nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2011‒02‒12
twelve papers chosen by
Marco Novarese
University Amedeo Avogadro

  1. Driven by Social Comparisons: How Feedback about Coworkers’ Effort Influences Individual Productivity By Francesca Gino; Bradley R. Staats
  2. Did We Overestimate the Role of Social Preferences? The Case of Self-Selected Student Samples By Falk, Armin; Meier, Stephan; Zehnder, Christian
  3. Competitive Preferences and Status as an Incentive: Experimental Evidence By Gary Charness; David Masclet; Marie-Claire Villeval
  4. State or Nature? Formal vs. Informal Sanctioning in the Voluntary Provision of Public Goods By Kenju Kamei; Louis Putterman; Jean-Robert Tyran
  5. Self-Organization for Collective Action: An Experimental Study of Voting on Formal, Informal, and No Sanction Regimes By Thomas Markussen; Louis Putterman; Jean-Robert Tyran
  6. Threat and Punishment in Public Good Experiments By David Masclet; Charles N. Noussair; Marie-Claire Villeval
  7. Weak moral motivation leads to the decline of voluntary contributions By Charles Figuieres; David Masclet; Marc Willinger
  8. Where do preferences come from? By Dietrich Franz; List Christian
  9. An Experimental Investigation of Intrinsic Motivations for Giving By Tonin, Mirco; Vlassopoulos, Michael
  10. Memory Lane and Morality: How Childhood Memories Promote Prosocial Behavior By Francesca Gino; Sreedhari D. Desai
  11. The Role of Passionate Individuals in Economic Development By Zakharenko, Roman
  12. Kenneth Boulding as a Moral Scientist By Davis, John B.

  1. By: Francesca Gino (Harvard Business School, Negotiation, Organizations & Markets Unit); Bradley R. Staats (University of North Carolina at Chapel Hill)
    Abstract: Drawing on theoretical insights from research on social comparison processes, this article explores how managers can use performance feedback to sustain employees' motivation and performance in organizations. Using a field experiment at a Japanese bank, we investigate the effects of valence (positive versus negative), type (direct versus indirect), and timing of feedback (one-shot versus persistent) on employee productivity. Our results show that direct negative feedback (e.g., an employee learns her performance falls in the bottom of her group) leads to improvements in employees' performance, while direct positive feedback does not significantly impact performance. Furthermore, indirect negative feedback (i.e., the employee learns she is not in the bottom of her group) worsens productivity while indirect positive feedback (i.e., the employee learns she is not in the top of her group) does not affect it. Finally, both persistently positive and persistently negative feedback lead to improvements in employees' performance. Together, our findings offer insight into the role of performance feedback in motivating productivity in repetitive tasks.
    Keywords: Feedback, Framing, Learning, Motivation, Persistence, Productivity, Social comparison
    Date: 2011–02
  2. By: Falk, Armin (University of Bonn); Meier, Stephan (Columbia University); Zehnder, Christian (University of Lausanne)
    Abstract: Social preference research has received considerable attention among economists in recent years. However, the empirical foundation of social preferences is largely based on laboratory experiments with self-selected students as participants. This is potentially problematic as students participating in experiments may behave systematically different than non-participating students or non-students. In this paper we empirically investigate whether laboratory experiments with student samples misrepresent the importance of social preferences. Our first study shows that students who exhibit stronger prosocial inclinations in an unrelated field donation are not more likely to participate in experiments. This suggests that self-selection of more prosocial students into experiments is not a major issue. Our second study compares behavior of students and the general population in a trust experiment. We find very similar behavioral patterns for the two groups. If anything, the level of reciprocation seems higher among non-students suggesting that results from student samples might be seen as a lower bound for the importance of prosocial behavior.
    Keywords: methodology, selection, experiments, prosocial behavior
    JEL: C90
    Date: 2011–02
  3. By: Gary Charness; David Masclet; Marie-Claire Villeval
    Abstract: In this paper, we investigate individuals’ investment in status in an environment where no monetary return can possibly be derived from reaching a better relative position. We use a real-effort experiment in which we permit individuals to learn and potentially improve their relative position in terms of performance. We find that people express a taste for status. People increase their effort when they are informed about their relative performance, and some individuals pay to sabotage others’ output or to artificially increase their own performance although they are paid a flat wage. Introducing the opportunity to sabotage others’ output exerts a negative effect on performance. Such effects can be alleviated by inducing group identity that favors positive rivalry but discourages sabotage among peers. <P>Dans cet article, nous étudions la recherche de statut par les agents économiques dans un environnement où un meilleur statut ne procure pas nécessairement un avantage monétaire. Pour cela, nous avons réalisé une expérience en effort réel dans laquelle les agents sont amenés à fournir un niveau d’effort et sont informés de la performance de leurs collègues de travail. Nous observons que la plupart des gens ont un goût élevé pour la compétition et la recherche de statut au sein de leur groupe. Les individus augmentent leur niveau d’effort dès lors qu’ils sont informés de l’effort des autres. Certains sont même disposés à saboter l’effort des autres ou à accroitre artificiellement leur propre effort afin d’accroitre artificiellement leur statut.
    Keywords: Status seeking, rank, competitive preferences, experiment , recherche de statut, classement, préférences compétitives, expérience
    JEL: C91 C92 M54 D63 J28 J31
    Date: 2011–01–01
  4. By: Kenju Kamei (Brown University); Louis Putterman (Brown University); Jean-Robert Tyran (University of Vienna)
    Abstract: The sanctioning of norm-violating behavior by an effective formal authority is an efficient solution for social dilemmas. It is in the self-interest of voters and is often favorably contrasted with letting citizens take punishment into their own hands. Allowing informal sanctions, by contrast, not only comes with a danger that punishments will be misapplied, but also should have no efficiency benefit under standard assumptions of self-interested agents. We experimentally investigate the relative effectiveness of formal vs. informal sanctions in the voluntary provision of public goods. Unsurprisingly, we find that effective formal sanctions are popular and efficient when they are free to impose. Surprisingly, we find that informal sanctions are often more popular and more efficient when effective formal sanctions entail a modest cost. The reason is that informal sanctions achieve more efficient outcomes than theory predicts, especially when the mechanism is chosen by voting.
    Keywords: sanction; social dilemma; public goods; voluntary contribution mechanism; punishment; experiment
    JEL: C92 C91 D71 H41
    Date: 2011–02
  5. By: Thomas Markussen; Louis Putterman; Jean-Robert Tyran
    Abstract: Entrusting the power to punish to a central authority is a hallmark of civilization. We study a collective action dilemma in which self-interest should produce a sub-optimal outcome absent sanctions for non-cooperation. We then test experimentally whether subjects make the theoretically optimal choice of a formal sanction scheme that costs less than the surplus it makes possible, or instead opt for the use of informal sanctions or no sanctions. Most groups adopt formal sanctions when they are of deterrent magnitude and cost a small fraction (10%) of the potential surplus. Contrary to the standard theoretical prediction, however, most groups choose informal sanctions when formal sanctions are more costly (40% of the surplus). Being adopted by voting appears to enhance the efficiency of both informal sanctions and non-deterrent formal sanctions.
    Keywords: formal sanctions, informal sanctions, experiment, voting, cooperation, punishment.
    Date: 2011
  6. By: David Masclet; Charles N. Noussair; Marie-Claire Villeval
    Abstract: Experimental studies of social dilemmas have shown that while the existence of a sanctioning institution improves cooperation within groups, it also has a detrimental impact on group earnings in the short-run. Could the introduction of pre-play threats to punish have enough of a beneficial impact on cooperation, while not incurring the cost associated with actual punishment, so that they increase overall welfare? We report an experiment in which players can issue non-binding threats to punish others based on their contribution levels to a public good. After observing others’ actual contributions, they choose their actual punishment level. We find that threats increase the level of contributions significantly. Efficiency is improved, but only in the long run. However, the possibility of sanctioning differences between threatened and actual punishment leads to lower threats, cooperation and welfare, restoring them to levels equal to or below the levels attained in the absence of threats. <P>Les agents n’hésitent pas à sanctionner les resquilleurs dans des situations de dilemmes sociaux et cela a un effet positif sur la coopération. Toutefois, les mécanismes de sanction peuvent également générer des externalités négatives fortes sur les gains. Dans quelle mesure l’introduction de menaces non crédibles est-elle en mesure d’impacter positivement la coopération sans engendrer ces externalités négatives? Afin de répondre à cette question, nous avons réalisé une expérience dans laquelle les agents ont la possibilité d’annoncer combien ils seraient prêts à sanctionner les autres membres de leur groupe pour tous les montants possibles de contribution. Nous observons qu’introduire cette étape de menace a un effet positif sur la coopération. Toutefois, l’efficience en termes de gain n’est pas améliorée à long terme. La possibilité de sanctionner ceux qui punissent moins que ce qu’ils ont annoncé conduit les agents à réduire le niveau de menace et celui de la coopération.
    Keywords: Threats, cheap talk, sanctions, public good, experiment., Menaces, parler à bon marché, sanctions, bien public, expérience.
    JEL: C92 H41 D63
    Date: 2011–01–01
  7. By: Charles Figuieres; David Masclet; Marc Willinger
    Abstract: We develop a model that accounts for the decay of the average contribution observed in experiments on voluntary contributions to a public good. The novel idea is that people’s moral motivation is "weak". Their judgment about the right contribution depends on observed contributions by group members and on an intrinsic "moral ideal". We show that the assumption of weakly morally motivated agents lead to the decline of the average contribution over time. The model is compatible with persistence of over-contributions, variability of contributions (across and within individuals), and the “restart effect”. Furthermore, it offers a rationale for conditional cooperation. <P>Cet article présente un modèle théorique qui permet d’expliquer le déclin des contributions observé dans les expériences de contribution volontaire au financement de biens publics répétés à horizon fini. Ce modèle s’appuie sur l’idée de motivation morale faible selon laquelle les agents auraient une motivation intrinsèque à contribuer un montant non nul au bien public et que cette motivation intrinsèque serait conditionnée à l’observation des contributions des autres membres du groupe. Ce modèle est compatible avec la persistance de la sur-contribution, la variabilité inter et intra individuelle dans les montants de contributions et l’effet de « restart ».
    Keywords: Conditional cooperation, voluntary contributions, moral motivation, experiments on public goods games, coopération conditionnelle, contributions volontaires, motivation morale, expériences de biens publics
    JEL: H00 H41 C72
    Date: 2011–01–01
  8. By: Dietrich Franz; List Christian (METEOR)
    Abstract: Rational choice theory analyzes how an agent can rationally act, given his or her preferences, but says little about where those preferences come from. Instead, preferences are usually assumed to be .xed and exogenously given. We introduce a framework for conceptualizing preference formation and preference change. In our model, an agent.s preferences are based on certain .motivationally of the alternatives over which the preferences are held. Preferences may change as new properties of the alternatives become salient or previously salient ones cease to be so. We suggest that our approach captures endogenous preferences in various contexts, and helps to illuminate the distinction between formal and substantive concepts of rationality, as well as the role of perception in rational choice.
    Keywords: microeconomics ;
    Date: 2011
  9. By: Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton)
    Abstract: This paper presents results from a modified dictator experiment aimed at distinguishing and quantifying the two intrinsic motivations for giving: warm glow and pure altruism. In particular, we implemented a within-subject experimental design with three treatments: (i) one, T1, where the recipient is the experimenters, which measures altruistic feelings towards the experimenters, (ii) the Crumpler and Grossman (2008) design, T2, in which the recipient is a charity, and the dictator’s donation crowds out one-for-one a donation by the experimenters, which aims at measuring warm glow giving, (iii) a third one, T3, with a charity recipient and no crowding out, which elicits both types of altruism. We use T1 to assess to what extent altruistic feelings towards the experimenters are a potential confound for measuring warm glow in T2. We find giving in T1 not to be significantly different from T2, suggesting that the Crumpler and Grossman design provides an upper bound estimate of warm glow giving. We provide a lower bound estimate based on the behavior of subjects whose warm glow giving in T2 is not confounded, that is, those who do not display altruistic feelings towards the experimenters in T1. We use these two estimates to quantify the portion of giving in T3 due to pure altruism and find it to be between 20% and 26% of endowment. We also propose a new method of detecting warm glow motivation based on the idea that in a random-lottery incentive (RLI) scheme, such as the one we employ, warm glow accumulates and this may lead to satiation, whereas purely altruistic motivation does not.
    Keywords: dictator game, warm glow, pure altruism, charitable giving, random lottery, incentive scheme
    JEL: C91 D64
    Date: 2011–01
  10. By: Francesca Gino (Harvard Business School, Negotiation, Organizations & Markets Unit); Sreedhari D. Desai (Harvard Law School; Harvard Kennedy School)
    Abstract: Four experiments demonstrated that recalling memories from one's own childhood lead people to experience feelings of moral purity and to behave prosocially. In Experiment 1, participants instructed to recall memories from their childhood were more likely to help the experimenter with a supplementary task than were participants in a control condition, and this effect was mediated by self-reported feelings of moral purity. In Experiment 2, the same manipulation increased the amount of money participants donated to a good cause, and self-reported feelings of moral purity mediated this relationship. In Experiment 3, participants who recalled childhood memories judged the ethically-questionable behavior of others more harshly, suggesting that childhood memories lead to altruistic punishment. Finally, in Experiment 4, compared to a control condition, both positively-valenced and negatively-valenced childhood memories led to higher empathic concern for a person in need, which, in turn increased intentions to help.
    Keywords: Childhood, Ethics, Memories, Morality, Prosocial Behavior, Purity
    Date: 2011–02
  11. By: Zakharenko, Roman
    Abstract: In this paper, I merge two theories -- theory of "passionate individuals" by Gumilev(1989) and Memetics by Dawkins(1976) - to develop a formal growth theory that states that societies become more developed when their members have more intrinsic motivation to solve problems of social importance (i.e. make "cultural contributions"). Individuals derive utility from genetic fitness (i.e. the number of surviving children) as well as from cultural fitness, defined as the amount of appreciation ("honor") of one's cultural contribution by future generations. To make a cultural contribution, one must study/honor cultural contributions of the past, which leads to multiple steady states. In the survival steady state, individuals expect that no one in the future will be interested in their cultural contribution, which makes them allocate all energy onto maximization of genetic fitness and care little about cultural contributions of the past. In the passionate steady state, individuals expect high appreciation of their cultural contribution and thus spend a lot of energy onto making such a contribution, which makes them highly appreciate cultural contributions of the past. Empirical implications of theory are also discussed.
    Keywords: passionate individuals; human values; poverty traps; memetics; economic growth
    JEL: O11 O49 Z13
    Date: 2011–02–01
  12. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: Kenneth Boulding’s AEA presidential address argued that economics is a moral science. His view derived from his general systems theory thinking, his three systems view of human society, and his early contributions to evolutionary economics. Boulding’s argument that economics could not be value-free should be distinguished from other well-known views of economics as a moral science, such as Gunnar Myrdal’s. This paper discusses the development and nature of Boulding’s thinking about economics as a moral science in the larger context of his thinking.
    Keywords: Boulding, moral science, general systems theory, three systems view, evolutionary economics
    JEL: A13 B31 B52
    Date: 2011–01

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