nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2015‒06‒27
eight papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Saving Face and Group Identity By Eriksson, Tor; Mao, Lei; Villeval, Marie Claire
  2. Decision confidence in the Ellsberg experiment By Duersch, Peter
  3. What do we learn from public good games about voluntary climate action? Evidence from an artefactual field experiment By Goeschl, Timo; Kettner, Sara Elisa; Lohse, Johannes; Schwieren, Christiane
  4. Does the gender mix among employers influence who gets hired? A labor market experiment By Alexia Gaudeul; Ayu Okvitawanli; Marian Panganiban
  5. How to cope with (new) uncertainties: A bounded rationality approach By Güth, Werner; Kliemt, Hartmut
  6. Can monetary valuation undermine nature conservation? Evidence from a decision experiment By Rode, Julian; Le Menestrel, Marc; Cornelissen, Gert
  7. The rise of behavioural economics: A quantitative assessment By Geiger, Niels
  8. Cooperative behavior and common pool resources : experimental evidence from community forest user groups in Nepal By Bluffstone,Randy; Dannenberg,Astrid; Martinsson,Peter; Jha,Prakash; Bista,Rjesh

  1. By: Eriksson, Tor (Aarhus School of Business); Mao, Lei (Central University of Finance and Economics); Villeval, Marie Claire (CNRS, GATE)
    Abstract: Are people willing to sacrifice resources to save one's and others' face? In a laboratory experiment, we study whether individuals forego resources to avoid the public exposure of the least performer in their group. We show that a majority of individuals are willing to pay to preserve not only their self- but also other group members' image. This behavior is frequent even in the absence of group identity. When group identity is more salient, individuals help regardless of whether the least performer is an in-group or an out-group. This suggests that saving others' face is a strong social norm.
    Keywords: pro-social behavior, social image, saving face, group identity, experiment
    JEL: C92 D03 M52 Z13
    Date: 2015–06
  2. By: Duersch, Peter
    Abstract: Subjects are asked to report their confidence in their own decisions regarding the Ellsberg three color urn. Subjective confidence is measured via a 5 point Likert scale. Surprisingly, subjects are more confident in their answer for the more complicated two color question, compared to the simple one color question. This is robust across a wide range of experimental contexts.
    Keywords: Ellsberg experiment; Confidence
    Date: 2015–06–18
  3. By: Goeschl, Timo; Kettner, Sara Elisa; Lohse, Johannes; Schwieren, Christiane
    Abstract: Evidence from public good game experiments holds the promise of instructive and cost-effective insights to inform environmental policy-making, for example on climate change mitigation. To fulfill the promise, such evidence needs to demonstrate generalizability to the specific policy context. This paper examines whether and under which conditions such evidence generalizes to voluntary mitigation decisions. We observe each participant in two different decision tasks: a real giving task in which contributions are used to directly reduce CO2 emissions and a public good game. Through two treatment variations, we explore two potential shifters of generalizability in a within-subjects design: the structural resemblance of contribution incentives between the tasks and the role of the subject pool, students and non-students. Our findings suggest that cooperation in public good games is linked to voluntary mitigation behavior, albeit not in a uniform way. For a standard set of parameters, behavior in both tasks is uncorrelated. Greater structural resemblance of the public goods game leads to sizable correlations, especially for student subjects.
    Date: 2015–06–19
  4. By: Alexia Gaudeul (Friedrich-Schiller-Universität, Jena); Ayu Okvitawanli (Friedrich-Schiller-Universität, Jena); Marian Panganiban (Friedrich-Schiller-Universität, Jena, and Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We consider in this paper whether the gender mix at the level of decision-makers in firms can influence gender representation at the employee level. We run a laboratory experiment whereby we present a pair of independent employers with applications from two potential employees. We consider whether the gender of the other employer will influence an employer's hiring decision. We find that the gender mix among employers plays a role in the individual hiring decisions of female members. Female employers when paired with a male employer are more likely to choose a female applicant over an equally competent male applicant. Results of an Implicit Association Test (IAT) and answers to a post-experimental questionnaire show that explicit beliefs about relative gender performance are significantly associated with the observed hiring bias, while implicit attitudes do not appear to play a role.
    Keywords: discrimination, hiring, IAT, implicit attitudes, gender quotas, labor markets, employment
    JEL: J71 J78 C91
    Date: 2015–06–18
  5. By: Güth, Werner; Kliemt, Hartmut
    Abstract: A rigorous reconstruction of scenario-based real choice making reveals the incompleteness of decision-modeling and the practical prevalence of uncertainty. Theoretically complete models conceal it. As a remedy a scenario-based procedure of coping with uncertainty can prescribe how the boundedly rational decision-maker should proceed from her or his internal point of view. Though models of substantive rationality cannot serve as guidance for decision-making under uncertainty, we can improve prescriptions for coping with uncertainties in view of evidence of substantive success or failure. Decision theory should aim for a reflective equilibrium incorporating internalist-prescriptive and externalist-descriptive aspects to turn good into better practice.
    Keywords: uncertainty,procedural rationality,satisficing,risk-communication
    JEL: D80 D01 D03 D21
    Date: 2015
  6. By: Rode, Julian; Le Menestrel, Marc; Cornelissen, Gert
    Abstract: Nature conservation scientists and practitioners have voiced the concern that a conservation discourse based on economic arguments and monetary valuation may undermine conservation efforts by eroding ("crowding out") the influence of other arguments for nature conservation. This paper presents the results of a decision experiment in which nature conservation is framed using an economic, a non-economic, or a combined discourse before participants take hypothetical decisions on the construction of hydropower dams in the Bolivian Amazon. We find that an economic discourse with monetary valuation framing leads to significantly fewer pro-conservation decisions, that is, decisions against dam construction. This is the case when a cost-benefit analysis inclusive of environmental costs reveals that the dam is economically viable (i.e., there remains a trade-off between economics and conservation), but also when such a costs-benefit analysis indicates that the dam is not viable (i.e., no trade-off). The results suggest that an economic discourse with monetary valuation framing can indeed undermine nature conservation efforts. They also suggest that the effect can be avoided, however, by presenting non-economic arguments side by side with an economic rationale.
    Keywords: nature conservation,policy discourse,framing,monetary valuation,crowding out
    JEL: D61 D63 D81 H41 O13 Q01 Q34 Q51 Q56 Q57
    Date: 2015
  7. By: Geiger, Niels
    Abstract: This paper is devoted to the question of operationalising the development of behavioural economics, focussing on trends in the academic literature. The main research goal is to provide a quantitative assessment in order to answer the question of whether or not behavioural economics has gained in relative importance in the past few years. After an introduction and a short summary of the history of behavioural economics, several studies are laid out and evaluated. The results generally confirm the story as it is usually told in the literature, and add some notable additional insights.
    Keywords: behavioural economics,bounded rationality,culturomics
    JEL: D03 E61 E65
    Date: 2014–09
  8. By: Bluffstone,Randy; Dannenberg,Astrid; Martinsson,Peter; Jha,Prakash; Bista,Rjesh
    Abstract: This paper examines whether cooperative behavior by respondents measured as contributions in a one-shot public goods game correlates with reported pro-forest collective action behaviors. All the outcomes analyzed are costly in terms of time, land, or money. The study finds significant evidence that more cooperative individuals (or those who believe their group members will cooperate) engage in collective action behaviors that support common forests, once the analysis is adjusted for demographic factors, wealth, and location. Those who contribute more in the public goods experiment are found to be more likely to have planted trees in community forests during the previous month and to have invested in biogas. They also have planted more trees on their own farms and spent more time monitoring community forests. As cooperation appears to be highly conditional on beliefs about others? cooperation, these results suggest that policies to support cooperation and strengthen local governance could be important for collective action and economic outcomes associated with forest resources. As forest management and quality in developing countries is particularly important for climate change policy, these results suggest that international efforts such as the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation should pay particular attention to supporting governance and cooperation at the local level.
    Keywords: Common Property Resource Development,Forestry Management,Wildlife Resources,Climate Change Mitigation and Green House Gases,Environmental Economics&Policies
    Date: 2015–06–22

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