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on Cognitive and Behavioural Economics |
| By: | Benno Torgler; Markus Schaffner; Bruno S. Frey; Sascha L. Schmidt |
| Abstract: | The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis testing the model of inequity aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequity aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives. |
| Keywords: | Inequity aversion; relative income; positional concerns; envy; social comparison; performance; interdependent preferences |
| JEL: | D00 D60 L83 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-11&r=cbe |
| By: | Park, Andreas (University of Toronto); Sgroi, Daniel (University of Warwick) |
| Abstract: | While herding has long been suspected to play a role in financial market booms and busts, theoretical analyses have struggled to identify conclusive causes for the effect. Recent theoretical work shows that informational herding is possible in a market with efficient asset prices if information is bi-polar, and contrarianism is possible with single-polar information. We present an experimental test for the validity of this theory, contrasting with all existing experiments where rational herding was theoretically impossible and subsequently not observed. Overall we observe that subjects generally behave according to theoretical predictions, yet the fit is lower for types who have the theoretical potential to herd. While herding is often not observed when predicted by theory, herding (sometimes irrational) does occur. Irrational contrarianism in particular leads observed prices to substantially differ from the efficient benchmark. Alternative models of behavior, such as risk aversion, loss aversion or error correction, either perform quite poorly or add little to our understanding. |
| Keywords: | Herding ; Informational Efficiency ; Experiments |
| JEL: | G14 G24 G28 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:854&r=cbe |
| By: | Julian Christ (Universität Hohenheim) |
| Abstract: | The systems of innovation (SI) approach has been established and extended during the last two decades. Although elementary goals and progress have been reached through seminal contributions by Freeman (1987), Lundvall (1992) or Nelson (1993), in designing a generic approach, displaying the dynamics of collaboration, networking and interactive learning, criticism has been raised that systems of innovation are still “undertheorized”. The objective of this paper is to describe briefly the historical evolution of the SI concept within the academic literature and the policy sphere. This review primarily attempts to highlight some of the most important contributions that strongly assisted to the framework, by providing more consistency and a more theory- oriented perspective. Consequently, the system concept itself seems to be a kind of “boundary object”. Within both, the academic and the policy field, different levels of conceptualization have been challenged and advanced in the course of time. These conceptualizations basically differ in their scale of analysis, taking geographical perspectives, technologies or sectoral classifications as foci for theorizing and empirical research. Despite these substantial levels of research, the SI framework is increasingly challenged, analyzed and extended in the context of globalization. As a result, regarding the openness and flexibility of the SI approach, this paper particularly tries to focus on the difficulties of contemporary research in defining functional and spatial boundaries in theory and empirical research. Agglomeration tendencies, knowledge externalities and localized learning are primarily based upon the concepts of knowledge diffusion, tacit knowledge and proximity. In spite of that, ICT and global business linkages foster inter-regional and trans-border knowledge flows. Thus, knowledge diffusion is also related to international and global “pipelines” that could support, strengthen and reinforce localized learning. |
| Keywords: | National, Sectoral, Technological and Regional Systems of Innovation, Geography of Innovation, Knowledge Externalities, Localized Knowledge Spillovers, Knowledge Diffusion, Tacit Knowledge |
| JEL: | O1 O3 R0 R1 D8 B5 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:old:wpaper:y:2007:i:25:p:1-46&r=cbe |
| By: | Paolo Pellizzari |
| Abstract: | In an agent-based exchange economy, we measure the loss of wealth for rational agents due to the presence of varying proportions of subrational (boundedly rational) traders that do not know all the needed parameters. We consider two departures from rationality: M-traders use private, stochastic and unbiased signals to build an estimate of the value of the risky asset; chartists only use the last observed price. The exchange takes place using a realistic continuous double auction. We show by numerical simulations that M-traders? subrational behavior does not reduce the wealth of the rational agents. On the contrary, a sizable fraction of chartists can lead to mispricing of the risky asset and to a reduction of the wealth share of the rational traders. Moreover, as chartists perceive a higher wealth than the others, due to wrong estimates of the fundamental value, their fraction in the market may not dissolve in the long run. |
| Keywords: | risk sharing; boundedly rationality; cost of subrational trading; agent-based markets |
| Date: | 2008–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:rpaper:217&r=cbe |
| By: | Diego Zavaleta Reyles |
| Abstract: | Shame and humiliation are central to the understanding of poverty yet internationally comparable data on this dimension are missing. Based on existing indicators from related fields, this article suggests eight indicators to measure specific aspects of shame and humiliation that could start an in-depth debate around this topic. The indicators are the following: whether respondents would feel shame if they were poor; levels of shame proneness; perceptions of respectful treatment, unfair treatment and prejudiced treatment; whether respondents perceive that their ethnic, racial or cultural background affects their chances of getting jobs, services and education; whether respondents perceive that economic conditions affect their chances of getting jobs, services and education; and levels of accumulated humiliation. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:qeh:ophiwp:ophiwp004&r=cbe |