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on Cognitive and Behavioural Economics |
| By: | Paola Manzini; Marco Mariotti; Luigi Mittone |
| Abstract: | We compare three methods for the elicitation of time preferences in an experimental setting: the Becker-DeGroot-Marschak (BDM) procedure (BDM), a second price auction and the multiple price list format. The first two methods have been used rarely to elicit time preferences. Although all methods used are broadly strategically equivalent, and should induce the same 'truthful' revelation, we find that the methods do differ: the money discount rates elicited with the multiple price list tend to be higher than those elicited with the other two methods. Furthermore, there are no significant differences between the rates elicited with the BDM and the auction elicitation procedure. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:0806&r=cbe |
| By: | Benito Arruñada; Veneta Andonova |
| Abstract: | We argue that in the development of the Western legal system, cognitive departures are the main determinant of the optimal degree of judicial rule-making. Judicial discretion, seen here as the main distinguishing feature between both legal systems, is introduced in civil law jurisdictions to protect, rather than to limit, freedom of contract against potential judicial backlash. Such protection was unnecessary in common law countries, where free-market relations enjoyed safer judicial ground mainly due to their relatively gradual evolution, their reliance on practitioners as judges, and the earlier development of institutional checks and balances that supported private property rights. In our framework, differences in costs and benefits associated with self-interest and lack of information require a cognitive failure to be active. |
| Keywords: | Legal systems, judiciary, institutional development, behavior, enforcement |
| JEL: | K40 N40 O10 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1098&r=cbe |
| By: | Urs Fischbacher; Simon Gaechter |
| Keywords: | Public goods experiments, social preferences, conditional cooperation, free riding |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0027&r=cbe |
| By: | Björn Vollan (Philipps-University Marburg/University of Mannheim) |
| Abstract: | This paper reports on a set of trust games with third party punishment (TPP) where participants are either family members or friends or unrelated villagers. The experimental sessions were carried out in southern Namibia (Karas) and the bordering northern South Africa (Namaqualand). The aim was to test several hypotheses derived from kin selection theory as well as to assess the importance of third party punishment for encounters among family members and friends. Building on Hamilton, (1964) it was proposed by e.g. Madsen et al., (2007) that kinship is the baseline behaviour among humans. Thus, I use kinship as basis for comparison of how we treat friends and unrelated people and when there is the possibility to punish free-riding behaviour. It turns out that kinship is the baseline behaviour when no other features are available to humans. However, a personal exchange among friends that has a third party observer performs better than a personal exchange among family members without third party punishment. Contributions to family members can substantially be increased by third party punishment. Thus, human ability to sustain a norm by punishing freeriders at personal costs could also have played an important role in sustaining co-operation among kin. |
| Keywords: | Trust, field experiment, third party punishment, kinship, friendship |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:200809&r=cbe |
| By: | Gerlinde Fellner (Department of Economics, Vienna University of Economics & B.A.); Gabriele K. Lünser (University College London, Department of Economics & ELSE) |
| Abstract: | Multiple group memberships are the rule rather than the exception. Locally operating groups frequently offer the advantage of providing social recognition and higher marginal benefits to the individual, whereas globally operating groups may be more beneficial from a social perspective. Within a voluntary contribution environment we experimentally investigate the tension that arises when subjects belong to a smaller local and a larger global group. When the global public good is more efficient individuals first attempt to cooperate in the global public good. However, this tendency quickly unravels and cooperation in the local public good builds up. |
| JEL: | C92 D71 D82 H41 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp122&r=cbe |
| By: | Werner Güth (Max Planck Institute of Economics, Jena, Strategic Interaction Group) |
| Abstract: | Similar to welfare economics where with(out) interpersonal comparisons one defines unique (set-valued) welfare (Pareto) optima, we present a framework for one-person decision making where with(out) a prior probability distribution individual optimality prescribes usually a unique (set of) choice(s). Satisfiable aspirations in the sense that there exists some choice guaranteeing them define a much larger choice set whose intersection with the set of prior-free optimal choices is never empty. We also review experimental procedures and results which incentivize aspiration formation and reject even prior-free optimality experimentally. |
| Keywords: | Satisficing, bounded rationality, optimality |
| JEL: | B4 D81 D10 |
| Date: | 2008–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-055&r=cbe |
| By: | Jaromir Kovarik (Universidad de Alicante) |
| Abstract: | We experimentally study the e¤ect of time on altruism. By postponing payments in a standard Dictator game, subjects allocate a future payment between themselves and others. Since both the payoffs of the Dictator and the Receiver are delayed until the same time, standard intertemporal utility maximization would predict that waiting time should not affect the Dictator's choice. In this respect, we observe that Dictators' decisions are not affected, as long as the time interval between the decision and payment is not large. On the other hand, for large time gaps, subjectsbecome more self-interested. |
| Keywords: | Altruism, Discounting, Dictator game, Intertemporal choice. |
| JEL: | C91 D64 D90 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2008-10&r=cbe |
| By: | Maurizio Mistri (University of Padua) |
| Abstract: | This paper analyzes the contributions to political economy of Carlo Cattaneo as an ante litteram institutionalist scholar. Carlo Cattaneo has been an original thinker with a polyhedricity of cultural interests. From a point of view of political economy, we can say that Cattaneo was influenced by the concept of sociality. He studied the human action framed in his social and relational dimensions. Cattaneo was aware that the development of society needed to be seen as the result of complex interactive and often conflicting forces. Carlo Cattaneo has been interested in forces that generate change in social and economic structures. One of these forces is the human intelligence -to day we say knowledge- which is at basis of his value theory. Another important force is the action of the enterpreneurs, who are the engines of economic progress. Cattaneo devoted a particulr attention to links between law and economic activities. In the paper the role of laws on economic trajectories is discussed, with a special attention to the effects of Israeli interdictions. |
| Keywords: | technological change, institutions, knowledge |
| JEL: | D83 K2 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0079&r=cbe |