nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2014‒12‒03
eight papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Custom-made healthcare: An experimental investigation By Keser, Claudia; Montmarquette, Claude; Schmidt, Martin; Schnitzler, Cornelius
  2. Ingratiation: Experimental Evidence By Stéphane Robin; Agnieszka Rusinowska; Marie Claire Villeval
  3. "Limited Attention and Status Quo Bias" By Mark Dean; Ozgur Kibris; Yusufcan Masatlioglu
  4. Higher Intelligence Groups Have Higher Cooperation Rates in the Repeated Prisoner's Dilemma By Proto, Eugenio; Rustichini, Aldo; Sofianos, Andis
  5. Does Relative Grading Help Male Students? Evidence from a Field Experiment in the Classroom By Czibor, Eszter; Onderstal, Sander; Sloof, Randolph; van Praag, Mirjam C.
  6. Do We Learn from Our Own Experience or from Observing Others? By Ralph-C Bayer
  7. Personality and Procedural Invariance: Effects on Bidding Behavior Across Induced Value Experimental Auction Mechanisms By Sackett-Brian, Hillary M.; Shupp, Robert
  8. First-Mover Advantage in Best-Of-Series: An Experiment Comparison of Role-Assignment Rules By Bradley J. Ruffle, Oscar Volij

  1. By: Keser, Claudia; Montmarquette, Claude; Schmidt, Martin; Schnitzler, Cornelius
    Abstract: In this paper, we investigate in a controlled laboratory experiment physician behavior in the case of payment heterogeneity. In the experiment, each physician provides medical care to patients whose treatments are paid for either under fee-for-service (FFS) or capitation (CAP). We observe that physicians customize care in response to the payment system. A FFS patient receives considerably more medical care than the corresponding CAP patient with the same illness and treatment preference. Physicians over-serve FFS patients and under-serve CAP patients. After a CAP payment reduction in the experiment we observe neither a quantity reduction under CAP nor a spillover into the treatment of FFS patients.
    Keywords: experimental economics,physician reimbursement,capitation,Fee-For-Service,customization,fee regulation
    JEL: C91 I12 I18
    Date: 2014
  2. By: Stéphane Robin (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)); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); 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 investigate experimentally ingratiatory behavior expressed by opinion conformity. Both individuals' performance at a task and their opinions on various topics can be observed before unequal payoffs are assigned by a second mover. In some treatments, first movers can change their opinion after learning that held by the second mover. We find evidence of high ingratiation indices, as opinion conformity is rewarded. However, second movers reward conformity less when it is common knowledge that opinions can be manipulated strategically. Introducing a monetary cost for changing opinion reduces ingratiation. Introducing performance-related pay for the second mover makes ingratiation less rewarding but does not eliminate it completely. Reducing the noise in the measurement of ability has little effect.
    Keywords: Ingratiation; opinion conformity; favoritism; discrimination; social distance; experiment
    Date: 2014
  3. By: Mark Dean; Ozgur Kibris; Yusufcan Masatlioglu
    Abstract: We introduce and axiomatically characterize a model of status quo bias in which the status quo affects choices by both changing preferences and focusing attention. The resulting Limited Attention Status Quo Bias model can explain both the finding that status quo bias is more prevalent in larger choice sets and that the introduction of a status quo can change choices between non-status quo alternatives. Existing models of status quo bias are inconsistent with the former finding while models of decision avoidance are inconsistent with the latter. We report the results of laboratory experiments which show that both attention and preference channels are necessary to explain the impact of status quo on choice.
    Keywords: Status Quo Bias, Reference Dependence, Attention, Revealed Preference
    Date: 2014
  4. By: Proto, Eugenio (University of Warwick); Rustichini, Aldo (University of Minnesota); Sofianos, Andis (University of Warwick)
    Abstract: Intelligence affects social outcomes of groups. A systematic study of the link is provided in an experiment where two groups of subjects with different levels of intelligence, but otherwise similar, play a repeated prisoner's dilemma. The initial cooperation rates are similar, it increases in the groups with higher intelligence to reach almost full cooperation, while declining in the groups with lower intelligence. The difference is produced by the cumulation of small but persistent differences in the response to past cooperation of the partner. In higher intelligence subjects, cooperation after the initial stages is immediate and becomes the default mode, defection instead requires more time. For lower intelligence groups this difference is absent. Cooperation of higher intelligence subjects is payoff sensitive, thus not automatic: in a treatment with lower continuation probability there is no difference between different intelligence groups.
    Keywords: repeated prisoner dilemma, cooperation, intelligence
    JEL: C73 C92
    Date: 2014–09
  5. By: Czibor, Eszter (University of Amsterdam); Onderstal, Sander (University of Amsterdam); Sloof, Randolph (University of Amsterdam); van Praag, Mirjam C. (Copenhagen Business School)
    Abstract: The provision of non-pecuniary incentives in education is a topic that has received much scholarly attention lately. Our paper contributes to this discussion by investigating the effectiveness of grade incentives in increasing student performance. We perform a direct comparison of the two most commonly used grading practices: the absolute (i.e., criterion-referenced) and the relative (i.e., norm-referenced) grading schemes in a large-scale field experiment at a university. We hypothesize that relative grading, by creating a rank-order tournament in the classroom, provides stronger incentives for male students than absolute grading. In the full sample, we find weak support for our hypothesis. Among the more motivated students we find evidence that men indeed score significantly higher on the test when graded on a curve. Female students, irrespective of their motivation, do not increase their scores under relative grading. Since women slightly outperform men under absolute grading, grading on a curve actually narrows the gender gap in performance.
    Keywords: education, test performance, grade incentives, competition, gender, field experiment
    JEL: I21 I23 A22 D03 C93
    Date: 2014–08
  6. By: Ralph-C Bayer (School of Economics, University of Adelaide)
    Abstract: Learning in real life is based on different processes. Humans learn to a certain extent from their own experience but also learn by observing what non directly related others have done. In this paper we propose a generalized payoff assessment learning (GPAL) model which enables us to evaluate the relative influences of these two different models of learning. We apply GPAL to a homogeneous good Bertrand duopoly experiment with random matching and population pricing information. The model explains the observed pricing and learning behavior at least as well and often better than learning models from the literature but has the advantage that the relative influence of the learning models can be estimated. We find that the own experience overwhelmingly dominates learning, despite the useful information about behavior of potential future opponents contained in the population price distribution.
    Keywords: Learning, Information, Bertrand Duopoly, Experiment
    JEL: C91 D83 L13
    Date: 2013–11
  7. By: Sackett-Brian, Hillary M.; Shupp, Robert
    Abstract: A growing literature exists on the design, implementation and evaluation of experimental auctions with a variety of non-market valuation applications. With behavioral economic models becoming more mainstreamed in the discipline, a natural question arises about how personality traits might affect bidding behavior in experimental auctions. To address this question, a series of induced-value experiments were carried out in the fall of 2012. Personality traits were measured in pre- and post-surveys aligning with the Midlife Development Inventory Analysis. Regression analysis determined the effects of personality traits on over- and under-bidding behaviors across four frequently used auction mechanism: the Becker-Degroot-Marschak, 2nd Price, Random Nth Price, and English auctions. Results indicate that only the BDM and Random Nth price auctions are significantly affected by personality profile. Specifically, openness, extraversion, and neuroticism are associated with overbidding behavior and agreeableness is associated with underbidding behaviors.
    Keywords: Experimental Auctions, Personality, Procedural Invariance, Behavior, Institutional and Behavioral Economics, Research Methods/ Statistical Methods,
    Date: 2014
  8. By: Bradley J. Ruffle, Oscar Volij (Wilfrid Laurier University)
    Abstract: Kingston (1976) and Anderson (1977) show that the probability that a given contestant wins a best-of-2k+1 series of asymmetric, zero-sum, binary-outcome games is, for a large class of assignment rules, independent of which contestant is assigned the advantageous role in each component game. We design a laboratory experiment to test this hypothesis for four simple role-assignment rules. Despite significant differences in the frequency of equilibrium play across the four assignment rules, our results show that the four rules are observationally equivalent at the series level: the fraction of series won by a given contestant and all other series outcomes do not differ across rules.
    Keywords: experimental economics, two-sided competitions, best-of series, asymmetric game, psychological pressure
    JEL: C90 D02 L83
    Date: 2014–09–30

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.