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on Cognitive and Behavioural Economics |
| By: | Gerald Eisenkopf; Pascal Sulser |
| Abstract: | We present results from a field experiment at Swiss high schools in which we compare the effectiveness of a classroom experiment against conventional economics teaching. We randomly assigned classes into different teaching environments or a control group. Our results suggest that both teaching methods improve economic understanding considerably in contrast to classes without prior training. We do not observe a significant overall effect of the classroom experiment, but more able students benefit from the experiment while others lose out. Furthermore there is no robust impact of economic training on social preferences, measured as both individual behavior in incentivized decisions or political opinions. |
| Keywords: | Education of Economics, Classroom Experiments, Field Experiments, Indoctrination |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0080&r=cbe |
| By: | Li Hao (Department of Economics, University of Arkansas, Fayetteville); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University) |
| Abstract: | We report data from a laboratory experiment demonstrating that cheating is significantly deterred when a possible intent to cheat must be revealed before, rather than after, a potentially dishonest act. Further, data from independent evaluators suggests a reason: the same action is more likely to be perceived as dishonest when cheating could have been planned, as compared to cases when it seems simply impulsive. Overall, we find the vast majority of participants prefer to appear honest, but only a minority prefers actually to be honest. Finally, we conduct a type-classification analysis that implies that after establishing an honest appearance people cheat to the greatest extent possible. It follows that the “incomplete cheating†behavior frequently reported in the literature may be due more to a preference for maintaining an honest appearance than an intrinsic aversion to cheating. Length: 43 |
| Keywords: | cheating, honest appearance, partial cheating, experimental design |
| JEL: | C91 D03 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1039&r=cbe |
| By: | Weng, Qian (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The effect of session size has largely been ignored in experimental studies, despite the possibility that it may play a role by changing people’s perception of the potential chance of encountering a certain type of people and by affecting the strength of the potential link between people. This paper investigates how the effect of an induced common identity on individual cooperative behavior differs depending on session size in a repeated public goods experiment with constant group size and partner matching. We find that induced identity significantly enhances cooperation only when the session size is small and only in the initial period. In all other periods, the effect of induced identity on cooperation is the same in small and large sessions, suggesting that session size is not a confounding factor of identity in repeated interaction settings. |
| Keywords: | session size; identity building; public goods experiment; China |
| JEL: | C91 D71 H41 |
| Date: | 2013–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0560&r=cbe |
| By: | Centorrino, Samuele; Concina, Laura |
| Abstract: | We show that introducing a competitive preliminary stage in a sequential public good game helps select one of the more cooperative leaders in the group. Using a modified second price auction, we find that bids have a strong positive predictive power on individual contributions. Moreover, evidence is provided that trust can explain voluntary and cooperative leadership. However, followers reaction to voluntary leaders may rise free riding behaviour, with uncertain effect on total public good provision. |
| Keywords: | Public good experiment Leadership Self-selection Cooperation Trust Public good provision. |
| JEL: | A13 C72 C92 H41 Z13 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26933&r=cbe |
| By: | Francesco Fallucchi (School of Economics, University of Nottingham); Elke Renner (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | We investigate the effects of information feedback in rent-seeking games with two different contest structures. In the deterministic contest a contestant receives a share of the rent equal to her share of rent-seeking expenditures, while in the stochastic contest a contestant wins the entire rent with probability equal to her share of rent-seeking expenditures. In deterministic contests average expenditures converge to equilibrium levels when subjects only get feedback about own earnings, and additional feedback about rivals’ choices and earnings raises average expenditures. In stochastic contests information feedback has an opposite, and even stronger, effect: when subjects only get feedback on own earnings we observe high levels of rent dissipation, usually exceeding the value of the rent, and additional feedback about rivals’ choices and earnings has a significant moderating influence on expenditures. In a follow-up treatment we endogenize information feedback by allowing contestants in a stochastic contest to make “public” or “private” expenditures. Subjects make the vast majority of expenditures privately and overall excess expenditures are similar to the stochastic contest with own feedback. |
| Keywords: | contests, rent-seeking, information feedback, learning, experiments |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-02&r=cbe |
| By: | HASAN, HAMID; EJAZ, NAUMAN |
| Abstract: | The paper attempts to test the following hypotheses: (i) Are people generally self interested, (ii) If people tend to be generous, what is the motive, i.e., either they fear rejection or do they have a preference for fairness, and (iii) Is there any behavioral difference in bargaining between males and females. In this respect, we conduct an ultimatum bargaining experiment in a “same gender pairings” setting in International Islamic University Islamabad, Pakistan. In order to test the first hypothesis we look at the overall offers made by the proposers and the rejection rates of the responders. In order to test the second hypothesis we compare the offers that proposers anticipate will be accepted by the responders and the offers they actually make. If actual offer exceeds the minimum acceptable offer anticipated by the proposer, we conclude that he is fair minded. Otherwise, he is being generous due to fear of rejection. In order to test the third hypothesis, we compare the offers and responses made by males and females in this game. At the start of this study, we were of the view that the people of an Islamic society, in general, and students of International Islamic University, Islamabad, in particular, would show a greater concern for fairness rather than fear of rejection. As is evident, the results of this study prove these views wrong. Further, this fear of rejection was very realistic, particularly, in case of males where the rejection rates for unfair offers were very high. |
| Keywords: | Ultimatum games, fairness, self-interest, gender |
| JEL: | C9 C91 C92 D0 D03 |
| Date: | 2013–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44923&r=cbe |
| By: | Mohamed Ali Bchir; Marc Willinger |
| Abstract: | We report the results of an experiment on voluntary contributions to a public good in which we implement a redistribution of the group endowment among group members in a lump sum manner. We study the impact of redistribution on group contribution, on individuals’ contribu- tions according to their endowment and on welfare. Our experimental results show that welfare increases when equality is broken, as predicted by theory (Itaya, De Meza & Myles, 1997), because the larger contribution of the rich subjects overcompensates the lower contribution of the poor subjects. Last but not least, agents’ behavior in situations of inequality of income, depends on initial conditions. In particular, the decisions of those who become poor seem to express a form of protest against the new distribution of incomes compared to those who started out as poor: from a behavioral point of view, being poor is therefore not equivalent to becoming poor. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:13-04&r=cbe |
| By: | Borghans, Lex (Department of Economics and Research Centre for Education and the Labour Market, Maastricht University); Meijers, Huub (UNU-MERIT/MGSoG and Department of Economics, Maastricht University); Weel, Bas ter (CPB Netherlands Bureau for Economic Policy Research and Department of Economics, Maastricht University) |
| Abstract: | This research provides an economic model of the way people behave during an IQ test. We distinguish a technology that describes how time investment improves performance from preferences that determine how much time people invest in each question. We disentangle these two elements empirically using data from a laboratory experiment. The main findings are that both intrinsic (questions that people like to work on) and extrinsic motivation (incentive payments) increase time investments and as a result performance. The presence of incentive payments seems to be more important than the size of the reward. Intrinsic and extrinsic motivations turn out to be complements. |
| Keywords: | incentives, cognitive test scores |
| JEL: | J20 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013006&r=cbe |
| By: | Shoji, Masahiro |
| Abstract: | I conducted an artefactual field experiment to identify whether guilt reduces crime, and how the crime reduction effects of guilt change due to peer effects. Guilt aversion predicts the occurrence of peer effects caused by changes in guilt sensitivity and belief. I found supporting evidence of changes in belief. My experiment is novel in that it develops an approach to elicit guilt sensitivity. Using this data, I show behavioural patterns consistent with guilt aversion but not with pure altruism or trustworthiness. The external validity of guilt sensitivity is also shown. |
| Keywords: | Guilt aversion; crime; experiment; external validity; peer effects; broken windows theory |
| JEL: | C91 C93 D63 K42 |
| Date: | 2013–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44746&r=cbe |
| By: | Neil J. Buckley; Stuart Mestelman; R. Andrew Muller; Stephan Schott; Jingjing Zhang |
| Abstract: | We study cheap-talk communication in common pool resource environments with and without output-sharing groups. Communication in groups of 12 does not improve efficiency over the non-cooperative Nash outcome without communication. Organizing subjects into output-sharing groups of four players introduces sufficient free-riding incentives to achieve full efficiency. Within-group communication decreases efficiency by countervailing the free-riding incentives induced by output sharing and enhancing between-group competition. The effects are stronger when output-sharing groups have repeated fixed membership. Adding public communication reduces the efficiency-reducing effects of within-group communication. Restricting private communication within social groups that do not share output increases efficiency to almost 100%. |
| Keywords: | Common pool resources, communication, competition, group behavior, partners and strangers, experiments |
| JEL: | Q20 C92 C72 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2013-06&r=cbe |
| By: | Leiter, Andrea; Rheinberger, Christoph |
| Abstract: | We develop a theoretical account of how athletes engaged in risky sports value riskreducing information and use stated-preference data from a sample of backcountry skiers to empirically challenge the predictions of our model. Risk taking in this specific context depends on the athlete’s personal attitudes toward risky activities and his strategies to control the risk. Usage of specific information is one strategy of risk control. We estimate the demand value for avalanche information. Caution is however warranted because unobserved factors may jointly affect the athlete’s perception of risk and his willingness-to-pay for obtaining the information. We use a recursive two stage estimation approach to account for endogeneity concerns. Our results indicate that the demand value of information increases with wealth and perceived risk and tends to decrease with better skills to control risk and more information about the prevailing field conditions. These results support our theoretical predictions and suggest that variation in athletes’ WTP can be explained by their beliefs about the usefulness of information. |
| Keywords: | Self-controlled risk, endogeneity, risky sports, value of information, WTP. |
| JEL: | D81 J17 Q26 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26934&r=cbe |
| By: | Jingnan (Cecilia) Chen (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University) |
| Abstract: | Although economic and social relationships can involve deception (Gneezy 2005), such relationships are often governed by informal contracts that require trust (Berg et al. 1995). While important advances have been made concerning deception in economics, the research has focused little on written forms of communication. Are there certain systematic cues that signal written communications as dishonest? Are those signals accurately detected and used by message receivers? We fill this gap by studying messages written in a novel three-person trust game (we call it the “Mistress Gameâ€). We find that: (i) messages that use encompassing terms, or a greater number of words, are significantly more likely to be viewed as promises; and (ii) promises that mention money are significantly more likely to be trusted. Notwithstanding the latter finding, we find senders who mention money within their promises to be significantly less likely to keep their word than those who do not. Length: 36 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1038&r=cbe |
| By: | Michailova, Julija; Katter, Joana K. Q. |
| Abstract: | This article illustrates the difficulties of quantifying overconfidence in economic experiments and suggests a procedure for the development of the reliable overconfidence measurement instrument (test). Following the suggested two-stage procedure a sample measure of overconfidence is developed. First a pilot test is conducted to divide the initial fifty items into three difficulty levels: hard, moderate and easy questions. A final test was compiled of six questions of each difficulty levels. In the second phase a replicability check was run with the final instrument. |
| Keywords: | overconfidence quantification, instrument development, economic experiment. |
| JEL: | C49 C80 C90 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44399&r=cbe |
| By: | Hassani Mahmooei, Behrooz; Parris, Brett |
| Abstract: | Trust is a dynamic and complex phenomenon and understanding the factors which affect its formation, evolution and disappearance is a critical research issue. It has been shown that trust plays a key role in how human and social capital develop, how economies grow and how societies progress. In this paper, we present an agent-based model of the relations between a dynamic effort allocation system, an evolving trust framework and a reputation module to study how changes in micro-level rent-seeking traits and decisions can shape the emergence of trust across the simulated environment. According to our results, variations in trust are correlated more with the returns to being productive, rather than rent-seeking. In line with previous studies, our model shows that higher than average levels of risk-taking by agents lead to further trust and gains during an interaction, though taken to an extreme, both trust and gain can decline as a result of reckless decisions. We also report on the formation of trust clusters in our model as an emergent phenomenon. |
| Keywords: | Trust, Rent-seeking, Agent-based Model, Reputation, Effort Allocation, Social Simulation |
| JEL: | C61 C63 D72 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44919&r=cbe |
| By: | Chatterjee, Sidharta |
| Abstract: | Traditionally, learning organizations face certain constraints related to both exogenous and endogenous factors. In this paper, I model three well established constraints that employees face while being part of their organizations. These are in the tune of constraints on their natural behavior which is explicit, and two implicit constraints on their endeavor to acquire new knowledge and perform new actions. The implicit constraints which are elaborated, is related to their relative performance in acquiring new knowledge and by their consecutive actions based on the new knowledge gained. This paper, so forth, attempts to underline such limitations which the agents face under organizational culture and suggest possible strategic initiatives that would effectively counteract such binding limitations to stimulate positive performances from their end. |
| Keywords: | Organizational learning, constraints, employee behavior, cognitive load, knowledge, organizational adaptation |
| JEL: | L20 M14 M51 |
| Date: | 2013–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44407&r=cbe |