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on Cognitive and Behavioural Economics |
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Issue of 2016‒03‒10
eleven papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Armin Falk (Universität Bonn); Anke Becker (Bonn Graduate School of Economics); Thomas Dohmen (Universität Bonn); David Huffman (University of Pittsburgh); Uwe Sunde (University of Munich) |
| Abstract: | This paper presents an experimentally validated survey module to measure six key economic preferences { risk aversion, discounting, trust, altruism, positive and negative reciprocity in a reliable, parsimonious and cost-effective way. The survey instruments included in the module were the best predictors of preferences revealed in incentivized choice experiments. We also offer a streamlined version of the module that has been optimized and piloted for applications where time efficiency and simplicity are paramount, such as international telephone surveys. |
| Keywords: | survey validation, experiment, preference measurement |
| JEL: | C81 C83 C90 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-003&r=cbe |
| By: | Burks, Stephen V. (University of Minnesota, Morris); Nosenzo, Daniele (University of Nottingham); Anderson, Jon E. (University of Minnesota, Morris); Bombyk, Matthew (Innovations for Poverty Action); Ganzhorn, Derek (Northwestern University); Götte, Lorenz (University of Bonn); Rustichini, Aldo (University of Minnesota) |
| Abstract: | We measure a specific form of other-regarding behavior, costly cooperation with an anonymous other, among 645 subjects at a trucker training program in the Midwestern US. Using subjects' second-mover strategy in a sequential form of the Prisoners' Dilemma, we categorize subjects as: Free Rider, Conditional Cooperator, and Unconditional Cooperator. We observe the subjects on the job for up to two years afterwards in two naturally-occurring choices – whether to send two types of satellite uplink messages from their trucks. The first identifies trailers requiring repair, which benefits fellow drivers, while the second benefits the experimenters by giving them some follow-up data. Because of the specific nature of the technology and job conditions (which we carefully review) each of these otherwise situationally similar field decisions represents an act of costly cooperation towards an anonymous other in a setting that does not admit of repeated-game or reputation-effect explanations. We find that individual differences in costly cooperation observed in the lab do predict individual differences in the field in the first choice but not the second. We suggest that this difference is linked to the difference in the social identities of the beneficiaries (fellow drivers versus experimenters), and we conjecture that whether or not individual variations in pro-sociality generalize across settings (whether in the lab or field) may depend in part on this specific contextual factor: whether the social identities, and the relevant prescriptions (or norms) linked to them that are salient for subjects (as in Akerlof and Kranton (2000); (2010)), are appropriately parallel. |
| Keywords: | experiments, generalizability, external validity, parallelism, social identity, other-regarding behavior, costly cooperation, social preferences, prisoners' dilemma, trucker, truckload |
| JEL: | B4 C9 D03 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9767&r=cbe |
| By: | Armin Falk (Universität Bonn); Anke Becker (Bonn Graduate School of Economics); Thomas Dohmen (Universität Bonn); Benjamin Enke (University of Bonn); David Huffman (University of Pittsburgh); Uwe Sunde (University of Munich) |
| Abstract: | This paper presents the Global Preference Survey, a globally representative dataset on risk and time preferences, positive and negative reciprocity, altruism, and trust. We collected these preference data as well as a rich set of covariates for 80,000 individuals, drawn as representative samples from 76 countries around the world, representing 90 percent of both the world’s population and global income. The global distribution of preferences exhibits substantial variation across countries, which is partly systematic: certain preferences appear in combination, and follow distinct economic, institutional, and geographic patterns. The heterogeneity in preferences across individuals is even more pronounced and varies systematically with age, gender, and cognitive ability. Around the world, our preference measures are predictive of a wide range of individual-level behaviors including savings and schooling decisions, labor market and health choices, prosocial behaviors, and family structure. We also shed light on the cultural origins of preference variation around the globe using data on language structure. |
| Keywords: | economic preferences, cultural variations |
| JEL: | D01 D03 F00 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-004&r=cbe |
| By: | Salar Jahedi (RAND Corporation); Cary Deck (University of Arkansas, University of Alaska-Anchorage, Chapman University); Dan Ariely (Duke University) |
| Abstract: | Previous experiments have found that subjecting participants to cognitive load leads to poorer decision making, consistent with dual-system models of behavior. Rather than taxing the cognitive system, this paper reports the results of an experiment that takes a complementary approach: arousing the emotional system. The results indicate that exposure to arousing visual stimuli as compared to neutral images has a negligible impact on performance in arithmetic tasks, impatience, risk taking in the domain of losses, and snack choice although we nd that arousal modestly increases in risk-taking in the gains domain and increases susceptibility to anchoring e ects. We nd the ef- fect of arousal on decision making to be smaller and less consistent then the e ect of increased cognitive load for the same tasks. |
| Keywords: | Dual System, Sexual Arousal, Impatience, Risk Taking, Behavioral Economics |
| JEL: | C91 D03 D81 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-02&r=cbe |
| By: | Caroline J. Charpentier; Jan-Emmanuel De Neve; Jonathan P. Roiser; Tali Sharot |
| Abstract: | Intuitively, how we feel about potential outcomes will determine our decisions. Indeed, one of the most influential theories in psychology, Prospect Theory, implicitly assumes that feelings govern choice. Surprisingly, however, we know very little about the rules by which feelings are transformed into decisions. Here, we characterize a computational model that uses feelings to predict choice. We reveal that this model predicts choice better than existing value-based models, showing a unique contribution of feelings to decisions, over and above value. Similar to Prospect Theory value function, feelings showed diminished sensitivity to outcomes as value increased. However, loss aversion in choice was explained by an asymmetry in how feelings about losses and gains were weighed when making a decision, not by an asymmetry in the feelings themselves. The results provide new insights into how feelings are utilized to reach a decision. |
| Keywords: | Decision-making, feelings, subjective well-being, value, utility, Prospect Theory |
| JEL: | D01 D03 D81 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1408&r=cbe |
| By: | Knowles, Stephen; Servátka, Maroš; Sullivan, Trudy |
| Abstract: | We conduct a field experiment to analyze the effect of deadline length on charitable tasks. Participants are invited to complete an online survey, with a donation going to charity if they do so. Participants are given either one week, one month or no deadline by which to respond. Completions are lower for the one month deadline, than for the other two treatments, consistent with the model of inattention developed in Taubinsky (2014) and also with the idea that not specifying a deadline conveys urgency. |
| Keywords: | charitable tasks; charitable giving; deadline; procrastination; inattention; field experiment |
| JEL: | C93 D64 |
| Date: | 2016–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69621&r=cbe |
| By: | Dasgupta, Utteeyo (Wagner College); Mani, Subha (Fordham University); Sharma, Smriti (UNU-WIDER); Singhal, Saurabh (UNU-WIDER) |
| Abstract: | Field constraints often necessitate choosing an elicitation task that is intuitive, easy to explain, and simple to implement. Given that subject behavior often differs dramatically across tasks when eliciting risk preferences, caution needs to be exercised in choosing one risk elicitation task over another in the face of field constraints. We compare behavior in the simple most investment game (Gneezy and Potters 1997) and the ordered lottery choice game (Eckel and Grossman 2002) to evaluate whether the simpler task allows us to elicit attitudes consistent with those elicited from the ordered lottery task. Using a sample of over 2000 Indian undergraduate students, we find risk attitudes to be fairly stable across the two tasks. Our results further indicate that the consistency of risk attitudes across the tasks depends on gender of the subject, quantitative skills, father's education level, and dispositional factors such as locus of control and Big Five personality traits. |
| Keywords: | risk preferences, experiment design, elicitation methods, personality traits, India |
| JEL: | C91 C81 D81 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9765&r=cbe |
| By: | Klajdi Bregu (University of Arkansas); Cary Deck (University of Arkansas, Chapman University, University of Alaska-Anchorage); Lindsay Ham (University of Arkansas); Salar Jahedi (RAND Corporation) |
| Abstract: | It is notoriously hard to study the effect of alcohol on decision making, given the selection that takes place in who drinks alcohol and when they choose to do so. In a controlled laboratory experiment, we study the causal effect of alcohol on economic decision making. We examine the impact of alcohol on the following types of tasks: math and logic, uncertainty, overcon dence, strategic games, food choices, anchoring, and altruism. Our results indicate that alcohol consumption, as measured by the blood alcohol concentration (BAC), increases cooperation in strategic settings and altruism in Dictator games. We do not find any effects of alcohol on individual decision making tasks with the exception of anchoring. People with higher BAC did better in the anchoring task. The results suggest that the effects of alcohol are domain specifc. |
| Keywords: | Alcohol, Risk Taking, Overconfidence, Altruism, Behavioral Economics |
| JEL: | C91 D03 D81 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-03&r=cbe |
| By: | Heinz, Matthias; Normann, Hans-Theo; Rau, Holger A. |
| Abstract: | We show that choices in competitive behavior may entail a gender wage gap. In our experi ments, employees first choose a remuneration scheme (competitive tournament vs. piece rate) and then conduct a real-effort task. Employers know the pie size the employee has generated, the remuneration scheme chosen, and the employee's gender. Employers then decide how the pie will be split, as in a dictator game. Whereas employers do not discriminate by gender when tournaments are chosen, they take substantially and significantly more from female employees who choose piece-rate remuneration. A discriminatory wage gap occurs which cannot be attributed to employees' performance. |
| Keywords: | dictator game,discrimination,gender wage gap,laboratory experiment,real-effort task |
| JEL: | C91 J16 M52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:213&r=cbe |
| By: | Nicolas Houy (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Jean-Philippe Nicolaï (ETH Zürich, Chair of Integrative Risk Management and Economics, Zurichbergstrasse 18, 8032 Zürich); Marie Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France) |
| Abstract: | Achieving an ambitious goal frequently requires succeeding in a sequence of intermediary tasks, some being critical for the final outcome, and others not. Individuals are not always able to provide a level of effort sufficient to guarantee success in all the intermediary tasks. The ability to manage effort throughout the sequence of tasks is therefore critical. In this paper we propose a criterion that defines the importance of a task and that identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals’ performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability to achieve the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures. |
| Keywords: | Critical ability, choking under pressure, Morris-importance, Skin Conductance Responses, experiment |
| JEL: | C72 C92 D81 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1609&r=cbe |
| By: | Nicolas Houy (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 - Centre National de la Recherche Scientifique); Jean-Philippe Nicolaï (Eidgenössische Technische Hochschule Zürich - ETHZ (SWITZERLAND)); 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 - Centre National de la Recherche Scientifique) |
| Abstract: | Achieving an ambitious goal frequently requires succeeding in a sequence of intermediary tasks, some being critical for the final outcome, and others not. Individuals are not always able to provide a level of effort sufficient to guarantee success in all the intermediary tasks. The ability to manage effort throughout the sequence of tasks is therefore critical. In this paper we propose a criterion that defines the importance of a task and that identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals' performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability to achieve the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures. |
| Keywords: | C ritical ability, choking under pressure, Morr is - importance, Skin Conductance Responses, experiment |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01277982&r=cbe |