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on Cognitive and Behavioural Economics |
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Issue of 2015‒08‒25
ten papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | David Dickinson (Department of Economics - Appalachian State University); David Masclet (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal, CREM - Centre de Recherche en Economie et Management - CNRS - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS) |
| Abstract: | Do individuals trained in law enforcement punish or reward differently from typical student-subjects? We analyze norm enforcement behavior of newly appointed police commissioners in both a game with positive externalities (based on a Voluntary Contribution Mechanism) and a similar game with negative externalities. Depending on the treatment, a reward or sanction institution is either exogenously or endogenously implemented. Police commissioners cooperate significantly more in both games and bear a higher burden of the sanction costs compared to non-police subjects. When the norm enforcement institution is endogenous, subjects favor rewards over sanctions, but police subjects are more likely to vote for sanctions. Police subjects also reward and sanction more than the others when the institution results from a majority vote. Our experiment suggests that lab evidence on social dilemma games with positive or negative externalities and enforcement institutions is rather robust. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01137702&r=all |
| By: | Nobuyuki Hanaki (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université); Nicolas Jacquemet (GATE - Groupe d'analyse et de théorie économique - CNRS - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines, PSE - Paris-Jourdan Sciences Economiques - CNRS - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)); Stéphane Luchini (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université); Adam Zylbersztejn (GATE - Groupe d'analyse et de théorie économique - CNRS - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines) |
| Abstract: | How is one's cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple 2 × 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive abilities are more sensitive to strategic uncertainty than those with lower cognitive abilities. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01095897&r=all |
| By: | Seeun Jung (ESSEC Business School - Essec Business School, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Radu Vranceanu (Economics Department - Essec Business School) |
| Abstract: | This paper reports results from a real-eort experiment in which men and women are paired to form a two-member team and asked to execute a real-effort task. Each participant receives an equal share of the team's output. Workers who perform better than their partner can punish him/her by imposing a fine. We manipulate the teams' gender composition (man-man, man-woman, and woman-woman) to analyze whether an individual's performance and sanctioning behavior depends on his/her gender and the gender interaction within the team. The data show that, on average, men perform slightly better than women. A man's performance will deteriorate when paired with a woman, while a woman's performance will improve when paired with a woman. When underperforming, women are sanctioned more often and more heavily than men; if sanctioned, men tend to improve their performance, while women's performance does not change. |
| Date: | 2015–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:hal-01171161&r=all |
| By: | Min Zhu (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS) |
| Abstract: | Boundedly rational people may engage in strategic behavior under the Deferred Acceptance mechanism, resulting in unstable outcome and reducing overall welfare. How to reduce strategic behavior is thus of importance for field implementation. I address this issue in a laboratory experiment by looking at whether experienced people can transmit what they have learned and promote truth-telling behavior. In this experiment, subjects repeatedly play the matching game induced by the Deferred Acceptance mechanism for a finite number of periods, and then offer advice about best strategies to their successors. Participants in succeeding sessions are either given advice from their predecessors or observe histories of previous sessions. I find that advice given by predecessors can help subjects coordinate on truth-telling behavior and the Pareto efficient stable outcome (but this effect is not statistically significant in correlated preference environment). On the contrary, observing histories has ambiguous effect on truth-telling adoption. This implies that policy makers can encourage real people to adopt truth-telling in the field by providing them with collections of good advice from people who have already participated in matching market. |
| Date: | 2015–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01176926&r=all |
| By: | John D Hey; Konstantina Mari |
| Abstract: | The disinvestment decision is of importance in many contexts: if funds are tied up for too long in a poorly-performing project, then opportunities for re-investment may be missed. Optimal disinvestment theory is a component of real options theory, but is relatively ignored by experimentalists. Two recent papers conclude that decision-makers stay in projects longer than that prescribed by the optimal behaviour of a risk-neutral agent. This departure is explained through riskaversion, but without a formal hypothesis under test. We report here on an experiment which explains the behaviour of the subjects through an estimationof risk-aversion. We also explore an alternative hypothesis – that subjects are myopic. Our results show that few subjects appear to be risk-neutral, many seem to be risk-averse but few are myopic. |
| Keywords: | disinvestment, experiments, myopia, real options, risk-aversion, rolling horizon |
| JEL: | C9 G02 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:15/13&r=all |
| By: | Burdín, Gabriel (Leeds University Business School); Halliday, Simon (Smith College); Landini, Fabio (LUISS Guido Carli University) |
| Abstract: | This paper studies the role of autonomy and reciprocity in explaining control averse responses in principal-agents interactions. While most of the social psychology literature emphasizes the role of autonomy, recent economic research has provided an alternative explanation based on reciprocity. We propose a simple model and an experiment to test the relative strength of these two motives. We compare two treatments: one in which control is exerted directly by the principal (second-party control); and the other in which it is exerted by a third party enjoying no residual claimancy rights (third-party control). If control aversion is driven mainly by autonomy, then it should persist in the third-party treatment. Our results, however, suggest that this is not the case. Moreover, when a third party instead of the principal exerts control, control results in a greater expected profit for the principal. The implications of these results for organizational design are discussed. |
| Keywords: | third party, second party, control aversion, autonomy, principal-agent game, social preferences, trust, reciprocity |
| JEL: | C72 C91 D23 M54 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9251&r=all |
| By: | Fabio Galeotti (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon) |
| Abstract: | An important branch of economic research on emotions has used power-to-take game experiments to study the impact of negative emotions, such as anger, irritation and contempt, on the decision to punish. We investigate experimentally the role that the specific punishment technology adopted plays in this context, and test to what extent punishing behavior can be truly attributed to negative emotions. We find that a large part (around 70%) of the punishment behavior observed in previous PTTG studies is explained by the technology of punishment adopted instead of negative emotions. Once this effect is removed, negative emotions do still play an important role, but the efficiency costs associated to them are much smaller. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01128873&r=all |
| By: | Marie Boltz (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Karine Marazyan (IEDES); Paola Villar (INED - Institut national d'études démographiques, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics) |
| Abstract: | Informal redistribution play a preponderant role in individual risk management in developing economies. However, strategies to reduce the pressure to redistribute are rather widespread and often costly, while under-explored in the economic literature. In this paper, we identify the potentially distortionary effects of informal redistribution on individual resource allocation choices, through exogenous variations on one hand of the share of unobservable income and on the other hand, of the pool of observers. For this, we conducted an original experiment combining both a lab-in-the-field and a randomized controlled trial in poor urban communities in Senegal on a randomly selected sample. A first contribution of the paper is to elicit in the lab the willingness-to-pay to hide one’s lab lottery gains from kin and neighbors. Second, we estimate the impact of the non-observability of this windfall income on resource allocation decisions of participants out of the lab. We find a high willingness-to-pay for hiding: 65% of subjects prefer to receive their gains in private rather than in public and among them, they are ready to forgo on average 14.3% of their unobserved income for the privacy option. Also, we find that the determinants of the willingness-to-pay to hide income while correlated with redistributive pressure differ across gender. Moreover, while lottery public winners are found to spend 22% of their windfall income on transfers to kin, lottery private winners showing preferences for hidden income transfer 24% less and reallocate this extra money in health and private expenditures. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01157710&r=all |
| By: | Bernd Irlenbusch (Corporate Development and Business Ethics - University of Cologne); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS, Université de Lyon) |
| Abstract: | This review surveys recent research developed in behavioral economics on the determinants of unethical behavior. Most recent progress has been made in three directions: the understanding of the importance of moral norms in individual decision-making, the conflicting role of opportunities provided by asymmetries of information and social preferences, and the crucial effect of rules, occupational norms and incentive schemes in the diffusion of dishonesty. The connection between economics and psychology is the most vivid on the first dimension. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01159696&r=all |
| By: | Elliot Aurissergues (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics) |
| Abstract: | In this paper, we criticize the current adaptive or statistical learning literature. Instead of emphasizing asymptotical results, we focus on the short run forecasting performance of the different algorithms before convergence to rational expectation solution occurs. First, we suggest that the literature should drop ordinary least squares techniques in favor of the more efficient Bayesian estimation. Second, we cast doubt on the rationality of the behavior implied by the theory. We argue that agents do not use all available information in these models. Past prices carry some information about expectations of others and some algorithms are able to exploit this information. In a very simple case, this algorithm is simply naive expectations. In more complex one, we augment the usual learning with an estimation of past expectation errors using Kalman Filter. Interestingly, we find that some of these algorithms are divergent and may beat convergent ones in the short run. For a large set of parameters, their dominance is too short to be significant. However, when the sensitivity of the actual price to the expected one is close to one, divergent algorithms should be considered. |
| Date: | 2014–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01092795&r=all |