nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2014‒10‒22
ten papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. A Shared Sense of Responsibility: Money versus effort contributions in the voluntary provision of public goods By Jared C. Carbone; Robert S. Gazzale
  2. Internet piracy and book sales: a field experiment By Wojciech Hardy; Michał Krawczyk; Joanna Tyrowicz
  3. A Model of Modeling By Itzhak Gilboa; Andrew Postlewaite; Larry Samuelson; David Schmeidler
  4. The Impact of High-Stakes School-Admission Exams on Study Effort and Achievements: Quasi-experimental Evidence from Slovakia By Miroslava Federicova
  5. Incentives and Children's Dietary Choices: A Field Experiment in Primary Schools By Michele Below; Jonathan James; Patrick Nolen
  6. Housework share between partners: Experimental evidence on gender identity By Katrin Auspurg; Maria Iacovou; Cheti Nicoletti
  7. Social norms, morals and self-interest as determinants of pro-environment behaviour By Mikolaj Czajkowski; Nick Hanley; Karine Nyborg
  8. Overconfidence, Underconfidence, and Welfare By Takao Asano; Takuma Kunieda; Akihisa Shibata
  9. Patient Preferences, Intergenerational Equity, and the Precautionary Principle By Urmee Khan; Maxwell Stinchcombe
  10. CONSUMERS PERCEPTIONS ABOUT FAIRNESS AND UNFAIRNESS PRICES By Maria Elisabeta Ioanas; Daniela Valentina Constantin

  1. By: Jared C. Carbone (Division of Economics and Business, Colorado School of Mines); Robert S. Gazzale (University of Toronto)
    Abstract: A frequently cited argument against the use of market-based instruments to provide public goods is that they diminish our sense of responsibility to be good citizens. In this paper, we report on the results of a laboratory experiment designed to explore the idea that this distrust stems from the ability of some members of society to contribute to the public good with money instead of time or effort even when the level of total contributions is held constant. In our experiments, subjects complete lab tasks as a contribution to a public good--carbon emission reductions. We look at how the number of lab tasks completed by subjects changes when their peers take advantage of an offer to buy out, i.e., contribute money in lieu of effort. We find that on average subjects reduce the number of completed tasks when their peers buy out. However, the aggregate result masks significant heterogeneity across individual responses. Those who choose not to buy out despite its expected profitability have no response to the treatment while those for whom it would not be profitable to buy out register large reductions in effort contributions. The magnitude of these responses is increasing in the share of the group that accepts the buyout offer, suggesting that it is the act of peers buying out rather than the simple introduction of monetary incentives that is the source of the effect.
    Keywords: experimental economics, public goods, effort contributions, environment, climate change
    JEL: C90 C91 H41 Q54
    Date: 2014–09
  2. By: Wojciech Hardy (Faculty of Economic Sciences, University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw)
    Abstract: We report the results of an experimental study analyzing the effects of Internet piracy on book sales. We conducted a year-long controlled large-scale field experiment with pre-treatment pair matching. Half of the book titles received experimental treatment, in which a specialized agency would immediately remove any unauthorized copy appearing on the Internet. For the other half we merely registered such occurrences, but no countermeasures were taken. For all the titles we obtained print and e-book sales statistics from the publishers. We find that removal of unauthorized copies was an effective method of curbing piracy, but this had no bearing on legal sales.
    Keywords: digital piracy, e-books, field experiment
    JEL: C93 D12 K42 L82 O34
    Date: 2014
  3. By: Itzhak Gilboa (HEC, Paris, and Tel-Aviv University); Andrew Postlewaite (Department of Economics, University of Pennsylvania); Larry Samuelson (Department of Economics,Yale University); David Schmeidler (The InterDisciplinary Center in Herzliya, and TAU)
    Abstract: We propose a formal model of scientific modeling, geared to applications of decision theory and game theory. The model highlights the freedom that modelers have in conceptualizing social phenomena using general paradigms in these fields. It may shed some light on the distinctions between (i) refutation of a theory and a paradigm, (ii) notions of rationality, (iii) modes of application of decision models, and (iv) roles of economics as an academic discipline. Moreover, the model suggests that all four distinctions have some common features that are captured by the model.
    Keywords: Methodology, Models, Economic Modeling
    JEL: B40 B41
    Date: 2014–09–13
  4. By: Miroslava Federicova
    Abstract: High-stakes admission exams to selective schools create incentives for more intensive study effort possibly increasing study achievements of students. Exploiting the exogenous change of a schooling system and using two waves of TIMSS survey data we find that high-stakes exams increase math test scores of ten-year-old students by 0.2 standard deviations. This effect additionally accrues by around 0.05 standard deviations for students in the top decile, i.e. students who apply for selective schools with the highest probability. Although the effects are similar for both genders, there are indications that girls exert higher study efforts than boys in a more competitive environment. The most perceptive to incentives are test items referring to the cognitive domain of reasoning requiring a deeper understanding of math problems.
    Keywords: high-stakes exams; students’motivation; achievement;
    JEL: I21 I24
    Date: 2014–09
  5. By: Michele Below; Jonathan James; Patrick Nolen
    Abstract: We conduct a field experiment in 31 primary schools in England to test the effectiveness of different temporary incentive schemes, a standard individual based incentive scheme and a competitive scheme, on increasing the choice and consumption of healthy items at lunchtime. The individual scheme has a weak positive effect that masks significantly differential effects by age whereas all students respond positively to the competitive scheme.For our sample of interest, the competivie scheme increases choice of healthy items by 33% and consumption of healthy items by 48%, twice and three times as much as ain the individual incentive scheme, respectively. The positive effects generally carry over to the week immediately following the treatment but we find little evidence of any effects six months later. Our results show that incentives can work, at least temporarily, to increase healthy eating but that there are large differences in effectiveness between schemes. Furthermore it is important to analyse things at the individual level as average effects appear to be masking significant heterogeneous effects that are predicted by the health literature.
    Date: 2014–09–05
  6. By: Katrin Auspurg; Maria Iacovou; Cheti Nicoletti
    Abstract: Using an experimental design, we investigate the reasons behind the gendered division of housework within couples. In particular, we assess whether the fact that women do more housework may beexplained by differences in preferences deriving from differences in gender identity between men and women. We find little evidence of any systematic gender differences in the preference for housework, suggesting that the reasons for the gendered division of housework lie elsewhere.
    Keywords: Gender, housework, unpaid work, division of labor, experiment
    JEL: J16 J22 C35
    Date: 2014–10
  7. By: Mikolaj Czajkowski (University of Warsaw, Faculty of Economic Sciences, Poland); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews); Karine Nyborg (University of Oslo, Department of Economics, Norway)
    Abstract: This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self- and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. Using a latent class model, we distinguish three types of individual who are described as duty-orientated recyclers, budget recyclers and homo oeconomicus. These groups vary in their preferences for how frequently waste is collected, and the number of categories into which household waste must be recycled. Our results have implications for the design of future policies aimed at improving participation in recycling schemes.
    JEL: D22 F18 Q41 Q52
    Date: 2014–08
  8. By: Takao Asano (Okayama University); Takuma Kunieda (City University of Hong Kong); Akihisa Shibata (Institute of Economic Research, Kyoto University)
    Abstract: Using a simple framework of Cooper and John (1988) and Cooper (1999), this paper derives the conditions under which overconfidence and underconfidence of agents lead to Pareto improvement. We show that an agent’s overconfidence in a game exhibiting strategic complementarity and positive spillovers and an agent’s underconfidence in a game exhibiting strategic complementarity and negative spillovers can lead to Pareto improvement.
    Keywords: overconfidence, underconfidence, strategic complementarity, strategic substitutability, positive spillover, negative spillover
    JEL: D62 C72
    Date: 2014–09
  9. By: Urmee Khan (Department of Economics, University of California Riverside); Maxwell Stinchcombe (University of Texas, Austin)
    Abstract: Patient preferences have a social welfare interpretation consonant with a belief that the society affected by present decisions will last for a very long time. In stochastic settings, these preferences lead to justifications for variants of the precautionary principle.
    Date: 2014–03
  10. By: Maria Elisabeta Ioanas (Bucharest University of Economic Studies, Romania); Daniela Valentina Constantin (Bucharest University of Economic Studies, Romania)
    Abstract: Buyers, when taking purchasing decisions are influenced by the perception they have on a product, offers, motivation (what urges them to buy a product) quality, price or impulse to buy items that they find attractive. There are many situations when the consumer doesn’t know the real price because the companies set them arbitrarily or with the purpose of increasing their profits. So price fairness perception is a comparative process. It has an individual component because people might evaluate a price, by comparing it with: a price paid by them in another buying occasion, a price set by another store, or with the costs estimated by them for the product. It also has a social component, in that the price might be compared with a price paid by another person (Xia, Monroe, and Cox, 2004). The article aims to study the perception of price fairness and unfairness in some given situations. The goal of the present research is to observe various factors that influence the consumer perceptions of price fairness.
    Date: 2013–09

This nep-cbe issue is ©2014 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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