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on Cognitive and Behavioural Economics |
|
Issue of 2015‒04‒02
fifteen papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Takehisa Kumakawa (Osaka University); Tatsuyoshi Saijo (School of Economics and Management, Kochi University of Technology); Takehiko Yamato (Tokyo Institute of Technology) |
| Abstract: | What motivates subjects in their decision making is a lingering issue in public goods experiments. Using a nonlinear payoff function and a two-subject model, we create a one-toone correspondence between contributions and motivations, enabling us to isolate and identify the following three possible motivations: Nash, cooperative, and altruistic motivations. The experimental results show that Nash- motivated behavior accounts for more than 70% of all decisions. Some subjects reveal a cooperative motivation when they know the other subject's payoff information. Altruistic motivation is found to be rare throughout the experiment. |
| Keywords: | Motivation, Nash, Cooperation, Altruism, Voluntary contribution mechanism |
| JEL: | C92 H41 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2015-16&r=cbe |
| By: | Martin G. Kocher; Amrei Marie Lahno; Stefan T. Trautmann |
| Abstract: | An extensive literature has studied ambiguity aversion in economic decision making, and how ambiguity aversion can account for empirically observed violations of expected utility-based theories. Almost all relevant applied models presume a general dislike of ambiguity. In this paper, we provide a systematic experimental assessment of ambiguity attitudes in different likelihood ranges and in the gain domain, the loss domain and with mixed outcomes. We draw on a unified framework with more than 500 participants and find that ambiguity aversion is the exception, not the rule. We replicate the usual finding of ambiguity aversion for moderate likelihood gains. However, when introducing losses or lower likelihoods, we observe either ambiguity neutrality or even ambiguity seeking behavior. Our results are robust to different elicitation procedures. |
| Keywords: | ambiguity aversion, decision under uncertainty, Ellsberg experiments |
| JEL: | C91 D81 |
| Date: | 2015–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:qut:qubewp:wp033&r=cbe |
| By: | Lauri Saaksvuori (University of Hamburg); Abhijit Ramalingam (University of East Anglia) |
| Abstract: | This paper examines how third-party surveillance influences preferences over distributional outcomes. In addition, we examine what motivates people to invest economic resources to monitor decision-making processes. Our results show that a large majority of individuals is willing to pay for a right to monitor decision-making processes over distributional outcomes despite pecuniary incentives to the contrary. We find that electronic third-party surveillance does not affect distributional outcomes in a three-person ultimatum game. Finally, we find that third- parties are the most over-optimistic about their own outcomes when they have a chance to signal their presence to the negotiators. Our results suggest that people may overestimate the impact of transparent decision-making on economic outcomes. |
| Keywords: | bargaining, communication, distributional preferences, experiment, negotiations, surveillance |
| JEL: | C72 C92 D01 D03 D83 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:15-01&r=cbe |
| By: | Christopher Boyce (Management School,University of Stirling, Scotland, UK); Mikolaj Czajkowski (University of Warsaw, Department of Economic Sciences, Poland); Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews); (Department of Geography and Sustainable Development, University of St. Andrews); Charles Noussair (Department of Economics, Tilburg University, the Netherlands); Michael Townsend (National Institute for Water and Atmosphere Ltd, Hamilton, New Zealand); Steve Tucker (School of Management, University of Waikato, New Zealand) |
| Abstract: | This paper tests whether changes in “incidental emotions” lead to changes in economic choices. Incidental emotions are experienced at the time of an economic decision but are not part of the payoff from a particular choice. As such, the standard economic model predicts that incidental emotions should not affect behavior, yet many papers in the behavioral science and psychology literatures find evidence of such effects. In this paper, we used a standard procedure to induce different incidental emotional states in respondents, and then carried out a choice experiment on changes to an environmental good (beach quality). We estimated preferences for this environmental good and willingness to pay for changes in this good, and tested whether these were dependent on the particular emotional state induced. We also tested whether choices became more or less random when emotional states were induced, based on the notion of randomness in a standard random utility model. Contrary to our a-priori hypothesis we found no significant evidence of treatment effects, implying that economists need not worry about the effects of variations in incidental emotions on preferences and the randomness of choice, even when there is measured (induced) variation in these emotions. |
| Keywords: | choice experiments, behavioral economics, ecosystem services, emotions, rationality |
| JEL: | Q51 Q57 D03 D87 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:2015-08&r=cbe |
| By: | Francesco Bogliacino; Iván González Gallo |
| Abstract: | In this article we test the main hypotheses of the behavioural theory of entrepreneurship, namely that risk preferences are reference-dependent, that entrepreneurs are not ambiguity-averse and that aspirations act as a reference point in the sense postulated by Prospect Theory. We use an experimental methodology to elicit risk preferences and we manipulate aspirations by means of a psychological priming technique to guarantee exogenous variation of the independent variable. We also assess the relationship between risk preferences and correlates at the firm and individual level. Although causality cannot be established, as expected the risk preferences are mainly related with individual characteristics. If we look at the relationship between biases and firm performance we see some effect of loss aversion in interaction with personality traits (locus of control) and level of risk propensity. Our experimental fieldwork has been conducted in Colombia. |
| Keywords: | Experiments, Prospect Theory, Aspirations, Entrepreneurship. |
| JEL: | C93 D81 L26 O54 |
| Date: | 2015–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:col:000178:012652&r=cbe |
| By: | Bradler, Christiane |
| Abstract: | Economic theory suggests that performance pay may serve as an effective screening device to attract productive agents. The existing evidence on the self-selection of agents is largely limited to job tasks where performance is driven by routine, well-defined procedures. This study presents evidence for a creative task and studies how agents self-select into a tournament-based scheme vs. a fixed pay scheme. The experiment allows for the measurement of creative productivity, risk preferences, self-assessments, gender, and other socio-economic characteristics such as the Big Five personality traits. Results show that the two payment schemes systematically attract agents with different characteristics. However, results differ fundamentally from previously found patterns. Agents did not self-select into the tournament scheme according to their creative productivity, but only according to their risk attitudes and self-assessments. The reason for the absence of a selection of the most creative agents into the tournament is that there exist substantial misjudgments of relative creative productivity. Further evidence from a representative German survey data set provides additional support for the experimental results suggesting external validity. |
| Keywords: | performance pay,tournaments,selection,sorting,creativity,experiment |
| JEL: | C91 D03 J33 M52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15021&r=cbe |
| By: | R. Orsini; E. Ciaramelli; C. Giannetti |
| Abstract: | The thought of one’s own death induces anxiety and threatens self-esteem. According to Terror Management Theory, to reduce this existential threat individuals typically embrace their cultural worldview, and seek for an increase in self-esteem and status by improving their productivity. Within an experimental economy setting, this paper investigates the effect of Mortality Salience (MS) on individual productivity, using for the first time a real-effort task where the economic incentive is to not perform. We investigated whether the improvement in productivity was significantly driven by self-esteem or status seeking, providing either private feedback alone or, additionally, public feedback. Always controlling for participants’ individual susceptibility to the MS induction, our results indicate that subjects generally tend to be more sensitive to in-group conformity under MS compared to a control (Music) induction condition. That is, they initially improve their performance to enhance self-esteem, but then homologate to average performance levels, consistent with the incentive not to perform. However, for a subset of less materialistic participants, with strong susceptibility to MS, performance levels constantly improved along the task. |
| JEL: | C91 C92 D12 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp997&r=cbe |
| By: | Jean-Christian Tisserand (CRESE) |
| Abstract: | The ultimatum game undoubtely lists the largest experimental literature of the past three decades. In this article, we focus on the choice of the proposer of the ultimatum game and the explanatory variables that may influence the amount offered. We perform a meta-analysis with a total of 97 observations from simple ultimatum game gathered through 42 articles published between 1983 and 2012. While the theoretical prediction announces that the equilibrium offer should be zero, our results show that the weighted average offer is 42.3% of the amount at stake. Among the numerous variables studied, only being an economist has a significant impact on the amounts offered. |
| Keywords: | Meta-analysis, Ultimatum game, Experimental economics, Microeconomics, Behavioral economics |
| JEL: | C78 C91 D03 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:0802032&r=cbe |
| By: | Simone Galperti; Bruno Strulovici |
| Keywords: | Anticipation, Cognitive Skill, Discounting, Human Capital, Impatience, Present Bias, Time Preference shocks, risk aversion. JEL Classification: D01, D03, D90, D91 |
| Date: | 2015–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:nwu:cmsems:1582&r=cbe |
| By: | Fehr, Dietmar; Hakimov, Rustamdjan; Kübler, Dorothea |
| Abstract: | We report on experiments to replicate Plott and Zeiler's (2005) findings that the WTP-WTA gap disappears when using procedures that are aimed at reducing misunderstandings, such as training rounds for the BDM mechanism. Following the design by Plott and Zeiler (2005) and Isoni, Loomes, and Sugden (2011) who re-ran the Plott/Zeiler experiments to study the paid practice rounds with lotteries, we replicate the findings from the lottery tasks where a WTP-WTA gap is present in all studies. However, unlike in the two previous studies the WTP-WTA gap does not disappear in the main task where subjects state their WTA or WTP for a mug. We introduce two additional lottery tasks to classify subjects and find that even for the most rational group of subjects who never make dominated choices in the paid practice rounds, the WTP-WTA gap in the mug task exists. The findings are replicated in a similar experiment with USB sticks instead of mugs. |
| Keywords: | endowment effect,WTP-WTA gap,BDM mechanism,misconceptions,replication |
| JEL: | C72 C92 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2015204&r=cbe |
| By: | Reischmann, Andreas |
| Abstract: | The Conditional Contribution Mechanism for public good provision gives all agents the possibility to condition their contribution on the total level of contribution provided by all agents. In this experimental study the mechanism's performance is compared to the performance of the Voluntary Contribution Mechanism. In an environment with binary contribution and linear valuations subjects play the mechanisms in a repeated setting. The mechanisms are compared in one case of complete information and homogeneous valuations and in a second case with heterogeneous valuations and incomplete information. In both cases a significantly higher contribution rate can be observed when the Conditional Contribution Mechanism is used. |
| Keywords: | Experimental Economics; Public Goods; Mechanism Design; Better Response Dynamics. |
| Date: | 2015–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0587&r=cbe |
| By: | Arsalan Khanmohammadi Otaghsara (Department of psychology, Ayatollah Amoli Branch, Islamic Azad University, Amol, Iran); Alireza Homayouni (Department of psychology, Bandargaz Branch, Islamic Azad University, Bandargaz, Iran); Gholamali Nikpour (Department of Psychology, Allameh Tabataba’i University, Tehran, Iran) |
| Abstract: | Aim: The research aimed to investigate role of personality traits and Emotional Intelligence in tendency to addiction. Methods: In sampling process a total of 73 addicted people and 73 non-addicted people that were randomly selected and completed Schutte's Self- Report E / I Test (SSREIT) (33 items) and Mc Care and Costa’s NEO PI-R Inventory. In order to analyzing the data independent T test was used to compare means of two groups. Results: Findings indicated significant differences between two groups in components of Emotional Intelligent. Addicted people had less scores in agreeableness, extroversion, conscientiousness, appraisal of emotion, utilization of emotion and general score of emotional intelligence, and more scores in neuroticism than and openness to experience than nonaddicted people. Conclusion: Considering the current study are congruent with the other research in this field, it is recommended to apply the plans for EI education related to personality traits for enhancing emotional intelligent components in order to increasing abilities and competencies in confronting with crisis and bad events and reducing risk of abnormal behaviors, specially addiction. |
| Keywords: | Emotional intelligence, Personality traits, Addiction |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:0100079&r=cbe |
| By: | Malka Tal-Shmotkin (The College for Academic Studies) |
| Abstract: | The current study aims to explore a new method for creating an effective working team, using music terminology as a metaphor for team work. Teams have been proved to play a crucial role in organizations, with most organizational activities being conducted through teams. Success in organizations depends upon the quality of their teams, meaning the teams have the necessary competencies for their operation. Establishing efficient working teams requires a thorough and constant development. The rationale of using music terminology as metaphors in the current work relies on the assumption that metaphors advance insights into team activities and act as spotlights on related phenomena, often in novel and surprising ways.Graduate and undergraduate students in Business Management classes volunteered to participate within 10-member teams in an experiment following a lecture that dealt with groups and teams in organizations. None of them had any musical background, according to a pre-condition of taking part in this activity. The students were first given a short introduction regarding music terminology such as rhythm, dynamics, phrase, beat, etc. Following this introduction they were given a short rhythm section as well as a variety of musical (mostly repercussion) instruments. Their objective was to perform the whole rhythm section as a team according to instructions provided to them. The other students in the class served as observers, watching the team's members coping with the assignment up to the final performance. After the experimental session was completed, the team, along with the observers, filled out various rating scales and held a discussion about their feelings and insights.The contribution of the current study is both conceptual and practical. The experience of acting in a musical group with a defined goal may enlighten more clearly the characteristics and competencies required for those who take part in a team work within organizational settings. The musical activity examined here does not pose psychological threats that may hinder natural behavior on the participants' part. This kind of activity provides the team members, as well as their observers, with new tools for evaluating their behaviors. |
| Keywords: | team work, team development, music |
| JEL: | L29 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:0201261&r=cbe |
| By: | Christiane Hinerasky (University of Paderborn); Rene Fahr (University of Paderborn) |
| Abstract: | We empirically evaluate the job performance effects of a 6 month part-time training program in a large retail chain, in which participants received feedback on their training success based on a final exam. The data's quasi-experimental structure allows comparison of sales revenue of trained and untrained managers before, during and after the training. We find that the training significantly increases sales of very successful participants by approximately 8% during and by 7% after the training period. However, the training has a substantial negative impact on the post-training sales performance of unsuccessful participants. The results indicate that the indirect motivational effects of training programs may be much more important than the direct effects of skill acquisition. |
| Keywords: | Evaluation, Returns to Company Training, Performance Effects, Feedback, Motivation |
| JEL: | C31 C33 J24 M53 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:16&r=cbe |
| By: | Christopher Boyce (Management School, University of Stirling); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (Department of Geography and Sustainable Development, University of St Andrews); Charles Noussair (Department of Economics, Tilburg University); Michael Townsend (National Institute for Water and Atmosphere Ltd); Steve Tucker (School of Management, University of Waikato) |
| Abstract: | This paper tests whether changes in “incidental emotions” lead to changes in economic choices. Incidental emotions are experienced at the time of an economic decision but are not part of the payoff from a particular choice. As such, the standard economic model predicts that incidental emotions should not affect behavior, yet many papers in the behavioral science and psychology literatures find evidence of such effects. In this paper, we used a standard procedure to induce different incidental emotional states in respondents, and then carried out a choice experiment on changes to an environmental good (beach quality). We estimated preferences for this environmental good and willingness to pay for changes in this good, and tested whether these were dependent on the particular emotional state induced. We also tested whether choices became more or less random when emotional states were induced, based on the notion of randomness in a standard random utility model. Contrary to our a-priori hypothesis we found no significant evidence of treatment effects, implying that economists need not worry about the effects of variations in incidental emotions on preferences and the randomness of choice, even when there is measured (induced) variation in these emotions. |
| Keywords: | choice experiments, behavioral economics, ecosystem services, emotions, rationality |
| JEL: | Q51 Q57 D03 D87 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2015-13&r=cbe |