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on Cognitive and Behavioural Economics |
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Issue of 2014‒06‒07
twelve papers chosen by Marco Novarese Universita' del Piemonte Orientale Amedeo Avogadro |
| By: | Riccardo Ghidoni; Matteo Ploner |
| Abstract: | In a modified dictator game experiment, we study how distributional justice, measured by the proportionality between effort exerted and rewards obtained, and guilt feelings triggered by others’ expectations affect dictator’s choices. We consider these two sources of behavior in isolation and in interaction. Our results suggest that both justice concerns and guilt aversion are important drivers of behavior. However, the expectations of others are more relevant when the choice environment is likely to induce less equitable outcomes. |
| Keywords: | Justice, Guilt Aversion, Entitlement Rights, Experiments |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:1403&r=cbe |
| By: | Haoran He (School of Economics and Business Administration - Beijing Normal University / Beijing); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I (UCBL)) |
| Abstract: | We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team decision-making. However, teams are no more selfish than individuals who decide in isolation. Individuals express strategically more inequality aversion in their initial proposals in team decision-making because they anticipate the selfishness of other members. Members with median social preferences drive team decisions. Finally, we show that social image has little influence because guilt and envy are almost similar in anonymous and non-anonymous interactions. |
| Keywords: | Team; inequity aversion; preference aggregation; social image; experiment |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00996545&r=cbe |
| By: | Maria Porter |
| Abstract: | This paper examines the motivation for intergenerational transfers between adult children and their parents, and the nature of preferences for such giving behaviour, in an experimental setting.� Participants in our experiment play a series of dictator games with parents and strangers, in which we vary endowments and prices for giving to each recipient.� We find that preferences for giving are typically rational.� When parents are recipients as opposed to strangers, participants display greater sensitivity to the price of giving, and a higher relative proclivity for giving.� Our findings also provide evidence of reciprocal motivations for giving, as players give more to parents who have full information regarding the context in which giving occurs. |
| Keywords: | transfer motives, intergenerational, dictator games, lab experiments, altruism, reciprocity |
| JEL: | C91 D12 D64 |
| Date: | 2014–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:709&r=cbe |
| By: | David Dickinson (Department of Economics - Appalachian State University); David Masclet (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I (UCBL)) |
| Abstract: | Do individuals trained in law enforcement punish or reward differently from typical student subjects ? We analyze norm enforcement behavior of newly appointed police commissioners in both a Voluntary Contribution Mechanism game and a Common Pool Resource game. Our experimental design includes treatments where a reward or sanction institution is exogenously imposed, as well as treatments with endogenous selection of the norm enforcement institution. Compared to a standard student-subject pool, police commissioners cooperate significantly more in both games. With exogenous institutions, police commissioners bear a higher burden of punishment costs than non-police subjects. When the norm enforcement institution is endogenous, all subjects vote more in favor of rewards over sanctions, but police subjects with some work experience are more likely to vote for sanctions. Police subjects also reward and sanction more than the others when the institution results from a majority vote. |
| Keywords: | Norm enforcement; Common Pool Resources; Voluntary Contribution Mechanism; Police officers; Experiment |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00996511&r=cbe |
| By: | Ralf Bergheim |
| Abstract: | This paper experimentally investigates individual information acquisition and decisions in ambiguous situations in which the degree of ambiguity can endogenously and individually be decreased by the subjects. In particular, I analyze how risk aversion, ambiguity attitude and personality traits are related to an individual’s information acquisition prior to a decision and to the decision itself based on this information. I focus on urn decisions and conduct treatments that consider the loss and gain domain separately and that vary the amount of available information and the probabilistic structure. |
| Keywords: | Ambiguity aversion; risk aversion; experiment; decision making; information acquisition; personality traits |
| JEL: | C91 D03 D81 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0488&r=cbe |
| By: | Lauren Larrouy (University of Nice Sophia Antipolis, France; GREDEG CNRS) |
| Abstract: | The paper purports to stress how the two major contributions of Bacharach: "Variable Frame Theory" (VFT) and "Team Reasoning" (TR) improve Standard Non-Cooperative Game Theory in some relevant aspects which I point out. The aims are to show: (i) how Bacharach respectively justifies coordination and cooperation within these theories, and (ii) how these improvements in both VFT and TR involve a new conception of players and their rationality. I underline how coordination and cooperation rely on contextual and social determinants, which challenge and even contradict some pillars of standard individual rationality in terms of subjective expected utility, in games. Even if Bacharach's conceptual and methodological choices within these theories induce numerous difficulties, I try to show that Bacharach’s work underlines some of the implications and related problems induced by the mere foundations of standard non-cooperation game theory. |
| Keywords: | non-cooperative game theory, framing, salience, focal points, Team Reasoning, coordination, cooperation, individual rationality, social rationality, collective rationality |
| JEL: | B21 B41 C72 D03 D79 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-17&r=cbe |
| By: | Li Hao (Walton College - University of Arkansas); Daniel Houser (Interdisciplinary Center for Economic Science, George Mason University - George Mason University); Lei Mao (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I (UCBL)); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I (UCBL)) |
| Abstract: | Using a field experiment in China, we study whether migration status is correlated with attitudes toward risk, ambiguity, and competitiveness. Our subjects include migrants and non-migrants. We find that, migrants exhibit no differences from non-migrants in risk and ambiguity preferences elicited using pairs of lotteries ; however, migrants are significantly more likely to enter competition in the presence of strategic uncertainty when they expect competitive entries from others. Our results suggest that migration may be driven more by a stronger belief in one's ability to succeed in an uncertain and competitive environment than by risk attitudes under state uncertainty. |
| Keywords: | Migration; risk preferences; strategic uncertainty; ambiguity; field experiment |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00997502&r=cbe |
| By: | Akay, Alpaslan (University of Gothenburg); Andersson, Lisa (University of Gothenburg); Martinsson, Peter (University of Gothenburg); Medhin, Haileselassie (University of Gothenburg) |
| Abstract: | Previous research suggests a lower degree of positional concerns among people from poor countries. Yet the evidence is limited and most often builds on the assumption that people’s reference groups are the same across all individuals. We conduct a survey experiment in urban Ethiopia that is modified to include multiplicity of reference groups. We estimate positional concerns considering various reference groups to test whether the low positional concerns found in the literature is due to misspecification of the reference groups. The results show a low degree of positional concern which is highly stable across different reference groups. |
| Keywords: | reference groups, income comparison, experiment |
| JEL: | D60 C90 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8215&r=cbe |
| By: | Michael W.M. Roos; Andreas Orland |
| Abstract: | This paper reports the results of a questionnaire study used to explore the economic understanding, normative positions along the egalitarian-libertarian spectrum, and the party preferences of a large student sample. The aim of the study is both to find socio-economic determinants of normative and positive beliefs and to explore how beliefs about the economy influence party support. We find that positive beliefs of lay people differ systematically from those of economic experts. Positive beliefs can be explained by high school grades, field of study, reasons for the choice of subject, personality traits, and – in part – by gender. Normative beliefs are self-serving in the sense that students whose father have high-status jobs and who seek high incomes are more libertarian than others. Party preferences are explained by the professional status of the father, religion, gender, and economic beliefs. Normative beliefs are more important for party support than positive beliefs. While there is a clear positive relation between libertarianism and support for right-leaning parties, positive beliefs only matter for some parties. A parochialism bias in positive beliefs seems to reinforce libertarian views favoring the most conservative party. |
| Keywords: | Economic beliefs; party preference; sociotropic voting; pocketbook voting; survey; personality traits |
| JEL: | D83 D72 Z13 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0483&r=cbe |
| By: | Bellemare, Charles (Université Laval); Shearer, Bruce S. (Université Laval) |
| Abstract: | We present results from a field experiment designed to measure the importance of managerial commitment to a contract within a firm that pays its workers piece rates. In the tree planting industry the piece rate paid to workers is determined as a function of the difficulty of the terrain to be planted. During the experiment, workers began planting a terrain at a trial piece rate, but were told this rate would be revised upwards if, after a few work days, average productivity was below that observed on a similar (control) terrain on which the firm had committed to the contract. Our results suggest that worker productivity was 20% to 40% lower in the absence of commitment. The reduction was less pronounced when workers had less time to benefit from any subsequent increase in the piece rate. This provides support for models of worker turnover as a means of overcoming ratchet effects. |
| Keywords: | ratchet effect, piece rates, incentive contracts, field experiments |
| JEL: | J33 M52 C93 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8214&r=cbe |
| By: | Vessela Daskalova (University of Cambridge); Nicolaas J. Vriend (Queen Mary University of London) |
| Abstract: | The use of coarse categories is prevalent in various situations and has been linked to biased economic outcomes, ranging from discrimination against minorities to empirical anomalies in financial markets. In this paper we study economic rationales for categorizing coarsely. We think of the way one categorizes one's past experiences as a model of the world that is used to make predictions about unobservable attributes in new situations. We first show that coarse categorization may be optimal for making predictions in stochastic environments in which an individual has a limited number of past experiences. Building on this result, and this is a key new insight from our paper, we show formally that cases in which people have a motive to coordinate their predictions with others may provide an economic rationale for categorizing coarsely. Our analysis explains the intuition behind this rationale. |
| Keywords: | Categorization, Prediction, Decision-making, Coordination, Learning |
| JEL: | D83 C72 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp719&r=cbe |
| By: | Schurer, Stefanie (University of Sydney) |
| Abstract: | Policy-makers worldwide are embarking on school programmes aimed at boosting students' resilience. One facet of resilience is a belief about cause and effect in life, locus of control. I test whether positive control beliefs work as a psychological buffer against health shocks in adulthood. To identify behavioural differences in labour supply, I focus on a selected group of full-time employed men of working age and similar health. Men with negative control beliefs, relative to men with positive beliefs, are 230-290% more likely to work part-time or drop out of the labour market after a health shock. In old age men with negative control beliefs are by a factor of 2.7 more likely to die after a health shock. The heterogeneous labour supply responses are also observed for other non-cognitive skills, but only for the ones which correlate with control beliefs. Interventions aimed at correcting inaccurate beliefs and negative perceptions may be a low-cost tool to moderate rising public expenditures on social protection and health care. |
| Keywords: | non-cognitive skills, locus of control, labor supply, mortality, health shocks, SOEP |
| JEL: | I12 J24 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8203&r=cbe |