nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2017‒04‒09
eleven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Choice of the Group Increases Intra-Cooperation By Babkina, Tatiana; Myagkov, Mikhail; Lukinova, Evgeniya; Peshkovskaya, Anastasiya; Menshikova, Olga; Berkman, Elliot T.
  2. Status Quo Bias under Uncertainty: An Experimental Study By Amnon Maltz; Giorgia Romagnoli
  3. Using Personality Questionnaires in Experiments -- Limits and Potentials By Müller, Julia; Schwieren, Christiane
  4. Gift Ratios in Laboratory Experiments By Tagiew, Rustam; Ignatov, Dmitry
  5. Women form social networks more selectively and less opportunistically than men By Friebel, Guido; Lalanne, Marie; Richter, Bernard; Schwardmann, Peter; Seabright, Paul
  6. Pay Attention or Be Paid for Attention? Impact of Incentives on Allocation of Attention By Ismaël Rafaï; Mira Toumi
  7. Individual Dynamic Choice Behaviour and the Common Consequence Effect By Maria J. Ruiz Martos
  8. Friends or Strangers? Strategic Uncertainty and Cooperation across Experimental Games of Strategic Complements and Substitutes By Gabriele Chierchia; Fabio Tufano; Giorgio Coricelli
  9. Agent base model in public goods game By Chen Yuyou
  10. Am I my peer's keeper? Social Responsibility in Financial Decision Making By Sascha Fullbrunn; Wolfgang J. Luhan; ;
  11. Estimating the Relationship between Skill and Overconfidence By Feld, Jan; Sauermann, Jan; de Grip, Andries

  1. By: Babkina, Tatiana; Myagkov, Mikhail; Lukinova, Evgeniya; Peshkovskaya, Anastasiya; Menshikova, Olga; Berkman, Elliot T.
    Abstract: This research investigates how variation in sociality, or the degree to which one feels belonging to a group, affects the propensity for participation in collective action. By bringing together rich models of social behavior from social psychology with decision modeling techniques from economics, these mechanisms can ultimately foster cooperation in human societies. While variation in the level of sociality surely exists across groups, little is known about whether and how it changes behavior in the context of various economic games. Specifically, we found some socialization task makes minimal group members behavior resemble that of an established group. Consistent with social identity theory, we discovered that inducing this type of minimal sociality among participants who were previously unfamiliar with each other increased social identity, and sustained cooperation rates in the newly formed groups to the point that they were comparable to those in the already established groups. Our results demonstrate that there are relatively simple ways for individuals in a group to agree about appropriate social behavior, delineate new shared norms and identities.
    Keywords: collective action, group formation, cooperation
    JEL: C01 D0 D23 D50
    Date: 2016–07–18
  2. By: Amnon Maltz (University of Haifa, Department of Economics); Giorgia Romagnoli (University of Amsterdam)
    Abstract: Individuals' tendency to stick to the current state of a airs, known as the status quo bias, has been widely documented over the past 30 years. Yet, the determinants of this phenomenon remain elusive. Following the intuition suggested by Bewley (1986), we conduct a systematic experiment exploring the role played by di erent types of uncertainty on the emergence of the bias. We nd no bias when the status quo option and the alternative are both risky (gambles with known probabilities) or both ambiguous (gambles with unknown probabilities). The bias emerges under asymmetric presence of ambiguity, i.e., when the status quo option is risky and the alternative ambiguous, or vice versa. These ndings are not predicted by existing models based on loss aversion (Kahneman and Tversky, 1979) or incomplete preferences (Bewley, 1986) and suggest a novel determinant of the status quo bias: the dissimilarity between the status quo option and the alternative
    Keywords: Status Quo Bias, Risk, Ambiguity, Reference E ects, Experiment
    JEL: C91 D11 D81
  3. By: Müller, Julia; Schwieren, Christiane
    Abstract: Growing interest in using personality variables in economic research has led to the question whether personality as measured by psychology is useful to predict economic behavior. It is undoubted that personality can influence large-scale economic outcomes. Whether personality variables can also be used to understand micro-behavior in economic games is, however, less clear. We discuss the reasons for and against this assumption. In the framework of our own experiment, we test whether and which personality factors are useful in predicting behavior in the Trust Game. We can also use the Trust Game to understand how personality measures fare relatively in predicting behavior when situational constraints are strong or weak. This approach can help economists to better understand what to expect from the inclusion of personality variables in their models and experiments, and where further research might be useful and needed.
    Keywords: Personality, Big Five, Five Factor Model, Incentives, Experiment, Trust Game
    JEL: C72 C91 D03
    Date: 2017–04–05
  4. By: Tagiew, Rustam; Ignatov, Dmitry
    Abstract: This paper presents statistics of a controlled laboratory gift-exchange-game experiment. These numbers can be used for assumptions about human behavior in analysis of noisy web data. The experiment was described in ‘The Impact of Social Comparisons on Reciprocity’ by Gächter et al. 2012. As already shown in relevant literature from experimental economics, human decisions deviate from rational payoff maximization. The average gift rate was 31%. Gift rate was under no conditions zero. Further, we derive some additional findings and calculate their significance.
    Keywords: experimental economics, machine learning
    JEL: C10 D03
    Date: 2016–07–18
  5. By: Friebel, Guido; Lalanne, Marie; Richter, Bernard; Schwardmann, Peter; Seabright, Paul
    Abstract: We test two hypotheses, based on sexual selection theory, about gender differences in costly social interactions. Differential selectivity states that women invest less than men in interactions with new individuals. Differential opportunism states that women's investment in social interactions is less responsive to information about the interaction's payoffs. The hypotheses imply that women's social networks are more stable and path dependent and composed of a greater proportion of strong relative to weak links. During their introductory week, we let new university students play an experimental trust game, first with one anonymous partner, then with the same and a new partner. Consistent with our hypotheses, we find that women invest less than men in new partners and that their investments are only half as responsive to information about the likely returns to the investment. Moreover, subsequent formation of students' real social networks is consistent with the experimental results: being randomly assigned to the same introductory group has a much larger positive effect on women's likelihood of reporting a subsequent friendship.
    Keywords: social networks,gender differences,trust game
    JEL: C91 D81 J16
    Date: 2017
  6. By: Ismaël Rafaï (Université Côte d'Azur, France; GREDEG CNRS); Mira Toumi (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: We investigate the impact of monetary incentives on individual attention allocation. We propose a new experimental design where the participants invest costly attention to reduce uncertainty in a two alternatives forced choice task. We compare three different incentivized environments where subjects' decisions do not impact the payoff (T0), impact their own payoff (T1) and impact other subjects' payoff (T2). Our results show that both incentives (T1) and (T2) increase the amount of allocated attention (measured by Response Time), besides the efficiency of the allocation process (measured by Error Rate) and regardless of subjects’ intrinsic motivation. Finally, we find that standard measure of social preferences (Social Value Orientation) do not explain attentional contribution in our Public Good like environment (T2). This latter result contradicts standard ones, providing new insight about social preferences.
    Keywords: Allocation of attention, Incentives, Public Good Game, Social Preferences, Intrinsic Motivation
    JEL: A13 C9 H41 D8
    Date: 2017–03
  7. By: Maria J. Ruiz Martos (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: What should you do when confronting a sequence of decisions such that you make some choices and chance makes some others, i.e., a dynamic decision making problem under risk? Standard economic rationality requires you to look at the final choices, determine the preferred options, choose the sequence of decisions that lead to those and follow that sequence through to the end. That behaviour is implied by the conjunction of the principles of separability, dynamic consistency and reduction of compound lotteries. Experimental research on these dynamic choice principles has been developed within the common ratio effect theoretical framework. This paper experimentally investigates what subjects do when confronting such a problem within a new theoretical framework provided by the common consequence effect that manipulates the value of the foregone-consequence in the prior risks.Results suggest that reduction of compound lotteries holds throughout, whilst dynamic consistency and separability do not and theirfailure is related to the foregone-consequence.
    Keywords: reduction of compound lotteries, dynamic consistency, separability, non-expected utility and risk
    JEL: C91 D11 D81
    Date: 2017–03–30
  8. By: Gabriele Chierchia (Center for Mind/Brain Science, University of Trento; and Planck Institute for Human Cognitive and Brain Sciences, Berlin); Fabio Tufano (School of Economics, University of Nottingham); Giorgio Coricelli (Center for Mind/Brain Science, University of Trento; and Department of Economics, University of Southern California)
    Abstract: It is commonly assumed that friendship should decrease strategic uncertainty in games involving tacit coordination. However, this has never been tested on two “opposite poles†of coordination, namely, games of strategic complements and substitutes. We present an experimental study having participants interacting with either a friend or a stranger in two classic games: (i.) the stag hunt game, which exhibits strategic complementarity; (ii.) the entry game, which exhibits strategic substitutability. Both games capture a frequent trade-off between a potentially high paying but uncertain action and a lower paying but safe alternative. We find that, relative to strangers, friends exhibit a propensity towards uncertainty in the stag hunt game, but an aversion to uncertainty in the entry game. Friends also “trembled†less than strangers in the stag hunt game but this advantage was lost in the entry game. We further investigate the role of interpersonal similarities and friendship qualities on friendship’s differential impact on uncertainty across games of strategic complements and substitutes.
    Keywords: coordination; entry game; friendship; strategic complementarity; strategic substitutability; stag hunt game; strategic uncertainty
    Date: 2017–03
  9. By: Chen Yuyou
    Abstract: Build some model to describe types of different social preference. Explore all composition of social preference in public game, and find some of them will disobey the dynamics of free riding. Base on the public goods game, we build five types social preference agents, and simulate this agents play public goods game.The dynamics of free riding in public game play key role at the most. And it suggests that selfishness is inevitable. Only in the case that agents in one group are altruism, the contribution will not decline. With the numbers of agents in one group increasing, much more composition can be distinguished as advantageous to improve public welfare. The belief formation mechanism make no sense in repeat game.
    Keywords: China, Agent-based modeling, Agent-based modeling
    Date: 2015–07–01
  10. By: Sascha Fullbrunn (Radboud University); Wolfgang J. Luhan (Portsmouth Business School); ;
    Abstract: Risky decisions are often taken on behalf of others rather than for oneself. Competing theoretical models predict both; higher as well as lower levels of risk aversion when taking risk for others. The experimental literature on this topic has found mixed results. In our comprehensive within-subject design, subjects in the role of money managers have substantial social responsibility by taking investment decisions for a group of six anonymous clients, with own payments either fixed or perfectly aligned with their clients payments. We find that money managers invest significantly less for others than for themselves, which is mainly driven by a less risk averse sub-sample. Digging deeper, we find money managers to act in line with what they believe their clients would invest for themselves. We derive a responsibility weighting function to show that with a perfectly aligned payment the money managers' actions are determined by a mix of egoistic and social risk preferences.
    Keywords: financial decision making, social responsibility, decision making for others, risk preferences, experiment
    JEL: C91 D03 D81 G11
    Date: 2017–03–31
  11. By: Feld, Jan (victoria university of wellington); Sauermann, Jan (sofi, stockholm university); de Grip, Andries (Research Centre for Educ and Labour Mark)
    Keywords: Dunning-Kruger effect, overconfidence, judgment error, measurement error, instrumental variable
    JEL: D03 I23
    Date: 2017–03–23

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