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on Cognitive and Behavioural Economics |
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Issue of 2015‒02‒11
thirteen papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Asiedu, Edward; Ibanez, Marcela |
| Abstract: | To study the persistence of cultural norms that mandate respect towards the elder, we conducted an artefactual field experiment in two cities in Ghana. Using a public good game with third-party punishment, we find that punisher's age is an important determinant of cooperation. Our results indicate the elder are more efficient using punishment than youngsters. |
| Keywords: | Field experiment, status, age, punishment, public goods, Community/Rural/Urban Development, Institutional and Behavioral Economics, Public Economics, H41, C92, C93, |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:175303&r=cbe |
| By: | Sander van der Linden |
| Abstract: | Examining the conceptual relationship between personal experience, affect, and risk perception is crucial in improving our understanding of how emotional and cognitive process mechanisms shape public perceptions of climate change. This study is the first to investigate the interrelated nature of these variables by contrasting three prominent social-psychological theories. In the first model, affect is viewed as a fast and associative information processing heuristic that guides perceptions of risk. In the second model, affect is seen as flowing from cognitive appraisals (i.e., affect is thought of as a post-cognitive process). Lastly, a third, dual-process model is advanced that integrates aspects from both theoretical perspectives. Four structural equation models were tested on a national sample (N = 808) of British respondents. Results initially provide support for the “cognitive” model, where personal experience with extreme weather is best conceptualized as a predictor of climate change risk perception and, in turn, risk perception a predictor of affect. Yet, closer examination strongly indicates that at the same time, risk perception and affect reciprocally influence each other in a stable feedback system. It is therefore concluded that both theoretical claims are valid and that a dual-process perspective provides a superior fit to the data. Implications for theory and risk communication are discussed. |
| JEL: | G32 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57689&r=cbe |
| By: | Asiedu, Edward; Ibanez, Marcela |
| Abstract: | This paper investigates the hypothesis that women are underrepresented in leadership roles due to a lower ability to influence others. By comparing societies that differ in the inheritance rights of men and women, we trace the origins of such difference. The results of a public good game with third party punishment indicate that in patriarchal societies there are persistent gender differences in social influence while in matrilineal societies these differences are smaller. While in the patriarchal society sanctioning behavior is not different across genders, cooperation is lower in groups with a female monitor than a male monitor. In contrast, in the matrilineal society male monitors sanction more often than female monitors, though cooperation does not depend on the gender of the monitor. |
| Keywords: | Gender, norm enforcement, culture, inequality, collective action, Institutional and Behavioral Economics, International Development, Public Economics, C92, C93, D03, J14, J16, |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:165743&r=cbe |
| By: | Nikos Nikiforakis (Department of Economics, The University of Melbourne, Victoria 3010, Australia; CNRS, Groupe dAnalyse et de Théorie Economique, 93, Chemin des Mouilles, 69130 Ecully, France; Max Planck Institute for Research on Collective Goods, Kurt Schumacher Strasse 10, 53113 Bonn, Germany); Jörg Oechssler (Department of Economics, University of Heidelberg, Bergheimer Str. 58, 69115 Heidelberg, Germany); Anwar Shah (School of Economics, Quaid-I-Azam University, 45320 Islamabad, Pakistan) |
| Abstract: | The power to coerce workers is important for the e¢ cient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a laboratory experiment where a senior and a junior player interact repeatedly for a finite number of periods. We find that senior players try repeatedly to use their power to exploit junior workers. These attempts are successful only when junior workers have incomplete information about how their e¤ort impacts on the earnings of senior players, but not when they have complete information. Evidence from an incentive-compatible questionnaire indicates that the social acceptability of exploitation depends on whether the junior worker can detect she is being exploited. We also show how a history of exploitation affects future interactions. |
| Keywords: | coercion, exploitation, disobedience, hierarchy, social norms |
| JEL: | C91 C72 D74 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1434&r=cbe |
| By: | Bertrand Koebel; André Schmitt; Sandrine Spaeter |
| Abstract: | How people develop beliefs about themselves (self-theories) plays an important role on motivation and achievement as shown by Carol Dweck’s life-long research. In this paper, we conduct a field experiment to investigate whether self-theories impact overconfidence and risk taking. Self-theories deal with how an individual perceives some of her attributes such as intelligence, personality or moral character. In this paper, we are interested by how people perceive their mindset (fixed or growth). All decisions taken by young Vietnamese executives were incentivized to identify their degree of overconfidence and risk taking. As in previous studies, we find that subjects exhibit significant overconfidence. We also find that fixed mindset subjects are less over-confident than growth mindset persons, the latter earning the highest incomes in our experiment. Finally, we find correlation between risk taking and overconfidence. However, contrary to the existing results in the literature on behavioral finance, in our experiment, the higher the degree of overconfidence, the lower the investment in risky lotteries. Gender does not seem to have any impact on neither overconfidence nor risk-taking behavior. |
| Keywords: | overconfidence, experiment; self-theories, mindset, risk-taking. |
| JEL: | C93 D81 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2015-04&r=cbe |
| By: | Kleine, Marco (Max Planck Institute for Innovation and Competition); Kube, Sebastian (University of Bonn) |
| Abstract: | We study how upward communication – from workers to managers – about individual efforts affects the effectiveness of gift exchange as a contract-enforcement device for work teams. Our findings suggest that the use of such self-assessments can be detrimental to workers' performance. In the controlled environment of a laboratory gift-exchange experiment, our workers regularly overstate their own contribution to the joint team output. Misreporting seems to spread distrust within the team of workers, as well as between managers and workers. This manifests itself in managers being less generous with workers' payments, and in workers being more sensitive to the perceived kindness of their relative wage payments. By varying the source and degree of information about individual efforts between treatments, we see that precise knowledge about workers' actual contributions to the team output is beneficial for the success of gift-exchange relationships. Yet, workers' self-assessments can be a problematic tool to gather this information. |
| Keywords: | communication, gift exchange, incomplete contracts, reciprocity, performance appraisal, self-assessment, work team, laboratory experiment |
| JEL: | C92 J33 M52 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8762&r=cbe |
| By: | Rebecca Tunstall; Anne Green; Ruth Lupton; Simon Watmough; Katie Bates |
| Abstract: | There are substantial variations in labour market outcomes between neighbourhoods. One potential partial explanation is that residents of some neighbourhoods face discrimination from employers. Although studies of deprived areas have recorded resident perceptions of discrimination by employers and negative employer perceptions of certain areas, until now there has been no direct evidence on whether employers treat job applicants differently by area of residence. This paper reports a unique experiment to test for a neighbourhood reputation effect involving 2001 applications to 667 real jobs by fictional candidates nominally resident in neighbourhoods with poor and bland reputations. The experiment found no statistically significant difference in employer treatment of applicants from these areas, indicating that people living in neighbourhoods with poor reputations did not face ‘postcode discrimination’ in the labour market, at the initial selection stage. |
| JEL: | R14 J01 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55913&r=cbe |
| By: | Robin M. Hogarth (Department of Economics and Business, Universitat Pompeu Fabra and Barcelona Graduate School of Economics, Ramon Trias Fargas, 25–27, 08005 Barcelona, Spain); Marie Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France) |
| Abstract: | When the assignment of incentives is uncertain, we study how the regularity and frequency of rewards and risk attitudes influence participation and effort. We contrast three incentive schemes in a real-effort experiment in which individuals decide when to quit : a continuous incentive scheme and two intermittent ones, fixed and random. In all treatments, we introduce a regime shift by withdrawing monetary rewards after the same unknown number of periods. In such an ambiguous environment, we show that less able and more risk averse players are less persistent in effort. Intermittent incentives lead to a greater persistence of effort, while continuous incentives entail exit as soon as payment stops. Randomness increases both earlier and later exiting. This selection effect in terms of ability and risk attitudes combined with the impact of intermittent rewards on persistence lead to an increase in mean performance after the regime shift when incentives are intermittent. |
| Keywords: | Incentives, intermittent reinforcement, randomness, effort, quitting, learning, experiment |
| JEL: | C92 D84 M54 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1432&r=cbe |
| By: | Banerjee, Debosree |
| Abstract: | We analyze gender difference in risk and ambiguity attitude of subjects across two different ethnicities that differ in the degree of female empowerment. Santal is a patriarchal tribe and Khasi is a matrilineal tribe with men and women being the social head in their respective societies. We compare subject’s willingness to take up risk and ambiguity for themselves and on behalf of others. Besides we analyze the differences in risk and ambiguity attitude of subjects from these societies. Our findings show that women in both societies are significantly more risk averse, but not ambiguity averse. Patriarchal male and female are more risk averse in group risk than in individual risk but matrilineal subjects are not. Therefore, higher risk aversion in group is an ethnic trait among Santals. Comparing the between ethnicity differences we find that matrilineal subjects are more risk averse than patriarchal subjects. Regarding attitudes towards ambiguity, we did not find any gender or ethnicity differences. |
| Keywords: | Risk and Ambiguity, Gender, Matrilineal and Patriarchal society, Field experiment, Institutional and Behavioral Economics, Risk and Uncertainty, C93, D81, J15, J16, |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:180978&r=cbe |
| By: | W. David Bradford; Paul Dolan; Matteo M. Galizzi |
| Abstract: | Time discounting is at the heart of economic decision-making. We disentangle hyperbolic discounting from subjective time perception using experimental data from incentive-compatible tests to measure time preferences, and a set of experimental tasks to measure time perception. The two behavioural parameters may be related to two factors that affect how we look ahead to future events. The first is that some component of time preferences reflect hyperbolic discounting. The second factor is that non-constant discounting may also be a reflection of subjective time perception: if people’s perception of time follows a near logarithmic process (as all other physiological perceptions such as heat, sound, and light do) then all existing estimates of individual discounting will be mis-measured and incorrectly suggest “hyperbolic” discounting, even if discounting over subjective time is constant. To test these hypotheses, we empirically estimate the two distinct behavioural parameters using data collected from 178 participants to an experiment conducted at the London School of Economics Behavioural Research Lab. The results support the hypothesis that apparent non-constant discounting is largely a reflection of subjective time perception. |
| Keywords: | Time preferences; Time perception; Hyperbolic discounting |
| JEL: | D1 D10 D91 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60265&r=cbe |
| By: | Alessandro Bucciol (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona)) |
| Abstract: | We present evidence that non-cognitive skills such as individual investors’ personality traits significantly impact their portfolio choices. Based on large-scale survey data from the 2006-2012 waves of the US Health and Retirement Study (HRS) we show that portfolio decisions are influenced by a variety of traits and facets traditionally investigated in the field of personality psychology. Two personality traits that taken together depict a self-centered personality profile appear to have the most significant impact on financial risk taking: lower Agreeableness and higher Cynical Hostility predict higher willingness to take risks. A number of robustness checks corroborate our results. We also show that the effects of Agreeableness seem to pass through the preferences – rather than the beliefs – channel. Our findings shed new light on the non-cognitive side of individuals’ risk taking and have implications for our understanding of the sources of heterogeneity in financial decisions. |
| Keywords: | Portfolio Choice, Personality Traits, Risk Taking, Behavioral Finance |
| JEL: | D03 D14 G11 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:03/2015&r=cbe |
| By: | Xiaohua, Yu; Binjian, Yan; Zhifeng, Gao |
| Abstract: | Human behaviours are driven by two different types of motives: implicit and explicit motives. Psychologists have developed two main tools, namely time pressure and cognitive load, to disentangle the two motives. It implies that the values of willingness to pay (WTP) are sensitive to time pressure and cognitive load levels in practice. An experiment with 233 students is conducted in China to study the willingness to pay for organic food with consideration of different time pressures and cognitive load levels. Results show that (1) increasing cognitive load could significantly reduce consumers’ WTP for organic food; and (2) time pressure does not have significant impact on WTP values. Such results remind us of being particularly cautious about the cognitive load situations of respondents during a WTP survey. Otherwise, the WTP results are unstable and inconvincible. |
| Keywords: | Motives, Time Pressure, Cognitive Load, WTP, Organic Food, Experiments, Agribusiness, Consumer/Household Economics, Institutional and Behavioral Economics, Marketing, Research Methods/ Statistical Methods, C91, Q13, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:169402&r=cbe |
| By: | Yuki Tanaka (National Graduate Institute for Policy Studies); Takashi Yamano (International Rice Research Institute) |
| Abstract: | Educational investment involves risks and long-term commitment, and the degree of risk aversion or patience of parents could play a vital role in the schooling decision. Yet, there are few studies analyzing the impact of such preferences on educational investment. This paper utilizes a unique dataset with a large-scale field experiment of preferences and estimates the impacts of the patience and risk aversion of the parents on school attendance, delayed enrollment, and the education expenditure of their children in Uganda. Our results show that the risk aversion of the parent delays enrollment of young children, especially boys. This could be explained by parents’ security concerns for their young children. Girls of impatient parents have high attendance rates when they are young (6 – 9 years old) but have low attendance rates when they are older (10 – 13 years old). Boys aged 10 to 13 have low attendance rates if their parents have a high present bias. Finally, the patience of the parents increases the education expenditure. |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:14-24&r=cbe |