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on Cognitive and Behavioural Economics |
| By: | Johnston, D.W.;; Lordan, G.; |
| Abstract: | This paper explores why the poor are more likely to be overweight and obese than the rich. The main aim is to better understand the mechanisms underlying the income-obesity relationship so that effective policy interventions can be developed. Our approach involves analysing data on approximately 9,000 overweight British adults from between 1997 and 2002. We estimate the effect of income on the probability that an overweight individual correctly recognises their overweight status and the effect of income on the probability that an overweight individual attempts to lose weight. Our work finds that low-income individuals are more likely to both misperceive that they are a healthy weight and fail to address their unhealthy weight. Both of these effects are higher for males than females. For example, it is estimated that overweight low-income males are 15%-points less likely to recognize their overweight status than overweight high-income males, and that after controlling for weight perceptions, overweight low-income males are 10%-points less likely to be trying to lose weight. An implication of these results is that more public education on what constitutes overweight and the dangers associated with being overweight is needed, especially in low income neighbourhoods. |
| Keywords: | Obesity, Overweight, Weight Control, Weight Misperceptions |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:12/27&r=cbe |
| By: | Michele Berardi; Jaqueson K. Galimberti |
| Abstract: | The literature on bounded rationality and learning in macroeconomics has often used recursive algorithms such as least squares and stochastic gradient to depict the evolution of agents' beliefs over time. In this work, we try to assess the plausibility of such practice from an empirical perspective, by comparing forecasts obtained from these algorithms with survey data. In particular, we show that the relative performance of the two algorithms in terms of forecast errors depends on the variable being forecasted, and we argue that rational agents would therefore use different algorithms when forecasting different variables. By using survey data, then, we show that agents instead always behave as least squares learners, irrespective of the variable being forecasted. We thus conclude that such findings point to a puzzling conflict between rational and actual behaviour when it comes to expectations formation. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:177&r=cbe |
| By: | Allcott, Hunt (NYU); Rogers, Todd (Harvard University) |
| Abstract: | Behavioral decision research has profoundly changed our understanding of decision-making. Recent research has begun to explore how behavioral insights can influence behavior in the world, at scale. This work often involves field experiments studying outcomes over short time windows. We study a descriptive social norms intervention's impact on household energy usage continuously over 39 to 49 months. Our two field experiments (N=155,000 households) each have three conditions: untreated control, continued treatment, and treatment that is subsequently discontinued. We find that continued treatment reduces energy usage over the entire period ("durability"). Further, after treatment is discontinued, a sizable energy use reduction persists ("persistence"). Finally, continued treatment generates a greater impact over time than discontinued treatment, showing that continued treatment exerts incremental influence on behavior over and above persistence. We discuss implications, describe how long-term persistence can occur, and argue that future behavioral decision research should address long-term effects of interventions. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-045&r=cbe |
| By: | Verhagen, T.; Nauta, A.; Feldberg, J.F.M. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2012-10&r=cbe |
| By: | Francisco Campos-Ortiz; Louis Putterman; T.K. Ahn; Loukas Balafoutas; Mongoljin Batsaikhan; Matthias Sutter |
| Abstract: | We study experimentally the protection of property in five widely distinct countries-Austria, Mexico, Mongolia, South Korea and the United States. Our main results are that the security of property varies with experimental institutions, and that our subject pools exhibit significantly different behaviors that correlate with country-level property security, trust and quality of government. Subjects from countries with higher levels of trust or perceptions of safety are more prone to abstain initially from theft and devote more resources to production, and subjects from countries with higher quality political institutions are more supportive of protecting property through compulsory taxation. This highlights the relevance of socio-political factors in determining countries' success in addressing collective action problems including safeguarding property rights. |
| Keywords: | Property Rights, Theft, Efficiency, Experiment, Socio-Political Factors |
| JEL: | C91 C92 D03 H41 P14 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2012-26&r=cbe |
| By: | Dessi, Roberta (IDEI, Toulouse School of Economics); Monin, Benoît (Stanford University) |
| Abstract: | What makes individuals conform or diverge after observing prosocial or selfish behavior by others? We study experimentally how social comparison (observing a peer’s behavior) interacts with identity motives for cooperation. Participants play two games. We increase the strength of the identity motive by inducing subjects in a treatment condition to infer their identity from behavior in the first game. Cooperators who observe a peer defect donate 28% more to their unknown partner in the second game in the treatment than in the control group. Our results are consistent with the predictions of Bénabou and Tirole (2011), and show that the "suckerto- saint effect" identified by Jordan and Monin (2008) can have important behavioral consequences. |
| Keywords: | , |
| JEL: | A1 A12 D1 D3 D64 Z1 |
| Date: | 2012–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:26502&r=cbe |
| By: | Joaquín Gómez-Miñambres (Economic Science Institute, Chapman University); Brice Corgnet (Argyros School of Business and Economics, Chapman University); Roberto Hernán González (Universidad de Granada, Department of Economic Theory and Economic History) |
| Abstract: | The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. To establish our theoretical conjectures we develop a model where assigned goals act as reference points to workers’ intrinsic motivation, creating a sense of gain when attained and a sense of loss when not attained. Consistent with our theoretical framework, we find evidence that managers set goals that are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. We study the interaction between goal setting and monetary rewards by considering different values for the monetary incentives involved in completing the task. Interestingly, we find that goal setting is especially effective when monetary incentives are strong. These results suggest that goal setting may foster workers’ intrinsic motivation and increase their level of performance beyond what is achieved using solely monetary incentives. |
| Keywords: | Intrinsic motivation, incentives, goal-setting, reference dependent preferences, virtual organizations. |
| JEL: | C92 D23 M54 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:12-24&r=cbe |
| By: | Thomas Vischer; Thomas Dohmen; Armin Falk; David Huffman; Jürgen Schupp; Uwe Sunde; Gert G. Wagner |
| Abstract: | This study presents results of the validation of an ultra-short survey measure of patience included in the German Socio-Economic Panel (SOEP). Survey responses predict intertemporal choice behavior in incentive-compatible decisions in a representative sample of the German adult population. |
| Keywords: | Time preferences, discounting, validation of survey measures |
| JEL: | D01 D03 D91 C91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp499&r=cbe |
| By: | Mitesh Kataria (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Natalia Montinari (Max Planck Institute of Economics, Strategic Interaction Group, Jena) |
| Abstract: | Researchers frequently studied the casual relationships of other-regarding preferences by applying experimental methods in bilateral settings (e.g., dictator game and ultimatum game). We use a framed experiment on taxes to study preferences for redistribution in a multi-person setting. We find presence of heterogeneous preferences with a substantial share of tax rate choices in line with both payoff maximization and other-regarding preferences. Notably, our data is not consistent with inequality aversion but points to other forms of other-regarding preferences, as fairness and altruism. By manipulating how subjects are assigned to a given level of pre-tax income, we vary the individual entitlements. We find a difference in the willingness to redistribute income when comparing the treatment where pre-tax income is assigned by relative performance in a production task (a general knowledge quiz) to the treatment where pre-tax income is assigned by luck. We do not find any significant difference in comparison to the intermediate treatment where pre-tax income is assigned by a combination of luck and performance. The perception of a "fair" tax is different depending on whether subjects' pre-tax income is below or above average, which is in line with a fairness bias. Finally, subjects not knowing whether their pre-tax income is below or above the average when choosing the tax rate behave as if they were more other-regarding. |
| Keywords: | Redistribution, Entitlements, Fairness Bias, Risk, Framed Tax Experiment |
| JEL: | D6 C9 |
| Date: | 2012–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-061&r=cbe |
| By: | Baumeister, Roy F. (FL State University); Vohs, Kathleen D. (University of MN); Aaker, Jennifer L. (Stanford University); Garbinsky, Emily N. (Stanford University) |
| Abstract: | Being happy and finding life meaningful overlap, but there are important differences. A large survey revealed multiple differing predictors of happiness (controlling for meaning) and meaningfulness (controlling for happiness). Satisfying one's needs and wants increased happiness but was largely irrelevant to meaningfulness. Happiness was largely present-oriented, whereas meaningfulness involves integrating past, present, and future. For example, thinking about future and past was associated with high meaningfulness but low happiness. Happiness was linked to being a taker rather than a giver, whereas meaningfulness went with being a giver rather than a taker. Higher levels of worry, stress, and anxiety were linked to higher meaningfulness but lower happiness. Concerns with personal identity and expressing the self-contributed to meaning but not happiness. We offer brief composite sketches of the unhappy but meaningful life and of the happy but meaningless life. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:2119&r=cbe |
| By: | Marco Castillo; David L. Dickinson; Ragan Petrie |
| Abstract: | We investigate the consistency and stability of individual risk preferences by slightly manipulating the cognitive resources of subjects through sleepiness. Participants are recruited and randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time of day (circadian mismatched). For the decision task, subjects and are asked to choose how much to allocate between two state-dependent assets (using the Choi et al., 2007, design). We have two main findings. First, the consistency of behavior for circadian matched and mismatched subjects is statistically the same. This is true whether it is (nonparametrically) defined as consistency with GARP, payoff dominance, expected utility, disappointment aversion or cumulative prospect theory. Second, while our cognitive resource manipulation yields no difference in consistency of behavior, it results in an increased tendency to take risk. Our experiment confirms theoretical predictions that preferences are consistent yet state-dependent. Key Words: |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:12-04&r=cbe |
| By: | Katrin Muehlfeld; Utz Weitzel; Arjen van Witteloostuijn |
| Abstract: | We analyze investors' trading behavior, particularly their coping with fundamental shocks in asset value, depending on individual differences in the sensitivity of two basic neurophysiological systems-the Behavioral Approach System (BAS), the 'driving force' of human behavior, and the Behavioral Inhibition System (BIS), its 'braking system'. By analyzing 15 independent experimental asset markets with a total of 171 participants, we find that differences in BAS and BIS sensitivity affect trading in both 'normal' and shocktrading environments: under normal trading conditions, individuals with a more sensitive BAS are more active traders, prefer riskier portfolios, and generate higher individual overall profits. High BIS subjects generate lower scalping and overall profits. Fundamental shocks generally reinforce the preference of high BAS investors for riskier portfolios, while positive shocks 'unfreeze' high BIS investors: they trade more frequently and generate higher profits. At the market level, normal trading in markets with a high BIS median is associated with lower volatility, compared to low BIS median markets, while greater concentration of traders' BAS scores around the mean is associated with better efficiency and liquidity, compared to markets with lower BAS kurtosis. In high BIS median markets, positive shocks lead to improved efficiency, lower bid-ask spread, and lower volatility. We observe no significant differences in market-level reactions to negative shocks. |
| Keywords: | Individual decision making; Investment decisions; Behavioral Approach System/Behavioral Inhibition System; Experimental asset markets; Fundamental shocks. |
| JEL: | C91 G11 D03 D81 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1218&r=cbe |
| By: | Raphaële Préget; Phu Nguyen-Van; Marc Willinger |
| Abstract: | We show that the preference to act as a leader rather than as a follower is related to subjects’ behavioral type. We rely on the methodology proposed by Fischbacher et al. (2001) and Fischbacher and Gächter (2010) in order to identify subjects’ behavioral types. We then link the likelihood to act as a leader in a repeated public goods game to the elicited behavioral types. The leader in a group is defined as the subject who voluntarily decides in the first place about his contribution. The leader’s contribution is then reported publicly to the remaining group members who are requested to take their contribution decisions simultaneously. Our main findings are that leaders emerge in almost all rounds and that conditional cooperators are more likely to act as leaders compared to free riders. We also find that voluntary leaders, irrespective of their behavioral type, contribute more than the followers. However leadership does not prevent the decay that is commonly observed in linear public goods experiments. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:12-34&r=cbe |
| By: | Andreas Nicklisch; Irenaeus Wolff |
| Abstract: | We experimentally show that current models of reciprocity are incomplete in a systematic way using a new variant of the ultimatum game that provides second-movers with a marginal-cost-free punishment option. For a substantial proportion of the population, the degree of first-mover unkindness determines the severity of punishment actions even when marginal costs are absent. The proportion of these participants strongly depends on a treatment variation: higher fixed costs of punishment more frequently lead to extreme responses. The fractions of purely selfish and inequity-averse participants are small and stable. Among the variety of reciprocity models, only one accommodates (rather than predicts) parts of our findings. We discuss ways of incorporating our findings into the existing models. |
| Keywords: | Distributional fairness, experiments, intention-based fairness, reciprocity, ultimatum bargaining |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0079&r=cbe |
| By: | Jérôme Hergueux (LaRGE - Laboratoire de Recherche en Gestion et Economie, Sciences Po - Sciences Po); Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne) |
| Abstract: | Internet is a very attractive technology for experiments implementation, both in order to reach more diverse and larger samples and as a field of economic research in its own right. This paper reports on an experiment performed both online and in the laboratory, designed so as to strengthen the internal validity of decisions elicited over the Internet. We use the same subject pool, the same monetary stakes and the same decision interface, and randomly assign two group of subjects between the Internet and a traditional University laboratory to compare behavior in a set of social preferences games. This comparison concludes in favor of the reliability of behaviors elicited through the Internet. Our behavioral results contradict the predictions of social distance theory, as we find that subjects allocated to the Internet treatment behave as if they were more altruistic, more trusting, more trustworthy and less risk averse than laboratory subjects. Those findings have practical importance for the growing community of researchers interested in using the Internet as a vehicle for social experiments and bear interesting methodological lessons for social scientists interested in using experiments to research the Internet as a field. |
| Keywords: | Social experiment, field experiment, internet, methodology, randomized assignment. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00748615&r=cbe |
| By: | Dessi, Roberta (IDEI, Toulouse School of Economics); Monin, Benoît (Stanford University) |
| Abstract: | What makes individuals conform or diverge after observing prosocial or selfish behavior by others? We study experimentally how social comparison (observing a peer’s behavior) interacts with identity motives for cooperation. Participants play two games. We increase the strength of the identity motive by inducing subjects in a treatment condition to infer their identity from behavior in the first game. Cooperators who observe a peer defect donate 28% more to their unknown partner in the second game in the treatment than in the control group. Our results are consistent with the predictions of Bénabou and Tirole (2011), and show that the "suckerto- saint effect" identified by Jordan and Monin (2008) can have important behavioral consequences. |
| Keywords: | , |
| JEL: | A1 A12 D1 D3 D64 Z1 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26503&r=cbe |