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on Cognitive and Behavioural Economics |
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Issue of 2015‒01‒19
nine papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Tim Friehe; Mario Mechtel; 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 significantly correlated with positional income concerns. |
| Keywords: | Relative income, status, personality, Big Five, survey, SOEP, economic preferences, risk, fairness |
| JEL: | D03 D12 D63 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp712&r=cbe |
| By: | De Paola, Maria (University of Calabria); Gioia, Francesca (University of Edinburgh) |
| Abstract: | We investigate whether and how time pressure affects performance. We conducted a field experiment in which students from an Italian University are proposed to choose between two exam schemes: a standard scheme without time pressure and an alternative scheme consisting of two written intermediate tests, one of which to be taken under time pressure. Both exam schemes consist of a verbal and a numerical part, each carrying half of the total marks. Students deciding to sustain the alternative exam are randomly assigned to a "time pressure" and a "no time pressure" group. Students performing under time pressure at the first test perform in absence of time pressure at the second test and vice versa. We find that being exposed to time pressure exerts a negative and statistically significant impact on students' performance both at the verbal and at the numerical task. The effect is driven by a strong negative impact on females' performance, while there is no statistically significant effect on males. Gender differences in handling time pressure are relevant only when dealing with the verbal task. Using data on students' expectations, we also find that the effect produced by time pressure on performance was correctly perceived by students. Female students expect a lower grade when working under time pressure, while males do not. |
| Keywords: | time pressure, time constraints, gender differences, student performance |
| JEL: | C93 D03 I23 J71 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8708&r=cbe |
| By: | Alexander N. Tatarko (National Research University Higher School of Economics) |
| Abstract: | This article presents the results of study dedicated to the interrelation of trust, cooperative behavior and the size of the winning prize in the multi-way decision modified prisoners’ dilemma. The experiment was organized using a specially designed computer program. The study involved six groups of participants and each group consisted of 7 players. The experiment consisted of a series of 15 rounds and included preliminary and final testing. The study found that cooperative behavior within the members in the group had fallen during 11 rounds, but there was a tendency to improve it. The trust level of an individual and his/her choice of cooperative strategy in the first series of the experiment are interrelated. Generalized trust is a rather stable construct, but it does not remain unchanged with an actual reduction of cooperative behavior. |
| Keywords: | trust, cooperative behavior, prisoners’ dilemma, economic psychology |
| JEL: | D03 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:22psy2014&r=cbe |
| By: | Keser, Claudia; Markstädter, Andreas; Schmidt, Martin |
| Abstract: | In a public-good experiment with heterogeneous endowments, we investigate if and how the contribution level as well as the previously observed "fair-share" rule of equal contributions relative to one´s endowment (Hofmeyr et al., 2007; Keser et al., 2014) may be influenced by minimum-contribution requirements. We consider three different schedules: FixMin, requiring the same absolute contributions, RelMin, requiring the same relative contributions, and ProgMin, requiring minimum contributions that progressively increase with the endowment. We find that minimum contributions exert norm-giving character and may lead to an increase in average group contributions. This is especially true for the progressive schedule. On the individual level, this schedule leads to higher relative contributions by the wealthier players and thus violates the "fair-share" norm. On the group level, it leads to highest contribution level and the lowest inequality in total profits as measured by the Gini index. |
| Keywords: | experimental economics,public goods,heterogeneous endowments,mandatory minimum contributions,norms |
| JEL: | C92 D63 H41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:224&r=cbe |
| By: | Kritikos, Alexander S. (University of Potsdam, DIW Berlin); Tan, Jonathan H. W. (University of Nottingham) |
| Abstract: | This paper experimentally investigates the nature of image concerns in gift giving. For this, we test variants of dictator and impunity games where the influences of social preferences on behavior are kept constant across all games. Givers maximize material payoffs by pretending to be fair when receivers do not know the actual surplus size, implying that portraying an outward appearance of norm compliance matters more than actual compliance. In impunity games, receivers can reject gifts with no payoff consequence to givers. In the face of receivers' feedback, some givers ensure positive feedback by donating more while some avoid negative feedback by not giving at all. Removing feedback reduces the incentive to give altogether. Differing behavior in the four games implies that social confirmation plays a crucial role in the transmission of image concerns in giving. |
| Keywords: | dictator game, impunity game, experiment, image, social confirmation |
| JEL: | C78 C92 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8739&r=cbe |
| By: | Ubøe, Jan (Dept. of Business and Management Science, Norwegian School of Economics); Andersson, Jonas (Dept. of Business and Management Science, Norwegian School of Economics); Jörnsten, Kurt (Dept. of Business and Management Science, Norwegian School of Economics); Lillestøl, Jostein (Dept. of Business and Management Science, Norwegian School of Economics); Sandal, Leif K. (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | In this paper we establish a link between probabilistic cost efficiency and bounded rationality in the newsvendor model. This establishes a framework where bounded rationality can be examined rigorously by statistical methods. The paper offers a relatively deep theoretical analysis of underorders/overorders in the newsvendor model. The theory is supported by empirical findings from our analysis of empirical data from laboratory experiments. In particular, we observe that underorders are systematically larger than overorders, an issue that our theoretical model explains. From statistical tests we conclude that all variability in our data can be explained by probabilistic cost efficiency and risk aversion. |
| Keywords: | Behavioral economics; experimental economics; bounded rationality; probabilistic cost efficiency. |
| JEL: | C00 C70 |
| Date: | 2014–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2014_041&r=cbe |
| By: | Castillo, Marco (George Mason University); Dickinson, David L. (Appalachian State University); Petrie, Ragan (George Mason University) |
| Abstract: | We investigate the consistency and stability of individual risk preferences by manipulating cognitive resources. Participants are randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time (circadian mismatched) and choose allocations between two risky assets (using the Choi et al., 2007, design). Consistency of behavior of circadian matched and mismatched subjects is statistically the same, however mismatched subjects tend to take more risks. We conclude that, consistent with several theories, preferences are rational yet can change depending on state-level cognitive resources. |
| Keywords: | sleep, risky preference, choice consistency |
| JEL: | C91 D81 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8709&r=cbe |
| By: | Wang, Qi (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm); Sandström, Ulf (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm) |
| Abstract: | The aim of this paper is twofold: (1) to provide a methodology that can measure cognitive distance between researchers and (2) to explore the role of cognitive distance on the results of peer review processes. Citing references and the content of articles are used to represent their respective scientific knowledge bases. Based on the two different approaches—Author-Bibliographic Coupling analysis and Author-Topic analysis—we apply the methodology on a recent competition for grants from the Swedish Strategic Foundation. Results indicate that cognitive distances between applicants and reviewers might influence peer review results, but that the impact is to some extent at the unexpected end. The main contribution of this paper is the elaboration on the relevance of the concept of cognitive distance to the issue of research evaluation in general, and especially in relation to peer review as a model used in grant decisions. |
| Keywords: | peer review; cognitive distance; cognitive bias |
| JEL: | I20 |
| Date: | 2014–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthind:2014_010&r=cbe |
| By: | Claudia Keser; Andreas Markstädter; Martin Schmidt |
| Abstract: | In a public-good experiment with heterogeneous endowments, we investigate if and how the contribution level as well as the previously observed “fair-share” rule of equal contributions relative to one’s endowment (Hofmeyr et al., 2007; Keser et al., 2014) may be influenced by minimum-contribution requirements. We consider three different schedules: FixMin, requiring the same absolute contributions, RelMin, requiring the same relative contributions, and ProgMin, requiring minimum contributions that progressively increase with the endowment. We find that minimum contributions exert norm-giving character and may lead to an increase in average group contributions. This is especially true for the progressive schedule. On the individual level, this schedule leads to higher relative contributions by the wealthier players and thus violates the “fair-share” norm. On the group level, it leads to the highest contribution level and the lowest inequality in total profits as measured by the Gini index. <P> |
| Keywords: | Experimental economics, public goods, heterogeneous endowments, mandatory minimum contributions, norms, |
| JEL: | C92 D63 H41 |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-47&r=cbe |