth settings, the two decision problems are generically distinguishable. We show that in general, revealed preferences cannot be used for making welfare judgements and we characterize the conditions under which they can inform welfare analysis. We provide an existence result for the case of incomplete preferences. We suggest novel implications for policy and welfare analysis.
    Keywords: Decisions ; psychology ; indistinguishability ; revealed preferences ; welfare ; existence ; aspirations
    JEL: D01 D62 C61 I30
    Date: 2008
  7. By: Piet Keizer
    Abstract: In social science the concept of ‘institution’ plays a very important role. There are, however, significant differences in the way the concept is interpreted by the different schools of thought. Within economics is a divide between Original Institutional Economics and New Institutional Economics. Within sociology the Classical Sociology approaches the concept differently compared with the way Micro-Sociology is interpreting it. Serious methodological differences make a fruitful confrontation between the different approaches almost impossible. This paper shows that a methodological synthesis is possible. The method of isolated abstraction, as applied by orthodox economics has the potential to offer a synthesis by adding social and psychic logic to the analysis of economic logic. Moreover, the application of methodological institutionalism can overcome the divide between the typical micro and the typical macro methodology.
    Keywords: economic institutions, social institutions, logical approach, historical approach, methodological institutionalism, methodological synthesis
    JEL: B10 B20 B40 B50
    Date: 2007–11
  8. By: Spiliopoulos, Leonidas
    Abstract: This paper is concerned with the modeling of strategic change in humans’ behavior when facing different types of opponents. In order to implement this efficiently a mixed experimental setup was used where subjects played a game with a unique mixed strategy Nash equilibrium for 100 rounds against 3 preprogrammed computer algorithms (CAs) designed to exploit different modes of play. In this context, substituting human opponents with computer algorithms designed to exploit commonly occurring human behavior increases the experimental control of the researcher allowing for more powerful statistical tests. The results indicate that subjects significantly change their behavior conditional on the type of CA opponent, exhibiting within-sub jects heterogeneity, but that there exists comparatively little between-subjects heterogeneity since players seemed to follow very similar strategies against each algorithm. Simple heuristics, such as win-stay/lose-shift, were found to model subjects and make out of sample predictions as well as, if not better than, more complicated models such as individually estimated EWA learning models which suffered from overfitting. Subjects modified their strategies in the direction of better response as calculated from CA simulations of various learning models, albeit not perfectly. Examples include the observation that subjects randomized more effectively as the pattern recognition depth of the CAs increased, and the drastic reduction in the use of the win-stay/lose-shift heuristic when facing a CA designed to exploit this behavior.
    Keywords: Behavioral game theory; Learning; Experimental economics; Simulations; Experience weighted attraction learning; Simulations; Repeated games; Mixed Strategy Nash equilibria; Economics and psychology
    JEL: C9 C63 C70 C73 C72 C91
    Date: 2008–01–09
  9. By: Jean Bonnet (CREM-CNRS-University of Caen); Thomas Brau (CREM-CNRS-University of Caen); Pascal Cussy (CREM-CNRS-University of Caen)Stéphane Auray (GREMARS - University of Lille 3)
    Date: 2008

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