nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2014‒12‒19
twelve papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Awareness Programs and Change in Taste-based Caste Prejudice By Banerjee, Ritwik; Datta Gupta, Nabanita
  2. Improving voluntary public good provision by a non-governmental, endogenous matching mechanism: Experimental evidence By Reif, Christiane; Rübbelke, Dirk; Löschel, Andreas
  3. Leaders as Role Models for the Voluntary Provision of Public Goods By Gächter, Simon; Renner, Elke
  4. Medical insurance and free choice of physician shape patient overtreatment: A laboratory experiment By Huck, Steffen; Lünser, Gabriele; Spitzer, Florian; Tyran, Jean-Robert
  5. Enjoyment takes time: Some implications for choice theory By Nisticò, Sergio
  6. Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information By Nicolas Jacquemet; Adam Zylbersztejn
  7. Visual Attribute Non-Attendance in a Food Choice Experiment: Results From an Eye-tracking Study By Van Loo, Ellen J.; Nayga, Rodolfo M. Jr.; Seo, Han-Seok; Verbeke, Wim
  8. Two birds, one stone? Positive mood makes products seem less useful for multiple-goal pursuit By Anastasiya Pocheptsova; Francine Espinoza Petersen; Jordan Etkin
  9. Positional Income Concerns: Prevalence and Relationship with Personality and Economic Preferences By Tim Friehe; Mario Mechtel; Markus Pannenberg
  10. Narrative and deliberative instauration: The use of narrative as process and artefact in the social construction of institutions By William James Fear; Ricardo Azambuja
  11. A Test of Dual-Process Reasoning in Charitable Giving By Grossman, Zachary; van der Weele, Joël
  12. Accounting for Context: Separating Monetary and Social Incentives By Andreas Bergh; Philipp C. Wichardt

  1. By: Banerjee, Ritwik (Aarhus University); Datta Gupta, Nabanita (Aarhus University)
    Abstract: Becker's theory of taste-based discrimination predicts that relative employment of the discriminated social group will improve if there is a decrease in the level of prejudice for the marginally discriminating employer. In this paper we experimentally test this prediction offered by Becker (1971) in the context of caste in India, with management students (potential employers in the near future) as subjects. First, we measure caste prejudice and show that awareness through a TV social program reduces implicit prejudice against the lower caste and the reduction is sustained over time. Second, we find that the treatment reduces the prejudice levels of those in the left tail of the prejudice distribution - the group which can potentially affect real outcomes as predicted by the theory. And finally, a larger share of the treatment group subjects exhibit favorable opinion about reservation in jobs for the lower caste.
    Keywords: caste prejudice, taste-based discrimination, implicit association test, laboratory experiment, media influence
    JEL: C91 O1 J15
    Date: 2014–08
  2. By: Reif, Christiane; Rübbelke, Dirk; Löschel, Andreas
    Abstract: Social norms can help to foster cooperation and to overcome the free-rider problem in private provision of public goods. This paper focuses on the enforcement of social norms by a selfintroduced punishment and reward scheme. We analyse if subjects achieve to implement a normenforcement mechanism at their own expense by applying the theory of non-governmental normenforcement by Buchholz et al. (2014) in a laboratory experiment. Based on their theory without central authority and endogenously determined enforcement mechanism, we implement a twostage public good game: At the first stage subjects determine the strength of penalty/reward on their own and in the second stage they decide on their contributions to the public good. We find that the mechanism by Buchholz et al. (2014) leads to a higher public good contribution than without the use of any mechanism. Only in a few cases groups end up with a zero enforcement mechanism. This result indicates that subjects are apparently willing to contribute funds for implementing an enforcement mechanism. Moreover, higher enforcement parameters lead to higher public good contributions in the second stage, although too high enforcement parameters lead to unreachable theoretical optima.
    Keywords: laboratory experiment,public good,matching mechanism,social norms,norm enforcement
    JEL: H41 C92
    Date: 2014
  3. By: Gächter, Simon (University of Nottingham); Renner, Elke (University of Nottingham)
    Abstract: We investigate the link between leadership, beliefs and pro-social behavior. This link is interesting because field evidence suggests that people's behavior in domains like charitable giving, tax evasion, corporate culture and corruption is influenced by leaders (CEOs, politicians) and beliefs about others' behavior. Our framework is an experimental public goods game with a leader. We find that leaders strongly shape their followers' initial beliefs and contributions. In later rounds, followers put more weight on other followers' past behavior than on the leader's current action. This creates a path dependency the leader can hardly correct. We discuss the implications for understanding belief effects in naturally occurring situations.
    Keywords: leadership, beliefs, experiments, public goods, path dependency, public policy, management
    JEL: C72 C90 H41 Z13
    Date: 2014–10
  4. By: Huck, Steffen; Lünser, Gabriele; Spitzer, Florian; Tyran, Jean-Robert
    Abstract: In a laboratory experiment designed to capture key aspects of the interaction be-tween physicians and patients in a stylized way, we study the effects of medical insurance and competition in the guise of free choice of physician. Medical treat-ment is an example of a credence good: only the physician (but not the patient) knows the appropriate treatment, and even after consulting, the patient is not sure whether he got proper treatment or got an unnecessary treatment, i.e. was overtreated. We find that with insurance, moral hazard looms on both sides of the market: patients consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment compared to the baseline and patients therefore consult more often. When the two institutions are combined, competition is found to partially offset the adverse effects of insur-ance: most patients seek treatment, but overtreatment is moderated.
    Keywords: Credence good,Patient,Physician,Overtreatment,Competition,Insurance,Moral hazard
    JEL: C91 I11 I13
    Date: 2014
  5. By: Nisticò, Sergio
    Abstract: The paper suggests that casting the choice problem in terms of alternative time-consuming activities can foster the fruitful cross-fertilization between economics and psychology along the lines suggested by Scitovsky in the Joyless Economy. The first part emphasizes how mainstream, utility-based choice theory has eradicated "time" from the analysis, in contrast with the seminal contribution to the subjective theory of value proposed by Gossen in 1858. The limits of Becker's well-known approach to time-use are also analyzed. The second part opens with the presentation of an alternative approach based on activities, intended as productive processes allowing for pleasant time to be produced by consuming "direct" unpleasant time plus the "indirect" amount of unpleasant time equivalent to the market goods used up as inputs. Finally, the approach is applied to an intertemporal context by drawing on Hicks's temporary equilibrium method. Scitovsky's distinction between defensive and creative activities is discussed in conclusion, suggesting that individuals might refrain from engaging in more skilled, time-consuming activities because of the attractiveness of a certain, higher present-period rate of return of less skilled, goods-intensive activities.
    Keywords: Time use,consumption Activities,behavior,choice
    JEL: B41 D03 D11 D81
    Date: 2014
  6. By: Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II); Adam Zylbersztejn (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: We experimentally study an asymmetric coordination game with two Nash equilibria: one is Pareto-efficient, the other is Pareto-inefficient and involves a weakly dominated strategy. We assess whether information about the interaction partner helps eliminate the imperfect equilibrium. Our treatments involve three information-enhancing mechanisms: repetition and two kinds of individual signals: messages from partner or observation of his past choices. Repetition-based learning increases the frequencies of the most efficient outcome and the most costly strategic mismatch. Moreover, it is superseded by individual signals. Like previous empirical studies, we find that signals provide a screening of partners' intentions that reduces the frequency of coordination failures. Unlike these studies, we find that the transmission of information between partners, either via messages or observation, does not suffice to significantly increase the overall efficiency of outcomes. This happens mostly because information does not restrain the choice of the dominated action by senders.
    Keywords: coordination game; communication; cheap-talk; observation
    Date: 2013–07
  7. By: Van Loo, Ellen J.; Nayga, Rodolfo M. Jr.; Seo, Han-Seok; Verbeke, Wim
    Abstract: Respondents in choice experiments (CEs) may ignore some of the attributes presented to them when evaluation alternatives in a choice task, which has been referred to as attribute non-attendance (ANA). Previous studies have shown that ANA may impact both the model fit as the WTP estimates for the presented attributes. We used a new approach and accounted for the issue of ANA, by using eye-tracking measures. By accounting for visual ANA, the coefficients from the ANA model differ from the model which did not account for this issue. This clearly indicates that assuming that respondents in a CE attended to all attributes in all of the choice tasks biases your estimation results.
    Keywords: Eye-tracking, sustainability labeling, Attribute non-attendance, Visual attention, Consumers, Decision making, Agricultural and Food Policy, Marketing, Research Methods/ Statistical Methods,
    Date: 2014
  8. By: Anastasiya Pocheptsova (R. H. Smith School of Business, University of Maryland); Francine Espinoza Petersen (ESMT European School of Management and Technology); Jordan Etkin (Fuqua School of Business, Duke University)
    Abstract: Negotiating the pursuit of multiple goals often requires making difficult trade-offs between goals. In these situations, consumers can benefit from using products that help them pursue several goals at the same time. But do consumers always prefer these multipurpose products? We propose that consumers’ incidental mood state alters perceptions of products in a multiple-goals context. Four studies demonstrate that being in a positive mood amplifies perceptions of differences between multiple conflicting goals. As a consequence, consumers are less likely to evaluate multipurpose products as being able to serve multiple distinct goals simultaneously. We conclude by discussing implications of these findings for marketers of multipurpose products.
    Keywords: Goals, product evaluation, positive mood
    Date: 2014–11–11
  9. By: Tim Friehe (Center for Advanced Studies in Law and Economics Rheinische Friedrich-Wilhelms-Universität Bonn); Mario Mechtel (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Markus Pannenberg
    Abstract: This paper presents detailed evidence about who compares to whom in terms of relative income. We rely on representative survey data on the importance of income comparisons vis-a-vis seven reference groups, allowing us to exploit within subject heterogeneity. We explore the prevalence and determinants of positional income concerns, investigating the role of personality and economic preferences. Our results establish robust relationships between positional income concerns and the personality traits agreeableness, conscientiousness, and neuroticism, some of which depend on the reference group. Furthermore, risk and fairness preferences are signicantly correlated with positional income concerns.
    Keywords: relative income, status, personality, Big Five, survey, SOEP, economic preferences, risk, fairness
    JEL: D03 D12 D63
    Date: 2014–11
  10. By: William James Fear (Department of Organizational Psychology - Birkbeck College University of London); Ricardo Azambuja (MC - Management et Comportement - Grenoble École de Management (GEM))
    Abstract: Patient Safety is a global institution in the field largely assumed to have emerged following the publication of To Err Is Human by the Institute of Medicine in 1999. In this paper we demonstrate that Patient Safety has been constructed as an institution separately in the practice of anaesthesia since 1954 and in hospitalised care since 1964. The publication of To Err was, in fact, only one of a number of later field configuring events. We use Bruner's (1991) theory of narrative to frame the institution building process which we term deliberative instauration in recognition of the historic literature on the subject. We further link the process of institution building to Vygotsky's theory of social mediation and the use of artefacts in relation to the object of intended action. We conclude that a narrative can be understood as both an artefact and a process used in the social construction of institutions by professional psychological collectives (in this case physicians).
    Keywords: Institution; Artefact; Narrative; Patient Safety; Healthcare
    Date: 2014
  11. By: Grossman, Zachary; van der Weele, Joël
    Abstract: Previous economic experiments on dual-process reasoning in altruistic decisions have yielded inconclusive results. However, these studies do not create a conflict between affective and cognitive motives, resulting in imperfect identification. We interact standard cognitive and affective manipulations in a giving task, and hypothesize that the affective manipulation has stronger effects when we simultaneously put the cognitive system under load. In line with earlier results, we find little evidence for dual-process reasoning in giving. Our independent treatment checks cast doubt on the effectiveness of standard treatment manipulations and show that both cognitive and affective manipulations consistently have opposite effects on the two sexes. We discuss the implications of our findings for economic experiments in this nascent research field.
    Keywords: Social and Behavioral Sciences, dual-process reasoning, charitable giving, dictator games, experimental economics
    Date: 2014–11–07
  12. By: Andreas Bergh; Philipp C. Wichardt
    Abstract: This paper proposes a simple framework to model social preferences in a game theoretic framework which explicitly separates economic incentives from social (context) effects. It is argued that such a perspective makes it easier to analyse contextual effects. Moreover, the framework is used to exemplify both theoretically and empirically how contextual variables such as social norms can worsen a social dilemma or possibly make it disappear. The empirical results of a randomised controlled classroom experiment show that women are more responsive to such contextual effects and that social agreements can also worsen economic inefficiencies
    Keywords: Context Effects, Efficiency, Social Norms, Social Preferences, Utility
    JEL: D03 D63 Z10
    Date: 2014–11

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