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on Cognitive and Behavioural Economics |
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Issue of 2014‒01‒24
eleven papers chosen by Marco Novarese Universita' del Piemonte Orientale Amedeo Avogadro |
| By: | Giacomo Degli Antoni (University of Parma, Department of Law; Econometica, Inter-University Center for Economic Ethics and Corporate Social Responsibility, Italy); Gianluca Grimalda (University of Duisburg-Essen, Centre for Global Cooperation Research and Kiel Institute for the World Economy, Germany; LEE-Universitat Jaume I of Castellón, Spain) |
| Abstract: | We investigate the effect of beliefs and preferences on trust and trustworthiness in the first experiment involving a stratified sample of association members and a demographically comparable sample of non-members. We show that: (1) Neither expectations on others’ behaviour nor risk aversion are relevant to account for members’ significantly higher trust and trustworthiness. Hence, members and non-members must differ in their basic preferences. (2) Expectations account for the lower trust and trustworthiness observed in Southern Italians compared to Northern Italians. This sheds light on two issues of main importance in the social capital literature. |
| Keywords: | Trust; Beliefs; Other-regarding preferences; Voluntary associations; Field experiment |
| JEL: | A13 C91 C93 D03 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2013/21&r=cbe |
| By: | Mette Trier Damgaard (Department of Economics and Business, Aarhus University, Denmark); Christina Gravert (Department of Economics and Business, Aarhus University, Denmark) |
| Abstract: | This study designs two field experiments to estimate the effect of binding deadlines and reminders on charitable giving. We sent out 62,000 e-mails and text messages to prior donors of a large Danish charity while varying the length of the deadline and whether they received a reminder. We find that a reminder increases both the likelihood of making a donation and the amount donated. We find no effect of the deadlines on the propensity to give. Instead we observe a “now-or-never” effect; either donations are made immediately or not at all. In line with the “avoiding-the-ask” theory, both shorter deadlines and the reminder increase the number of requests to be taken off the mailing list. |
| Keywords: | Field experiment, charitable contributions, time preferences, avoiding-the-ask |
| JEL: | C93 D03 D64 |
| Date: | 2014–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2014-03&r=cbe |
| By: | Säve Söderberg, Jenny (Swedish Institute for Social Research, Stockholm University); Sjögren Lindquist, Gabriella (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | - |
| Keywords: | risk; children; |
| Date: | 2014–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2013_007&r=cbe |
| By: | Miller, Margaret; Reichelstein, Julia; Salas, Christian; Zia, Bilal |
| Abstract: | This paper presents a systematic and comprehensive meta-analysis of the literature on financial education interventions. The analysis focuses on financial education studies designed to strengthen the financial knowledge and behaviors of consumers. The analysis identifies 188 papers and articles that present impact results of interventions designed to increase consumers'financial knowledge (financial literacy) or skills, attitudes, and behaviors (financial capability). These papers are diverse across a number of dimensions, including objectives of the program intervention, expected outcomes, intensity and duration of the intervention, delivery channel used, and type of population targeted. However, there are a few key outcome indicators where a subset of papers are comparable, including those that address savings behavior, defaults on loans, and financial skills, such as record keeping. The results from the meta analysis indicate that financial literacy and capability interventions can have a positive impact in some areas (increasing savings and promoting financial skills such as record keeping) but not in others (credit default). |
| Keywords: | Financial Literacy,Access to Finance,Access&Equity in Basic Education,Curriculum&Instruction,Teaching and Learning |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6745&r=cbe |
| By: | Frederik Schwerter |
| Abstract: | This study test whether social reference points impact individual risk taking. In a laboratory experiment, decision makers observe the earnings of a peer subject before making a risky choice. We exogenously manipulate the peer earnings across two treatments. We find a signicant treatment effect on risk taking: decision makers vary their risk taking in order to surpass or stay ahead of their peer. Our findings are consistens with a social-comparison-based, reference-dependent preference model that formalizes relative concerns via social loss aversion. Additionally, we relate our findings to the impact of private reference points on risk taking. |
| Keywords: | Social Comparisons, Social Loss Aversion, Reference-Dependent Preferences, Lab Experiments, Relative Income Concerns |
| JEL: | C91 D03 D81 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse11_2013&r=cbe |
| By: | Cox, Caleb |
| Abstract: | I show how improper conditioning of beliefs can lead to under-contribution in public goods environments with interdependent values. I consider a simple model of a binary, excludable public good. In equilibrium, provision of the public good is good news about its value. Naive players who condition expectations only on their private information contribute too little, despite the absence of free-riding incentives. In a laboratory experiment, subjects indeed under-contribute relative to equilibrium. Using modified games with different belief conditioning effects, I verify that under-contribution is due to improper belief conditioning. I find little evidence of learning over multiple rounds of play. |
| Keywords: | Public goods; experiments; cursed equilibrium; game theory |
| JEL: | C72 C92 D71 H41 |
| Date: | 2014–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53074&r=cbe |
| By: | Erte Xiao (Department of Social and Decision Sciences Carnegie Mellon University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University) |
| Abstract: | We develop and model a two-stage incentivized intervention to promote pro-sociality. In the first stage, participants are incentivized to complete a compound task consisting of a targeted pro-social activity and a complement activity. In the second stage, participants are incentivized to complete repeatedly only the complement activity. The model predicts that, conditional on compliance with the first-stage compound task, intrinsic interest in the target activity is promoted regardless of compliance with the second-stage task. To test this we design and implement a field experiment on volunteering. The results are consistent with our model. Moreover, in the one year subsequent to our experiment, those who participated in our compound-task mechanism reported volunteering systematically more than those who participated in alternative mechanisms we investigated. Our approach has useful implications for promoting positive individual and social outcomes in many behavioral domains. Length: 41 |
| Keywords: | volunteering, incentives, pro-social attitudes, cognitive dissonance, field experiment |
| JEL: | C93 D02 D03 D04 D64 H41 Z13 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1043&r=cbe |
| By: | W. David Bradford; Paul Dolan; Matteo M. Galizzi |
| Abstract: | Time discounting is at the heart of economic decision-making. We disentangle hyperbolic discounting from subjective time perception using experimental data from incentive-compatible tests to measure time preferences, and a set of experimental tasks to measure time perception. The two behavioural parameters may be related to two factors that affect how we look ahead to future events. The first is that some component of time preferences reflect hyperbolic discounting. The second factor is that non-constant discounting may also be a reflection of subjective time perception: if people's perception of time follows a near logarithmic process (as all other physiological perceptions such as heat, sound, and light do) then all existing estimates of individual discounting will be mis-measured and incorrectly suggest "hyperbolic" discounting, even if discounting over subjective time is constant. To test these hypotheses, we empirically estimate the two distinct behavioural parameter s using data collected from 178 participants to an experiment conducted at the London School of Economics Behavioural Research Lab. The results support the hypothesis that apparent non-constant discounting is largely a reflection of subjective time perception. |
| Keywords: | Time preferences, Time perception, Hyperbolic discounting |
| JEL: | D1 D10 D91 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1255&r=cbe |
| By: | Ioannou, Christos A.; Makris, Miltiadis |
| Abstract: | Global games and Poisson games have been proposed to address equilibrium indeterminacy in Coordination games. The former assume that agents face idiosyncratic uncertainty about economic fundamentals, whereas the latter, following Myerson (2000), model the number of actual players as a Poisson random variable to capture population uncertainty in large games. Given that their predictions differ, it is imperative to understand which type of uncertainty drives behavior, if any. Recent experimental literature findings that inexperienced (in the sense of limited game-play) subjects' behavior is similar in Global and Common Knowledge Coordination games, thus casting doubts on whether idiosyncratic uncertainty about economic fundamentals is an important determinant of such behavior. We design an experiment to study the behavior of inexperienced subjects in Global, Poisson and Common Knowledge Coordination games. Our findings corroborate the above experimental literature. More importantly, they also suggest that uncertainty about the number of actual players in large games does influence inexperienced subjects' behavior. In addition, inexperienced subjects' behavior under such uncertainty is, in fact, consistent with the theoretical prediction of Poisson Coordination games |
| Date: | 2014–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:stn:sotoec:1401&r=cbe |
| By: | Maggian, Valeria (University of Milan Bicocca); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | While previous research has shown that social preferences develop in childhood, we study whether this development is accompanied by reduced use of deception when lies would harm others, and increased use of deception to benefit others. In a sample of children aged between 7 and 14, we find strong aversion to lying at all ages. Lying is driven mainly by selfish motives and envy. Children with stronger social preferences are less prone to deception, even when lying would benefit others at no monetary cost. Older children lie less than younger children and require more self-justification to lie. |
| Keywords: | lie aversion, deception, social preferences, children, experiment |
| JEL: | C91 D03 D63 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7857&r=cbe |
| By: | Baert, Stijn (Ghent University); Decuypere, Lynn (Ghent University) |
| Abstract: | In this letter we present a laboratory experiment to assess the relative and independent effect of perceived attractiveness and personality traits on hiring decisions. Our results indicate that attractiveness and conscientiousness, followed by emotional stability, are important drivers of recruiters' decisions. |
| Keywords: | lab experiments, hiring discrimination, economics of beauty, economics of personality |
| JEL: | C91 J24 J71 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7847&r=cbe |