nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2014‒09‒25
six papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Strategic signaling or emotional sanctioning? An experimental study of ex post communication in a repeated public goods game By Adam Zylbersztejn
  2. What is trustworthiness and what drives it? By James C. Cox; Rudolf Kerschbamer; Daniel Neururer
  3. Autonomy-enhancing paternalism By Binder, Martin; Lades, Leonhard
  4. Food Comes First, Then Morals: Redistribution Preferences, Altruism and Group Heterogeneity in Western Europe By David Rueda
  5. Measuring the willingness-to-pay for others' consumption: an application to joint decisions of children By Sabrina BRUYNEEL; Laurens CHERCHYE; Sam COSAERT; Bram DE ROCK; Siegfried DEWITTE
  6. Reciprocity in the labour market: experimental evidence By Annarita COLASANTE; Alberto RUSSO

  1. By: Adam Zylbersztejn (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Several experimental studies show that ex post communication promotes generosity in situations where individual incentives contradict with common interest, like the provision of public goods. The root underlying the effect of this institution, especially in a repeated interaction, is nonetheless still obscure. This study provides a novel empirical testbed for two mechanisms by which ex post communication may affect behavior in repeated interactions : one is related to strategic signaling, the other involves emotions induces by others' opinions. The main findings are as follows. First, the presence of ex post communication (conducted through the attribution of costless disapproval points) fosters pro-social behavior and reduces free-riding. Second, I find systematic evidence that subjects tend to use ex post communication as a signaling device, whilst no evidence in favor of the emotion-based hypothesis. A possible interpretation of this phenomenon is that ex post messages are used to announce future sanctions for free-riding.
    Keywords: Public goods game; voluntary contribution mechanism; ex post communication
    Date: 2013–02
  2. By: James C. Cox; Rudolf Kerschbamer; Daniel Neururer
    Abstract: This paper reports the results of experiments designed to isolate the impact of various combinations of the following motives on trustworthiness: (i) unconditional other-regarding preferences - like altruism, inequality aversion, quasi-maximin, etc.; (ii) deal-responsiveness - reacting to actions that allow for a mutual improvement by adopting behavior that implies a mutual improvement; (iii) gift-responsiveness - reacting to choices that allow the trustee to obtain an improvement by adopting actions that benefit the trustor; and (iv) vulnerability-responsiveness - reacting to the vulnerability of the trustor by adopting actions that do not hurt the trustor. Our results indicate that - besides unconditional other-regarding preferences - vulnerability-responsiveness is an important determinant of trustworthiness even in cases where the vulnerability of the trustor does not come together with a gift to the trustee. Motivated by our empirical findings we provide formal definitions of trust and trustworthiness based on revealed willingness to accept vulnerability and the response to it.
    Keywords: trustworthiness, trust, trust game, investment game, deal-responsiveness, gift-responsiveness, vulnerability-responsiveness, generosity, reciprocity
    JEL: C70 C91 D63 D64
    Date: 2014–09
  3. By: Binder, Martin; Lades, Leonhard
    Abstract: We present a form of soft paternalism called "autonomy-enhancing paternalism" that seeks to in-crease individual well-being by facilitating the individual ability to make critically reflected, au-tonomous decisions. The focus of autonomy-enhancing paternalism is on helping individuals to become better decision-makers, rather than on helping them by making better decisions for them. Autonomy-enhancing paternalism acknowledges that behavioral interventions can change the strength of decision-making anomalies over time, and favors those interventions that improve, ra-ther than reduce, individuals' ability to make good and unbiased decisions. By this it prevents ma-nipulation of the individual by the soft paternalist, accounts for the heterogeneity of individuals, and counteracts slippery slope arguments by decreasing the probability of future paternalistic inter-ventions. Moreover, autonomy-enhancing paternalism can be defended based on both liberal val-ues and welfare considerations.
    Keywords: welfare economics; preference learning; autonomy; behavioral economics; libertarian paternalism
    Date: 2014–09
  4. By: David Rueda (Department of Politics & IR and Nuffield College, University of Oxford)
    Abstract: Altruism is an important omitted variable in much of the Political Economy literature. While material self-interest is the base of most approaches to redistribution (first affecting preferences and then politics and policy), there is a paucity of research on inequality aversion. I propose that other-regarding concerns influence redistribution preferences and that (1) they matter most to those in less material need and (2) they are conditional on the identity of the poor. Altruism is a luxury good most relevant to the rich, and it is most influential when the recipients of benefits are similar to those financing them. Using data from the European Social Survey from 2002 to 2010, I will show that group homogeneity magnifies (or limits) the importance of altruism for the rich. In making these distinctions between the poor and the rich, the arguments in this paper challenge some influential approaches to the politics of inequality.
    Keywords: social policy; welfare state
    Date: 2014
  5. By: Sabrina BRUYNEEL; Laurens CHERCHYE; Sam COSAERT; Bram DE ROCK; Siegfried DEWITTE
    Abstract: We propose a method to quantify the willingness-to-pay for the consumption of others in group decisions. Our method is based on revealed preference theory. It measures willingness-to-pay for others' consumption by evaluating positive consumption externalities in monetary terms. Within the framework of cooperative (i.e. Pareto efficient) consumption behavior, we introduce a selfishness parameter that defines a continuum of models that are characterized by varying degrees of consumption externalities. We use our method to analyze decisions made by dyads of children in an experimental consumption setting. We find that children's consumption decisions are systematically characterized by externalities (i.e. non-selfish). But we also observe that there is substantial heterogeneity across children, which we can relate to differences in age, gender and degree of friendship between dyad members.
    Date: 2014–07
  6. By: Annarita COLASANTE (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alberto RUSSO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: In this paper we focus on the impact of involuntary unemployment on wage formation using experimental evidence. We use the well-known Gift Exchange Game to analyze players' interaction in a simplified job market. The aim of this paper is twofold: on the one hand, we are interested in analyzing the relation between involuntary unemployment and wages; on the other hand, we aim at understanding whether the interaction between employers and employees could be affected by reciprocity. Our results show that unemployment has a negative impact on wages. Moreover, there is a positive correlation between wage and effort.
    Keywords: Gift Exchange, Reciprocity, Unemployment
    JEL: C91 E24 J28 J30
    Date: 2014–08

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