nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2017‒02‒12
twelve papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Consumer inattention, heuristic thinking and the role of energy labels By Andor, Mark; Gerster, Andreas; Sommer, Stephan
  2. When does it matter how you ask? Cross-subject heterogeneity in framing effects in a charitable donation experiment By David Fielding; Stephen Knowles; Kirsten Robertson
  3. Moral Costs and Rational Choice: Theory and Experimental Evidence By James C. Cox; John A. List; Michael Price; Vjollca Sadiraj; Anya Samek
  4. Decision structure of risky choice By Lamb Wubin; Naixin Ren
  5. An online experiment on cooperation and groupishness across urban districts By Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
  6. Nudging à la carte – A field experiment on food choice By Gravert, Christina; Kurz, Verena
  7. In Your Eyes Only? Discrepancies and Agreement Between Self- and Other-Reports of Personality From Age 14 to 29 By Julia Rohrer; Boris Egloff; Michal Kosinski; David Stillwell; Stefan Schmukle
  8. The Behavioralist as Policy Designer: The Need to Test Multiple Treatments to Meet Multiple Targets By Robert Hahn; Robert D. Metcalfe; David Novgorodsky; Michael K. Price
  9. It's your turn: experiments with three-player public good games By Riyanto, Yohanes E.; Roy, Nilanjan
  10. Emotion at Stake – The role of stake size and emotions in a power-to-take game experiment in China with a comparison to Europe By Hennig-Schmidt, Heike; Bosman, Ronald; van Winden, Frans
  11. Altruistic Norm Enforcement and Decision-Making Format in a Dilemma: Experimental Evidence By Kamei, Kenju
  12. Clean up your own mess: An experimental study of moral responsibility and efficiency By Jakob, Michael; Kübler, Dorothea; Steckel, Jan Christoph; van Velduizen, Roel

  1. By: Andor, Mark; Gerster, Andreas; Sommer, Stephan
    Abstract: Energy labels have been introduced in many countries to increase consumers' attention to energy use in purchase decisions of durables. In a discrete-choice experiment among about 5,000 households, we implement randomized information treatments to explore how energy labels influence purchasing decisions. Our results show that adding annual operating cost information to the EU energy label promotes the choice of energy-efficient durables. In addition, we find that a majority of participants value efficiency classes beyond the economic value of the underlying energy use differences. Our results further indicate that displaying operating cost affects choices through two distinct channels: it increases the attention to operating cost and reduces the valuation of efficiency class differences.
    Keywords: environmental certification,discrete choice experiment,energy efficiency,energy-using durables
    JEL: D03 D12 D83 Q48 Q50
    Date: 2017
  2. By: David Fielding (Department of Economics, University of Otago, New Zealand); Stephen Knowles (Department of Economics, University of Otago, New Zealand); Kirsten Robertson (Department of Marketing, University of Otago, New Zealand)
    Abstract: In this paper we present results from an experiment that draws on insights from economics on different possible incentives for generosity and insights from social psychology on different possible personality types. Firstly, we test whether the effect of an appeal to a pure altruism motive versus an appeal to a self-interest motive varies across subjects. We find that there is substantial variation, and this variation is strongly correlated with a subject’s level of materialism. Secondly, we test whether spoken appeals and written appeals have different effects. We find no evidence for such a difference. These results have important implications for the fundraising strategies of charities and for experimental design.
    Keywords: Altruism, Self-Interest, Dictator Game, Materialism
    JEL: D64 M31 C91
    Date: 2017–01
  3. By: James C. Cox; John A. List; Michael Price; Vjollca Sadiraj; Anya Samek
    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.
    Keywords: experiment, giving, taking, altruism, moral cost
    JEL: C93 D03 D64
    Date: 2016–05
  4. By: Lamb Wubin; Naixin Ren
    Abstract: As we know, there is a controversy about the decision making under risk between economists and psychologists. We discuss to build a unified theory of risky choice, which would explain both of compensatory and non-compensatory theories. Obviously, decision strategy is not stuck in a rut, but based on the things, in the real life, and experiment materials, in the laboratory. We believe that human has a decision structure, which has constant and variable, interval, concepts of probability and value. Namely, according to cognition ability, we argue that people could not build a continuous and accurate subjective probability world, but several intervals of probability perception. More precisely, decision making is an order reduction process, which is simplifying the decision structure. However, we are not really sure which reduction path will occur during decision making process. It is why preference reversal always happens when making decisions. The most efficient way to reduce the order of decision structure is mathematical expectation. We also argue that the deliberation time at least has four parts, which are consist of substitution time,{\tau}''(G) d{\tau} time, {\tau}'(G) d{\tau} time and calculation time. Decision structure can simply explain the phenomenon of paradoxes and anomalies. JEL Codes: C10, D03, D81.
    Date: 2017–01
  5. By: Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
    Abstract: We present experimental evidence that illuminates the trade-off between efficiency considerations and social identity concerns in an inter-city multilevel public goods game. In total, 616 inhabitants of Heidelberg and Mannheim take part in an online experiment in which they can allocate an initial endowment between a private account, an excludable (local) public good, and a non-excludable (regional) public good. We vary the efficiency of the two public goods and find that participants substitute contributions away from the local to the regional public good if the latter is more efficient. To investigate the role of social identity considerations we compare a condition in which the group composition in unknown to a decision in which participants are informed that they share the local public good with three other participants from their own neighborhood. We do not find that a salient common social affiliation affects participants’ behavior per se. If the common local affiliation is revealed through a label, only citizens perceiving a strong local identification adjust their contribution behavior and contribute more to the excludable local public good. Revealing the local affiliation becomes even more effective in a priming condition when participants are remembered of their common local affiliation before they indicate their contribution decision.
    JEL: C90 D70 H41
    Date: 2016
  6. By: Gravert, Christina (Department of Economics, School of Business, Economics and Law, Göteborg University); Kurz, Verena (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We test the effect of framing of a menu on the choice of ordering climate friendly dishes in a randomized controlled experiment. Rearranging the menu in favor of vegetarian food has a large and significant effect on the willingness to order a vegetarian dish instead of meat. We show that there exists a considerable marginal group willing to change meat consumption behavior at least in the short term. Our results demonstrate both to policy makers and to actors in the food service sector that small, cheap interventions can significantly decrease carbon emissions from food consumption.
    Keywords: Nudging; Field experiment; default; food choice
    JEL: C93 D12 Q50
    Date: 2017–02
  7. By: Julia Rohrer (University of Leipzig); Boris Egloff (Johannes Gutenberg University Mainz); Michal Kosinski (Stanford University); David Stillwell (University of Cambridge); Stefan Schmukle (University of Leipzig)
    Abstract: Do others perceive the personality changes that take place between the ages of 14 and 29 in a similar fashion as the aging person him- or herself? This cross-sectional study analyzed age trajectories in self- versus other-reported Big Five personality traits and in self-other agreement in a sample of more than 10,000 individuals from the myPersonality Project. Results for self-reported personality showed maturation effects (increases in extraversion, conscientiousness, openness to experience, and emotional stability), and this pattern was generally also reflected in other-reports, albeit with discrepancies regarding timing and magnitude. Age differences found for extraversion were similar between the self- and other reports, but the increase found in self-reported conscientiousness was delayed in other reports, and the curvilinear increase found in self-reported openness was slightly steeper in other-reports. Only emotional stability showed a distinct mismatch with an increase in self reports, but no significant age effect in other-reports. Both the self- and other-reports of agreeableness showed no significant age trends. The trait correlations between the self- and other-reports increased with age for emotional stability, openness, agreeableness, and conscientiousness; by contrast, agreement regarding extraversion remained stable. The profile correlations confirmed increases in self-other agreement with age. We suggest that these gains in agreement are a further manifestation of maturation. Taken together, our analyses generally show commonalities but also some divergences in age-associated mean level changes between self- and other-reports of the Big Five, as well as an age trend towards increasing self-other agreement.
    Keywords: personality maturation, other-reports, self-other agreement, Big Five, personality cross-ratings
    Date: 2017
  8. By: Robert Hahn; Robert D. Metcalfe; David Novgorodsky; Michael K. Price
    Abstract: We explore Tinbergen's fundamental insight that policymakers need at least as many policy instruments as targets. We extend this idea using a large natural field experiment in water resource management. We use social comparisons and loss-framed messages to help achieve two goals of our partner utility: getting consumers to purchase drought-resistant plants and reducing water use. Our results show that seemingly related behavioral instruments can affect different household decisions. By themselves, social comparisons and loss framing have no significant impact on the number of rebate requests; when combined, however, they lead to a 36% increase in requests. Only loss framing leads to a significant increase in the purchase of drought-resistant plants, and only the social comparison reduces water consumption. These results highlight the importance of testing different combinations of instruments, particularly when policymakers have multiple goals and the relationship between instruments and goals is uncertain.
    Keywords: technology adoption, loss aversion, social norms, water conservation
    JEL: D12 H41 Q25
    Date: 2016–11
  9. By: Riyanto, Yohanes E.; Roy, Nilanjan
    Abstract: We report results from experiments designed to investigate the prevalence of turn-taking in three-person finitely repeated threshold public good games without communication. Individuals can each make a discrete contribution. If the number of contributors is at least equal to the threshold, a public benefit accrues to all group members. Players take turns to provide the public good each round when the endowments are homogeneous. When the turn-taking path is at odds with efficiency or under private information of endowments, players seldom engage in taking turns. An endogenous-move protocol limits the frequency of mis-coordinated outcomes every round.
    Keywords: Public good provision, Turn-taking, Repeated game, Endogenous move, Experiment
    JEL: C72 C92 D03 D82 H41
    Date: 2017–02–03
  10. By: Hennig-Schmidt, Heike; Bosman, Ronald; van Winden, Frans
    Abstract: This paper experimentally investigates how monetary incentives and emotions influence behaviour in a two-player power-to-take game. In this game, one player can claim any part of the other's endowment (take rate), and the second player can respond by destroying his or her own endowment. We focus on how stake size (endowment) and emotions influence responses in China. Our main findings are the following. First, average (median) take and destruction rates are not influenced by a large or small stake size. Second, emotions related to anger and joy mediate the impact of the take rate on destruction. Third, monetary incentives matter for the reaction function of the responder regarding the take rate: when stakes are low there is more destruction for low and intermediate take rates (smaller than 80%), while, when stakes are high, there is more destruction for high take rates (larger than 80%). This result is explained in terms of the amount of behavioural control that the responder has over his or her actions via emotion regulation. Finally, comparing our data with existing data for countries in Europe, it turns out that average (median) take and destruction rates are similar, while a similar set of emotions mediates destruction in both regions.
    JEL: C91 O53 O52
    Date: 2016
  11. By: Kamei, Kenju
    Abstract: Past research has shown that people often take punitive actions towards norm violators even when they are not directly involved in transactions. However, it at the same time suggests that such third-party punishment may not be strong enough to enforce cooperation norms in dilemma situations. This paper experimentally compares the effectiveness of third-party punishment between different enforcement formats. Consistent with past studies, our data shows that having an individual third-party punisher in a group does not make one’s defection materially unbeneficial because of the weak punishment intensity. It also shows that third-party punishment is not effective when two individuals form a pair as a punisher and jointly decide how strong third-party punishment they impose. However, third-party punishment can be sufficiently strong to enforce cooperation norms when a third-party punisher’s action choice is made known to another individual third-party punisher in a different group, or when there are two independent individual third-party players in a group.
    Keywords: experiment, cooperation, dilemma, third-party punishment, social norms
    JEL: C92 D79 H41
    Date: 2017–02–06
  12. By: Jakob, Michael; Kübler, Dorothea; Steckel, Jan Christoph; van Velduizen, Roel
    Abstract: Although market-based environmental policy instruments feature prominently in economic theory and are widely employed, they often meet with public resistance. We argue that such resistance may be driven by a feeling of moral responsibility where citizens prefer to tackle environmental problems themselves, rather than delegating the task to others by means of a market mechanism. Using a laboratory experiment that isolates moral responsibility from alternative explanations, we show that moral responsibility induces participants to incur a sizable cost on themselves as well as on other participants. We discuss the implications of this finding for the design and implementation of environmental policies.
    Keywords: Laboratory Experiment,Moral Responsibility,Environmental Policy,Market Mechanism,Climate Change
    JEL: C90 H23 Q53 Q54 Q58
    Date: 2016

This nep-cbe issue is ©2017 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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