nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2015‒06‒05
ten papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Grandparents Matter: Perspectives on Intergenerational Altruism. An Experiment on Family Dynamic Spillovers in Public Goods Games. By Marianna Baggio; Luigi Mittone
  2. Let the sunshine in? The effects of luminance on economic preferences, choice consistency and dominance violations By Glimcher, Paul W.; Tymula, Agnieszka
  3. Narrative and deliberative instauration: The use of narrative as process and artefact in the social construction of institutions By William James Fear; Ricardo Azambuja
  4. Parenthood and Risk Preferences By Katja Görlitz; Marcus Tamm
  6. Charitable Dictators? Determinants of Giving to NGOs in Uganda By Kim Lehrer; Catherine Porter
  7. An Experimental Study of Persuasion Bias and Social Influence in Networks By Jordi Brandts; Ayça Ebru Giritligil; Roberto A. Weber
  8. Am I my Peer‘s Keeper? Social Responsibility in Financial Decision Making By Sascha Füllbrunn; Wolfgang J. Luhan
  9. Social Identity and Social Free-Riding By Mark Bernard; Florian Hett; Mario Mechtel
  10. Reason-based choice and context-dependence: An explanatory framework By Dietrich, Franz; List, Christian

  1. By: Marianna Baggio; Luigi Mittone
    Abstract: The development and use of long-lived public goods involves more than one demographic generation, leaving the classic literature on voluntary provisions partially unfit to explain complex phenomena such as welfare systems, climate policies and major infrastructure projects. This paper proposes a model that explains how equilibrium is reached in a context where a public good is produced by one generation of individuals and the following generation reaps the benefits of it. Within this model the case of intergenerational public goods production is explained using a spillover rule, where a percentage of the public good produced in time t by experimental parents will integrate the endowment of their artifactual children in t+1. A cascade mechanism allows also for the rebirth of three generations of players, mimicking the biological and anthropological mechanisms of gene transmission and intergenerational altruism. Experimental evidence shows that subjects who are reminded of their lineage membership tend to contribute more compared to those who are not included in a dynastic model. More importantly, results show that the real dynastic background of individuals is a prominent influence in the levels of investment in public goods.
    Keywords: public goods, generations, intergenerational spillovers, intergenerational altruism, OLG.
    Date: 2015
  2. By: Glimcher, Paul W.; Tymula, Agnieszka
    Abstract: Weather, in particular the intensity and duration of sunshine (luminance), has been shown to significantly affect marketoutcomes. Yet, because of the complexity of market interactions we do not know how human behavior is affected by luminance in a way that could inform microeconomic choice models. In this paper, we use data from an incentive compatible, decision making experiment conducted daily over a period of two years and from the US Earth System Research Laboratory luminance sensor to investigate the impact of luminance on risk preferences, ambiguity preferences, choice consistency and dominance violations. We find that luminance levels affect all of these. Age and gender influence the strength of some of these effects.
    Date: 2015–05
  3. 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).
    Date: 2014
  4. By: Katja Görlitz; Marcus Tamm
    Abstract: This study analyzes how risk attitudes change when individuals become parents using longitudinal data for a large and representative sample of individuals. The results show that men and women experience a considerable increase in risk aversion which already starts as early as two years before becoming a parent, is largest shortly after giving birth and disappears when the child becomes older. These findings show that parenthood leads to considerable changes in individual risk attitudes over time. Thus, analyses using risk preferences as the explanatory variable for economic outcomes should be careful in interpreting the findings as causal effects.
    Keywords: Risk aversion; risk preferences; preference stability; parenthood; children; gender differences
    JEL: D1 D81 J13 J16
    Date: 2015–04
  5. By: Petar Hafner, Milos Krstic (University of Niš, Faculty of Economics, University of Nis, Faculty of Mathematics and Science)
    Abstract: Behavioral economics and economic sociology arise and develop on the point where economics and psychology, as well as economics and sociology, overlap. Behavioral economics studies economic factors and psychological appearance that have a direct impact on economic behavior. On the other hand, economic sociology studies the behavioral norms of the social groups and the organizations. The correlation between the research subjects of these scientific disciplines imposes a need for specifying an interdisciplinary model of human behavior in society. The aim of this paper is to evaluate opportunities for the development of an interdisciplinary model of human behavior.
    Keywords: Economic sociology, behavioral economics, rational behavioral, interdisciplinary research
    JEL: A10 A14
    Date: 2015–01
  6. By: Kim Lehrer (Département d'Économique, Université de Sherbrooke); Catherine Porter (Department of Accountancy, Economics and Finance, Heriot-Watt University)
    Abstract: We play a modified dictator game in Uganda with students, civil servants, and individ- uals from the private sector. The sample includes both Ugandans and expatriates. In the dictator game, participants divide a sum of (real) money between themselves and a local charity. In a "turning a blind eye" treatment, participants are rst given the choice of knowing the identity of the recipient. Finally, participants are asked whether they wish to add their own money to the amount of the endowment they chose to allocate to their selected charity. Contrary to many experimental findings, non-students (civil servants) are not significantly more generous than students. In fact, after controlling for demographic characteristics, their average donation is significantly lower than that of students. Very few individuals donate their own money, despite 30% of participants donating the full endowment. Attitudes to charities do not predict the amount donated in the expected way. Length: 36 pages
    Keywords: Dictator game, charitable giving, philanthropy, Uganda
    JEL: C72 D63 D64
    Date: 2015–05
  7. By: Jordi Brandts; Ayça Ebru Giritligil; Roberto A. Weber
    Abstract: In many areas of social life, individuals receive information about a particular issue of interest from multiple sources. When these sources are connected through a network, then proper aggregation of this information by an individual involves taking into account the structure of this network. The inability to aggregate properly may lead to various types of distortions. In our experiment, four agents all want to find out the value of a particular parameter unknown to all. Agents receive private signals about the parameter and can communicate their estimates of the parameter repeatedly through a network, the structure of which is known by all players. We present results from experiments with three different networks. We find that the information of agents who have more outgoing links in a network gets more weight in the information aggregation of the other agents than under optimal updating. Our results are consistent with the model of “persuasion bias” of DeMarzo et al. (2003).
    Keywords: persuasion bias, experiments, bounded rationality
    JEL: C92 D03 D83
    Date: 2015–05
  8. By: Sascha Füllbrunn; Wolfgang J. Luhan
    Abstract: Decision makers often take risky decisions on the behalf of others rather than for themselves. Competing theoretical models predict both, higher as well as lower levels of risk aversion when taking risk for others, and the experimental evidence is mixed. In our within-subject design, money managers have substantial responsibility by taking investment decisions for themselves and for a group of six clients, when payments are either fixed or perfectly aligned. We find that money managers invest significantly less for others than for themselves (cautious shift) which is mainly driven by a less risk averse sub sample. Digging deeper we find money managers to rather act in line with what they believe the clients would invest for themselves. We derive a responsibility weighting function to show that with a perfectly aligned payment the money manager weights egoistic and social preferences. Finally we bring our results in perspective with the mixed experimental literature.
    Keywords: Financial decision making; social responsibility; decision making for others; risk preferences; experiment
    JEL: C91 D81 G11
    Date: 2015–04
  9. By: Mark Bernard (Department of Management and Microeconomics, Goethe University Frankfurt); Florian Hett (Department of Management and Microeconomics, Goethe University Frankfurt); Mario Mechtel (Institute for Labour Law and Industrial Relations in the EU, University of Trier)
    Abstract: We model individual identification choice as a strategic group formation problem. When choosing a social group to identify with, individuals appreciate high social status and a group stereotype to which they have a small social distance. A group's social status and stereotype are shaped by the (exogenous) individual attributes of its members and hence endogenous to individuals' choices. Unless disutility from social distance is strong enough, this creates a strategic tension as individuals with attributes that contribute little to group status would like to join high-status groups, thereby diluting the latters' status and changing stereotypes. Such social free-riding motivates the use of soft exclusion technologies in high-status groups, which provides a unifying rationale for phenomena such as hazing rituals, charitable activities or status symbols that is not taste-based or follows a standard signaling mechanism.
    Keywords: social identity, social status, social distance, categorization, group formation
    JEL: Z13 D01 D03
    Date: 2015–05
  10. By: Dietrich, Franz; List, Christian
    Abstract: We introduce a “reason-based” framework for explaining and predicting individual choices. It captures the idea that a decision-maker focuses on some but not all properties of the options and chooses an option whose motivationally salient properties he/she most prefers. Reason-based explanations allow us to distinguish between two kinds of context-dependent choice: the motivationally salient properties may (i) vary across choice contexts, and (ii) include not only “intrinsic” properties of the options, but also “context-related” properties. Our framework can accommodate boundedly rational and sophisticatedly rational choice. Since properties can be recombined in new ways, it also o↵ers resources for predicting choices in unobserved contexts.
    Keywords: Rational choice, reasons, context-dependence, bounded and sophisticated rationality, prediction of choice.
    JEL: B40 B49 B5 B50 C0 C00 C02 D0 D01 D03 D8 D80
    Date: 2015–05

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