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on Cognitive and Behavioural Economics |
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Issue of 2016‒08‒21
ten papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Anya Samek; James Cox; John List; Michael Price; Vjollca Sadiraj |
| Abstract: | The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics - the contraction axiom - within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theory also organizes the broader sharing patterns in the received literature. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00445&r=cbe |
| By: | Lucks, Konstantin |
| Abstract: | This paper explores how reduced self-control affects individual investment behavior in two laboratory tasks. For this purpose, I exogenously reduce subjects’ self-control using a well-established psychological treatment. In each task, I find no significant main treatment effect, but secondary effects consistent with findings on self-control from other studies and self-control’s potential relevance in financial markets. In experiment 1, I find no significant change in the disposition effect following the manipulation. However, treated participants trade fewer different shares per round. In experiment 2, I look at the effect of self-control on myopic loss aversion by implementing a 2×2 design by varying investment horizon and self-control in a repeated lottery environment. Average behavior suggests that reduced self-control increases framing effects, but I cannot reject the null hypothesis of equal investment levels between the self-control treatments within each investment frame. Analyzing the dynamics of decision making in more detail, self-control depleted participants in the narrow frame reduce their investment levels on average over time which seems to be driven by more intense reactions to investment experiences. |
| Keywords: | Self-control, loss aversion, disposition effect, trade clustering, myopic loss aversion |
| JEL: | D53 D81 G02 G11 |
| Date: | 2016–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73099&r=cbe |
| By: | Alex Imas; Anya Samek; Sally Sadoff |
| Abstract: | There is growing interest in the use of loss contracts that offer performance incentives as upfront payments that employees can lose. Standard behavioral models predict a tradeoff in the use of loss contracts: employees will work harder under loss contracts than under gain contracts; but, anticipating loss aversion, they will prefer gain contracts to loss contracts. In a series of experiments, we test these predictions by measuring performance and preferences for payoff-equivalent gain and loss contracts. We find that people indeed work harder under loss than gain contracts, as the theory predicts. Surprisingly, rather than a preference for the gain contract, we find that people actually prefer loss contracts. In exploring mechanisms for our results, we find suggestive evidence that people do anticipate loss aversion but select into loss contracts as a commitment device to improve performance. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00415&r=cbe |
| By: | Anya Samek; John List; Terri Zhu |
| Abstract: | We use a field experiment to investigate the effect of incentives on food purchase decisions at a grocery store. We recruit over 200 participants and track their purchases for a period of 6 months, permitting us a glimpse of more than 3,500 individual shopping trips. We randomize participants to one of several treatments, in which we incentivize fresh fruit and vegetable purchases, provide tips for fruit and vegetable preparation, or both. We report several key insights. First, our informational content treatment has little effect. Second, we find an important price effect: modest pecuniary incentives more than double the proportion of dollars spent on produce in the grocery store. Third, we find an interesting pattern of consumption after the experiment ends: even when incentives are removed, the treatment group has higher fruit and vegetable purchases compared to the control group. These long-term results are in stark contrast to either a standard price model or a behavioral model of 'crowd out.' Rather, our results are consonant with a habit formation model. This opens up the distinct possibility that short term incentives can be used as a key instrument to combat obesity. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00421&r=cbe |
| By: | Anya Samek; Daniel Houser; Joachim Winter; John List; Marco Piovesan |
| Abstract: | Acts of dishonesty permeate life. Understanding their origins, and what mechanisms help to attenuate such acts is an underexplored area of research. This study takes an economics approach to explore the propensity of individuals to act dishonestly across different contexts. We conduct an experiment that includes both parents and their young children as subjects, exploring the roles of moral cost and scrutiny on dishonest behavior. We find that the highest level of dishonesty occurs in settings where the parent acts alone and the dishonest act benefits the child. In this spirit, there is also an interesting, quite different, effect of children on parents' behavior: parents act more honestly under the scrutiny of daughters than under the scrutiny of sons. This finding sheds new light on the origins of the widely documented gender differences in cheating behavior observed among adults, where a typical result is that females are more honest than males. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00418&r=cbe |
| By: | Anya Samek; Inkyoung Hur; Ji Soo Yi; Sung-Hee Kim |
| Abstract: | We investigate the effect of different interactive technologies on the decision-making process in an information search laboratory experiment. In our experiment, the participant makes a selection from a list of differently-valued objects with multiple attributes. We compare presenting information in static form to two methods of interactive presentation. In the first, the participant can manually sort objects by attribute, a capability similar to that found in spreadsheet software. In the second, we present an interactive visual tool that (1) automatically sorts all objects by attribute and (2) uses visual cues for comparisons. Manual sorting capability does not cause an improvement in decisions in this context. On the other hand, the visual tool increases the value of the objects selected by the participant and decreases time spent deliberating. We also find that our interactive presentations affect the decision-making process of participants by changing the number of intermediate options considered. Our results highlight the importance of investigating the effect of technology on information search, and suggest that appropriate interactive visual displays may improve search in practice. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00427&r=cbe |
| By: | Anya Samek; Heather Royer; Manuela Angelucci; Silvia Prina |
| Abstract: | How do peers influence the impact of incentives? Despite much work on incentives, little is known about the spillover effects of incentives. We investigate two mechanisms by which these effects can occur: through peers' actions and peers' incentives. In a field experiment on snack choice (grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers' choices are incentivized among over 1,500 children in the school lunchroom. Incentives increase the likelihood of initially choosing grapes. However, peer spillover effects can be large enough to undo these positive effects. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00444&r=cbe |
| By: | Anya Samek |
| Abstract: | The rising childhood obesity rate calls for interventions aimed at improving child food choice, and one recent innovation is the use of behavioral 'nudges.' We conducted a field experiment with over 1,400 children to measure the impact of interventions based on two behavioral theories: reciprocity and theories of self-control. The interventions were implemented in the classroom prior to observing choices between a healthy and less healthy milk choice in the cafeteria. We found that small, unconditional gifts (triggering reciprocity) increased the choice of the healthier milk by 15 percentage points relative to a control group. Giving the option to set a goal (an internal commitment device) was most effective for the younger children and increased the choice of the healthier milk by 10 percentage points. About two thirds of children made a goal to select the healthier milk, and almost 90 percent followed through with their goal. We also see an impact of health information delivered by teachers. Our results have implications for policy and practice, since low cost interventions implemented at school may have an impact on what kids choose to eat and in turn on obesity rates. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00433&r=cbe |
| By: | Anya Samek; Charles Sprenger; Sally Sadoff |
| Abstract: | We conduct a natural field experiment with over 200 customers at a grocery store to investigate dynamic inconsistency and the demand for commitment in food choice. Subjects are invited to allocate and re-allocate food items received as part of a grocery delivery program. We observe substantial dynamic inconsistency, as well as a demand for commitment among a non-negligible number of subjects. Interestingly, individuals who demand commitment are more likely to be dynamically consistent in their prior behavior. This work provides direct evidence of dynamic inconsistency in consumption choices in the field and points towards potential extensions to models of temptation. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00417&r=cbe |
| By: | Jung, Seeun (Inha University); Choe, Chung (Hanyang University); Oaxaca, Ronald L. (University of Arizona) |
| Abstract: | In addition to discrimination, market power, and human capital, gender differences in risk preferences might also contribute to observed gender wage gaps. We conduct laboratory experiments in which subjects choose between a risky (in terms of exposure to unemployment) and a secure job after being assigned in early rounds to both types of jobs. Both jobs involve the same typing task. The risky job adds the element of a known probability that the typing opportunity will not be available in any given period. Subjects were informed of the exogenous risk premium being offered for the risky job. Women were more likely than men to select the secure job, and these job choices accounted for between 40% and 77% of the gender wage gap in the experiments. That women were more risk averse than men was also manifest in the Pratt-Arrow Constant Absolute Risk Aversion parameters estimated from a random utility model adaptation of the mean-variance portfolio model. |
| Keywords: | occupational choice, gender wage differentials, risk aversion, lab experiment |
| JEL: | J16 J24 J31 C91 D81 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10132&r=cbe |