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on Cognitive and Behavioural Economics |
| By: | Mário Alexandre Patrício Martins da Silva (Faculdade de Economia, Universidade do Porto) |
| Abstract: | The paper develops a formal model of external knowledge and identifies the role of knowledge multipliers. Social interactions and knowledge multipliers play a crucial role in the determination of the rate of technological change. The analytical identification of the knowledge multiplier expression constitutes a key step in the appreciation of the crucial role of knowledge interactions. First, social considerations endogenously change the knowledge production function of each firm. The knowledge multiplier is the specific mechanism by means of which external knowledge contributes to enhance the innovative capacity of each firm. The production function of knowledge shows that the knowledge multiplier is larger, the stronger the cumulative positive effects of external knowledge on the generation of new knowledge. Second, social considerations explain the long-run dynamics of innovation. Social reinforcement and the knowledge multiplier determine the rise or fall of the rate of accumulation of technological knowledge. |
| Keywords: | External knowledge, social interactions, social multiplier, localized knowledge, innovation network, interactive learning, sustainable growth |
| JEL: | O30 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:456&r=cbe |
| By: | Daniel Müller (QUT); Benno Torgler (QUT); Eric Uslaner (University of Maryland) |
| Abstract: | Algan and Cahuc in “Inherited Trust and Growth” (AER, 2010) argue that “inherited trust” is a key factor in explaining growth rates across countries. They derive a measure of inherited trust by linking respondents’ “home countries” in the United States General Social Survey (1972-2004) and the 2000 wave of the World Values Survey. Algan and Cahuc then estimate trust levels for people born before 1910 (inherited trust in 1935) and afterwards (inherited trust in 2000). They show a strong link between economic growth rates and inherited trust. We do not challenge this result, but we do argue that: (1) the 2000 World Values Survey has many anomalous results; (2) the estimates for inherited trust in 1935 are mostly based upon tiny samples for most ethnic heritage groups in the General Social Survey; and (3) Algan and Cahuc’s findings are based upon two-tailed rather than one-tailed tests. We reestimate their model using the more reliable waves of the World Values Survey and find much weaker relationships between inherited trust in 1935 and trust in the home country. We also suggest caution in the overall measure of inherited trust in 1935. |
| Keywords: | Inherited trust, generalized trust, US immigrants |
| JEL: | N31 N32 Z12 Z13 |
| Date: | 2012–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:281&r=cbe |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In this paper we investigate how cognitive ability influences behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive ability: more cognitively able subjects choose numbers closer to equilibrium, converge more frequently to equilibrium play and earn more even as behavior approaches the equilibrium prediction. To understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning based on level-k reasoning. We find a systematic positive relationship between cognitive ability and levels; furthermore, the average level of more cognitively able subjects responds positively to the cognitive ability of their opponents, while the average level of less cognitively able subjects does not respond at all. Our results suggest that, in strategic environments, higher cognitive ability translates into better analytic reasoning and a better ‘theory of mind’ |
| Keywords: | Cognitive ability; Bounded rationality; Learning; Convergence; Level-k; Nonequilibrium behavior; Beauty contest; Repeated games; Structural modeling; Theory of mind; Intelligence; Raven test |
| JEL: | D83 C73 C91 |
| Date: | 2012–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38317&r=cbe |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In a real effort experiment with repeated competition we find striking differences in how the work effort of men and women responds to previous wins and losses. For women losing per se is detrimental to productivity, but for men a loss impacts negatively on productivity only when the prize at stake is big enough. Responses to luck are more persistent and explain more of the variation in behavior for women, and account for about half of the gender performance gap in our experiment. Our findings shed new light on why women may be less inclined to pursue competition-intensive careers. |
| Keywords: | Real effort experiment; Gender differences; Gender gap; Competition aversion; Tournament; Luck; Win; Loss; Competitive outcomes |
| JEL: | J33 C91 J16 |
| Date: | 2012–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38220&r=cbe |
| By: | Marimo, Pricilla; Kaplan, Todd R; Mylne, Ken; Sharpe, Martin |
| Abstract: | Experimental economics methods were used to assess public understanding of information in weather forecasts and test whether the participants were able to make better decisions using the probabilistic information presented in table or bar graph formats than if they are presented with a deterministic forecast. We asked undergraduate students from the University of Exeter to choose the most probable temperature outcome between a set of “lotteries” based on the temperature up to five days ahead. If they choose a true statement, participants were rewarded with a cash reward. Results indicate that on average participants provided with uncertainty information make better decisions than those without. Statistical analysis indicates a possible learning effect as the experiment progressed. Furthermore, participants who were shown the graph with uncertainty information took on average less response time compared to those who were shown a table with uncertainty information. |
| Keywords: | experimental economics; uncertainty; decision making; bar graph; table |
| JEL: | D81 D83 C91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38287&r=cbe |
| By: | Christian Schubert |
| Abstract: | Robert Sugden has recently elaborated upon the case for a normative standard of freedom as "opportunity" that is supposed to cope with the problem of how to realign normative economics - with its traditional rational choice orientation - with behavioral economics. His standard, though, presupposes that people respond to uncertainty about their own future preferences by dismissing any kind of self-commitment. We argue that the approach lacks psychological substance: Sugden's normative benchmark - the "responsible person" - is a purely artificial construct that can hardly serve as a convincing role model in a contractarian setting. An alternative concept is introduced, and some policy implications are briefly discussed. |
| Keywords: | Opportunity Criterion, Preference Change, Reconciliation Problem |
| JEL: | D51 D63 |
| Date: | 2012–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2012-08&r=cbe |
| By: | Morone, Andrea; Morone, Piergiuseppe |
| Abstract: | This paper provides an experimental test of the traveller’s dilemma using individual and group data. Our investigation aims to address three fundamental research questions, which can be summarised as follows: (i) claims are affected by the size of the penalty/reward; (ii) individual decisions differ significantly from group decisions; (iii) individual claims are affected by the induction of a focal point a là Schelling. Experimental findings reported in this paper provide answers to each of these questions showing that: (i) although the size of the penalty/reward did not affect subject choices in the first-period, it played a key role in determining subjects’ behaviour in the repeated game; (ii) overall, groups behave more rationally, in the sense that they were always closer to the Nash equilibrium; (iii) the reference point did not encourage coordination around the Pareto optimal choice. |
| Keywords: | traveller’s dilemma; focal point; individual and group decision |
| JEL: | D70 C92 C91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38199&r=cbe |
| By: | Théodora Dupont-Courtade (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | This paper investigates how the general public behaves when confronted with low probability events and ambiguity in an insurance context. It reports the results of a questionnaire completed by a large representative sample of the French population that aims at separating attitudes toward risk, imprecision and conflict and at determining if there is a demand for ambiguous and extreme event risks. The data show a strong distinction between two aspects of the problem : the decision of purchasing insurance and the willingness to pay. In the decision to insure, more than 25% of the respondents refuse to buy insurance and people are more willing to insure in a risky situation than in an ambiguous one. This certain taste for risk can be explained by the respondents' observable characteristics. In addition, it highlights a lack of confidence in the insurance markets. When it comes to willingness to pay, people exhibit ambiguity seeking behaviors. They are willing to pay more under risk than under ambiguity (embracing here imprecision and conflict), revealing that people consider ambiguous situations as inferior. Furthermore, respondents behave differently under imprecision and conflict. They exhibit a preference for consensual information and dislike conflicts. However, the willingness to pay is poorly correlated with observable characteristics. |
| Keywords: | Ambiguity, imprecision, conflict, decision making, extreme risk, insurance demand, willingness to pay. |
| JEL: | C93 D81 D83 Q54 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12020&r=cbe |
| By: | Michal Bauer (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Julie Chytilová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Barbara Pertold-Gebicka (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | Other-regarding preferences are important for establishing and maintaining cooperative outcomes. In this paper, we study how formation of other-regarding preferences during childhood is affected by parental background. Our subjects, aged 4-12 years, are classified into other-regarding types based on simple binary choice dictator games. The main finding is that children of parents with low education are more spiteful, more selfish and less altruistic. This link is robust to controlling for a rich set of child characteristics and class fixed effects. The parental effects stand out against the overall development of preferences, as we find children to become less spiteful and more altruistic with increasing age. Our findings, complemented by an analysis of the World Values Survey data, suggest that low socio-economic status affects parental effort invested in instilling other-regarding preferences into children, making them less likely to acquire cooperative types of preferences. |
| Keywords: | other-regarding preferences, altruism, spite, children, family background, field experiment |
| JEL: | C93 D03 D64 I24 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2012_10&r=cbe |
| By: | Philomena M. Bacon (Department of Economics, Lancaster University Management School, United Kingdom); Anna Conte (Strategic Interaction Group, Max Planck Institute of Economics, Jena, and EQM Department, University of Westminster, London); Peter G. Moffatt (School of Economics, University of East Anglia, Norwich, United Kingdom) |
| Abstract: | The determinants of risk attitude in couples are explored using data from the German Socio-Economic Panel over the period 2004 to 2009. The focus of the analysis is the repeated responses to the survey question about general willingness to take risk. Responses to this question are provided on a 0-10 Likert scale. We focus on couples in the data set, and we apply the bivariate panel ordered probit model to the analysis of the simultaneous determination of the male's and the female's risk attitude. A number of individual characteristics, including age, height, education and household income, are found to have strong effects on risk attitude, in some cases differing markedly between the male and the female. Both the individual-specific effects and the observation-specific error terms are assumed to have non-zero correlations between the two equations. These correlations are estimated to be +0.27 and +0.28 respectively. We consider the former to be a key parameter, since its positive sign may be interpreted as a form of homophily: individuals tend to form partnerships with others having a similar risk attitude. |
| Keywords: | Multiple Equation Models, Panel Data, Risk Attitude |
| JEL: | C33 D81 |
| Date: | 2012–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-016&r=cbe |
| By: | E. OPDECAM; P. EVERAERT; H. VAN KEER; F. BUYSSCHAERT |
| Abstract: | The first objective of this study is to investigate students’ preferences for learning methods in relation to their learning strategy, motivation, gender, and ability. Two learning methods are considered: team learning and lecture-based learning. The second objective is to explore the effectiveness of the chosen learning method by comparing academic achievement between the lecture-based and team-learning groups. A quasi-experiment was administered, consisting of an untreated control group with a pre-test and a post-test, for a first-year undergraduate accounting class. Students choose one of the two learning paths and subsequently follow their chosen learning path. The results show that female students had a higher preference for team learning than male students. Furthermore, team-learning students were more intrinsically motivated, had a lower ability level, and had less control of their learning beliefs, but they were more willing to share their knowledge with peers. The teamlearning approach also resulted in increased performance in an advanced accounting course while controlling for the differences in gender and ability. This beneficial impact of team learning on performance was not found for other courses, leading to the conclusion that team learning offers an appropriate learning method at the university level for a first-year accounting course. |
| Keywords: | Team learning, cooperative learning, academic performance, MSLQ, instructional preferences |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:12/774&r=cbe |
| By: | Andrea Morone (Department of Economics, Universitat Jaume I; Department of Economics, University of Bari); Piergiuseppe Morone (Department of Economics, Universitat Jaume I; Department of Economics, University of Foggia) |
| Abstract: | This paper provides an experimental test of the traveller's dilemma using individual and group data. Our investigation aims to address three fundamental research questions, which can be summarised as follows: (i) claims are affected by the size of the penalty/reward; (ii) individual decisions differ significantly from group decisions; (iii) individual claims are affected by the induction of a focal point a là Schelling. Experimental findings reported in this paper provide answers to each of these questions showing that: (i) although the size of the penalty/reward did not affect subject choices in the first-period, it played a key role in determining subjects' behaviour in the repeated game; (ii) overall, groups behave more rationally, in the sense that they were always closer to the Nash equilibrium; iii) the reference point did not encourage coordination around the Pareto optimal choice.trading.Length: 19 pages |
| Keywords: | traveller's dilemma, focal point, individual and group decision. |
| JEL: | C91 C92 D81 D70 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2012/09&r=cbe |