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on Cognitive and Behavioural Economics |
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Issue of 2016‒12‒18
eleven papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Morone, Andrea; Temerario, Tiziana |
| Abstract: | The recent literature on individual and group choices over risk has led to different results. In some studies under unanimity, groups were found to be less risk averse than individuals, while those under majority did not highlight significant differences. However, both the types of studies impose the decision rule to the group. In the present work we elicited groups’ preference under risk using a consensus rule, i.e. groups are free to solve disagreement endogenously, just as in the real life. Results from our pairwise choices experiment shows that when group members are free to use any rule they want in order to reach unanimity, there is no statistical difference between individuals’ and groups’ risk aversion. |
| Keywords: | Group Preferences,Risk,Individual Preferences,Lab |
| JEL: | C9 C90 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:148357&r=cbe |
| By: | Alisa Frik; Luigi Mittone |
| Abstract: | We created a model of factors influencing Internet users' trustworthiness perceptions and purchase intentions. Using focus group we calibrated the list of websites' attributes that represent those factors. Then we ran an online survey with 117 adult participants to validate the research model. We found that privacy (including awareness, information collection and control practices), security, and reputation (including background and feedback) have strong effect on trust and willingness to buy, while website quality plays a marginal role. While generally trustworthiness perceptions and purchase intention are positively correlated, in some cases participants were likely to purchase from the websites that they judged as untrustworthy. We discuss how behavioral biases, and decision-making heuristics may explain this discrepancy between perceptions and behavioral intentions. Finally, we analyze and suggest what factors, particular websites' attributes, and individual characteristics have the strongest effect on hindering or advancing customers' trust and willingness to buy. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:1609&r=cbe |
| By: | Joy A. Buchanan (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Matthew K. McMahon (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Matthew Simpson (Department of Statistics, University of Missouri - Columbia); Bart J. Wilson (Economic Science Institute, Chapman University) |
| Abstract: | We investigate the degree to which people in a shopping mall express other-regarding behavior in the dictator game. Whereas many studies have attempted to increase the social distance between the dictator and experimenter and between the dictator and dictatee, we attempt to minimize that social distance between random strangers by video recording the decisions with the permission of the dictators to display their image on the Internet. Offers made by dictators are high relative to other experiments and a nontrivial number give the entire experimental windfall away, however a nontrivial number of people keep everything as well. |
| Keywords: | experimental economics, social distance, dictator game |
| JEL: | A13 C70 C93 D63 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1061&r=cbe |
| By: | Wilson, Norbert L.W.; Rickard, Bradley J.; Saputo, Rachel; Ho, Shuay-Tsyr |
| Abstract: | The presence of food waste, and ways to reduce food waste, has generated significant debate among industry stakeholders, policy makers, and consumer groups in the United States and elsewhere. Many have argued that the variety of date labels used by food manufacturers leads to confusion about food quality and food safety among consumers. Here we develop a laboratory experiment with treatments that expose subjects to different date labels (Sell by, Best by, Use by, and Fresh by) for six food products; we include both small and large-sized ready-to-eat cereal, salad greens, and yogurt. Our results show that, holding other observed factors constant, that date labels do influence subjects’ value of food waste. We find that subjects will waste food across all date labels, but that the value of waste is greatest in the “Use by” treatment, the date label suggestive of food safety, and lowest for the “Sell by” treatment. Two-way ANOVA tests provide evidence that subjects respond differentially to date labels by product. Pair-wise comparison indicate that the “Sell by” treatment generates a waste value that is different than other date labels. We see subjects have different values of waste depending on date label and product. The value of waste for cereal is more responsive to “Fresh by”; for salad, the value of waste is more responsive to all date labels except for “Fresh by”; for yogurt, subjects adjusted their value of waste the most to the “Sell by” treatment. Date labels influence food waste despite the limited information provided by the labels. |
| Keywords: | Consumer preferences, Date labels, Experimental economics, Food quality, Food safety, Public policy analysis, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Q13, Q18, |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudawp:250016&r=cbe |
| By: | Pietro Battiston; Simona Gamba |
| Abstract: | We study the behavior of individuals coming from different geographic regions of Italy, in a same public good game. We confirm previous findings according to which, faced with the same incentives and experimental conditions, Southern citizens exhibit a lower propensity to cooperate than Northern ones. This difference is mainly explained by a gap in the impact of coordination devices available to participants, as we show by manipulating them. Most importantly, when subjects with different geographic origins are teamed up together, their contributions decrease with respect to homogeneous groups, again because of a reduced effect of coordination devices. These findings reinforce the interpretation of the Italian South-North divide as related to trust, prejudice and a consequent path-dependence in levels of social capital, rather than due to the mere effect of differences in institutions and economic opportunities. |
| Keywords: | public good, cooperation, social capital, cultural differences, laboratory experiment |
| Date: | 2016–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/41&r=cbe |
| By: | Morone, Andrea; Temerario, Tiziana |
| Abstract: | We analysed dyads strategies in one-shot public goods game. By means of a laboratory experiment, using a variant of the strategy-method, we found that more than one third of the dyads are conditional cooperators, whereas 18% can be categorised as free riders. |
| Keywords: | Voluntary contributions,Conditional cooperation,Free riding,Strategy-method |
| JEL: | H41 C91 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:148356&r=cbe |
| By: | Federico Favaretto; Donato Masciandaro |
| Abstract: | Can the inertia in the monetary policymaking be attributed to psychological drivers? Our model shows two results. First, our baseline model with individual loss aversion explains inertia in a monetary policy committee (MPC) where holds a de jure majority rule. Second, our second model shows that introducing a specication of loss aversion for all members in a MPC leads to inertial decisions when status-quo ination is below the ination target. Conversely when status-quo ination is above the target rate, inertial policy does not occur until the level of ination discounts the loss aversion mechanism. In the framework of a hawk-dove dimension we conclude that loss aversion favors inertial monetary policy. |
| Keywords: | Monetary Policy, Behavioral Economics |
| JEL: | D7 E5 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp1617&r=cbe |
| By: | M. Bigoni; S. Bortolotti; F. Parisi; A. Porat |
| Abstract: | Current law and economics scholarship analyzes efficient breach cases monolithically. The standard analysis holds that breach is efficient when performance of a contract generates a negative total surplus for the parties. However, by simplistically grouping efficient breach cases as of a single kind, the prior literature overlooks that gainseeking breaches might be different from loss-avoiding breaches. To capture these different motives, we designed a novel game called Contract-Breach Game where we exogenously varied the reasons for the breach — pursuing a gain or avoiding a loss — under a specific performance remedy. Results from an incentivized laboratory experiment indicate that the motives behind the breach induce sizable differences in behavior; subjects are less willing to renegotiate when facing gain-seeking than loss-avoiding breaches, and the compensation premium obtained by the promisee is higher. Our analysis suggests that inequality aversion is an important driver of our results; indeed, inequality-averse subjects accept low offers more often in cases of loss-avoiding breaches than gain-seeking breaches. These results give us insight into the preferences and expectations of ordinary people in a case of a breach. |
| JEL: | K12 D86 C9 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1088&r=cbe |
| By: | Eva M. Berger (Johannes Gutenberg University Mainz); Guenther Koenig; Henning Mueller (Johannes Gutenberg University Mainz); Felix Schmidt (Johannes Gutenberg University Mainz); Daniel Schunk (Johannes Gutenberg University Mainz) |
| Abstract: | Recent evidence suggests that self-regulation plays an important role for labor market success. We conduct a randomized ?eld experiment embedded in an existing labor market reactivation program to examine the effect of a self-regulation training on long-term unemployed individuals. First, we ?nd a positive treatment effect on the quality of submitted CVs. Second,there is no overall treatment effect on (short-term) labor market reintegration, but heterogeneous effects with respect to participants’ Locus of Control that are consistent with psychological theory. The low costs of our intervention suggest high individual and social rates of return from a roll-out to other programs. |
| Keywords: | Active Labor Market Policy, Natural Field Experiment, Germany, Labor Market Reintegration, Unemployment, Reemployment, Self-Regulation, Locus of Control, Non-Cognitive Skills |
| JEL: | C93 J24 J64 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1622&r=cbe |
| By: | Eva M. Berger (Johannes Gutenberg University Mainz); Luke Haywood (DIW Berlin (Deutsches Institut für Wirtschaftsforschung)) |
| Abstract: | This paper investigates the effect of locus of control (LOC) on the length of mothers’ employment break after childbirth. Using data from the German Socio-Economic Panel Study (SOEP), duration data reveals that women with an internal LOC return to employment more quickly than women with an external LOC.We ?nd that this effect is particularly pronounced in jobs in which the penalties in terms of lower wage growth are highest. We thus argue that the effect of LOC on return is mainly related to differential appreciation of the career costs of longer maternity leave. |
| Keywords: | Locus of Control, Noncognitive Skills, Personality, Maternal Employment, Female Labor Supply, Survival Analysis |
| JEL: | J22 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1614&r=cbe |
| By: | David Huffman (University of Pittsburgh); Raimond Maurer (Goethe University); Olivia S. Mitchell (The Wharton School of the University of Pennsylvania) |
| Abstract: | This research project evaluates the extent of heterogeneity in time discounting among elderly Americans, as well as its role in explaining older peoples’ key behaviors. We first show how older Americans evaluate simple (hypothetical) intertemporal choices in which payments now are compared with payments in the future. This adds to the literature on time horizon experiments by focusing on a nationally representative sample of persons age 70+. Using the indicators derived from this experiment, we show how differences in discounting patterns are associated with characteristics of particular importance in elderly populations, such as serious health and mental conditions. We then relate our discounting measure to key outcome variables including wealth, the timing of retirement, investments in health, and decisions about end-of-life care. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp347&r=cbe |