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on Cognitive and Behavioural Economics |
| By: | Erik Monsen (Max Planck Institute of Economics, Jena, Germany); Diemo Urbig (Max Planck Institute of Economics, Jena, Germany) |
| Abstract: | Based on the aggregated insights of the existing theories related to multiple sources of efficacy and locus of control, we introduce the theory of mixed control, a model of compound-risk perception. This theory considers outcome expectancies as being composed of expectancies regarding three distinct sources of risk (self, others, and chance). This reflects that entrepreneurship is a complex and dynamic activity, involving multiple sources of risk. Beliefs about the efficacy of these elements are weighted by the degree to which these elements are perceived to control the outcome. The interaction of efficacy and control beliefs is therefore at the core of our theory. Further, we discuss that risks are not only subjectively perceived but can be endogenous and depend on future decisions and actions of the entrepreneur. |
| Keywords: | locus of control, self-efficacy, risk perception |
| JEL: | D8 D83 D84 |
| Date: | 2009–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-018&r=cbe |
| By: | Gary Bolton; Ben Greiner; Axel Ockenfels |
| Abstract: | Reciprocal feedback distorts the production and content of reputation information, hampering trust and trade efficiency. Data from eBay and other sources combined with laboratory data provide a robust picture of how reciprocity can be guided by changes in the way feedback information flows through the system, leading to more accurate reputation information, more trust and more efficient trade. |
| Keywords: | market design, reputation, trust, reciprocity, eBay |
| JEL: | C73 C9 D02 L14 |
| Date: | 2009–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:kls:series:0042&r=cbe |
| By: | Francesca Bortolami; Luigi Mittone |
| Abstract: | From a purely theoretical perspective, there is no reason to expect that different levels of contributions in public goods games are associated with the same sanctioning/rewarding rule. The efficiency of a norm should be independent of its enactment procedure. On the contrary, multidisciplinary and empirical considerations suggest that individuals may behave differently, according to the level of their direct involvement. The question whether participation in norm enactment results in more contributory gap than when the same norm is received, has not been addressed in public good literature so far. Our three experiments show a behavioural regularity: participating in a normative enactment generates different contributory effects, with respect to the case when the sanctioning norm is merely received. |
| Keywords: | participation, public good games, free riding |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:0902&r=cbe |
| By: | Migheli, Matteo |
| Abstract: | Trust is an important variable in economics, as several transactions are based on it; unfortunately it is difficult to measure. The recent economic literature on social capital shows a positive association between this concept and trust. As social capital is easier to measure than trust is, this paper analyzes the possibility of assessing trust measuring social capital using experimental economics. A basic trust game is played in three Western European countries with undergraduate students; a questionnaire measures their level of social capital, as time spent within social networks. This measure is stronger and more precise than the ones generally used. In particular this paper firstly measures social capital as the intensity of a membership to a voluntary organization, while the extant literature generally considers only the membership per se. Secondly the use of an experiment instead of a questionnaire allows for constructiong a measure of trust which is in principle continuous. Thirdly to play an experiment allows for observing the behaviour of the participants better than by the means of a survey. The results are supportive of the fact that trust can be assessed through social capital, although the presence of a strong geographical effect has to be accounted for. |
| Keywords: | generalized trust, social capital, gender effect |
| JEL: | C72 C93 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:119&r=cbe |
| By: | Salomonsson, Marcus (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | This paper surveys the literature on group selection. I describe the early contributions and the group selection controversy. I also describe the main approaches to group selection in the recent literature; fixation, assortative group formation, and reproductive externalities. |
| Keywords: | Altruism; spite; externalities; conformity; fixation; signalling |
| JEL: | C70 D62 D64 |
| Date: | 2009–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0712&r=cbe |
| By: | M. Raimondi |
| Abstract: | The issue of the cooperation among private agents in realising collective goods has always raised problems concerning the basic nature of individual behaviour as well as the more traditional economic problems. The Computational Economics literature on public goods provision can be useful to study the possibility of cooperation under alternative sets of assumptions concerning the nature of individual rationality and the kind of interactions between individuals. In this work I will use an agent-based simulation model to study the evolution of cooperation among private agents taking part in a collective project: a high number of agents, characterised by computational rationality, defined as the capacity to calculate and evaluate their own immediate payoffs perfectly and without errors, interact to producing a public good. The results show that when the agents’ behaviour is not influenced either by expectations of others’ behaviour or by social and relational characteristics, they opt to contribute to the public good to an almost socially optimal extent, even where there is no big difference between the rates of return on the private and the public investment. |
| Keywords: | Computational Economics; Agent-based models; Social Dilemmas; Collective Action; Public Goods |
| JEL: | C63 D64 D80 H41 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:par:dipeco:2009-ep02&r=cbe |
| By: | Franz Hackl; Martin Halla; Gerald J. Pruckner |
| Abstract: | This paper explores the capability of the state to affect the individual’s decision to work for free. For this purpose we combine individual-level data from the European and World Values Survey with macroeconomic and political variables for OECD member countries. Empirically we identify three channels for crowding out of voluntary labor. Firstly, an increase in public social expenditure decreases the probability that the individual will volunteer (fiscal crowding out). Secondly, a political consensus between individuals and the government also induces volunteers to reduce their unsalaried activities (consensual crowding out). And finally, the more a government supports democratization, the lower is the individual’s engagement (participatory crowding out). Religiosity and a more unequal income distribution in a country increase individuals’ willingness to volunteer. |
| Keywords: | Volunteering, voluntary labor supply, private provision of public goods, public social expenditure, political consensus, democratization |
| JEL: | H41 H44 H31 J22 I38 H11 D30 D64 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2009_01&r=cbe |
| By: | Hermann Brandstätter (University of Linz); Werner Güth (Max Planck Institute of Economics, Jena, Germany); Hartmut Kliemt (Frankfurt School of Finance & Management, Frankfurt am Main, Germany) |
| Abstract: | During the last three decades the ascent of behavioral economics clearly helped to bring down artificial disciplinary boundaries between psychology and economics. Noting that behavioral economics seems still under the spell of the rational choice tradition - and, indirectly, of behaviorism - we scrutinize in an exemplary manner how the development of some kind of "cognitive economics" might mirror the rise of "cognitive psychology" without endangering the advantages of the division of labor and of disciplinary specialization. |
| Keywords: | bounded rationality, game theory, satisficing, interdisciplinary research, experimental economics, economic psychology |
| JEL: | B31 B41 C72 C73 C78 D63 |
| Date: | 2009–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-017&r=cbe |
| By: | Booth, Alison L. (Australian National University); Nolen, Patrick J. (University of Essex) |
| Abstract: | Women and men may differ in their propensity to choose a risky outcome because of innate preferences or because their innate preferences are modified by pressure to conform to gender-stereotypes. Single-sex environments are likely to modify students’ risk-taking preferences in economically important ways. To test this, our controlled experiment gave subjects an opportunity to choose a risky outcome − a real-stakes gamble with a higher expected monetary value than the alternative outcome with a certain payoff − and in which the sensitivity of observed risk choices to environmental factors could be explored. The results show that girls from single-sex schools are as likely to choose the real-stakes gamble as much as boys from either coed or single sex schools, and more likely than coed girls. Moreover, gender differences in preferences for risk-taking are sensitive to the gender mix of the experimental group, with girls being more likely to choose risky outcomes when assigned to all-girl groups. This suggests that observed gender differences in behaviour under uncertainty found in previous studies might reflect social learning rather than inherent gender traits. |
| Keywords: | gender identity, controlled experiment, risk aversion, risk attitudes, |
| JEL: | C9 C91 C92 J16 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4026&r=cbe |
| By: | Stanton, Angela A. |
| Abstract: | Some economists believe that neuroeconomists threatens the theory of economics. Glenn Harrison’s paper “Neuroeconomics: A Critical Reconsideration” (2008) provides some support for this view, though some of the points he makes are somewhat disguised. The field of neuroeconomics is barely into its teenage years; and it is trying to do what? Criticize and redesign the field of economics developed over hundreds of years? But that is not what neuroeconomics is trying to do, in spite of all the efforts of some economists trying to place it into that shoebox (see the argument in great detail in Andrew Caplin, Andrew Schotter 2008). Neuroeconomics is a Mendelian-Economics of sort; it is a science that is able to generate data by fixing the environment to some degree, varying a single independent variable for its affects, and is able to see each individual’s choices from initiation of the decision-making process to its outcome. Mainstream (standard) economics, on the other hand, looks at the average of the outcomes of many individuals and proposes how people chose those outcomes, retroactively. The two fields, neuroeconomics and standard economics, are evaluating two sides of the same coin: one with and the other without ceteris paribus; they are not in conflict with one another. |
| Keywords: | Neuroeconomics; Standard Economics; Ceteris Paribus; Hormones |
| JEL: | D01 C91 D87 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13957&r=cbe |
| By: | Sudipta Sarangi; Tibor Besedes; Cary Deck; Mikhael Shor |
| Abstract: | We examine in controlled experiments how individuals make choices when faced with multiple options. The choice tasks mimic the selection of health insurance, prescription drug, or retirement savings plans. However, in our experiment, the available options can be objectively ranked. We find that the probability of a person selecting the optimal option declines as the number of options increases, with the decline more pronounced for older subjects. Heuristics seem to differ by age with older subjects relying more on suboptimal decision rules. Behavior consistent with the estimated decision rules is observed in an out-of-sample experiment. |
| URL: | http://d.repec.org/n?u=RePEc:lsu:lsuwpp:2009-03&r=cbe |
| By: | Bruno S. Frey |
| Abstract: | Academic economists today are caught in a “Publication Impossibility Theorem System” or PITS. To further their careers, they are required to publish in A-journals, but this is impossible for the vast majority because there are few slots open in such journals. Such academic competition is held to provide the right incentives for hard work, but there may be serious negative consequences: the wrong output may be produced in an inefficient way, the wrong people may be selected, and the losers may react in a harmful way. The paper suggests several ways for improvement. |
| Keywords: | Academia, economists, publication, journals, incentives, economic methodology |
| JEL: | A1 D02 I23 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:406&r=cbe |