nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2016‒03‒06
eleven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Does active learning improve student performance? A randomized experiment in a Chilean university By Alcalde, Pilar; Nagel, Juan
  2. Social comparison and gender differences in risk taking By Schmidt, Ulrich; Friedl, Andreas; Lima de Miranda, Katharina
  3. Does informal risk sharing induce lower efforts? Evidence from lab-in-the-field experiments in rural Mexico By Alger, Ingela; Juarez, Laura; Juarez-Torres, Miriam; Miquel-Florensa, Josepa
  4. Pleasures of skill and moral conduct By Falk, Armin; Szech, Nora
  5. Early maternal employment and non-cognitive outcomes in early childhood and adolescence: evidence from British birth cohort data By Warn N. Lekfuangfu; Nattavudh Powdthavee; Andrew E. Clark; George Ward
  6. MTurk Survey on "Mood and Personality". Documentation By Marc Höglinger; Ben Jann
  7. Does the Reliability of Institutions Affect Public Good Contributions? Evidence from a Laboratory Experiment By Fochmann, Martin; Jahnke, Bjoern; Wagener, Andreas
  8. Effect of Overlapping Price Ranges on Price Perception: Revisiting the Range Theory of Price Perception By Jaikumar, Saravana; Sahay, Arvind
  9. On Peer Effects: Behavioral Contagion of (Un)Ethical Behavior and the Role of Social Identity By Dimant, Eugen
  10. Heterogeneous Returns and Group Formations in the Public Goods Game By Elena Molis; Levent Neysey; Raul Peña-Fernandez
  11. Psychological Skills, Education, and Longevity of High-Ability Individuals By Peter A. Savelyev

  1. By: Alcalde, Pilar; Nagel, Juan
    Abstract: We study the causal effect of an active learning teaching method on grades. We designed a randomized experiment with students at an undergraduate business and economics program in Chile. Two groups were taught by the same professor: the control group used traditional lectures, while the treatment group used an active learning method. Treated students failed the class less but the effect was not significant. They also had significantly better grades at the end and during the semester. The treatment effect was larger for males and students with high application scores. The effect does not appear instantaneously, and appears to fade away at the end of the semester. Results suggest students allocate effort differently across both groups, and this interacts with the treatment effect.
    Keywords: Classroom experiments, course performance, peer instruction, innovation in teaching
    JEL: A20 C21 C90
    Date: 2015–11–06
  2. By: Schmidt, Ulrich; Friedl, Andreas; Lima de Miranda, Katharina
    Abstract: The present paper contributes to the controversy regarding gender differences in risk taking by investigating the impact of social comparison. Social comparison is formalized by integrating a social reference point into the model of Köszegi and Rabin. Drawing on previous results from evolutionary biology, we hypothesize that men (women) focus more on relative (absolute) income, i.e., the relative weight of social gain-loss utility is higher for men than for women. Our model predicts that risk taking is higher for correlated than for uncorrelated risks and that this effect is stronger for men than for women. These predictions are confirmed by a simple classroom experiment. We conclude that social comparison and the correlation of risks play an important role in the discussion of gender differences in risk taking.
    Keywords: risk taking,gender differences,correlation of risks,social reference point
    JEL: C91 D81 J16
    Date: 2015
  3. By: Alger, Ingela; Juarez, Laura; Juarez-Torres, Miriam; Miquel-Florensa, Josepa
    Abstract: How does informal risk sharing affect incentives to avoid risk? While moral hazard is expected under formal insurance, theory suggests that the incentive effects of informal risk sharing are ambiguous: internalization of the external effects of transfers on others may reduce or enhance incentives to avoid risk. To study this issue, which is particularly relevant for developing economies, we designed a novel real-effort lab experiment and conducted it in 16 small villages in rural Mexico. We fi nd that subjects internalize the effects of transfers enough for the presence of transfers to signi cantly increase e¤ort compared to autarky situations.
    Keywords: informal insurance, effort, moral hazard, free-riding effect, empathy effect
    JEL: C93 D64 O12
    Date: 2016–02
  4. By: Falk, Armin; Szech, Nora
    Abstract: As was recognized by Bentham, skillfulness is an important source of pleasure. Humans like achievement and to excel in tasks relevant to them. This paper provides controlled experimental evidence that striving for pleasures of skill can have negative moral consequences and causally reduce moral values. In the study, subjects perform an IQ-test. They know that each correctly solved question not only increases test performance but also the likelihood of moral transgression. In terms of self-image, this creates a trade-off between signaling excellence and immoral disposition. We contrast performance in the IQ-test to test scores in an otherwise identical test, which is, however, framed as a simple questionnaire with arguably lower self-relevance. We find that subjects perform significantly better in the IQ-test condition, and thus become more willing to support morally problematic consequences. Willingness to reduce test performance in order to behave more morally is significantly less pronounced in the IQ versus the more neutral context. The findings provide controlled and causal evidence that the desire to succeed in a challenging, self-relevant task has the potential to seduce subjects into immoral behaviors and to significantly decrease values attached to moral outcomes.
    Date: 2016
  5. By: Warn N. Lekfuangfu; Nattavudh Powdthavee; Andrew E. Clark; George Ward
    Abstract: We analyse the relationship between early maternal employment and child emotional and behavioural outcomes in early childhood and adolescence. Using rich data from a cohort of children born in the UK in the early 1990s, we find little evidence of a strong statistical relationship between early maternal employment and any of the emotional outcomes. However, there is some evidence that children whose mother is in full-time employment at the 18th month have worse behavioural outcomes at ages 4, 7, and 12.We suggest that these largely insignificant results may in part be explained by mothers who return tofull-time work earlier being able to compensate their children: we highlight the role of fathers’ time investment and alternative childcare arrangements in this respect.
    Keywords: child outcomes; maternal employment; well-being; conduct; ALSPAC
    JEL: D1 I1 J6
    Date: 2015–10
  6. By: Marc Höglinger; Ben Jann
    Abstract: Social desirability and the fear of negative consequences often deter a considerable share of survey respondents from responding truthfully to sensitive questions. Thus, resulting prevalence estimates are biased. Indirect techniques for surveying sensitive questions such as the Randomized Response Technique are intended to mitigate misreporting by providing complete concealment of individual answers. However, it is far from clear whether these indirect techniques actually produce more valid measurements than standard direct questioning. In order to evaluate the validity of different sensitive question techniques we carried out an online validation experiment at Amazon Mechanical Turk in which respondents' self-reports of norm-breaking behavior (cheating in dice games) were validated against observed behavior. This document describes the design of the validation experiment and provides details on the questionnaire, the different sensitive question technique implementations, the field work, and the resulting dataset. The appendix contains a codebook of the data and facsimiles of the questionnaire pages and other survey materials.
    Keywords: Online Survey, Amazon Mechanical Turk, Sensitive Questions, Randomized Response Technique, Crosswise Model, Dice Game, Validation
    JEL: C81 C83
    Date: 2016–02–15
  7. By: Fochmann, Martin; Jahnke, Bjoern; Wagener, Andreas
    Abstract: Reliable institutions - i.e., institutions that live up to the norms that agents expect them to keep - foment cooperative behavior. We experimentally confirm this hypothesis in a public goods game with a salient norm that cooperation was socially demanded and corruption ought not to occur. When nevertheless corruption attempts came up, groups that were told that "the system" had fended off the attempts made considerably higher contributions to the public good than groups that only learned that the attempt did not affect their payoffs or that were not at all exposed to corruption.
    Keywords: Public goods, Experiment, Institutions
    JEL: H41 A13 C91
    Date: 2016–02
  8. By: Jaikumar, Saravana; Sahay, Arvind
    Abstract: The context in which a product is seen has an impact on the behavior of consumers. Specifically the impact of the context provided by the most and least extreme values, i.e., the range of stimuli presented has been well documented. In the price context, the range theory posits that an individual's evaluation of a product's price depends on the range of prices observed. Prior research on range theory has demonstrated the effect of a single price distribution (by varying the range and frequency of values within the distribution) on consumer product and price evaluations. In this research, we examine a more realistic situation in which a consumer has to evaluate a product's price in the presence of two or more price distributions whose anchors (end points) may overlap. A consumer has to take into account two or more end points simultaneously to make judgments. Based on the tenets of regret theory, we develop 'the overlapping ranges hypotheses' and design a series of experiments to p;rovide empirical evidence. We propose using the 'eye-tracking method' as a tool to illustrate the cognitive process in evaluating the overlapping price ranges. We develop a boundary condition for the 'overlapping ranges hypotheses' and argue that goal-directed behavior will inhibit the consumer from considering multiple ranges simultaneously. Finally, we consider multiple attributes of a product and take into account attribute tradeoffs across price ranges. Across four studies we provide consistent experimental evidence supporting our hypotheses.
  9. By: Dimant, Eugen
    Abstract: Social interactions and the resulting peer effects loom large in both economic and social contexts. This is particularly true for the spillover of (un)ethical behavior in explaining how behavior and norms spread across individual people, neighborhoods, or even cultures. Although we understand and observe the outcomes of such contagion effects, little is known about the drivers and the underlying mechanisms, especially with respect to the role of social identity with one’s peers and the (un)ethicality of behavior one is exposed to. We use a variant of a give-or-take dictator game to shed light on these aspects in a con-trolled laboratory setting. Our experiment contributes to the existing literature in two ways: first, using a novel approach of inducing social identification with one’s peers in the lab, our design allows us to analyze the spillover-effects of (un)ethical behavior under varied levels of social identification. Second, we study whether contagion of ethical behavior differs from contagion of unethical behavior. Our results suggest that a) unethical behavior is more contagious, and b) social identification with one’s peers and not the (un)ethicality of observed behavior is the main driver of behavioral contagion. Our findings are particularly important from a policy perspective both in order to foster pro-social and mitigate deviant behavior.
    Keywords: Conformity, Behavioral Contagion, Peer effects, Social Identity, Unethical Behavior
    JEL: D03 D73 D81
    Date: 2015–12–28
  10. By: Elena Molis (Department of Economic Theory and Economic History, University of Granada.); Levent Neysey (Kiel Institute for the World Economy); Raul Peña-Fernandez (University of Granada)
    Abstract: In a public goods game, it is usually assumed that people only consider their private returns when contributing to public goods. However, individuals in a same society may benefit from a public project differently. As a result, their willingness to contribute may vary. We experimentally analyze individuals contribution behavior in a repeated public goods game, where participants are categorized in two types, low or high, according with the returns they derive from the public good. In our design we consider different group formations, homogeneous and heterogeneous. All the members of a homogeneous group benefit from the public good equally, while in a heterogeneous group, the return levels are not equally distributed among the members. We show that the dif- ferences in contributions between the two types of players are larger in heterogeneously formed groups than the homogeneous ones, although the contribution differences are insignificant on ag- gregate level. These results underline the social aspect of public good provision and suggest that aggregation may misleadingly cover heterogeneities in the societies.
    Keywords: Public Goods, Heterogeneity, Group Effects, Marginal per Capita Returns
    JEL: C90 H41 D80
    Date: 2016–02–15
  11. By: Peter A. Savelyev (Vanderbilt University, Department of Economics)
    Abstract: Based on the 1922–1991 Terman data of children with high ability, I investigate the effects of childhood psychological skills and post-compulsory education on longevity. I identify causal effects and account for measurement error using factor-analytic methodology (Heckman et al., 2006). Latent class analysis supports the causal interpretation of results. For males, I find strong effects of psychological skills and education on longevity and an interaction between personality and education. Results are in line with the IV literature. For females, who are born around 1910 and live longer than men, I find no effects of education and personality on longevity.
    Keywords: longevity, survival function, life expectancy, value of longevity, post-compulsory education, IQ, personality skills, Big Five, average treatment effect, Terman Data of Children with High Ability, gender difference
    JEL: I1 C1
    Date: 2014–08–04

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