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on Cognitive and Behavioural Economics |
| By: | Attanasi, Giuseppe; Corazzini, Luca; Georgantzis, Nikolaos; Passarelli, Francesco |
| Abstract: | We study, both theoretically and experimentally, the relation between preferred majority thresholds and behavioral traits such as the degree of risk aversion and the subjective confidence on others preferences over the alternative to vote. The main theoretical findings are supported by experimental data. The majority threshold chosen by a subject is positively and significantly correlated with her degree of risk aversion while it is negatively and significantly associated to her con dence on othersvotes. Moreover, in a treatment in which each subject can privately observe the distribution of preferences over a sub-group of participants, we find that the quality of information crowds-out subject's confidence. |
| Keywords: | majority threshold, risk aversion, (over-)confidence |
| JEL: | D91 D72 D81 H11 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22195&r=cbe |
| By: | Hopfensitz, Astrid; Wranik, Tanja |
| Abstract: | Investment behavior is traditionally investigated with the assumption that it is on average advantageous to invest. However, this may not always be the case. In this paper, we experimentally studied investment choices made by students and financial professionals facing alternately an advantageous and disadvantageous environment in a multi-round investment game. Expected returns from investment in the advantageous environment were higher than a safe alternative, while expected returns were lower in the disadvantageous environment. We investigate how experience and personality are related to choices. Investment behavior does not differ dependent on expected returns and professionals do not significantly differ from students. Personality predicts behavior and in particular we observe that openness to experience was an asset in unfavorable markets, leading to reduced risk taking. |
| JEL: | D14 D81 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22245&r=cbe |
| By: | Cochard, François; Couprie, Hélène; Hopfensitz, Astrid |
| Abstract: | Models of household economics require an understanding of economic interactions in families. Social ties, repetition and reduced strategic uncertainty make social dilemmas in couples a very special case that needs to be empirically studied. In this paper we present results from a large economic experiment with 100 maritally living couples. Participants made decisions in a social dilemma with their partner and with a stranger. We predict behavior in this task with individual and couples' socio-demographic variables, efficiency preferences and couples' marital satisfaction. As opposed to models explaining behavior amongst strangers, the regressions on couples’ decisions highlight clear patterns concerning cooperation behavior which could inspire future household decision-making models. |
| Keywords: | noncooperative games, laboratory, individual behavior |
| JEL: | C72 C91 D13 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22255&r=cbe |
| By: | Arnaud Reynaud; Stephane Couture |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:10.10.316&r=cbe |
| By: | Moinas, Sophie; Pouget, Sébastien |
| Abstract: | This paper proposes a theory of rational bubbles in an economy with finite trading opportunities. Bubbles arise because agents are never sure to be last in the market sequence. This theory is used to design an experimental setting in which bubbles can be made rational or irrational by varying one parameter. This complements the experimental literature on irrational bubbles initiated by Smith, Suchanek and Williams (1988). Our experimental results suggest that it is pretty difficult to coordinate on rational bubbles even in an environment where irrational bubbles flourish. Maximum likelihood estimations show that these results can be reconciled within the context of Camerer, Ho, and Chong (2004)'s cognitive hierarchy model, and Mc Kelvey and Palfrey (1995)'s quantal response equilibrium. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:21929&r=cbe |
| By: | Hopfensitz, Astrid |
| Abstract: | When investment is repeated, previous outcomes (winning/losing) as well as the current budget level (gain/loss domain) influence decisions. The first is related to the so-called "gamblers fallacy". The second to value function relative to some reference point. Both effects have been extensively studied, however not their interaction. We present a meta-study of five experiments initially conducted to investigate myopic-lossaversion. We observe that investment is related to the number of previous winning rounds as well as to the current budget position relative to a reference point. These effects persist when the analysis is extended to settings with restricted flexibility concerning investment. |
| Keywords: | reference point, gamblers fallacy, meta study |
| JEL: | C91 D81 G11 |
| Date: | 2009–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22194&r=cbe |
| By: | Jack Douglas Stecher (Carnegie Mellon University); Timothy Shields (Argyros School of Business & Economics, Chapman University); John Dickhaut (Economic Science Institute, Chapman University) |
| Abstract: | This article develops a method for drawing samples from which it is impossible to infer any quantile or moment of the underlying distribution. The method provides researchers with a way to give subjects the experience of ambiguity. In any experiment, learning the distribution from experience is impossible for the subjects, essentially because it is impossible for the experimenter. We describe our method mathematically, illustrate it in simulations, and then test it in a laboratory experiment. Our technique does not withhold sampling information, does not assume that the subject is incapable of making statistical inferences, is replicable across experiments, and requires no special apparatus. We compare our method to the techniques used in related experiments that attempt to produce an ambiguous experience for the subjects. |
| Keywords: | ambiguity; Ellsberg; Knightian uncertainty; laboratory experiments; ignorance; vagueness JEL Classications: C90; C91; C92; D80; D81 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:08-10&r=cbe |
| By: | Charness, Gary (University of California, Santa Barbara); Kuhn, Peter J. (University of California, Santa Barbara) |
| Abstract: | This paper surveys the contributions of laboratory experiments to labor economics. We begin with a discussion of methodological issues: why (and when) is a lab experiment the best approach; how do laboratory experiments compare to field experiments; and what are the main design issues? We then summarize the substantive contributions of laboratory experiments to our understanding of principal-agent interactions, social preferences, union-firm bargaining, arbitration, gender differentials, discrimination, job search, and labor markets more generally. |
| Keywords: | labor economics, laboratory experiments, principal-agent theory, personnel economics |
| JEL: | C9 J0 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4941&r=cbe |
| By: | Sergio Sousa (School of Economics, University of Nottingham) |
| Abstract: | This paper investigates the efficacy of a punishment mechanism in promoting cooperative behaviour in a public goods game when enforcement of punishment is uncertain. Experimental studies have found that a sanctioning system can induce individuals to adopt behaviour deemed as socially acceptable. Yet, our experiment shows that a sanctioning system cannot promote cooperative behaviour if enforcement is a low-probability event and free-riding behaviour is not often punished. This supports the view that punishment needs to be exercised to be feared, otherwise the simple threat of it cannot be effective in promoting cooperation. |
| Keywords: | uncertain enforcement; public good game; altruistic punishment; decisionmaking under uncertainty; cooperation |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2010-06&r=cbe |
| By: | Shchetinin, Oleg |
| Abstract: | The paper studies the impact of altruism on Agent’s motivation in the career concerns model. The paper shows the new channel of interaction between intrinsic and extrinsic motivation. The common point in the literature is that intrinsic motivation can be crowded out by the extrinsic incentives. My paper shows that crowding effect can go in the opposite direction: extrinsic incentives can be lessened for the intrinsically motivated agent. The analysis shows that altruism can decrease effort, though conventional wisdom suggests that effort should always be higher for the more altruistic worker. The key for the result is the distinction between current and anticipated altruism. The paper also studies the effect of altruism on wage. The model has a number of other interesting features. It gives an example of winner’s blessing, it shows that ambitions can hinder altruistic relation. The model can be naturally applied to the workplace relation; another application is the local public good provision. |
| Keywords: | extrinsic and intrinsic motivation, career concerns, altruism |
| JEL: | D82 M52 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22198&r=cbe |
| By: | Störmer, Susi (University of Hamburg); Fahr, René (University of Paderborn) |
| Abstract: | We investigate the influence of personality as measured by the Big Five personality scale on absenteeism using representative data for Germany. In particular, the 2005 wave of the German Socio-Economic Panel provides detailed information on socio-economic background characteristics along with a Big Five personality scale. Estimates of a Logit model and of count data regression are used to analyze an empirical model based on the theory of hedonic labour market outcomes. These estimates allow us to test hypotheses on the influence of the Big Five personality traits on work attendance. We find clear negative correlations between the probability to be absent and Conscientiousness as well as Agreeableness. We find a strong positive impact of Neuroticism on work attendance decisions in general and clues for a positive impact of Extraversion among men. When looking at the length of absence occurrences the personality dimensions of Neuroticism and Agreeableness are found to significantly influence male absenteeism. Implications of our results are discussed. |
| Keywords: | absenteeism, Five Factor Model, personality, count data model |
| JEL: | J20 M12 M51 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4927&r=cbe |
| By: | Donkers, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University); Diepen, M. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University); Franses, Ph.H.B.F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Charitable organizations send out large volumes of direct mailings, soliciting for money in support of many good causes. Without any request, donations are rarely made, and it is well known that each request for money by a charity likely generates at least some revenues. Whether a single request from a charity increases the total amount donated by an individual is however unknown. Indeed, a response to one request can hurt responses to others. The net effect is therefore not easily observable, certainly not when multiple charities address the same individuals. In this paper we alleviate these observational difficulties by carrying out a field experiment in which five large charities cooperate. With the unique data that we collect, we study the impact of sending more requests on total donations. The results indicate that there is a negative competitive effect on requests from other charities, but this effect dies out rapidly. Soon after the mailing has been sent, it is only a strong cannibalization of the charity’s own revenues that prevails. This empirical finding suggests the important conclusion that not much coordination across charities is needed to increase revenues. We also demonstrate that charities need sophisticated evaluation tools that do not ignore the effects of cannibalization. |
| Keywords: | fundraising;competition;direct mailing;field experiment |
| Date: | 2010–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765019423&r=cbe |
| By: | Ricci, Sophie; Fourcadet, Olivier |
| Abstract: | At the beginning of this research, we had in mind the low consumption level of fruits and vegetables among French young people despite several months of intense exposure to health messages, such as âeat 5 portions of fruits and vegetables every dayâ. Studies show that French young people have memorized the messages, but did not alter their eating habits. Our major hypothesis was that some âmental blocksâ might be curbing fruit consumption, and removing them might increase consumption. Similarly we thought that some âmental leversâ if well activated could increase fruit consumption. Identifying âmental blocksâ and âmental leversâ related to fruits became our research goal. To achieve this objective, building the cognitive map of the fruit universe appears an appropriate method. In the process of constructing the map we discovered that we could also assess, although imperfectly, how people have formed their mental representation over the courses of the years. |
| Keywords: | Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Risk and Uncertainty, |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi09:59194&r=cbe |