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on Cognitive and Behavioural Economics |
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Issue of 2014‒06‒28
eight papers chosen by Marco Novarese Universita' del Piemonte Orientale Amedeo Avogadro |
| By: | Mazzocchi, Mario; Irz, Xavier; Modugno, Lucia; Traill, W Bruce |
| Abstract: | The continuous aging of the EU population poses important challenges to the sustainability of welfare states. Part of the solution is to ensure that people not only live longer but also better (i.e., can function independently while remaining free of disease and disability), which may be achieved through better nutrition. In order to test that proposition, we develop a behavioural model of diet quality choice and health determination. The simultaneous equation model, which accounts for the endogeneity of dietary and other lifestyle choices, is applied to a sample of older people from Italy and allows for the possibility of bi-directional causality between diet and health. |
| Keywords: | Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics, International Relations/Trade, |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc14:170497&r=cbe |
| By: | Ronald M. Harstad (Department of Economics, University of Missouri-Columbia) |
| Abstract: | Laboratory experiments employing an induced-values methodology often report on allocative efficiencies observed. That methodology requires experimenters know subjects' motivations, questionable in laboratory experiments, impossible in field experiments. Allocative efficiency implies a hypothetical costless aftermarket would be inactive. An allocation mechanism's outcome is herein defined to be behaviorally efficient if an appropriate aftermarket is actually appended to the mechanism and at most a negligible size of remaining mutually beneficial gains identified. Methodological requirements for behavioral efficiency observation are provided. A first demonstration observes significantly greater behavioral inefficiencies in secondthan in first-price auctions. A simple field demonstration indicates when a public good increase can be observed to cover marginal cost to subjects' mutual benefit, without knowing valuations. Several empirical issues that arise are briefly discussed. A wide variety of empirical economic policy studies can utilize this methodology to observe comparative evidence of alternative policies' allocative efficiency shortfalls. |
| Keywords: | behavioral efficiency, aftermarkets, field experiment methodology, allocative efficiency, valuation revelation |
| JEL: | C9 C93 D01 D61 D03 D46 |
| Date: | 2014–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1405&r=cbe |
| By: | Kamei, Kenju |
| Abstract: | Unequally-distributed resources, whether people’s income or competence, are ubiquitous in our real world. Whether to promote competition or to lead to a more equal environment is often in question in societies or organizations. With heterogeneous endowments, we let subjects collectively choose whether to have a competitive lottery contest - where only one individual in a group wins and receives an award, generating a greater income inequality - or to have a public good that benefits the less-endowed to a greater degree. Our data indicates that highly-endowed individuals contribute little when the public good is selected. The majority of subjects, however, vote in favor of having a public good, contrary to the standard theory predictions. In addition, a belief elicitation task shows that they expect payoffs to be more equally distributed under the public good regime than under the contest regime. Moreover, the subjects’ preferences between the two regimes are little affected by their risk attitudes or the size of awards in competition. These suggest that people’s institutional choices are driven more by their income inequality-averse preferences. |
| Keywords: | heterogeneity, experiment, cooperation, competition, public goods, inequality |
| JEL: | C92 D63 D70 D72 H4 |
| Date: | 2014–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56774&r=cbe |
| By: | Lars Dommermuth; Jane Klobas; Trude Lappegård (Statistics Norway) |
| Abstract: | This paper focuses on the realization of positive fertility intentions with different time frames. The analyses are based on a unique combination of survey data and information from Norwegian administrative registers on childbearing in the years following the complete selected sample. Guided by the theoretical and empirical framework of the Theory of Planned Behavior (TPB), the results suggest that a fertility intention’s time frame is relevant for childbearing behaviour, but the patterns are somewhat different for respondents who were childless at the time of the interview compared to those who already had children. Overall, childless respondents were less likely to realize their fertility intentions than parents. Following the TPB, childless individuals may underestimate the difficulty of acting on their intentions and therefore have more difficulty realizing their intentions, versus parents who take into account their ability to manage another child. The results also show that childless individuals with an immediate fertility intention are more likely to succeed than those with a longerterm intention. Likewise, parents with an immediate fertility intention are more likely to realize their intention during the two first years after the interview, but after four years the childbearing rate was higher among those with longer-term fertility intentions. |
| Keywords: | Childbearing; Fertility intentions; Time frame of fertility intentions; Realization of fertility intentions; Fertility; Theory of Planned Behavior; Norway; GGS; Register data |
| JEL: | N34 Z10 Z13 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:781&r=cbe |
| By: | Ariely, Dan; Garcia-Rada, Ximena; Hornuf, Lars; Mann, Heather |
| Abstract: | By running an experiment among Germans collecting their passports or ID cards in the citizen centers of Berlin, we find that individuals with an East German family background cheat significantly more on an abstract task than those with a West German family background. The longer individuals were exposed to socialism, the more likely they were to cheat on our task. While it was recently argued that markets decay morals (Falk and Szech, 2013), we provide evidence that other political and economic regimes such as socialism might have an even more detrimental effect on individuals’ behavior. |
| Keywords: | Experimental economics; cheating; cross-culture study |
| JEL: | C93 D63 P51 |
| Date: | 2014–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:20974&r=cbe |
| By: | Ennio Bilancini; Leonardo Boncinelli |
| Abstract: | We develop a model of persuasion where, consistent with the psychological literature on dual process theory, the persuadee has to sustain a cognitive effort - the elaboration cost - in order to fully and precisely elaborate information. The persuader makes an offer to the persuadee and, aware that she is a dual process reasoner, also sends her a costly signal - the reference cue - which refers the oer to a category of offers whose average quality is known by the persuadee. Initially, the actual quality of the offer by the persuader is hidden to the persuadee, while the signal is visible. Then, the persuadee can either rely on cheap low elaboration and form expectations on the basis of the signal - thinking coarsely, i.e., by category - or engage in costly high elaboration to attain knowledge of the actual quality of the offer. This signaling setup allows us to keep the assumption that agents are both rational and Bayesian and, at the same time, to match many of the findings emphasized by well established psychological models of persuasion - such as the Elaboration Likelihood Model and the Heuristic-Systematic Model. In addition, the model provides novel theoretical results such as the possibility of separating equilibria that do not rely on the single-crossing property and, in particular, the emergence of a new phenomenon that we name reverse-signaling, where high types send low signals and low types send high signals. |
| Keywords: | persuasion, coarse reasoning, peripheral and central route, heuristic and systematic reasoning, reverse-signaling, counter-signaling. |
| JEL: | D01 D82 D83 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:mod:recent:102&r=cbe |
| By: | Gill, Andrej; Heinz, Matthias; Schumacher, Heiner |
| Abstract: | We examine trust and trustworthiness of individuals with varying professional preferences and experiences. Our subjects study business and economics in Frankfurt, the financial center of Germany and continental Europe. In the trust game, subjects with a high interest in working in the financial industry return 25 percent less than subjects with a low interest. We find no evidence that the extent of professional experience in the financial industry has a negative impact on trustworthiness. We also do not find any evidence that the financial industry screens out less trustworthy individuals in the hiring process. In a prediction game that is strategically equivalent to the trust game, the amount sent by first-movers was significantly smaller when the second-mover indicated a high interest in working in finance. These results suggest that the financial industry attracts less trustworthy individuals, which may contribute to the current lack of trust in its employees. -- |
| Keywords: | Trust,Trustworthiness,Selection,Financial Industry |
| JEL: | C9 G2 M5 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:458&r=cbe |
| By: | Krahnen, Jan Pieter; Ockenfels, Peter; Wilde, Christian |
| Abstract: | This paper provides a systematic analysis of individual attitudes towards ambiguity, based on laboratory experiments. The design of the analysis allows to capture individual behavior across various levels of ambiguity, ranging from low to high. Attitudes towards risk and attitudes towards ambiguity are disentangled, providing pure measures of ambiguity aversion. Ambiguity aversion is captured in several ways, i.e. as a discount factor net of a risk premium, and as an estimated parameter in a generalized utility function. We find that ambiguity aversion varies across individuals, and with the level of ambiguity, being most prominent for intermediate levels. Around one third of subjects show no aversion, one third show maximum aversion, and one third show intermediate levels of ambiguity aversion, while there is almost no ambiguity seeking. While most theoretical work on ambiguity builds on maxmin expected utility, our results provide evidence that MEU does not adequately capture individual attitudes towards ambiguity for the majority of individuals. Instead, our results support models that allow for intermediate levels of ambiguity aversion. Moreover, we find risk aversion to be statistically unrelated to ambiguity aversion on average. Taken together, the results support the view that ambiguity is an important and distinct argument in decision making under uncertainty. -- |
| Keywords: | ambiguity,valuation discount,experimental economics |
| JEL: | D81 G02 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:55&r=cbe |