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on Cognitive and Behavioural Economics |
| By: | I Walker; P Bingley |
| Abstract: | Many countries provide transfers for particular client groups such as children and often such transfers are in-kind rather than cash. However, this may, at least partially, crowd out private expenditures on the goods in question because they reduce the incentive for other individuals, like parents, to make altruistic transfers. They are often made to one household member on behalf of another so there may also be agency concerns: the recipient may divert some of the transfer away from the intended beneficiary. This paper throws light on these issues using three nutrition programs for children in UK households: free lunch at school for children from poor households; free milk to poor households with pre-school children; and free milk at day-care for pre-school children in attendance regardless of parental income. We provide difference in difference estimates based on a welfare reform and on variation in the timing of school holidays. These estimates are broadly consistent with estimates of a structural model that is identified using the same welfare reform. This gives us confidence in the interpretation of our estimates that the structural model provides but the simple difference-in-difference cannot. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:2034&r=cbe |
| By: | Nejat Anbarci; Nick Feltovich |
| Abstract: | We use a human–subjects experiment to investigate how bargaining outcomes are affected by changes in bargainers’disagreement payoffs. Subjects bargain against changing opponents, with an asymmetric disagreement outcome that varies over plays of the game. Both bargaining parties are informed of both disagreement payoffs (and the cake size) prior to bargaining. We find that bargaining outcomes do vary with the disagreement outcome, but subjects severely under–react to changes in their own disagreement payoff and to changes in the opponent’s disagreement payoff, relative to the risk–neutral prediction. This effect is observed in a standard Nash demand game and a related unstructured bargaining game, and for two different cake sizes varying by a factor of four. We show theoretically that standard models of expected utility maximisation are unable to account for this under–responsiveness – even when risk aversion is introduced. We also show that other–regarding preferences can explain our main results. |
| Keywords: | Nash demand game, unstructured bargaining, disagreement, experiment, risk aversion, social preference, other–regarding behaviour, bargaining power. |
| JEL: | C78 C72 D81 D74 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-36&r=cbe |
| By: | Itzhak Gilboa (HEC, Paris, and Tel-Aviv University); Andrew Postlewaite (Department of Economics, University of Pennsylvania); Larry Samuelson (Department of Economics, Yale University); David Schmeidler (The InterDisciplinary Center in Herzliya, and TAU) |
| Abstract: | People often wonder why economists analyze models whose assumptions are known to be false, while economists feel that they learn a great deal from such exercises. We suggest that part of the knowledge generated by academic economists is case-based rather than rule-based. That is, instead of offering general rules or theories that should be contrasted with data, economists often analyze models that are “theoretical cases”, which help understand economic problems by drawing analogies between the model and the problem. According to this view, economic models, empirical data, experimental results and other sources of knowledge are all on equal footing, that is, they all provide cases to which a given problem can be compared. We offer some complexity arguments that explain why case-based reasoning may sometimes be the method of choice; why economists prefer simple examples; and why a paradigm may be useful even if it does not produce theories. |
| Keywords: | Methodology, Case-based reasoning |
| JEL: | B40 B41 |
| Date: | 2011–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:12-001&r=cbe |
| By: | Dirk Engelmann; Alistair Munro; Marieta Valente (NIMA, Universidade do Minho) |
| Abstract: | Ethical goods are increasingly available in markets for conventional goods giving pro-ethically motivated consumers a convenient option to contribute to public goods. In a previous experiment we explored the behavioural relevance of impure public goods in a within-subject setting and observed reduced aggregate pro-social behavior in the presence of impure goods that favor private consumption at the expense of public good provision. In this experiment, we implement a between-subject design to test the behavioural relevance of impure public goods with only a token contribution to a public good cause. From a theoretical perspective, assuming people demand private and public characteristics regardless of how they are provided, we would expect no behavioural relevance of the presence of impure public goods. However, this experiment establishes that pro-social behaviour defined as contributing to a public good, is negatively affected by impure goods with token contributions, in comparison to when they are absent. Furthermore, if the token impure good is mandatory instead of optional the negative effect on pro-social behaviour seems to be offset. The results from this experiment suggest impure public goods are not behaviourally irrelevant, can decrease pro-social behaviour but their optional or mandatory nature can have different behavioural consequences. |
| Keywords: | Experimental Economics, impure public goods, ethical goods, pro-social behaviour, social norms, experimental dictator games |
| JEL: | C91 D64 H41 Q59 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:45/2011&r=cbe |
| By: | Hasan, Dr. Syed Akif; Subhani, Dr. Muhammad Imtiaz; Osman, Ms. Amber |
| Abstract: | The Faith is the belief which comes from inside of a human or it is the inner state of strength which is similar to confidence while provoking a human to trust within a secular/ non secular context. The purpose of this article is to identify parallels of various stages of faith particularly as suggested by Fowler, from the person who is filled with fantasies first then has the moral rules and attitude, who moves on thereafter towards experiencing the world beyond the family, and then believes on self identity, has prejudices, and finally actualizes the spirit of an inclusive human community. |
| Keywords: | Faith; Stages of Faith; Self-identity; Human Psychology |
| JEL: | B0 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35690&r=cbe |
| By: | Machado, Fabiana |
| Abstract: | Economic and political decisions usually involve a trade-off between efficiency and equality considerations. While some inequality is expected to prevail in our soci- eties, high levels of it are objectionable on various grounds. One of the fundamental roles of government is to collect and reallocate resources among its citizens, and iden- tifying the right policies to guide these reallocations is central to promoting higher equality. While we now have a good grasp of which policies lead to more equality and which do not, we know much less about why they seem to be adopted to varying degrees of intensity in some places and times and not in others. To explain this varia- tion in policy outcomes, the most fundamental task is to identify the constituencies for the different policies. Who supports what policies and under what conditions do they support them? In this paper this question is investigated based on public opinion data on preferences over taxation and government spending on conditional-cash-transfers, pension schemes, and education. All policies that were found to significantly affect inequality. We find that disagreement across socio-economic groups arise not so much on whether the government should tackle inequality, but on how it should go about doing it. Poorer respondents tend to support cash transfers to a greater extent than the rich. But the rich tend to be more likely to support expenditures on public provision education than the poor. Contrary to what is commonly assumed, inequality seems to breed altruism among the rich when it comes to the quintessential poverty reduction scheme of conditional-cash-transfers. |
| Keywords: | Preferences for redistribution; Inequality; Conditional cash transfers |
| JEL: | D70 H50 |
| Date: | 2011–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35664&r=cbe |