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on Cognitive and Behavioural Economics |
| By: | Andreas Glöckner (Max Planck Institute for Research on Collective Goods, Bonn); Tilmann Betsch (University of Erfurt); Nicola Schindler (University of Erfurt) |
| Abstract: | It has been shown that in decision making evaluations of evidence and attributes are modified. In three studies it was investigated if this finding of coherence shifts generalizes to real-world probabilistic inference decisions which are made from given probabilistic cues. Using a within-subjects design, cue validities were measured before, after (Exp. 1) and during deci-sion making (Exp. 2 & 3). It was found that even in environments with considerable real-world cue knowledge (weather forecasts) and in decisions for which the application of fast-and-frugal heuristics has been claimed (city-size decisions) the validity of cues was systematically modified. These shifts indicate that subjective cue validities are not fixed parameters, but that they are changed to form coherent representations of the decision situation. The findings conflict with the basic assumption of complex decision models and the fast-and-frugal heuristics approach, which claim that probabilistic inferences are made in a unidirectional manner. They corroborate the parallel constraint satisfaction approach to decision making. |
| Keywords: | Decision Making, Connectionism, Parallel Constraint Satisfaction, Fast-and-Frugal Heuristics, Bounded Rationality |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2008_14&r=cbe |
| By: | Daniela Raeva; Luigi Mittone; Jens Schwarzbach |
| Abstract: | Theoretical and empirical body of research have exposed the powerful role of experiencing regret in guiding choice behavior. In this paper, we examined the impact of experienced regret (and rejoicing) induced by a feedback provided on a risk decision prior to a two-period intertemporal choice (i.e. decision-unrelated experienced regret). To our knowledge, this is the first attempt to bring together experienced regret and choice over time.We used the two-component discounted utility model approach as a framework. We applied previous research findings on the effect of experienced regret on utility, and we performed an experiment to test whether experienced decision-unrelated regret and rejoicing have an impact on the discount factor. We found that both experienced decisionunrelated regret and rejoicing have an impact on the way people discount future: when regret is experienced the discount factor decreases, whereas when rejoicing is experienced the discount factor increases. |
| Keywords: | intertemporal choice, regret theory |
| JEL: | A12 C91 D91 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:0804&r=cbe |
| By: | Benno Torgler; Markus Schaffner; Sascha L. Schmidt; Bruno S. Frey |
| Abstract: | Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times. |
| Keywords: | Relative income; positional concerns; envy; social comparison; relative derivation; performance |
| JEL: | D00 D60 L83 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-12&r=cbe |
| By: | Victor Hiller (Centre d'Economie de la Sorbonne et Paris School of Economics) |
| Abstract: | This article investigates the co-evolution of labor relationships and workers preferences. According to recent experimental economics findinggs on social preferences, the workforce is assumed to be heterogeneous. It is composed by both cooperative and non-cooperative workers. In addition, firms differ by the type of contract they offer (explicit or implicit). Finally, both the distribution of preferences and the degree of contractual completeness are endogeneized. Preferences evolve through a process of cultural transmission and the proportion of implicit contracts is driven by an evolutionary process. The complementarity between the transmission of cooperation and the implementation of implicit contracts leads to multiple equilibria which allow for path-dependence. This property is illustrated by the evolutions of American and Japanese labor contracts during the Twentieth century. |
| Keywords: | Explicit contract, implicit contract, cultural transmission, preferences for reciprocity, path dependence. |
| JEL: | D64 D86 Z10 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v08028&r=cbe |
| By: | Claro, Danny P.; Claro, Priscila |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_97&r=cbe |
| By: | Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Robert-Vincent Joule (LPS - Laboratoire de Psychologie Sociale - Ecole des Hautes Etudes en Sciences Sociales); Jason Shogren (Departement Economy and Finance, University of Wyoming - University of Wyoming) |
| Abstract: | Do French Students really bid sincerely in real and hypothetical incentive compatible auctions? Recent evidence suggests they do, which goes counter to most observed bidding behavior in the<br />United States, and supports the idea that cultural differences may explain bidding behavior more than economic circumstances. Herein we run a robustness check by exploring bidding behavior in classic Vickrey auction for real and hypothetical values in the two largest cities (Paris and Lyon). Two striking results emerge–(1) French students bid sincerely; and (2) no hypothetical bias exists. |
| Keywords: | Auctions; Demand revelation; Experimental valuation; Hypothetical bias |
| Date: | 2008–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00277282_v1&r=cbe |
| By: | Giorgio Fagiolo (Sant'Anna School of Advanced Studies, Pisa, Italy); Andrea Roventini (Università di Verona; Dipartimento di Scienze economiche (Università di Verona)) |
| Abstract: | In the last years, a number of contributions has argued that monetary - and, more generally, economic - policy is finally becoming more of a science. According to these authors, policy rules implemented by central banks are nowadays well supported by a theoretical framework (the New Neoclassical Synthesis) upon which a general consensus has emerged in the economic profession. In other words, scientific discussion on economic policy seems to be ultimately confined to either fine-tuning this ''consensus'' model, or assessing the extent to which ''elements of art'' still exist in the conduct of monetary policy. In this paper, we present a substantially opposite view, rooted in a critical discussion of the theoretical, empirical and political-economy pitfalls of the neoclassical approach to policy analysis. Our discussion indicates that we are still far from building a science of economic policy. We suggest that a more fruitful research avenue to pursue is to explore alternative theoretical paradigms, which can escape the strong theoretical requirements of neoclassical models (e.g., equilibrium, rationality, etc.). We briey introduce one of the most successful alternative research projects - known in the literature as agent-based computational economics (ACE) - and we present the way it has been applied to policy analysis issues. We conclude by discussing the methodological status of ACE, as well as the (many) problems it raises. |
| Keywords: | Economic Policy, Monetary Policy, New Neoclassical Synthesis, New Keynesian Models, DSGE Models, Agent-Based Computational Economics, Agent-Based Models, Post-Walrasian Macroeconomics, Evolutionary Economics. |
| JEL: | B41 B50 E32 E52 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:47&r=cbe |
| By: | Krüger, Niclas A (Department of Business, Economics, Statistics and Informatics); Svensson, Mikael (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | This paper studies the relationship between the business cycle and alcohol sales in Sweden using a data set for the years 1861-2000. Using wavelet based band-pass filtering it is found that there is a pro-cyclical relationship, i.e. alcohol sales increases in short-term economic upturns. Using moving window techniques we see that the pro-cyclical relationship holds over the entire time period. We also find that alcohol sales are a long-memory process with non-stationary behavior, i.e. a shock in alcohol sales has persistent effects |
| Keywords: | Businesscycles:Alcohol:Sweden |
| JEL: | E32 I12 |
| Date: | 2008–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2008_002&r=cbe |