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on Cognitive and Behavioural Economics |
| By: | Lotito, Gianna; Migheli, Matteo; Ortona, Guido |
| Abstract: | Our experiment aims at studying the impact of two types of relational goods on the voluntary contributions to the production of a public good, i.e. acquaintance among the contributors and having performed a common work before the experiment. We implement two treatments with 128 participants from two different groups. In the first treatment the subjects are left talking in a room before the experiment (cheap talk treatment); they are not suggested any particular topic to talk about, nor are they requested to perform any activity in particular. The second treatment involves the performance of a common work (namely, the computation of some indices of economic performance of three companies, based on their balance sheets). The two groups of subjects are composed either by people with or without previous acquaintance. An equal number of subjects from each of these groups is then allocated to either treatment. After that the subjects played a standard 10-rounds public goods game in groups of 4. The groups were gender-homogeneous. This allows us also to inquire for the possible presence of a gender effect in our experiment. Our results show that: 1) both common work and previous acquaintance increase the average contribution to the public good, 2) there is a relevant gender effect with women contributing more or less than men, depending on the treatment. Therefore, we conclude that relational goods are important to enhance cooperation, that acquaintance and working together are rather complements than substitutes, and that different relational goods produce different effects on cooperation. Also, we find further evidence for women's behaviour to be more context-specific than men's. |
| Keywords: | relational goods; public goods experiments; gender effect |
| JEL: | C91 H41 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:160&r=cbe |
| By: | Bruno S. Frey; Margit Osterloh |
| Abstract: | Research rankings based on publications and citations today dominate governance of academia. Yet they have unintended side effects on individual scholars and academic institutions and can be counterproductive. They induce a substitution of the "taste for science" by a "taste for publication". We suggest as alternatives careful selection and socialization of scholars, supplemented by periodic self-evaluations and awards. Neither should rankings be a basis for the distributions of funds within universities. Rather, qualified individual scholars should be supported by basic funds to be able to engage in new and unconventional research topics and methods. |
| Keywords: | Academic governance; rankings; motivation; selection; socialization |
| JEL: | A10 D02 H83 L23 M50 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2011-16&r=cbe |
| By: | Barmettler, Franziska (Foundation for Global Sustainability); Fehr, Ernst (University of Zurich); Zehnder, Christian (University of Lausanne) |
| Abstract: | Social preference research has received considerable attention in recent years. Researchers have demonstrated that the presence of people with social preferences has important implications in many economic domains. However, it is important to be aware of the fact that the empirical basis of this literature relies to a large extent on experiments that do not provide anonymity between experimenter and subject. It has been argued that this lack of experimenter-subject anonymity may create selfish incentives to engage in seemingly other-regarding behavior. If this were the case these experiments would overestimate the importance of social preferences. Previous studies provide mixed results and methodological differences within and across studies make it difficult to isolate the impact of experimenter-subject anonymity on prosocial behavior. In this paper we use a novel procedure that allows us to examine the impact of the exact same ceteris-paribus variation in anonymity on behavior in three of the most commonly used games in the social preference literature. Our data does not support the hypothesis that introducing experimenter-subject anonymity affects observed prosocial behavior. We do not observe significant effects of experimenter-subject anonymity on prosocial behavior in any of our games. |
| Keywords: | laboratory experiments, anonymity, scrutiny, prosocial behavior |
| JEL: | C91 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5925&r=cbe |
| By: | Peter Bardsley; Nisvan Erkal; Nikos Nikiforakis; Tom Wilkening |
| Abstract: | This paper investigates the relationship between firm longevity and rat races in an environment where long-lived firms are operated by overlapping generations of short-lived players. We first present a complete information model in which workers in the young generation are offered employment contracts designed by the firms' owners who belong to the old generation. When old, employed workers are granted ownnership rights as long as the firm continues to operate. We test the theoretical predictions of the model in a laboratory experiment. In line with our model's predictions, as firm longevity increases, the recursive nature of the contracts leads to a rat race characterized by low wages, high effort levels, and rent dissipation |
| Keywords: | Overlapping-generations models; Recursive contracts; Rat races; Experiments |
| JEL: | C91 D02 D21 D86 D92 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:1122&r=cbe |
| By: | Alessia Isopi (School of Economics, University of Nottingham); Daniele Nosenzo (School of Economics, University of Nottingham); Chris Starmer (School of Economics, University of Nottingham) |
| Abstract: | This paper reports an experiment designed to test whether prior consultation within a group affects subsequent individual decision making in tasks where demonstrability of correct solutions is low. In our experiment subjects considered two paintings created by two different artists and were asked to guess which artist made each painting. We observed answers given by individuals under two treatments: in one, subjects were allowed the opportunity to consult with other participants before making their private decisions; in the other there was no such opportunity. Our primary findings are that subjects in the first treatment evaluate the opportunity to consult positively but they perform significantly worse and earn significantly less. |
| Keywords: | Consultation; Decision making; Group decisions; Individual decisions |
| JEL: | C91 C92 D80 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2011-08&r=cbe |
| By: | David Gill; Rebecca Stone |
| Abstract: | Teams are becoming increasingly important in work settings. We develop a framework to study the strategic implications of a meritocratic notion of desert under which team members care about receiving what they feel they deserve. Team members find it painful to receive less than their perceived entitlement, while receiving more may induce pleasure or pain depending on whether preferences exhibit desert elation or desert guilt. Our notion of desert generalizes distributional concern models to situations in which effort choices affect the distribution perceived to be fair; in particular, desert nests inequity aversion over money net of effort costs as a special case. When identical teammates share output equally, desert guilt generates a continuum of symmetric equilibria. Equilibrium effort can lie above or below the level in the absence of desert, so desert guilt generates behavior consistent with both positive and negative reciprocity and may underpin social norms of cooperation. |
| Keywords: | Desert, deservingness, equity, inequity aversion, loss aversion, reference-dependence preferences, guilt, reciprocity, social norms, team production |
| JEL: | D63 J33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:563&r=cbe |
| By: | Cobb-Clark, Deborah A. (University of Melbourne); Schurer, Stefanie (Victoria University of Wellington) |
| Abstract: | We use a large, nationally-representative sample of working-age adults to demonstrate that personality (as measured by the Big Five) is stable over a four-year period. Average personality changes are small and do not vary substantially across age groups. Intra-individual personality change is generally unrelated to experiencing adverse life events and is unlikely to be economically meaningful. Like other non-cognitive traits, personality can be modeled as a stable input into many economic decisions. |
| Keywords: | non-cognitive skills, Big-Five personality traits, stability |
| JEL: | J24 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5943&r=cbe |
| By: | David Gill; Victoria Prowse |
| Abstract: | We present experimental evidence which sheds new light on why women may be less competitive than men. Specifically, we observe striking differences in how men and women respond to good and bad luck in a competitive environment. Following a loss, women tend to reduce effort, and the effect is independent of the monetary value of the prize that the women failed to win. Men, on the other hand, reduce effort only after failing to win large prizes. Responses to previous competitve outcomes explain about 11% of the variation that we observe in women’s efforts, but only about 4% of the variation in the effort of men, and differential responses to luck account for about half of the gender performance gap in our experiment. These findings help to explain both female underperformance in environments with repeated competition and the tendency for women to select into tournaments at a lower rate than men. |
| Keywords: | Real effort experiment, gender differences, gender gap, competition aversion, tournament, luck, win, loss, competitive outcomes |
| JEL: | C91 J16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:564&r=cbe |
| By: | Olivier Armantier; Wändi Bruine de Bruin; Giorgio Topa; Wilbert van der Klaauw; Basit Zafar |
| Abstract: | We compare the inflation expectations reported by consumers in a survey with their behavior in a financially incentivized investment experiment designed such that future inflation affects payoffs. The inflation expectations survey is found to be informative in the sense that the beliefs reported by the respondents are correlated with their choices in the experiment. Furthermore, most respondents appear to act on their inflation expectations showing patterns consistent (both in direction and magnitude) with expected utility theory. Respondents whose behavior cannot be rationalized tend to be less educated and to score lower on a numeracy and financial literacy scale. These findings are therefore the first to provide support to the microfoundations of modern macroeconomic models. |
| Keywords: | Consumer surveys ; Inflation (Finance) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:509&r=cbe |
| By: | Loïc Berger |
| Abstract: | I consider two-period self-insurance and self-protection models in the presence of ambiguity that either affects the loss or the probabilities, and analyze the effect of ambiguity aversion. I show that in most common situations, ambiguity prudence is a sufficient condition to observe an increase in the level of effort. I proposes an interpretation of the model in the context of climate change, such that self-insurance and self-protection are respectively seen as adaptation and mitigation efforts a policymaker should provide to deal with an uncertain catastrophic event, and interpret the results obtained as an expression of the Precautionary Principle. |
| Keywords: | non-expected utility; self-protection; self-insurance; ambiguity prudence; precautionary principle |
| JEL: | D61 D81 D91 Q58 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/95854&r=cbe |
| By: | Barseghyan, Levon (Cornell University); Molinari, Francesca (Cornell University); O'Donoghue, Ted (Cornell University); Teitelbaum, Joshua C. (Georgetown University) |
| Abstract: | We use data on households' deductible choices in auto and home insurance to estimate a structural model of risky choice that incorporates "standard" risk aversion (concave utility over final wealth), loss aversion, and nonlinear probability weighting. Our estimates indicate that nonlinear probability weighting plays the most important role in explaining the data. More specifically, we find that standard risk aversion is small, loss aversion is nonexistent, and nonlinear probability weighting is large. When we estimate restricted models, we find that nonlinear probability weighting alone can better explain the data than standard risk aversion alone, loss aversion alone, and standard risk aversion and loss aversion combined. Our main findings are robust to a variety of modeling assumptions. |
| JEL: | D01 D12 D81 G22 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:corcae:11-03&r=cbe |
| By: | M. Keith Chen (Yale School of Management, Cowles Foundation, Yale University) |
| Abstract: | Languages differ dramatically in how much they require their speakers to mark the timing of events when speaking. In this paper I test the hypothesis that being required to speak differently about future events (what linguists call strongly grammaticalized future-time reference) leads speakers to treat the future as more distant, and to take fewer future-oriented actions. Consistent with this hypothesis I find that in every major region of the world, speakers of strong-FTR languages save less per year, hold less retirement wealth, smoke more, are more likely to be obese, and suffer from worse long-run health. This holds true even after extensive controls that compare only demographically similar individuals born and living in the same country. While not dispositive, the evidence does not seem to support the most obvious forms of common causation. Implications of these findings for theories of intertemporal choice are discussed. |
| Keywords: | Language, Time preferences, Savings behavior, Health, National savings rates |
| JEL: | D14 D91 E21 I10 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1820&r=cbe |
| By: | Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Theodoropoulos, Nikolaos (University of Cyprus) |
| Abstract: | We estimate the effect of variable pay schemes on workplace absenteeism using two cross sections of British establishments. Private sector establishments that explicitly link pay with individual performance are found to have significantly lower absence rates. This effect is stronger for establishments that offer variable pay schemes to a greater share of their non-managerial workforce. Matched employer-employee data suggest that the effect is robust to a number of sensitivity tests. We also find that firms that tie a greater proportion of employees’ earnings to variable pay schemes are also found to experience lower absence rates. Further, quintile regression results suggest that variable pay schemes have a stronger effect on establishments with an absence rate that is higher than an average or “sustainable” level. Finally, panel data suggest that a feedback mechanism is present, whereby high absenteeism in the past is related to a greater future incidence of individual variable pay schemes, which, in turn, is correlated with lower absence rates. |
| Keywords: | performance-related pay, absenteeism, incentives, Britain |
| JEL: | J22 J33 C21 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5941&r=cbe |
| By: | Nilsson, Jonas (Umeå School of Business at Umeå University, Umeå, Sweden); Jansson , Johan (Umeå School of Business at Umeå University, Umeå, Sweden); Isberg, Sofia (Umeå School of Business at Umeå University, Umeå, Sweden); Nordvall, Anna-Carin (Umeå School of Business at Umeå University, Umeå, Sweden) |
| Abstract: | Although much research has been published on green/ethical consumer behaviour, the question of how consumers evaluate pro-socially positioned products in the post-purchase stage is still virtually unexplored. This is troubling given the significance of post-purchase evaluations within general marketing theory. To address this gap in the literature, this study examines how a set of technical and functional quality attributes contribute to customer satisfaction in a socially responsible investment (SRI) setting. The results of the study show that perceived financial quality of the SRI mutual fund is the most important predictor of customer satisfaction. However, perceived social, ethical, and environmental (SEE) quality is also positively related to satisfaction for the SRI mutual fund. Based on these results, it is argued that although SEE quality is important to customers, marketers of pro-socially profiled products should primarily focus on conventional quality attributes, as a good SEE record unlikely to generate customer satisfaction alone. |
| Keywords: | Customer satisfaction; ethics; perceived quality; socially responsible investment; mutual funds |
| Date: | 2011–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:sicgwp:2011_002&r=cbe |
| By: | Rachel A. Razza (Syracuse University); Anne Martin (Columbia University); Jeanne Brooks-Gunn (Columbia University) |
| Abstract: | This study examined the longitudinal associations between sustained attention in preschool and children’s school success in later elementary school within a low-income sample (N = 2,403). Specifically, two facets of sustained attention (focused attention and lack of impulsivity) at age 5 were explored as independent predictors of children’s academic and behavioral competence across eight measures at age 9. Overall, the pattern of results indicates specificity between the facets of attention and school success, such that focused attention was primarily predictive of academic outcomes while impulsivity was mainly predictive of behavioral outcomes. Both facets of attention predicted teacher ratings of children’s academic skills and approaches to learning, which suggests that they jointly influence outcomes that span both domains of school success. Patterns of association were similar for children above and below the poverty line. Implications of these findings for interventions targeting school readiness and success among at-risk children are discussed. |
| Keywords: | sustained attention, academic achievement, behavioral competence, low-income children |
| JEL: | D19 D69 I21 I32 J13 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:pri:crcwel:1330&r=cbe |