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on Cognitive and Behavioural Economics |
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Issue of 2017‒05‒28
five papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Gächter, Simon (University of Nottingham); Huang, Lingbo (University of Nottingham); Sefton, Martin (University of Nottingham) |
| Abstract: | We present an experiment to investigate the source of disappointment aversion in a sequential real-effort competition. Specifically, we study the contribution of social comparison effects to the disappointment aversion previously identified in a two-person real-effort competition (Gill and Prowse, 2012). To do this we compare "social" and "asocial" versions of the Gill and Prowse experiment, where the latter treatment removes the scope for social comparisons. If disappointment aversion simply reflects an asymmetric evaluation of losses and gains we would expect it to survive in our asocial treatment, while if losing to or winning against another person affects the evaluation of losses/gains we would expect treatment differences. We find behavior in social and asocial treatments to be similar, suggesting that social comparisons have little impact in this setting. Unlike in Gill and Prowse we do not find evidence of disappointment aversion. |
| Keywords: | real effort competition, social comparison effects, disappointment aversion, reference-dependent preferences |
| JEL: | C91 D12 D81 D84 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10754&r=cbe |
| By: | Bruttel, Lisa; Stolley, Florian; Utikal, Verena |
| Abstract: | This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game laboratory experiment in which giving entails an efficiency gain. Before the dictator decides, the recipient can send a free-form text message to the dictator. We find that the content of a message and its form do matter in the decision to give. Putting effort into the message by writing in a humorous and creative way pays off. We argue that this can be interpreted in terms of reciprocity. Mentioning reasons why the money is needed increases the generosity of dictators as well. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the specific power and responsibility of the dictator. |
| Keywords: | dictator game; communication; inequality; experiment |
| JEL: | C91 D63 D64 D83 |
| Date: | 2017–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79140&r=cbe |
| By: | Claudia Cerrone (Max Planck Institute for Research on Collective Goods); Leonhard K. Lades (University of Stirling, Economics) |
| Abstract: | The model of time-inconsistent procrastination by O'Donoughe and Rabin shows that individuals who are not aware of their present-bias (naïve) procrastinate more than individuals who are aware of it (sophisticated) or are not present-biased (time-consistent). This paper tests this prediction. We classify participants into types using a novel measure, and require them to perform a real-effort task on one out of three dates. We find that sophisticated participants perform the task significantly later than naïve participants. Our data suggest that this result may be explained by habit formation. |
| JEL: | C72 C73 D03 D91 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_08&r=cbe |
| By: | Morone, Andrea; Nuzzo, Simone; Temerario, Tiziana |
| Abstract: | The recent literature on individual vs. group decisions over risk has brought about divergent results, mainly depending on the institutional rules through which groups take decisions. While some studies where group decisions relied on the majority rule showed no appreciable difference between individuals and groups’ preferences, others where unanimity among group members was required found collective decisions to be less risk averse than individual ones. Of course, these studies share the imposition of a choice rule to determine the groups’ outcome. Alternatively, in the study at hand, we elicited groups’ preferences over risk using a consensus rule, i.e. leaving groups free to endogenously solve the potential disagreement among their members, just as in many real life instances. Our results from a logit regression unambiguously show that individuals’ preferences are systematically further from the risk neutrality than those of groups. In particular, individuals are more risk seeker than groups when facing gambles with positive expected payoff difference and more risk averse in the opposite case. |
| Keywords: | Risk attitudes, group’s behaviour |
| JEL: | C91 C92 D01 |
| Date: | 2017–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79332&r=cbe |
| By: | Pieter Desmet (TU Delf); Christoph Engel (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Experimental participants are more likely to follow an arbitrary rule the more of their peers do so as well. The difference between unconditional and conditional rule following is most pro-nounced for individuals who follow few rules unconditionally. |
| Keywords: | conditional rule following, deontological motives, conditional cooperation, experiment |
| JEL: | A13 C91 D03 D63 K42 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_09&r=cbe |