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on Cognitive and Behavioural Economics |
| By: | Tom Coupé; Victor Ginsburgh; Abdul Noury |
| Abstract: | Leading papers in a journal’s issue attract, on average, more citations than those that follow. It is, however, difficult to assess whether they are of better quality (as is often suggested), or whether this happens just because they appear first in an issue. We make use of a natural experiment that was carried out by a journal in which papers are randomly ordered in some issues, while this order is not random in others. We show that leading papers in randomly ordered issues also attract more citations, which casts some doubt on whether, in general, leading papers are of higher quality. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_014&r=cbe |
| By: | Joan Costa i Font; Mireia Jofre-Bonet |
| Abstract: | Excessive preoccupation for self-image has been pointed out as an essential factor explaining food disorders. This paper draws upon Akerlof and Kranton (2000) to model how ’self-image’ and others’ appearances influence health related behaviours. We estimate the influence of ’peers’ image’ on the likelihood of anorexia and self-image using data from a cross sectional European representative survey for 2004. We follow a two-step empirical strategy. First, we estimate the probability that a woman is extremely thin and, at the same time, she sees herself as too fat. Our findings reveal that peers’ average Body Mass Index decreases the likelihood of being anorexic. Second, we take apart the two processes and estimate a recursive probit model of being very thin and perceiving one self as being too fat. Although peers’ Body Mass Index decreases the likelihood of being very thin but increases that of seeing one self as too fat, the unobservables explaining both processes are significantly correlated. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-30&r=cbe |
| By: | Jason Aimone (Interdsciplinary Center for Economic Science, George Mason University); Daniel Houser |
| Abstract: | Trust promotes economic growth and development, and previous research has shed much light on reciprocity and other motives for trusting decisions. Why people choose not to trust has received substantially less attention, perhaps in part because not trusting is predicted by standard economic theory: selfish people consider the (perhaps subjective) stochastic nature of the environment and make the earnings-maximizing decision. This explanation is incomplete: we provide evidence from a laboratory analysis with an investment game that people¡¯s decisions vary according to how an environment¡¯s uncertainty will be resolved. In particular, if resolving uncertainty requires an investor to learn whether her trustee chose to betray then she is much less likely to trust. Our data thus provide evidence that ¡°betrayal aversion¡± detrimentally affects propensities for trusting decisions. Our results also emphasize the importance of impersonal, institution-mediated exchange in promoting investment and economic efficiency. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1007&r=cbe |
| By: | Andreas Park; Daniel Sgroi |
| Abstract: | We undertook the first market trading experiments that allowed heterogeneously informed subjects to trade in endogenous time, collecting over 2000 observed trades. Subjects’ decisions were generally in line with the predictions of exogenous-time financial herding theory when that theory is adjusted to allow rational informational herding and contrarianism. While herding and contrarianism did not arise as frequently as predicted by theory, such behavior occurs in a significantly more pronounced manner than in comparable studies with exogenous timing. Types with extreme information traded earliest. Of those with more moderate information, those with signals conducive to contrarianism traded earlier than those with information conducive to herding. |
| Keywords: | Herding, Contrarianism, Endogenous-time, Informational Efficiency, Experiments |
| JEL: | C91 D82 G14 |
| Date: | 2008–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-341&r=cbe |
| By: | Eike B. Kroll (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | Experimental economists have discovered various violations of expected utility theory and offered alternative models that can explain laboratory results. This study discovers a new violation in risky choices that cannot be explained by theories like Prospect Theory, Disappoint- ment or Regret Theory. In an experimental setting using a between- subject design, the influence of a dominated alternative on certainty equivalents is shown. One group of subjects was offered a series of choices between a lottery ticket with a 50-50 chance of winning and a sure payoff. A second group was offered the same choice plus a third alternative, that as it turned out was not chosen by any participant. As a result, the average chosen sure payoff in the second group was higher than in the first group. That means, by adding a dominated alternative to a choice set, the certainty equivalent of a lottery is in- creased. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:08028&r=cbe |
| By: | Pavel Luengas (Office of Evaluation and Oversight at the Interamerican Development Bank.); Inder J. Ruprah (Office of Evaluation and Oversight at the Interamerican Development Bank.) |
| Abstract: | This paper examines the association between trust and community involvement with fear of crime. Fear of crime is measured by three typical perception measures: neighborhood security; walking alone in the dark; and the risk of becoming a victim. The data is from Chile’s Victimization Survey. The techniques used are a multinomial regression and an impact –propensity score single difference- calculation. We find that while trust matters participation generally does not for fear. However, regressions leave open the direction of causality. An impact calculation confirms that participation in a neighborhood crime prevention program does not affect the fear of crime. Thus the evidence challenges the general idea that involvement in one’s community and the specific idea of community participation in neighborhood crime prevention programs reduce fear and increase feelings of safety. |
| Keywords: | Fear of crime, perceived safety, trust, community participation, multinomial logit regression, impact evaluation |
| JEL: | I31 I38 K14 H43 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:idb:ovewps:0808&r=cbe |
| By: | Li, Ming; Majumdar, Dipjyoti |
| Abstract: | We analyze a psychologically-based model of voter turnout. Potential voters experience regret if they fail to vote, which is the motivation for participation in voting. Regret from abstention is inversely related to the margin of victory. Voters on the winner's side experience less regret than those on the loser's side. We show that the unique equilibrium involves positive voter turnout. We show that the losing side has higher turnout. In addition, voter turnout is positively related to importance of the election and the competitiveness of the election. We also consider scenarios in which voters are uncertain about the composition of the electorate's political preferences and show similar phenomena emerge. |
| Keywords: | voter turnout; regret; economics and psychology. |
| JEL: | D82 D72 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10719&r=cbe |
| By: | Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); Matteo Ploner (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany, and University of Trento, Italy) |
| Abstract: | The satisficing approach is generalized and applied to finite n-person games. Based on direct elicitation of aspirations, we formally define the concept of satisficing, which does not exclude (prior-free) optimality but includes it as a border case. We also review some experiments on strategic games illustrating and partly supporting our theoretical approach. |
| Keywords: | Strategic interaction, Satisficing behavior, Bounded rationality |
| JEL: | C72 C92 D01 |
| Date: | 2008–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-078&r=cbe |
| By: | Peter Dürsch (University of Heidelberg, Department of Economics); Jörg Oechssler (University of Heidelberg, Department of Economics); Radovan Vadovic (ITAM, Department of Economics) |
| Abstract: | Sick pay is a common provision in most labor contracts. This paper employs an experimental gift-exchange environment to explore two related questions using both managers and undergraduates as subjects. First, do workers reciprocate sick pay in the same way as they reciprocate wage payments? Second, do firms benefit from offering sick pay? Firms may benefit in two different ways: directly, from workers reciprocating higher sick pay with higher efforts; and indirectly, from self-selection of reciprocal workers into contracts with higher sick pay. Our main finding is that the direct effect is rather weak in terms of effort and negative in terms of profits. However, when there is competition among firms for workers, sick pay can become an important advantage. Consequently, competition leads to a higher provision of sick pay relative to a monopsonistic labor market. |
| Keywords: | sick pay, sick leave, experiment, gift exchange |
| JEL: | C72 C91 C92 D43 L13 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0476&r=cbe |
| By: | Stephan Bartke; Reimund Schwarze |
| Abstract: | Research findings have proven that the willingness to take risks is distributed heterogeneously among individuals. In the general public, there is a widely held notion that individuals of certain nationalities tend to hold certain typical risk preferences. Furthermore, religious beliefs are thought to explain differences in risk-preparedness on the individual level. We analyze these two possible determinants of individual risk attitudes: nationality and religion. First addressing the study of risk attitudes in a literature review, we then test our hypotheses empirically using the large, representative German Socio-Economic Panel (SOEP). To understand the importance of nationality, we focus on emigrants to Germany. The key findings are: (1) Nationality is not a valid determinant of risk attitudes. It can be broken down into several constituent factors including religion. (2) Religiousness is a significant determinant of risk attitudes. Religious persons are less risk-tolerant than atheists. Moreover, religious affiliation matters: Muslims are less risk-tolerant than Christians. |
| Keywords: | Risk Aversion, Nationality, Immigrants, Religion, Germany |
| JEL: | D10 D80 D81 J15 Z12 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp131&r=cbe |
| By: | Jason Aimone (Interdsciplinary Center for Economic Science, George Mason University) |
| Abstract: | Economists have begun to embrace the notion, already accepted by the market, that GEDs and High School Diplomas signal similar cognitive abilities, but different non-cognitive abilities. To better understand this phenomenon and its implications, this paper presents a study of an education environment, prison, which provides natural controls for non-cognitive abilities. The study reveals similarities in decisions between the two types of agents that are surprising in light of decisions made in standard educational environments. The results support the mixed-signal theory and furthermore suggest that stricter enforcement of discipline and other non-cognitive attributes may help to reduce dropout rates in non-prison educational facilities. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1006&r=cbe |
| By: | Eike B. Kroll (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | This paper investigates decisions about inter-temporal tradeoffs. The objective of the study is to explore the valuation of time itself without tradeoffs between time and consequences. In an experimental study subjects made decisions about waiting time, where the time was subject to risk. We find that subjects are risk-seeking for decisions about time, which leads to the conclusion that waiting time is experienced as a loss. Subjects in this experiment show similar choice patters as can be seen in studies about money when losses are involved. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:08027&r=cbe |
| By: | David Dillenberger (Department of Economics, University of Pennsylvania); Philipp Sadowski (Department of Economics, Duke University) |
| Abstract: | We study a two-stage choice problem, where alternatives are allocations between the decision maker (DM) and a passive recipient. The recipient observes choice behavior in stage two, while stage one choice is unobserved. Choosing selfishly in stage two, in the face of a fairer available alternative, may inflict shame on DM. DM has preferences over sets of alternatives that represent period two choices. We axiomatize a representation that identifies DM’s selfish ranking, her norm of fairness and shame. Altruism is the most prominent motive that can explain non-selfish choice. We identify a condition under which shame to be selfish can mimic altruism, when only stage-two choice is observed by the experimenter. An additional condition implies that the norm of fairness can be characterized as the Nash solution of a bargaining game induced by the second-stage choice problem. The representation is generalized to allow for finitely many recipients and applied to a simple strategic situation, a game of trust. |
| Keywords: | selfishness, fairness, shame, altruism |
| JEL: | C78 D63 D64 D80 D81 |
| Date: | 2008–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:08-037&r=cbe |
| By: | Bischoff, Ivo; Heinemann, Friedrich; Hennighausen, Tanja |
| Abstract: | In this contribution we study the determinants of how individuals assess the social fairness of a given income distribution. We propose an analytical framework distinguishing between potential impact factors related to the following fields: first fairness preferences, second beliefs on the sources of economic success and the functioning of democracy and third selfinterest. We test this framework on representative survey data for Germany for the years 1991, 2000 and 2004. Our results indicate that self-interest, beliefs and fairness preferences jointly shape fairness assessments. In addition, a number of personal characteristics are found to be important: Compared to their western fellow citizens, people born in GDR have a more critical view at social fairness. A particularly strong impact is related to the belief on the functioning of the democratic system. This points an important role of procedural fairness for the acceptance of a given distribution. |
| Keywords: | fairness preferences, economic beliefs, ALLBUS |
| JEL: | A13 C42 D63 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7386&r=cbe |