nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2011‒10‒01
fourteen papers chosen by
Marco Novarese
University Amedeo Avogadro

  1. Should Candidates Smile to Win Elections? An Application of Automated Face Recognition Technology By Yusaku Horiuchi; Tadashi Komatsu; Fumio Nakaya
  2. Academic Performance and Single-Sex Schooling: Evidence from a Natural Experiment in Switzerland By Gerald Eisenkopf; Zohal Hessami; Urs Fischbacher; Heinrich Ursprung
  3. The Explanatory and Predictive Power of Non Two-Stage-Probability Theories of Decision Making Under Ambiguity By Noemi Pace; John D Hey
  4. Experimental Social Choice: The Impact of Nosy Preferences on Efficiency By Chetan Dave; Stefan Dodds; Sheryl Ball; Rachel Croson
  5. Do Women Prefer a Co-operative Work Environment? By Kuhn, Peter J.; Villeval, Marie Claire
  6. Work for Image and Work for Pay By Dessi, Roberta; Rustichini, Aldo
  7. Do People Care about Social Context? Framing Effects in Dictator Games By Dreber, Anna; Ellingsen, Tore; Johannesson, Magnus; Rand, David
  8. May I continue or should I stop? the effects of regulatory focus and message framings on video game players’ self-control By Ho, Shu-Hsun; Putthiwanit, Chutinon; Lin, Chia-Yin
  9. Credible Communication and Cooperation: Experimental Evidence from Multi-stage Games By Andersson, Ola; Wengström, Erik
  10. Unpacking the causal chain of financial literacy By Carpena, Fenella; Cole, Shawn; Shapiro, Jeremy; Zia, Bilal
  11. Non-cognitive Skills and the Gender Disparities in Test Scores and Teacher Assessments: Evidence from Primary School By Cornwell, Christopher; Mustard, David B.; Van Parys, Jessica
  12. Make it challenging : motivation through goal setting By Joaquín Gómez Miñambres
  13. Cognitive effort in the Beauty Contest Game By Pablo Brañas-Garza; Teresa García-Muño; Roberto Hernán
  14. More than Meets the Eye: an Eye-tracking Experiment on the Beauty Contest Game By Müller, Julia; Schwieren, Christiane

  1. By: Yusaku Horiuchi (The Australian National University (ANU) - Crawford School of Economics and Government); Tadashi Komatsu (Komatsu - Research Division); Fumio Nakaya (Osaka Kyoiku University)
    Abstract: Previous studies examining whether the faces of candidates affect election outcomes commonly measure study participants' subjective judgment of various characteristics of candidates, which participants infer based solely on the photographic images of candidates. We, instead, develop a smile index of such images objectively with automated face recognition technology. The advantage of applying this new technology is that the automated process of measuring facial traits is by design independent of voters' subjective evaluations of candidate attributes, based on the images, and thus allows us to estimate 'undiluted' effects of facial appearance per se on election outcomes. The results of regression analysis using Japanese and Australian data show that the smile index has statistically significant and substantial effects on the vote share of candidates even after controlling for other covariates.
    Keywords: voting behavior, automated face recognition, Australia, Japan
    JEL: D72 C81
    Date: 2011–03
  2. By: Gerald Eisenkopf; Zohal Hessami; Urs Fischbacher; Heinrich Ursprung
    Abstract: We study the effects of random assignment to coeducational and single-sex classes on the academic performance of female high school students. Our estimation results show that single-sex schooling improves the performance of female students in mathematics. This positive effect increases if the single-sex class is taught by a male teacher. An accompanying survey reveals that single-sex schooling also strengthens female studentsÕ selfconfidence and renders the self-assessment of their mathematics skills more level-headed. Single-sex schooling thus has profound implications for human capital formation and the mind-set of female students.
    Date: 2011
  3. By: Noemi Pace (Department of Economics, University Of Venice Cà Foscari); John D Hey (Department of Economics, University of York)
    Abstract: Representing ambiguity in the laboratory using a Bingo Blower (which is transparent and not manipulable) and asking the subjects a series of allocation questions (which are more efficient than pairwise choice questions), we obtain data from which we can estimate by maximum likelihood methods (with explicit assumptions about the errors made by the subjects) a significant subset of the empirically relevant models of behaviour under ambiguity, and compare their relative explanatory and predictive abilities. Our results suggest that not all recent models of behaviour represent a major improvement in explanatory and predictive power, particularly the more theoretically sophisticated ones.
    Keywords: Alpha Model, Ambiguity, Bingo Blower, Choquet Expected Utility, Contraction Model, Rank Dependent Expected Utility, Subjective Expected Utility,Vector Expected Utility.
    JEL: D81 C9
    Date: 2011
  4. By: Chetan Dave; Stefan Dodds; Sheryl Ball; Rachel Croson
    Abstract: A foundational paradox in social choice theory is that liberalism (freedom of action) and Pareto efficiency, the standard in evaluating economic outcomes, can conflict with each other (Sen 1970). We capture this tension in a series of sequential Battle of the Sexes game experiments. We find that most individuals are willing to waive rights to achieve efficient outcomes. In addition efficiency is higher when participants may claim new rights than when they may relinquish them or when only one player possesses them. This evidence may help resolve the tensions between efficiency and liberty that lie at the heart of social choice and political philosophy.
    Keywords: Pareto Optimality, Sen’s Paradox, Social Choice, Minimal Liberalism, preferences, rights, Battle of the Sexes game  
    Date: 2011
  5. By: Kuhn, Peter J. (University of California, Santa Barbara); Villeval, Marie Claire (CNRS, GATE)
    Abstract: Are women disproportionately attracted to work environments where cooperation rather than competition is rewarded? This paper reports the results of a real-effort experiment in which participants choose between an individual compensation scheme and a team-based payment scheme. We find that women are more likely than men to select team-based compensation in our baseline treatment, but women and men join teams with equal frequency when we add an efficiency advantage to team production. Using a simple structural discrete choice framework to reconcile these facts, we show that three elements can explain the observed patterns in the team-entry gender gap: (1) a gender gap in confidence in others (i.e. women are less pessimistic about their prospective teammates' relative ability), (2) a greater responsiveness among men to instrumental reasons for joining teams, and (3) a greater "pure" preference for working in a team environment among women.
    Keywords: gender, cooperation, self-selection, confidence, experiment
    JEL: C91 J16 J24 J31 M5
    Date: 2011–09
  6. By: Dessi, Roberta (Toulouse School of Economics (IDEI and GREMAQ), and CEPR); Rustichini, Aldo (University of Minnesota)
    Abstract: Standard economic models with complete information predict a positive, monotonic relationship between pay and performance. This prediction does not always hold in experimental tests: offering a small payment may result in lower performance than not offering any pay- ment. We test experimentally two main explanations that have been put forward for this result: the "incomplete contract" hypothesis views the payment rule as a signal given to subjects on purpose of the activity. The "informed principal" hypothesis views it as a signal concerning the characteristics of the agent or of the task. The incomplete contract view appears to oer the best overall explanation for our results. We also nd that high-powered monetary incentives do not "crowd out" intrinsic motivation, but may elicit "too much" eort when intrinsic motivation is very high.
    Date: 2011–09–10
  7. By: Dreber, Anna (Dept. of Economics, Stockholm School of Economics); Ellingsen, Tore (Dept. of Economics, Stockholm School of Economics); Johannesson, Magnus (Dept. of Economics, Stockholm School of Economics); Rand, David (Harvard University)
    Abstract: Many previous experiments document that behavior in multi-person settings responds to the name of the game and the labeling of strategies. Usually these studies cannot tell whether frames affect preferences or beliefs. In this Dictator game study, we investigate whether social framing effects are also present when only one of the subjects makes a decision, in which case the frame may only affect preferences. We find that behavior is insensitive to social framing.
    Keywords: beliefs; preferences; framing effects; altruism; cooperation
    JEL: C70 C91 D64
    Date: 2011–09–14
  8. By: Ho, Shu-Hsun; Putthiwanit, Chutinon; Lin, Chia-Yin
    Abstract: Two types of motivations exist in terms of regulatory focus: a promotion orientation concerned with advancement and achievement and a prevention orientation concerned with safety and security. The central premise of this research is that promotion-focused and prevention-focused players differ in their sensitivity to message frames and therefore respond with different levels of self-control. This study adopted a 2 (message frames: positive vs. negative) × 2 (regulatory focus: promotion vs. prevention) between-subjects design; the results confirmed the hypotheses that, for promotion-focused players, negative messages are significantly effective in preventing them from becoming addicted to the games; meanwhile, for prevention-focused players, positive messages significantly influenced players, leading them to become addicted. Hence, video games’ negative and addiction-related messages should be enhanced whereas positive messages should be cautiously released.
    Keywords: Regulatory focus; regulatory fit; message frames; self-control; video game
    JEL: M31
    Date: 2011–06–22
  9. By: Andersson, Ola (Research Institute of Industrial Economics (IFN)); Wengström, Erik (Lund University)
    Abstract: It is well known that communication often serves as a facilitator for cooperation in static games. Yet, communication can serve entirely different purposes in dynamic settings as communication during the game may work as a means for renegotiation, potentially undermining the credibility of cooperative strategies. To explore this issue, this paper experimentally investigates cooperation and non-binding communication in a two-stage game. More specifically, two treatments are considered: one with only pre-play communication and one where subjects can also communicate intra-play between the stages of the game. The results highlight a nontrivial difference concerning the effects of pre-play communication between the two treatments. Pre-play communication only has a significant impact on cooperation when no intra-play communication is possible. The results suggest that the credibility of pre-play messages may depend crucially on future communication opportunities.
    Keywords: Communication; Cooperation; Renegotiation; Experiments
    JEL: C72 C92
    Date: 2011–09–19
  10. By: Carpena, Fenella; Cole, Shawn; Shapiro, Jeremy; Zia, Bilal
    Abstract: A growing body of literature examines the causal impact of financial literacy on individual, household, and firm level outcomes. This paper unpacks the mechanism of impact by focusing on the first link in the causal chain. Specifically, it studies the experimental impact of financial literacy on three distinct dimensions of financial knowledge. The analysis finds that financial literacy does not immediately enable individuals to discern costs and rewards that require high numeracy skills, but it does significantly improve basic awareness of financial choices and attitudes toward financial decisions. Monetary incentives do not induce better performance, suggesting cognitive constraints rather than lack of attention are a key barrier to improving financial knowledge. These results illuminate the strengths and limitations of financial literacy training, which can inform the design and anticipated effects of such programs.
    Keywords: Financial Literacy,Education For All,Access&Equity in Basic Education,Access to Finance,Primary Education
    Date: 2011–09–01
  11. By: Cornwell, Christopher (University of Georgia); Mustard, David B. (University of Georgia); Van Parys, Jessica (Columbia University)
    Abstract: We extend the analysis of early-emerging gender differences in academic achievement to include both (objective) test scores and (subjective) teacher assessments. Using data from the 1998-99 ECLS-K cohort, we show that the grades awarded by teachers are not aligned with test scores, with the disparities in grading exceeding those in testing outcomes and uniformly favoring girls, and that the misalignment of grades and test scores can be linked to gender differences in non-cognitive development. Girls in every racial category outperform boys on reading tests and the differences are statistically significant in every case except for black fifth-graders. Boys score at least as well on math and science tests as girls, with the strongest evidence of a gender gap appearing among whites. However, boys in all racial categories across all subject areas are not represented in grade distributions where their test scores would predict. Even those boys who perform equally as well as girls on reading, math and science tests are nevertheless graded less favorably by their teachers, but this less favorable treatment essentially vanishes when non-cognitive skills are taken into account. White boys who perform on par with white girls on these subject-area tests and exhibit the same non-cognitive skill level are graded similarly. For some specifications there is evidence of a grade "bonus" for white boys with test scores and behavior like their girl counterparts. While the evidence is a little weaker for blacks and Hispanics, the message is essentially the same.
    Keywords: gender differences, test scores, grades, educational attainment
    JEL: I21
    Date: 2011–09
  12. By: Joaquín Gómez Miñambres
    Abstract: We study a principal agent model where agents derive a sense of pride when accomplishing production goals. As in classical models, the principal offers a pay-per-performance wage to the agent, determining the agent’s extrinsic incentives. However, in our setting, the principal does also want to set goals that affect the agents’ intrinsic motivation to work. Agents differ in their personal standard which determines what becomes challenging and rewarding to them, and hence the intensity of their intrinsic motivation to achieve goals. We show that, at the optimal contract, the agents’ production, as well as the goals set by the principal, increase with the agents’ personal standards. Thus, although goal setting is payoff irrelevant, since it does not directly affect agents’ wage, it increases agents’ achievement and hence the principal’s profits. Moreover, we show that a mediocre standard agent could end up being the most satisfied one
    Keywords: Intrinsic motivation; Goal-setting; Reference dependent preference
    JEL: D82 D86 M50 Z13
    Date: 2011–08
  13. By: Pablo Brañas-Garza (Universidad de Granada, Spain); Teresa García-Muño (Universidad de Granada, Spain); Roberto Hernán (Economic Science Institute, Chapman University, USA)
    Abstract: This paper analyzes cognitive effort in 6 different one-shot p-beauty games. We use both Raven and Cognitive Reflection tests to identify subjects' abilities. We find that the Raven test does not provide any insight on beauty contest game playing but CRT does: subjects with higher scores on this test are more prone to play dominant strategies.
    Keywords: Beauty Contest Game, Raven, Cognitive Reflection Test
    Date: 2011
  14. By: Müller, Julia; Schwieren, Christiane
    Abstract: The beauty contest game has been used to analyze how many steps of reasoning subjects are able to perform. A common finding is that a majority seem to have low levels of reasoning. We use eye-tracking to investigate not only the number chosen in the game, but also the strategies in use and the numbers contemplated. We can show that not all cases that are seemingly level-1 or level-2 thinking indeed are {they might be highly sophisticated adaptations to beliefs about other people's limited reasoning abilities.
    Keywords: beauty contest game; levels of reasoning; level-k model; strategic reason ing; cognitive hierarchy
    Date: 2011–09–22

This nep-cbe issue is ©2011 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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