nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2008‒12‒21
eight papers chosen by
Marco Novarese
University of the Piemonte Orientale

  1. Learning in experimental 2×2 games By Sebastian J. Goerg; Thorsten Chmura; Reinhard Selten
  2. Learning-Testing Process in Classroom: An Empirical Simulation Model By Buda, Rodolphe
  3. Prize Structure and Information in Tournaments: Experimental Evidence By Freeman, Richard B.; Gelber, Alexander M.
  4. Risk Aversion, Stochastic Dominance, and Rules of Thumb: Concept and Application By Vivek Dehejia
  5. Through the eyes of industrial researchers: how new “Connect & Develop” practices change the role of human resources in the lab By Alberto Di Minin; Andrea Piccaluga; Marco Rizzone
  6. The role of managers’ behavior in corporate fraud By Cohen, Jeffrey; Ding, Yuan; Lesage, Cedric; Stolowy, Hervé
  7. Confidence in Monetary Policy By Yakov Ben-Haim; Maria Demertzis
  8. (Over-)Stylizing experimental findings and theorizing with sweeping generality By Werner Güth; Hartmut Kliemt; M. Vittoria Levatia

  1. By: Sebastian J. Goerg; Thorsten Chmura; Reinhard Selten
    Abstract: In this paper we introduce four new learning models: impulse balance learning, impulse matching learning, action-sampling learning, and payoff-sampling learning. With this models and together with the models of self- tuning EWA learning and reinforcement learning, we conduct simulations over 12 different 2×2 games and compare the results with experimental data obtained by Selten & Chmura (2008). Our results are two-fold: While the simulations, especially those with action-sampling learning and impulse matching learning successfully replicate the experimental data on the aggregate, they fail in describing the individual behavior. A simple inertia rule beats the learning models in describing individuals behavior.
    Keywords: Learning, Action-sampling, Payo?-sampling, Impulse balance, Impulse matching, Reinforcement, self-tuning EWA, 2×2 games, Experimental data
    JEL: C72 C91 C92
    Date: 2008–12
  2. By: Buda, Rodolphe
    Abstract: This paper presents an empirical micro-simulation model of the teaching and the testing process in the classroomH. It is a non-econometric micro-simulation model describing informational behaviors of the pupils, based on the observation of the pupils’ communication behavior during lessons and tests. The representation of the knowledge process is very simplified. However, we tried to study the involvements of individual motivation, capability and relationship with other pupils of each pupil, to compare them to the new-classical(and keynesian) and Austrian information and knowledge theoretical results. It is a first step and future development should concern expectation behaviors and dynamics. This paper aims too to give, we hope so, some criteria of pupils’ rationality in the classroom.
    Keywords: Teaching ; Learning ; Cheating ; Information ; Communication ; Knowledge ; Micro-simulation ; Classroom
    JEL: G14 C88 D83 A2 B53
    Date: 2009–01
  3. By: Freeman, Richard B.; Gelber, Alexander M.
    Abstract: This paper examines behavior in a tournament in which we vary the tournament prize structure and the information available about participants' skill at the task of solving mazes. The number of solved mazes is lowest when payments are independent of performance; higher when a single, large prize is given; and highest when multiple, differentiated prizes are given. This result is strongest when we inform participants about the number of mazes they and others solved in a pre-tournament round. Some participants reported that they solved more mazes than they actually solved, and this misreporting also peaked with multiple differentiated prizes.
    Keywords: Tournaments; Wage Structure
    JEL: J22 D01 J33
    Date: 2008–12–05
  4. By: Vivek Dehejia (Department of Economics, Carleton University, CESifo, Munich, Germany.)
    JEL: D81
    Date: 2008–01–14
  5. By: Alberto Di Minin (Scuola Superiore Sant'Anna of Pisa); Andrea Piccaluga (Scuola Superiore Sant'Anna of Pisa); Marco Rizzone (Scuola Superiore Sant'Anna of Pisa)
    Abstract: An intense debate is going on about more “open” strategies that are supposedly diffusing in industrial R&D. We here discuss the relationship between such practices and Human Resources Management (HRM) in industrial R&D Labs. The paper in fact aims at representing an original attempt of looking at the linkage between R&D strategy and HRM in some Italian high-tech firms. In particular, we identify, select and discuss a set of variables related to the management of HR in R&D that fit with the reconceptualization of innovation proposed by Chesbrough in the “Open Innovation” (OI) paradigm and inspired by the example of P&G’s model of Connect and Develop (C&D). More precisely, our objective is that of investigating the role of HRM in the shift towards “Open Innovation” through the bottom-up lenses of industrial researchers’ characteristics, feelings and behaviours. What we here suggest is that by observing behaviour and expectations of R&D workers, we can investigate the acceptance and implementation of new R&D management practices. Our empirical base is represented by 330 questionnaires completed by R&D personnel and collected through an online survey. The results have been discussed with the HR managers of each company, in order to also gain a “top-down” perspective on the observed dynamics. The research is carried out around three main groups of issues: HR characteristics (e.g., demographic parameters, productivity, time horizons, satisfaction, expectations, mobility, education), job organization aspects (e.g., teamwork vs. individual research, flexibility, decisional centres, work time allocation, type of relationships, communication flows), and HRM tools (e.g., talent attraction, training, evaluation methods, goal definition, roles, leadership, responsibility, incentives, career systems, problem sources). According to Chesbrough, firms fitting the OI model present characteristics related to the R&D structure itself. Nonetheless, even if this model has been widely enthusiastically discussed and sometimes criticized by both practitioners and researchers, we still lack a comprehensive understanding of how such changes effect dynamics and daily operations of an R&D lab. Our empirical analysis ultimately aims at understanding to what extent the shift towards an extended definition of R&D, which includes the new concept of C&D, can be considered as one of the main potential factors of change in HR organization. Beyond the relevance of our findings for the debate among scholars, we argue that managerial implications may derive from a better knowledge of individual perceptions and behaviours of R&D personnel. In fact, the changing pattern of innovation processes implies parallel changes in the organization of R&D labs, where the role of the most important component, i. e. researchers themselves, is not always adequately considered. This paper is a first attempt to explore these relationships. Through a convenience sample we first attempted to test various strategies to best collect data, provide timely valuable feedbacks to our industrial partners and better define our framework, matching early results with existing theories. Further research will aim at making the sample representative of the Italian industrial R&D system.
    Keywords: Open Innovation Human Resources Management
    Date: 2008–08–07
  6. By: Cohen, Jeffrey; Ding, Yuan; Lesage, Cedric; Stolowy, Hervé
    Abstract: Based on anecdotal evidence from press articles covering 39 high profile alleged or acknowledged corporate fraud cases, the objective of this paper is to examine one dimension partially unexplored: the role of managers’ behavior in the commitment of the fraud.
    Keywords: Fraud auditing standards; fraud triangle; corporate fraud; theory of planned behavior; personality traits; ethics
    JEL: D23
    Date: 2008–07–01
  7. By: Yakov Ben-Haim; Maria Demertzis
    Abstract: In situations of relative calm and certainty, policy makers have confidence in the mechanisms at work and feel capable of attaining precise and ambitious results. As the environment becomes less and less certain, policy makers are confronted with the fact that there is a trade-off between the quality of a certain outcome and the confidence (robustness) with which it can be attained. Added to that, in the presence of Knightian uncertainty, confidence itself can no longer be represented in probabilistic terms (because probabilities are unknown). We adopt the technique of Info-Gap Robust Satisficing to first define confidence under Knightian uncertainty, and second quantify the trade-off between quality and robustness explicitly.We apply this to a standard monetary policy example and provide Central Banks with a framework to rank policies in a way that will allow them to pick the one that either maximizes confidence given an acceptable level of performance, or alternatively, optimizes performance for a given level of confidence. 
    Keywords: Knightian Uncertainty; Satisficing; Bounded Rationality; Minmax
    JEL: D81 E52 E58
    Date: 2008–12
  8. By: Werner Güth (Max Planck Institute of Economics, Jena, Germany); Hartmut Kliemt (Frankfurt School of Finance & Management, Frankfurt am Main, Germany); M. Vittoria Levatia (Dipartimento di Scienze Economiche e Metodi Matematici, University of Bari, Italy)
    Abstract: Human decision making is a process guided by different and partly competing motivations that can each dominate behavior and lead to different effects depending on strength and circumstances. "Over-stylizing" neglects such competing concerns and context-dependence, although it facilitates the emergence of elaborate general theories. We illustrate by examples from social dilemma experiments and inequality aversion theories that sweeping empirical claims should be avoided.
    Keywords: Context-dependent preferences, Experimental economics, Equity theories.
    JEL: A11 D63 D70
    Date: 2008–12–09

This nep-cbe issue is ©2008 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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