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on Cognitive and Behavioural Economics |
| By: | Carmit Segal |
| Abstract: | This paper argues that low-stakes test scores, available in surveys, may be partially determined by test-taking motivation, which is associated with personality traits but not with cognitive ability. Therefore, such test score distributions may not be informative regarding cognitive ability distributions. Moreover, correlations, found in survey data, between high test scores and economic success may be partially caused by favorable personality traits. To demonstrate these points, I use the coding speed test that was administered without incentives to National Longitudinal Survey of Youth 1979 (NLSY) participants. I suggest that due to its simplicity its scores may especially depend on individuals' test-taking motivation. I show that controlling for conventional measures of cognitive skills, the coding speed scores are correlated with future earnings of male NLSY participants. Moreover, the coding speed scores of highly motivated, though less educated, population (potential enlists to the armed forces) are higher than NLSY participants' scores. I then use controlled experiments to show that when no performance-based incentives are provided, participants' characteristics, but not their cognitive skills, affect effort invested in the coding speed test. Thus, participants with the same ability (measured by their scores on an incentivized test) have significantly different scores on tests without performance- based incentives. |
| Keywords: | Test Scores, Motivation, Cognitive Skills, Non-Cognitive Skills, Earnings |
| JEL: | J24 J31 C91 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1124&r=cbe |
| By: | David Cayla (ATOM - Analyse Théorique des Organisations et des Marchés - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper aims to analyze learning as a two-type process. A dynamic equilibrium process represents a stable learning process, that may express an individualistic behavioral learning or an organizational adaptation. A teleological process represents an intentional, goal-oriented, learning process. This second type of learning can express an individualistic cognitive learning or a managerial organizational change. It is argued that this learning typology can helps to understand why similar organizations or individuals may learn differently when confronted to the same environmental stimuli. |
| Keywords: | Dynamic Equilibrium; Learning; Organizational Learning; Teleology |
| Date: | 2008–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00267975_v1&r=cbe |
| By: | Victor Hiller (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| 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. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00275734_v1&r=cbe |
| By: | Guillaume Destré (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Louis Lévy-Garboua (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Michel Sollogoub (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | A model of informal training which combines learning from own experience and learning from others is proposed in this paper. It yields a closed-form solution that revises Mincer–Jovanovic's [Mincer, J., Jovanovic, B., 1981. Labor mobility and wages. In: Rosen, S. (Ed.), Studies in Labor Markets. Chicago University Press, Chicago, pp. 21–64] treatment of tenure in the human capital earnings function. We estimate the structural parameters of this non-linear model on a large French cross-section with matched employer–employee data. We find that workers on average can learn from others 10% of their own human capital on entering one plant, and catch half of their learning from others’ potential in just 2 years. The private marginal returns to education are declining with education as more educated workers have less to learn from others and share the social returns of their own education with their less qualified co-workers. The potential for learning from others on the job varies across jobs and establishments, and this provides a new distinction between imitation jobs and experience jobs. Workers in imitation jobs, who learn most from others, tend to have considerably longer tenure than workers in experience jobs. Although workers in experience jobs can learn little from others, we find that they learn a lot by themselves. We document several analogies between the imitation jobs/experience jobs “dualism” and the primary/secondary jobs and firms’ dualism implied by the dual labor market theory. However, our binary classification of jobs depicts the data more closely than the dual theory categorization into primary-type and secondary-type establishments. Competition prevails between jobs and firms but jobs differ by their learning technology. |
| Keywords: | Human capital earnings functions; Matched employer–employee data; Informal training; Learning from others; Learning from experience; Returns to tenure; Social returns of education; Labor market dualism |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00304283_v1&r=cbe |
| By: | Nadège Marchand (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Claude Montmarquette (Université de Montréal - Département de Sciences Economique - Université de Montréal) |
| Abstract: | Our study considers the question of training in firms using an experimental laboratory approach. We investigate the following questions : What conditions, excluding external certification, will bring workers and employers to cooperate and share a rent generated by the workers’ training ? What conditions will induce workers to accept the training offer, for employers to initially offer the training and to reward the trained workers in the last stage of the game ? We analyse the impact of the size of the rent created by training and the existence of an information system on employer reputation rewarding trained employees. Reputation does matter to induce cooperation, but in the absence of external institutions, coordination on the optimal outcome remains difficult. |
| Keywords: | general and speficic trainings in firms ; accreditation ; cooperation and reputation ; experimental econonmics |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00333521_v1&r=cbe |
| By: | De Langhe, B.; Sweldens, S.T.; Osselaer, S.M.J. van; Tuk, M.A. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Two experiments show that a shortage of self-regulatory resources results in more risk aversion in mixed-gamble (gain/loss) situations. The findings support a dual process view that distinguishes between a rational and an affective information processing system, in which self-regulatory resources are the necessary fuel for the rational system. Depending on the expected values of risk seeking versus risk averse behavior, ego depletion can have negative (experiment 1) as well as positive (experiment 2) consequences for investment behavior. |
| Keywords: | emotional information processing system;risk averse;ego depletion;investment behavior |
| Date: | 2008–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765013614&r=cbe |
| By: | Lacetera, Nicola (Case Western Reserve University); Macis, Mario (University of Michigan) |
| Abstract: | Using longitudinal data on the entire population of blood donors in an Italian town, we examine how donors respond to an award scheme which rewards them with “medals” when they reach certain donation quotas. Our results indicate that donors significantly increase the frequency of their donations immediately before reaching the thresholds for which the rewards are given, but only if the prizes are publicly announced in the local newspaper and awarded in a public ceremony. The results are robust to several specifications, sample definitions, and controls for observable and unobservable heterogeneity. Our findings are consistent with social image concerns being a primary motivator of pro-social behavior, and indicate that symbolic prizes are most effective as motivators when they are awarded publicly. Because we do not detect a reduction in donation frequency after the quotas are reached, this incentive based on social prestige leads to a net increase in the frequency of donations. |
| Keywords: | incentives, awards, public good provision, pro-social behavior, public health, social prestige |
| JEL: | D12 D64 I18 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3771&r=cbe |
| By: | Dirk Engelmann; Urs Fischbacher |
| Abstract: | We study indirect reciprocity and strategic reputation building in an experimental helping game. At any time only half of the subjects can build a reputation. This allows us to study both pure indirect reciprocity that is not contaminated by strategic reputation building and the impact of incentives for strategic reputation building on the helping rate. We find that pure indirect reciprocity exists, but also that the helping decisions are substantially a!ected by strategic considerations. We find that the behavioral pattern can best be captured by non-selfish preferences as assumed by reciprocity models. Finally, we find that strategic do better than non-strategic players and non-reciprocal do better than reciprocal players, casting doubt on previously proposed evolutionary explanations for indirect reciprocity. |
| Keywords: | indirect reciprocity, reputation, experimental economics |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0034&r=cbe |
| By: | Martha Starr |
| Abstract: | This paper investigates the influence of economic news on consumer sentiment, and examines whether ‘news shocks’ –- changes in coverage that would not be expected from incoming data on economic fundamentals -– have aggregate effects. Using monthly U.S. data and a structural vector-autoregression, I find that (1) sentiment is affected by news shocks, (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending, and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of non-fundamental factors in aggregate fluctuations. |
| Keywords: | Consumption, consumer sentiment, economic news, aggregate fluctuations |
| JEL: | E21 D12 E32 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:1608&r=cbe |
| By: | Emmanuel Flachaire (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Guillaume Hollard (OEP - Université de Marne-la-Vallée) |
| Abstract: | Surveys are sometimes viewed with suspicion when used to provide economic values, since they are sensitive to framing effects. However, the extent to which those effects may vary between individuals has received little attention. Are some individuals less sensitive to framing effects than others? We use the theory of social representation to assign to each individual a new variable to serve as a proxy for the individual's sensitivity to framing effects. This allows to gather new and relevant information to limit the impact of framing effects. We examine two framing effects, starting-point bias and illingness-to-pay and willingness-to-accept divergence. |
| Keywords: | starting-point bias ; wta-wtp divergence ; social representatio |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00176025_v1&r=cbe |
| By: | Sweldens, S.T.; Osselaer, S.M.J. van; Janiszewski, C. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Evaluative conditioning is an important determinant of consumers’ likes and dislikes. Three experiments show that it can result from two types of learning. First, stimulus-stimulus (S – S) or referential learning allows a conditioned stimulus (e.g., a brand) to acquire valence by triggering (unconscious) recollections of the unconditioned stimulus (e.g., a pleasant image). Second, stimulus-response (S – R) or intrinsic learning allows a conditioned stimulus to bind directly with the affective response that was previously generated by the unconditioned stimulus. We show when each type of learning occurs and demonstrate the consequences for the robustness of conditioned brand attitudes. |
| Keywords: | evaluative conditioning;referential learning;intrinsic learning |
| Date: | 2008–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765013612&r=cbe |
| By: | Michael W.M. Roos; Wolfgang J. Luhan |
| Abstract: | Previous experimental investigations have shown that expectations are not perfectly rational due to bias. Traditional adaptive models, however, in many cases do not perfectly describe the formation of expectations either. This paper makes two contributions to the experimental literature on the formation of expectations: First, we investigate whether subjects who have more information about the economic model than in previous studies also form biased expectations. Second, we argue that in some cases macroeconomic expectations might be formed by the anchoring-and-adjustment heuristic, which is well known in psychology. We find that subjects’ expectations are biased although the design might be more favorable to rational expectations.The anchoring- and-adjustment model of expectations gets some support by our data, but the best model encompasses both the anchoring-and-adjustment model and the traditional adaptive model. |
| Keywords: | Expectations, heuristics, beliefs, mental models, macroeconomic experiment |
| JEL: | D84 D83 C99 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0054&r=cbe |
| By: | Youichiro Higashi (Department of economics - University of Rochester); Sujoy Mukerji (Oxford University - University of Oxford); Norio Takeoka (Department of economics - University of Rochester); Jean-Marc Tallon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | The final step in the proof of Proposition 1 (p.311) of Mukerji and Tallon (2003) may not hold in generalbecause $\varepsilon>0$ in the proof cannot be chosen independently of $w,z$. We point out by a counterexample that the axioms they impose are too weak for Proposition 1. We introduce a modified set of axioms and re-establish theproposition |
| Keywords: | ambiguity;bid ask spread;Ellsberg paradox |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00175266_v1&r=cbe |