nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2009‒08‒30
eleven papers chosen by
Marco Novarese
University Amedeo Avogadro

  1. Research Governance in Academia: Are there Alternatives to Academic Rankings? By Margit Osterloh; Bruno S. Frey
  2. Institution design in social dilemmas: How to design if you must? By Rockenbach, Bettina; Wolff, Irenaeus
  3. Harnessing the Power of Focal Points To Measure Social Agreement By Jim Engle-Warnick; Stuart Soroka
  4. Counterpunishment revisited: an evolutionary approach By Wolff, Irenaeus
  5. Passing the buck in the garbage can model of organizational choice By Fioretti, Guido
  6. Repetition of Interaction and Learning: An Experimental Analysis By Bradley R. Staats; Francesca Gino; Gary P. Pisano
  7. Demography vs. Context: A Cross-Country Survey of the Willingness to Rely on Trust in Business Partnerships By Francis Bidault; José R. de la Torre; Stelios H. Zanakis
  8. Constructing Gender in the Economics Lab By Boschini, Anne; Muren, Astri; Persson, Mats
  9. Utility, games, and narratives By Fioretti, Guido
  10. Willingness to Pay to Reduce Future Risk By Jim Engle-Warnick; Julie Héroux; Claude Montmarquette
  11. What is the Cost of Venting? Evidence from eBay By Li, Lingfang (Ivy)

  1. By: Margit Osterloh; Bruno S. Frey
    Abstract: Peer reviews and rankings today are the backbone of research governance, but recently came under scrutiny. They take explicitly or implicitly agency theory as a theoretical basis. The emerging psychological economics opens a new perspective. As scholarly research is a mainly curiosity driven endeavor, we include intrinsic motivation and supportive feedback by the peers as important determinants of scholarly behavior. We discuss whether a stronger emphasis on selection and socialization offers an alternative to the present regime of academic rankings.
    Keywords: peer reviews; rankings; research governance; agency theory; psychological economics; new public management; economics of science; control theory
    Date: 2009–07
  2. By: Rockenbach, Bettina; Wolff, Irenaeus
    Abstract: Considerable experimental evidence has been collected on how to solve the public-good dilemma. In a 'first generation' of experiments, this was done by presenting subjects with a pre-specified game out of a huge variety of rules. A 'second generation' of experiments introduced subjects to two different environments and had subjects choose between those. The present study is part of a 'third generation', asking subjects not only to choose between two environments but to design their own rule sets for the public-good problem. Whereas preceding 'third-generation' experiments had subjects design and improve their strategies for a specified game, this study is the first to make an attempt at answering the question of how people would shape their environment to solve the public-good dilemma were they given full discretion over the rules of the game. We explore this question of endogenous institution design in an iterated design-and-play procedure. We observe a strong usage of punishment and redistribution components, which diminishes over time. Instead, subjects successfully contextualize the situation. Interestingly, feedback on fellow-players’ individual behavior tends to be rendered opaque. On average, rules do improve with respect to the welfare they elicit, albeit only to a limited degree.
    Keywords: Public good; strategy method; experiment; public choice
    JEL: C9 D7 D71 C92 D72 C72
    Date: 2009–07–17
  3. By: Jim Engle-Warnick; Stuart Soroka
    Abstract: This paper reports results from an application of Thomas Schelling’s (1960) concept of a focal point to the measure of social agreement on the received tone of media content. In our experiments, subjects rate the tone, positive, negative, or neutral, of newspaper articles and news broadcasts, with an incentive to coordinate responses. We compare the content analysis of a traditional subject pool with those of a representative cross-section of the general public. Our application of the coordination game with strategy labels illustrates that the concept of a focal point can be put to use as a measure of social agreement. <P>Le document présente les résultats obtenus en appliquant le concept de point focal, avancé par Thomas Schelling (1960), à la mesure de l’accord social concernant la perception du ton qui se dégage du contenu médiatique. Dans le cadre des expériences mises sur pied, les sujets évaluent le ton, positif, négatif ou neutre, adopté dans des articles de journaux et des bulletins de nouvelles et sont encouragés, par des mesures incitatives, à coordonner leurs réponses. Nous comparons l’analyse du contenu réalisée par un bassin traditionnel de sujets à celle menée par un échantillon représentatif du grand public. Notre application du jeu de coordination faisant appel à des étiquettes de stratégies démontre que la notion de point focal peut être utilisée pour mesurer l’accord social.
    Keywords: Coordination, focal point, experiment, content analysis, media, Coordination, point focal, expérience, analyse du contenu, médias
    Date: 2009–08–01
  4. By: Wolff, Irenaeus
    Abstract: Evolutionary game theory has shown that in environments characterised by a social-dilemma situation punishment may be an adaptive behaviour. Experimental evidence closely corresponds to this finding but yields contradictory results on the cooperation-enhancing effect of punishment if players are allowed to retaliate against their punishers. The present study sets out to examine the question of whether cooperation will still be part of an evolutionary stable strategy if we allow for counterpunishment opportunities in a theoretic model and tries to reconcile the seemingly contradictory findings from the laboratory. We find that the apparent contradictions can be explained by a difference in the number of retaliation stages employed (one vs many) and even small differences in the degree of retaliativeness.
    Keywords: Public goods; Strong reciprocity; Conformism; Counter-punishment; Evolution of behavior
    JEL: H4 H41 C90 C7 C73
    Date: 2009–06
  5. By: Fioretti, Guido
    Abstract: We reconstruct Cohen, March and Olsen's Garbage Can model of organizational choice as an agent-based model. In the original model, the members of an organization can postpone decision-making. We add another means for avoiding making decisions, that of buck-passing difficult problems to colleagues. We find that selfish individual behavior, such as postponing decision-making and buck-passing, does not necessarily imply dysfunctional consequences for the organizational level. The simulation experiments confirm and extend some of the most interesting conclusions of the Garbage Can model: Most decisions are made without solving any problem, organization members face the same old problems again and again, and the few problems that are solved are generally handled at low hierarchical levels. These findings have an implication that was overseen in the original model, namely, that top executives need not be good problem-solvers.
    Keywords: Organizational Decision Making; Garbage Can Model; Postponing Decisions; Buck-Passing
    JEL: D23 D89 D79
    Date: 2009–08–04
  6. By: Bradley R. Staats (University of North Carolina at Chapel Hill); Francesca Gino (University of North Carolina at Chapel Hill); Gary P. Pisano (Harvard Business School, Technology and Operations Management Unit)
    Abstract: The learning curve is used to investigate how increasing cumulative experience yields improved performance. Experience, however, can take many forms. Building on recent studies on learning in operations, we distinguish between repetition of task (i.e., prior experience with the task) and repetition of interaction (i.e., prior experience with team members). Repetition of interaction may improve learning, since experience working together aids in the identification, transfer, and application of knowledge among members within a group. Additionally, experience need not be constrained to one task. Prior work examining the relationship of multiple tasks (i.e., varied experience) and learning by groups finds inconsistent results. We hypothesize that repetition of interaction may help explain this difference, as familiar teams may be able to use the knowledge gained from the concurrent completion of multiple tasks while unfamiliar teams may not. Using an experimental study we find that while repetition of interaction has no effect on initial performance, it has a persistent effect on learning. By separately examining the repetition of interaction and repetition of task our work offers new insights and direction for the study of learning in operations.
    Keywords: Learning, Repetition of interaction, Repetition of task, Team familiarity, Varied experience
    Date: 2009–08
  7. By: Francis Bidault (ESMT European School of Management and Technology); José R. de la Torre (Florida International University); Stelios H. Zanakis (Florida International University)
    Abstract: We explore the determinants of the willingness to rely on trust in a business partnership where both partners are at risk. By focusing on the willingness to rely on trust (WTRT) we reduce the methodological challenge of perception-based approaches where trust is measured as an expectation on the partner's behavior. Executives in several countries were presented with a proposal for a business partnership and were asked about the level of safeguards they would require in the agreement, their main concerns as to future conditions, and to what extent their views would be affected by several behaviors and/or events. Twelve hypotheses are tested using path analysis and multiple/hierarchical regressions. Whereas our findings confirm prior results on differences in the propensity to trust between nationalities, they suggest that several organizational, functional and contextual variables mediate their impact in determining WTRT in inter-organizational ventures. Among these are the partners' cultural proximity, their concerns about business risk, and two organizational demographics regarding the size of the organization. In addition, we found that sensitivity to external information on partner's benevolence and the respondent's education and industry affected WTRT significantly.
    Keywords: inter-organizational trust, willingness to rely on trust, trustworthiness, contractual safeguards, international joint ventures, business partnerships, international business
    Date: 2009–07–13
  8. By: Boschini, Anne (Dept. of Economics, Stockholm University); Muren, Astri (Dept. of Economics, Stockholm University); Persson, Mats (Institute for International Economic Studies)
    Abstract: Several experimental studies on altruism have found women to be more generous than men. We investigate whether observed gender gaps in generosity can be explained by experimental setting, where some settings are more conducive than others to activating gender identity and social norms. In a dictator game we study priming along two dimensions: 1) some subjects enter their gender on the first page of the questionnaire (Pre) while others enter their gender on the last page (Post) and 2) some subjects are seated in single-sex rooms (Homogeneous) while others are seated in gender-mixed rooms (Mixed). It turns out that gender differences occur (women are more generous than men) only for the combination Pre and Mixed. The effect is driven by males: men are sensitive to priming, while women are not.
    Keywords: Gender roles; social norms; altruism; generosity; dictator game; priming
    JEL: C91 D64 J16
    Date: 2009–07–25
  9. By: Fioretti, Guido
    Abstract: This paper provides a general overview of theories and tools to model individual and collective decision-making. In particular, stress is laid on the interaction of several decision-makers. A substantial part of this paper is devoted to utility maximization and its application to collective decision-making, Game Theory. However, the pitfalls of utility maximization are thoroughly discussed, and the radically alternative approach of viewing decision-making as constructing narratives is presented with its emerging computational tools.
    Keywords: Interactions; Collective Decision-Making
    JEL: C79 D79
    Date: 2009–08–10
  10. By: Jim Engle-Warnick; Julie Héroux; Claude Montmarquette
    Abstract: We elicit subjects’ willingness to pay to reduce future risk. In our experiments, subjects are given a cash endowment and a risky lottery. They report their willingness to pay to exchange the risky lottery for a safe one. Subjects play the lottery either immediately, eight weeks later, or twenty-five weeks later. Thus, both the lottery and the future are sources of uncertainty in our experiments. In two additional treatments, we control for future uncertainty with a continuation probability, constant and independent across periods, that simulates the chances of not returning to play the lottery after eight and twenty-five periods. We find evidence for present bias in both the time-delay sessions and the continuation probability sessions, suggesting that this bias robustly persists in environments including both risk and future uncertainty, and suggesting that the stopping rule may be a tool to continue study in this area without the need to delay payments into the future. <P>Nous mesurons la volonté des participants de payer pour réduire les risques futurs. Au cours de nos séances expérimentales, les participants reçoivent une dotation en espèces et une loterie risquée. Ils signalent leur volonté de payer pour échanger la loterie risquée pour une loterie moins risquée. Les participants jouent à la loterie soit immédiatement, ou huit semaines plus tard, ou vingt-cinq semaines plus tard. Ainsi, dans ces expériences, la loterie et le futur forment deux sources d'incertitude. Lors de deux traitements additionnels, nous contrôlons l'aspect incertain de l'avenir avec une probabilité de continuation, constante et indépendante à travers les périodes, qui simule les chances de ne pas revenir jouer à la loterie après huit et vingt-cinq périodes. Nous avons trouvé des preuves d'un biais pour le présent à la fois dans les séances avec un délai temporel, que dans les séances avec une probabilité de continuation, ce qui suggère que cette tendance persiste avec vigueur dans les environnements comprenant de l'incertitude provenant à la fois du risque et du futur. Ceci suggère que cette règle d'arrêt peut constituer un outil efficace pour étudier ce domaine sans la nécessité de retarder les paiements dans le futur.
    Keywords: Hyperbolic discounting, uncertainty, risk, experiments , escompte hyperbolique, incertitude, risque, expériences
    JEL: C91 D81
    Date: 2009–08–01
  11. By: Li, Lingfang (Ivy)
    Abstract: This paper uses data collected from eBay's website to identify why buyers fail to leave (negative) feedback in online markets. Empirical results con¯rm that the fear of retaliation may be an important motivation for buyers not to leave (negative) feedback, while the time and effort cost of reporting may be not.
    Keywords: reputation; feedback; asymmetric information
    JEL: L81 L86
    Date: 2008–11

This nep-cbe issue is ©2009 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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