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on Cognitive and Behavioural Economics |
| By: | Patrick Cohendet; Patrick Llerena; Laurent Simon |
| Abstract: | The aim of this contribution is to proceed to an in-depth exploration of the micro-context of the origin of routines and of their intimate link with organizational creativity. Our view is that organizational creativity orchestrates continuous interactions between different types of routines, operating at different levels of the organization. More precisely we propose distinguishing three types of routines: - First, the routines issued from formal structures or hierarchical working groups in the firm (functional groups, project teams, task force, etc.), for which the context of work and coordination of specialized tasks is defined ex ante by the hierarchy of the firm; - Second, the routines emerging from informal structures, the “knowing communities” which is a “generic term that defines different types of autonomous learning groups of individuals (communities of practice, epistemic communities, and other more or less informal learning groups) united by common beliefs and interests who voluntarily share their resources on a long term basis in order to create and diffuse knowledge” - Third, the routines that are inherently related to the organizational creativity of the firm, which are essentially corporate routines as expression of patterns of thinking, feeling and acting in the corporate culture. In essence they are the genes of collective identity, and take the shape of project management staging and gating principles and practices, framing collective divergent exploration and convergent production toward a creative goal. The contribution is based on an in-depth analysis of the organizational creativity in the world- leading videogame company, Ubisoft, with a special focus on the studio located in Montréal. To some extent, Ubisoft is one of the flagships of the “creative industries”, in which the clear imperative is to sustain creativity on a permanent basis. These reasons explain the choice we made to test our approach of organizational creativity and routines in this firm. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2012-05&r=cbe |
| By: | Mitesh Kataria (Max Planck Institute of Economics, Jena, Germany); Tobias Regner (Max Planck Institute of Economics, Jena, Germany) |
| Abstract: | This study investigates experimentally whether people in retrospective are self-aware that they engage in status-seeking behavior. Subjects participated in a real-effort task where effort translated into a donation to a charity. Within-subjects we varied the visibility of their performance (private/public feedback). On average subjects exerted more effort in the public treatment. After the real effort task subjects were asked to state their retrospective beliefs about their performance in public given feedback about their performance in private, and about the performance of other subjects in public given the average performance in private. Between-subjects we varied the compensation (low/high) for accurate estimates. Our results show a lack of self-awareness about status-seeking behavior that is robust to increased belief compensation. We also found that subjects expected others to be as status-seeking as they are themselves or even less. |
| Keywords: | Social status, self-image, self-awareness, self-deception, experiment, beliefs |
| JEL: | C91 D03 D84 |
| Date: | 2012–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-032&r=cbe |
| By: | Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Anastasios Koukoumelis (Max Planck Institute of Economics, Strategic Interaction Group, Jena); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena, and Department of Economics, University of Verona); Matteo Ploner (DECO-CEEL, University of Trento) |
| Abstract: | Based on an axiomatically derived provision rule allowing community members to endogenously determine which, if any, public project should be provided, we perform experiments where (i) not all parties benefit from provision, and (ii) the projects' "costs" can be negative. In the tradition of legal mechanism design, the proposed provision rule is widely applicable. Additionally, it relies on intuitive fairness and profitability requirements. Our results indicate that the provision rule is conducive to efficiency, despite its multiplicity of equilibria and un- derbidding incentives. The only condition is that the cost of the most efficient project is positive. |
| Keywords: | Public project, Bidding behavior, Procedural fairness |
| JEL: | C72 C92 D63 H44 |
| Date: | 2012–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-034&r=cbe |
| By: | Kirsten, Johann F.; Vermeulen, Hester; Van Zyl, Karlien; Du Randt, Gerrie; Du Plessis, H.; Weissnar, Tessa |
| Abstract: | The difference between hypothetical and real values when evaluating consumers’ preferences (termed ‘hypothetical bias’) has received significant attention in scientific literature, as the outcome of this bias is often an overestimation of willingness to pay (WTP) values. This is the main focus of this paper as we unpack South African consumers’ perceptions and preferences for an origin based meat product through a set of different methodologies. These different approaches (sensory analysis, perception analysis, conjoint analysis, experimental auction and an in-store experiment) are all employed to illustrate the ‘hypothetical bias’ but also to establish beyond any doubt the market potential for a specific origin based meat product and also to test the consumers’ willingness to pay a premium, and the range of the premium obtained from different methodologies. This paper presents the results of a number of studies applying different methods related to the same product but with different groups of consumers in different locations. The different results suggest that there is sufficient evidence that suggest that the regional identity of the product is important. It is further also evident that the various willingness to pay estimates presented different results. It is however clear that the stated preference methods confirm the hypothesis that consumers recognise the reputation of the product and will be willing to pay premium. This conclusion is strengthened by the positive results from the stated preference methods (the experimental auction and in-store experiment). Together these results present a strong case for the marketing potential of origin based mutton / lamb which could sell at a price premium similar or slightly higher than comparable existing luxury and niche lamb brands on the South African market. |
| Keywords: | Meat of Origin, willingness to pay, consumer perceptions, experimental economics, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, Agriucltural Marketing, Food Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:125764&r=cbe |
| By: | Eriksson, Stefan (Uppsala Center for Labor Studies); Johansson, Per (Uppsala Center for Labor Studies); Langenskiöld, Sophie (IFAU) |
| Abstract: | We study the recruitment behavior of Swedish employers using data from a stated choice experiment. In the experiment, the employers are first asked to describe an employee who recently and voluntarily left the firm, and then to choose between two hypothetical applicants to invite to a job interview or to hire as a replacement for their previous employee. The two applicants differ with respect to characteristics such as gender, age, education, experience, ethnicity, religious beliefs, family situation, weight, and health. Our results show that employers discriminate against applicants who are old, non-European, Muslim, Jewish, obese, have several children, or have a history of sickness absence. Moreover, increasing the firms’ cost of uncertainty in hiring – through more firm co-payment in the sickness benefit system – may reduce hiring, but does not affect the degree of discrimination. Also, there are only small differences in the degree of discrimination between different types of recruiters and firms. Overall, our results suggest that the discrimination, at least partially, should reflect statistical discrimination. |
| Keywords: | Stated choice experiment; Discrimination; Gender; Age; Ethnicity; Obesity; Sickness absence |
| JEL: | J71 |
| Date: | 2012–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2012_016&r=cbe |
| By: | Siegfried K. Berninghaus (Karlsruhe Institute of Technology (KIT), Institute for Economic Theory and Statistics); Sven Haller (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management); Tyll Krüger (University of Bielefeld, Research Center BiBoS); Thomas Neumann (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management); Stephan Schosser (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management); Bodo Vogt (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management) |
| Abstract: | For our experiment on corruption, we designed a coordination game to model the influence of risk attitudes, beliefs, and information on behavioral choices and determined the equilibria. We observed that the participants' risk attitudes failed to explain their choices between corrupt and non-corrupt behavior. Instead, beliefs appeared to be a better predictor of whether or not they would opt for the corrupt alternative. Furthermore, varying the quantity of information available to players (modeled by changing the degree of uncertainty) provided additional insight into the players' propensity to engage in corrupt behavior. The experimental results show that a higher degree of uncertainty in the informational setting reduces corruption. |
| Keywords: | Corruption, game theory, experiment, risk attitude, beliefs |
| JEL: | D73 K42 C91 C92 |
| Date: | 2012–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-033&r=cbe |
| By: | Jordi Brandts; Gary Charness; Matthew Ellman |
| Abstract: | We study experimentally how the ability to communicate affects the frequency and effectiveness of flexible and inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts are much more frequent and considerably more productive, both for buyers and sellers. Also, both buyer and seller earn considerably more from flexible with communication than rigid without communication. Our results show quite strongly that communication, a normal feature in contracting, can remove the potential cost of flexibility (disagreements caused by conflicting perceptions). We offer an explanation based on social norms. |
| Keywords: | Communication, contracts, perceptions and cooperation |
| JEL: | C91 D03 D63 J41 D86 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:648&r=cbe |
| By: | Pablo Branas-Garza; Debrah Meloso; Luis Miller |
| Abstract: | We use response time (RT) and behavioral data from two different but related games to test the hypothesis that individuals use introspection when confronted with a new strategic situation. Our results confirm that the need to reflect about the possible behavior of the other player (interactive thought) has an important role in the mental processes present in strategic interactions. We also find that players with longer response times have distributions of behavior that are more dispersed than for faster players. This suggests that the longest RTs across games correspond to thought dedicated to the resolution of moral dilemmas and not to guessing the likely behavior of other players in order to maximize own payoff. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:440&r=cbe |
| By: | Levitt, Steven D.; List, John A.; Neckermann, Susanne; Sado, Sally |
| Abstract: | Decades of research on behavioral economics have established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence educational performance. Several insights emerge. First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps. -- |
| Keywords: | educational economics,behavioral economics,field experiment |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12038&r=cbe |
| By: | Halevy, Yoram |
| Abstract: | A sequence of experiments documents static and dynamic "preference reversals" between sooner-smaller and later-larger rewards, when the sooner reward could be immediate. The theoretically-motivated design permits separate identification of time-consistent, stationary and time-invariant choices. Half of the subjects are time consistent, but only two-thirds of them exhibit stationary choices. About half of subjects with time inconsistent choices have stationary preferences. These results challenge the view that present-bias preferences are the main source of time inconsistent choices. |
| Keywords: | Discounting, dynamic consistency, present bias, stability |
| JEL: | D03 D81 D91 C91 |
| Date: | 2012–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:pmicro:yoram_halevy-2012-19&r=cbe |
| By: | Urs Fischbacher (Thurgau Institute of Economics at the University of Konstanz, Department of Economics, Germany); Simeon Schudy (Thurgau Institute of Economics at the University of Konstanz, Department of Economics, Germany); Sabrina Teyssier (Thurgau Institute of Economics at the University of Konstanz, Department of Economics, Germany) |
| Abstract: | In many cases individuals benefit differently from the provision of a public good. We study in a laboratory experiment how heterogeneity in returns and uncertainty affects unconditional and conditional contribution behavior in a linear public goods game. The elicitation of conditional contributions in combination with a within subject design allows us to investigate belief-independent and type-specific reactions to heterogeneity. We find that, on average, heterogeneity in returns decreases unconditional contributions but does not affects conditional contributions only weakly. Uncertainty in addition to heterogeneity reduces conditional contributions slightly. Individual reactions to heterogeneity differ systematically. Selfish subjects and one third of conditional cooperators do not react to heterogeneity whereas the reactions of the remaining conditional cooperators vary. A substantial part of heterogeneity in reactions can be explained by inequity aversion which accounts for different reference groups subjects compare to |
| Keywords: | public goods, social preferences, conditional cooperation, heterogeneity |
| JEL: | C91 C72 H41 |
| Date: | 2012–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1214&r=cbe |
| By: | Kathryn Duckworth (Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL, UK.); Greg J. Duncan (University of California, Irvine, 2056 Education, Mail Code: 5500, Irvine, CA, 92697.); Katja Kokko (Department of Psychology, P.O. Box 35, FI-40014 University of Jyvaskyla.); Anna-Liisa Lyyra (Department of Psychology, P.O. Box 35, FI-40014 University of Jyvaskyla.); Molly Metzger (Northwestern University, 626 Library Place, Evanston, IL 60208.); Sharon Simonton (University of Michigan, Institute for Social Research, 426 Thompson Street, Ann Arbor, MI.) |
| Abstract: | Seeking convergent findings in five data sets from four countries, we assess the relative importance of adolescent skills and behaviors for completed schooling and labor market success in adulthood. We provide a framework for classifying "noncognitive" skills and use data designed by developmental psychologists to provide reliable measures of a variety of achievement and behavioral skills assessed between ages 13 and 16. Results show that adolescent achievement, particularly math achievement, is a stronger predictor of completed schooling than measures of noncognitive skills. Achievement skills also out-predict noncognitive skills with regard to adult earnings, although the differences are not as striking. |
| Keywords: | adolescent skills, adolescent behaviors, adult earnings |
| JEL: | J24 J31 J45 |
| Date: | 2012–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1203&r=cbe |
| By: | Gerald Eisenkopf (Thurgau Institute of Economics at University of Konstanz, Department of Economics, Germany); Tim Friehe (Department of Economics, University of Konstanz, Germany) |
| Abstract: | This paper uses experimental data to analyze how competitive behavior is influenced by coaching and peer observation. We study behavior in a sequential contest, considering information about the effort level of subjects in other contests (observation of peers) and information about the payoff-maximizing effort level (coaching) as treatment variables. Presentation of peer effort has a significant impact on the effort levels of first movers but not on second movers’ effort levels. The decisions of second movers were positively influenced (in terms of payoffs) by coaching when this information was presented alone; however, when coaching was presented in combination with peer observation, the quality of second-mover decisions deteriorated. |
| Keywords: | tournament, peer effect, coaching, information, learning |
| JEL: | D03 D83 C90 |
| Date: | 2012–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1210&r=cbe |
| By: | Nattavudh Powdthavee; Yohanes E. Riyanto |
| Abstract: | We investigated experimentally whether people can be induced to believe in a non-existent expert, and subsequently pay for what can only be described as transparently useless advice about future chance events. Consistent with the theoretical predictions made by Rabin (2002) and Rabin and Vayanos (2010), we show empirically that the answer is yes and that the size of the error made systematically by people is large. |
| Keywords: | Behavioral finance, hot-hand, random streak, expertise, information |
| JEL: | C91 D03 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1153&r=cbe |
| By: | Yaakov Kareev |
| Abstract: | Being a product of evolutionary pressures, it would not be surprising to find that what seems to be a limitation of the cognitive system is actually a fine-tuned compromise between a set of competing needs. This thesis is demonstrated using the case of the limited capacity of short-term memory, which is often regarded as the prime example of a cognitive limitation. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp611&r=cbe |
| By: | Jordi Brandts; Gary Charness; Matthew Ellman |
| Abstract: | We study experimentally how the ability to communicate affects the frequency and effectiveness of flexible and inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts are much more frequent and considerably more productive, both for buyers and sellers. Also, both buyer and seller earn considerably more from flexible with communication than rigid without communication. Our results show quite strongly that communication, a normal feature in contracting, can remove the potential cost of flexibility (disagreements caused by conflicting perceptions). We offer an explanation based on social norms. |
| Keywords: | Communication, contracts, perceptions and cooperation. |
| JEL: | C91 D03 D63 J41 D86 |
| Date: | 2012–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:908.12&r=cbe |