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on Cognitive and Behavioural Economics |
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Issue of 2017‒06‒25
seven papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Sander van der Hoog |
| Abstract: | A very timely issue for economic agent-based models (ABMs) is their empirical estimation. This paper describes a line of research that could resolve the issue by using machine learning techniques, using multi-layer artificial neural networks (ANNs), or so called Deep Nets. The seminal contribution by Hinton et al. (2006) introduced a fast and efficient training algorithm called Deep Learning, and there have been major breakthroughs in machine learning ever since. Economics has not yet benefited from these developments, and therefore we believe that now is the right time to apply Deep Learning and multi-layered neural networks to agent-based models in economics. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1706.06302&r=cbe |
| By: | Engl, Florian (university of cologne); Riedl, Arno (General Economics 1 (Micro)); Weber, Roberto A. (university of zurich) |
| Abstract: | Institutions are an important means for fostering prosocial behaviors, but in many contexts their scope is limited and they govern only a subset of all socially desirable acts. We use a laboratory experiment to study how the presence and nature of an institution that enforces prosocial behavior in one domain affects behavior in another domain and whether it also alters prosocial preferences and beliefs about others' behavior. Groups play two identical public good games. We vary whether, for only one game, there is an institution enforcing cooperation and vary also whether the institution is imposed exogenously or arises endogenously through voting. Our results show that the presence of an institution in one game generally enhances cooperation in the other game thus documenting a positive spillover effect. These spillover effects are economically substantial amounting up to 30 to 40 percent of the direct effect of institutions. When the institution is determined endogenously spillover effects get stronger over time, whereas they do not show a trend when it is imposed exogenously. Additional treatments indicate that the main driver of this result is not the endogeneity but the temporal trend of the implemented institution. We also find that institutions of either type enhance prosocial preferences and beliefs about others' prosocial behavior, even toward strangers, suggesting that both factors are drivers of the observed spillover effects. |
| Keywords: | public goods, institutions, spillover effect, social preferences, beliefs |
| JEL: | C92 D02 D72 H41 |
| Date: | 2017–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2017016&r=cbe |
| By: | Daniel A. Brent; Corey Lott; Michael Taylor; Joseph Cook; Kim Rollins; Shawn Stoddard |
| Abstract: | We investigate how normative appeals for water conservation drive behavioral change using a large-scale field experiment. Using a new social comparison that reduces the correlation between pre-treatment consumption and the difference from the peer group, we isolate the normative component of the message. The strength of the message, which we define as a household's performance relative to a peer group, is a primary driver of social comparisons' efficacy, consistent with social compar- isons imposing a moral cost on excess consumption. Relative to a nudge highlighting financial savings, social comparisons generate less persistent water savings and are more dependent on multiple mailers. |
| URL: | http://d.repec.org/n?u=RePEc:lsu:lsuwpp:2017-07&r=cbe |
| By: | Gerhards, Leonie (University of Hamburg); Kosfeld, Michael (Goethe University Frankfurt) |
| Abstract: | We study the effect of likability on female and male team behavior in a lab experiment. Extending a two-player public goods game and a minimum effort game by an additional pre-play stage that informs team members about their mutual likability we find that female teams lower their contribution to the public good in case of low likability, while male teams achieve high levels of cooperation irrespective of the level of mutual likability. In mixed sex teams, both females' and males' contributions depend on mutual likability. Similar results are found in the minimum effort game. Our results offer a new perspective on gender differences in labor market outcomes: mutual dislikability impedes team behavior, except in all-male teams. |
| Keywords: | gender differences, likability, experiment, team behavior |
| JEL: | C90 J16 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10825&r=cbe |
| By: | Shinsuke Ikeda; Takeshi Ojima |
| Abstract: | We describe consumers’ dynamic decision-making under limited self-control, emphasizing the fatiguing nature of self-regulation. The temptation theory is extended in a two-good setting with tempting and non-tempting goods, where self-regulation in moderating tempting good consumption depreciates mental capital (willpower). The resulting non-homothetic feature of consumer preferences helps describe self-regulatory behavior in such an empirically relevant way that it depends on the nature of the tempting good (luxury or inferior) and on consumer wealthiness. First, richer consumers are more selfindulgent and impatient in consuming tempting luxuries, whereas less so in consuming tempting inferiors: marginal impatience is increasing in wealth for high-end brand wine whereas decreasing for junk foods. Second, self-control fatigue weakens implied patience for tempting good consumption. Third, upon a stressful shock, with the resulting increasing scarcity of willpower, self-indulgence and impatience for tempting good consumption increase over time. Fourth, without substantial difference in wealth holdings, naive consumers, unaware of the willpower constraint, display weaker self-control in the long run than the sophisticated consumers do. |
| JEL: | D90 E21 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1704&r=cbe |
| By: | Cars Hommes (Amsterdam School of Economics (University of Amsterdam) & Tinbergen Institute); Domenico Massaro (Universit? Cattolica del Sacro Cuore & Complexity Lab in Economics); Matthias Weber (Bank of Lithuania & Faculty of Economics, Vilnius University) |
| Abstract: | Expectations play a crucial role in modern macroeconomic models. We consider a New Keynesian framework under rational expectations and under a behavioral model of expectation formation. We show how the economy behaves in the alternative scenarios with a focus on inflation volatility. Contrary to the rational model, the behavioral model predicts that inflation volatility can be lowered if the central bank reacts to the output gap in addition to inflation. We test the opposing theoretical predictions in a learning-to-forecast experiment. The results support the behavioral model and the claim that output stabilization can lead to less volatile inflation. |
| Keywords: | Experimental macroeconomics; Heterogeneous expectations; LtFE; Tradeoff inflation and output gap |
| JEL: | C90 E03 E52 D84 |
| Date: | 2017–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:lie:wpaper:42&r=cbe |
| By: | Gächter, Simon (University of Nottingham); Starmer, Chris (University of Nottingham); Tufano, Fabio (University of Nottingham) |
| Abstract: | We introduce the concept of "group cohesion" to capture the economic consequences of ubiquitous social relationships in group production. We measure group cohesion, adapting the "oneness scale" from psychology. A comprehensive program of new experiments reveals the considerable economic impact of cohesion: higher cohesion groups are significantly more likely to achieve Pareto-superior outcomes in classic weak-link coordination games. We show that effects of cohesion are economically large, robust, and portable. We identify social preferences as a primary mechanism explaining the effects of cohesion. Our results provide proof of concept for group cohesion as a productive new tool of economic research. |
| Keywords: | social relationships, group cohesion, oneness, coordination, weak-link game, experiments, real groups |
| JEL: | C92 D03 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10824&r=cbe |