nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2010‒02‒20
nine papers chosen by
Marco Novarese
University Amedeo Avogadro

  1. Raising "lab rats" By Pablo Guillen; Róbert F. Veszteg
  2. Colorful economics: seeing red in a prisoner's dilemma game By Kaufmann W.; Van Witteloostuijn A.; Boone Ch.
  3. Trust, discrimination and acculturation Experimental evidence on Asian international and Australian domestic university students By Daniel Ji; Pablo Guillen
  4. Risk Preferences Are Not Time Preferences By James Andreoni; Charles Sprenger
  5. Certain and Uncertain Utility: The Allais Paradox and Five Decision Theory Phenomena By James Andreoni; Charles Sprenger
  6. Estimating Time Preferences from Convex Budgets By James Andreoni; Charles Sprenger
  7. Do Peers Affect Student Achievement? Evidence from Canada Using Group Size Variation By Vincent Boucher; Yann Bramoullé; Habiba Djebbari; Bernard Fortin
  8. A behavioral model of simultaneous borrowing and saving By Basu, Karna
  9. Dissonance and harmony: a study of the recognition of artists in modernistic music in Brussels; 1919-1939 By Boone Ch.; Declerck C.H.; Rao H.; Van Den Buys K.

  1. By: Pablo Guillen (The University of Sydney); Róbert F. Veszteg (Universidad Carlos III de Madrid)
    Abstract: Experimental subjects usually self-select to the laboratory and this may introduce a bias to the derived conclusions. We analyze data stored by a subject-pool management software at an experimental laboratory and speculate about the eect of individual decisions on returning. In particular, we test whether experience and earnings in previous sessions together with demographic variables explain the decision to return to the laboratory. We nd that males and (in monetary terms) well-performing subjects are more likely to participate again in experiments.
    Keywords: demographic characteristics, experiments, subject pool
    Date: 2010–01–20
  2. By: Kaufmann W.; Van Witteloostuijn A.; Boone Ch.
    Abstract: The color red has been found to influence behavior and performance in a wide range of settings. We introduce the color red in a Prisoner’s Dilemma by performing a series of oneshot and repeated Bertrand duopoly laboratory games. We hypothesize a positive relationship between the color red and the number of competitive choices. Furthermore, we expect to see a habituation effect, implying that the impact of red on competitive behavior is more pronounced at the beginning of the experiment, to then fade away over time. Results indicate that the effect of the color red on cooperative behavior is more complex than hypothesized. We find no main effect for the color red, but we do reveal a significant habituation effect of the color red in the one-shot games. Contrary to our expectation, however, an escalation effect emerges in the repeated game, which suggests that the competition-enhancing effect of red is reinforced by receiving feedback about the other party’s choice.
    Date: 2009–11
  3. By: Daniel Ji (Federal Reserve Bank of Australia); Pablo Guillen (The University of Sydney)
    Abstract: Intercultural relations between Australia and Asia are pivotal to the economic prosperity of the Asia-Pacific region. However, there appears to be tension between Australian domestic and Asian international students at universities in Australia. To measure the degree of trust and patterns of discrimination between these groups, the Berg, Dickhaut and McCabe (1995) trust game and a series of control games were used in framework where each participant played each game against several partners. Controlling for individual heterogeneity, domestic students significantly discriminated against international students in the trust game, and individual discrimination was preference-based rather than based on beliefs towards international students’ trustworthiness. Moreover, the degree of in-group favouritism shown by domestic students was negatively correlated with the Big Five personality trait of Openness. Intercultural patterns across the games also pointed to a willingness of international students to build relations with domestic students. However, the average amount that they sent in the trust game was negatively related with the number of semesters studied at university in Australia, which may partly reflect cultural adjustment but also institutional disadvantages faced specifically by international students. The study furthers understanding of the patterns of discrimi-nation between domestic and international university students, the nature of this discrimination, and illustrates the extent of challenges faced by the Australian tertiary education sector.
    Keywords: rust, discrimination, intercultural differences, economic experiments
    Date: 2010–01–01
  4. By: James Andreoni; Charles Sprenger
    Date: 2010–02–04
  5. By: James Andreoni; Charles Sprenger
    Date: 2010–02–04
  6. By: James Andreoni; Charles Sprenger
    Date: 2010–02–04
  7. By: Vincent Boucher; Yann Bramoullé; Habiba Djebbari; Bernard Fortin
    Abstract: We provide the first empirical application of a new approach proposed by Lee (2007) to estimate peer effects in a linear-in-means model. This approach allows to control for group-level unobservables and to solve the reflection problem. We investigate peer effects in student achievement in Mathematics, Science, French and History in Quebec secondary schools. We estimate the model using maximum likelihood and instrumental variables methods. We find evidence of peer effects. The endogenous peer effect is positive, when significant, and some contextual peer effects matter. Using calibrated Monte Carlo simulations, we find that high dispersion in group sizes helps with potential issues of weak identification. <P>Nous présentons une première application empirique d’une nouvelle approche développée par Lee (2007) pour estimer les effets de pairs dans un modèle linéaire-en-moyenne. Cette méthode permet de tenir compte des variables non-observées au niveau du groupe et de solutionner le problème de réflexion. Nous estimons les effets de pairs sur la performance scolaire (mesurée par les résultats aux épreuves du ministère de l’Éducation, du Loisir et du Sport) en Mathématiques, en Science, en Français et en Histoire dans les écoles secondaires du Québec. À cette fin, nous utilisons des méthodes de maximum de vraisemblance et de variables instrumentales. Nos résultats corroborent la présence d’effets de pairs. L’effet de pair endogène est positif, lorsqu’il est significatif. En particulier, une hausse d’un point dans la note moyenne de ses pairs accroît la note de l’élève de 0,5 en Français, de 0,65 en Histoire et 0,83 en Math (514). En outre, certains effets contextuels ont de l’importance. À partir de simulations Monte Carlo, nous trouvons qu’une grande variabilité dans la taille des groupes peut réduire les problèmes d’identification faible.
    Keywords: peer effects, student achievement, reflection problem, effets de pairs, performance scolaire, problème de réflexion
    JEL: C31 I20 Z13
    Date: 2010–02–01
  8. By: Basu, Karna
    Abstract: Why do individuals borrow and save money at the same time? I present a model in which sophisticated time-inconsistent agents, when faced with a future investment opportunity, rationally choose to save their wealth and then borrow to fund the investment. The combination of savings and a loan generates incentives for future selves to invest optimally by punishing over-consumption. This paper contains two main results. First, I show that agents who simultaneously save and borrow can have higher lifetime welfare than those who don’t. Second, I show that agents who have access to a non-secure savings technology can be better off than those who only have access to secure savings.
    Keywords: saving; borrowing; microfinance; hyperbolic discounting
    JEL: O1 O12
    Date: 2009
  9. By: Boone Ch.; Declerck C.H.; Rao H.; Van Den Buys K.
    Abstract: What explains the recognition gained by artists? Is it learning by doing? Or is it social structure? We study the recognition gained by modernistic composers in Belgium during the interwar years,and find that learning by doing increases recognition for pioneers, and that it matters only when there is fragmentation of the genre. However, novices secured recognition if they worked in a genre allied with a political ideology; more specifically, when the far right parties gained ground reflecting the rise of Flemish nationalism, expressionists belonging to the German pole garnered more recognition even if they were novices. Taken together, these results suggest that worlds of art shape the fates of works of art.
    Date: 2009–12

This nep-cbe issue is ©2010 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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