nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2014‒01‒10
five papers chosen by
Marco Novarese
Universita' del Piemonte Orientale Amedeo Avogadro

  1. Explaining Behavior in the "11-20” Game By Lawrence C.Y Choo; Todd R. Kaplan
  2. Reference Dependent Altruism By Breitmoser, Yves; Tan, Jonathan H.W.
  3. Out of control: impact of goal structure on personal control and implications for consumer judgments By Jamel Khenfer
  4. In sickness but not in wealth: Field evidence on patients? risk preferences in the financial and health domain By Miraldo, M; Galizzi, M; Stavropoulou, C
  5. Performance optimization – "sometimes" – result creativity By Iacob, Constanta; Gheorghe, Cristina Mihaela

  1. By: Lawrence C.Y Choo (Department of Economics, University of Exeter); Todd R. Kaplan (Department of Economics, University of Exeter and University of Haifa)
    Abstract: We investigate whether subjects’ behavior in the Arad and Rubinstein (2012) "11-20" game could be well explained by the k-level process described by the authors. We replicated their game in our baseline experiment and provided two other variations that retained the same mixed-strategy equilibrium but resulted in different predicted behavior by the k-level process. Our experiments results suggest that k-level process leads to inconsistent predictions. In contrast to the standard k-level process as in Arad and Rubinstein, we allow players to best respond stochastically in our "SK" model and compared the model’s statistical fit against the Quantal Response Equilibrium and Cognitive Hierarchy Model. The SK model and Cognitive Model were able to outperform the QRE in a statistical sense and performed as well as each other. In addition, theCognitiveHierarchy and to lesser extend the SK model, demonstrate consistent estimates. Our findings suggest that the behavioral assumptions of Arad and Rubinstein k-level process does not fully explain behavior in the "11-20" and better explanations could be obtained when one allows for stochastic best responds as in the SK and Cognitive Hierarchy Models.
    Keywords: k-level, Cognitive Hierarchy, Quantal Response Equilibrium, "11-20" money request game.
    JEL: C73 C91
    Date: 2014
  2. By: Breitmoser, Yves; Tan, Jonathan H.W.
    Abstract: In view of behavioral patterns left unorganized by current social preference theories, we propose a theory of reference dependent altruism (RDA). With RDA, one's degree of altruism increases at reference points. It induces equity and efficiency effects that are conditional on whether or not payoffs meet reference points. We verify the theory first by experimentally analyzing majority bargaining, where observed behavior contradicts existing theories but confirms RDA. Using parameter estimates from majority bargaining, we then make out-of-sample predictions for Charness-Rabin, Engelmann-Strobel, and Bolton-Ockenfels games. RDA organizes these seemingly disparate games out-of-sample, which validates our hypothesis that pro-social behavior primarily relates to reference points.
    Keywords: bargaining, non-cooperative game, laboratory experiment, social preferences, quantal response equilibrium
    JEL: C72 C78 D72
    Date: 2014–01–07
  3. By: Jamel Khenfer (IAE Aix-en-Provence - Institut d'Administration des Entreprises - Aix-en-Provence - Université Paul Cézanne - Aix-Marseille III, CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - Institut d'Administration des Entreprises (IAE) - Aix-en-Provence - Université Paul Cézanne - Aix-Marseille III : EA4225)
    Abstract: Aim: This paper presents empirical foundations for the study of the effect of goal structure on consumer judgment through lack of personal control. Methods: Three experiments were conducted. Results: Our experiments indicate that mental representation of consumer goal does affect personal control in opposite direction according to goal structure, namely the representation of the focal goal from the related tasks and subtasks. Conclusion: Because perceived order in one's environment primarily derives from personal control, when feelings of personal control are low, people should seek for structure and order their environment. Such an heuristics should affect consumer judgments by preferring strict categories when his/her goal is not structured, and at the opposite, by embracing the chaos in the means allowing goal pursuit when his/her goal is highly structured. This paper demonstrate that manipulation of goal structure (high vs. low) affects personal control in opposite directions.
    Keywords: goal structure; personal control; planning; compensatory control
    Date: 2013–08–18
  4. By: Miraldo, M; Galizzi, M; Stavropoulou, C
    Date: 2013–12–17
  5. By: Iacob, Constanta; Gheorghe, Cristina Mihaela
    Abstract: Seen first as an art, " dell'arte della scrittura venezziana " as he called Luke Paciolo accounting became in turn a technique , a science , a language formalized a social game and, more recently , a techno- science. Long preserved and still used the phrase " art of manipulating figures " which is not far from the truth if we consider the professional accountant freedom to choose between two or more accounting policy choice of the best options is dependent a multitude of factors including its ingenuity . Ingenuity , as well as imagination , novelty , originality and creativity are attributes that led the accounting field coverage of a certain reality , as desired and as there are not . Talking about the performance is natural to ask the following questions : is there a dose of fiction in it ? , That the steps in obtaining and menţienerea performance management may be considered constructive practices and practices with negative meanings ?
    Keywords: Accounting, creativity, performance, gain, competitive advantage
    JEL: M20 M41
    Date: 2014–01–06

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