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on Cognitive and Behavioural Economics |
| By: | Vrany, Martin |
| Abstract: | Procrastination is the notorious tendency to postpone work for tomorrow. This paper presents a formal model of procrastination based on expectations and prospect theory, which differs signficantly from the prevalent model of O’Donoghue and Rabin. Subject is assumed to work on a task for distant reward which depends on the number of periods actually spent working, where the subject faces varying op- portunity costs of working each period before the deadline. In order to assess a hypothesis that procrastination is an evolved and stable habit, the model is rendered dynamic in that past decisions and circumstances affect the present. The model is first explored via qualitative analysis and simulations are performed to further reveal its functionality. |
| Keywords: | procrastination; dynamic inconsistency; intertemporal choice; prospect theory; hyperbolic discounting; expectations |
| JEL: | D0 D81 D84 D90 J22 |
| Date: | 2010–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32618&r=cbe |
| By: | Cooper, David J. (Florida State University); Sutter, Matthias (University of Innsbruck) |
| Abstract: | Team success relies on assigning team members to the right tasks. We use controlled experiments to study how roles are assigned within teams and how this affects team performance. Subjects play the takeover game in pairs consisting of a buyer and a seller. Understanding optimal play is very demanding for buyers and trivial for sellers. Teams perform better when roles are assigned endogenously or teammates are allowed to chat about their decisions, but the interaction effect between endogenous role assignment and chat unexpectedly worsens team performance. We argue that ego depletion provides a likely explanation for this surprising result. |
| Keywords: | role selection in teams, team performance, takeover game, winner's curse, communication, experiment |
| JEL: | C91 C92 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5892&r=cbe |
| By: | Rosaz, Julie (University of Lyon 2); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | This paper presents the results of a laboratory experiment in which workers perform a real-effort task and supervisors report the workers’ performance to the experimenter. The report is non verifiable and determines the earnings of both the supervisor and the worker. We find that not all the supervisors, but at least one third of them bias their report. Both selfish black lies (increasing the supervisor's earnings while decreasing the worker's payoff) and Pareto white lies (increasing the earnings of both) according to Erat and Gneezy (2009)'s terminology are frequent. In contrast, spiteful black lies (decreasing the earnings of both) and altruistic white lies (increasing the earnings of workers but decreasing those of the supervisor) are almost non-existent. The supervisors' second-order beliefs and their decision to lie are highly correlated, suggesting that guilt aversion plays a role. |
| Keywords: | evaluation, lie-aversion, guilt aversion, self-image, deception, lies, experiments |
| JEL: | C91 D82 M52 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5884&r=cbe |
| By: | Lisa Bruttel; Tim Friehe |
| Abstract: | This paper presents experimental evidence that contributions to a public good can be path-dependent for a limited time span. We study a repeated linear public-good game with punishment opportunities. Our data shows that subjects who had experienced a higher marginal return on public-good contributions in rounds 1-10 contributed more to the public good in rounds 11 and 12, even though they faced the same marginal return as the control group in these later rounds. In contrast, di erences in contributions were not significant when comparing subjects bearing the same current costs of punishment points, but having had different costs in the past. |
| Keywords: | public-good game, team, punishment, path dependence, experiment |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0067&r=cbe |
| By: | Nadine Riedel (Centre for Business Taxation, University of Oxford); Hannah Schildberg-Hoerisch (University of Bonn) |
| Abstract: | We use a laboratory experiment to investigate the behavioral effects of obligations that are not backed by binding deterrent incentives. To implement such `expressive law' we introduce different levels of very weakly incentivized, symmetric and asymmetric minimum contribution levels (obligations) in a repeated public goods experiment. The results provide evidence for a weak expressive function of law: while the initial impact of high obligations on behavior is strong, it decreases over time. Asymmetric obligations are as effective as symmetric ones. Our results are compatible with the argument that expressive law affects behavior by attaching an emotional cost of disobeying the own obligation. |
| Keywords: | non-binding obligations, expressive law, public goods, experiment |
| JEL: | C92 H41 K40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:1110&r=cbe |
| By: | Manzini, Paola (University of St. Andrews); Mariotti, Marco (University of St. Andrews); Tyson, Christopher J. (Queen Mary, University of London) |
| Abstract: | We introduce and study the problem of manipulation of choice behavior. In a class of two-stage models of decision making, with the agent's choices determined by three "psychological variables," we imagine that a subset of these variables can be selected by a "manipulator." To what extent does this confer control of the agent's behavior? Within the specified framework, which overlaps with two existing models of choice under cognitive constraints, we provide a complete answer to this question. |
| Keywords: | attention, choice function, revealed preference, satisficing, threshold |
| JEL: | D01 D70 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5891&r=cbe |
| By: | Ferdinand von Siemens (University of Amsterdam) |
| Abstract: | Empirical research suggests that - rather than improving incentives - exerting control can reduce workers' performance by eroding motivation. The present paper shows that intention-based reciprocity can cause such motivational crowding-out if individuals differ in their propensity for reciprocity and preferences are private information. Not being controlled might then be considered to be kind, because not everybody reciprocates not being controlled with high effort. This argument stands in contrast to existing theoretical wisdom on motivational crowding-out that is primarily based on signaling models. |
| Keywords: | extrinsic and intrinsic motivation; crowding-out; intention-based reciprocity |
| JEL: | A13 C70 D63 D82 L20 |
| Date: | 2011–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110115&r=cbe |
| By: | Yves Ortiz (Study Center Gerzensee); Martin schüle (Institute of Neuroinformatics, University of Zurich and ETH Zurich) |
| Abstract: | We develop a multi-agent framework based on probabilistic cellular automata theory to describe off-equilibrium dynamics in the context of the economic problem of price adjustment in different strategic situations as investigated experimentally by Fehr and Tyran (2001) and (2008). It is found that the main experimental findings, namely suboptimal aggregate behavior in terms of sluggish adjustment after a fully anticipated money shock, can be reproduced and largely explained by the interaction of sophisticated and naive agents. Furthermore, a range of conceptual issues as e.g. the source of endogenous beliefs on the other players rationality is addressed within our multi-agent framework. We find that, if costs/payoffs act as driver of rational behavior, then endogenous beliefs and consequential aggregate behavior are driven by the particular off-equilibrium time-dependent payoff/cost profile rather than by total off- equilibrium payoffs/costs that naive agents face in the respective strategic situation. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:szg:worpap:1108&r=cbe |