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on Cognitive and Behavioural Economics |
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Issue of 2017‒09‒03
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Rudolf Kerschbamer; Daniel Muller |
| Abstract: | This paper investigates - in a large heterogeneous sample - the relationship between social preferences on the one hand, and socioeconomic factors and political preferences on the other hand. Socioeconomic factors correlate with social preferences, and social preferences robustly shape political attitudes and voting behavior in a particular way: Selfish subjects are the extremists on one side of the political spectrum - they are more likely to vote for a right-wing party, they are less inclined to favor redistribution and they are more likely to self-assess themselves as right-wing than all the other types. Inequality-averse subjects, altruists and maxi-min sit at the opposite end of the political spectrum, while all the other types behave less systematically and in a less extreme fashion. Overall, our evidence indicates that elicited social preferences are externally valid as a predictor for political attitudes, and that social preferences are fairly stable across contexts and over longer periods of time. |
| Keywords: | Distributional Preferences, Social Preferences, Equality Equivalence Test, Political Attitudes, Voting Behavior, German Internet Panel |
| JEL: | C91 D30 D63 D64 D72 H50 |
| Date: | 2017–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2017-16&r=cbe |
| By: | João Ferreira (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille); Nicolas Gravel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille) |
| Abstract: | We propose a framework for the analysis of choice behavior when the later explicitly depends upon time. We relate this framework to the traditional setting from which time is absent. We illustrate the usefulness of the introduction of time by proposing three possible models of choice behavior in such a framework: (i) changing preferences, (ii) preference formation by trial and error, and (iii) choice with endogenous status-quo bias. We provide a full characterization of each of these three choice models by means of revealed preference-like axioms that could not be formulated in a timeless setting. |
| Keywords: | choice behavior,time,revealed preferences,changing preferences,learning by trial-and-error,inertia bias |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01577260&r=cbe |
| By: | Koch, Alexander K. (Aarhus University); Nafziger, Julia (Aarhus University) |
| Abstract: | We study in an online, real-effort experiment how the bracketing of non-binding goals affects performance in a work-leisure self-control problem. We externally induce the goal bracket – daily goals or a weekly goal – and within that bracket let subjects set goals for how much they want to work over a one-week period. Our theoretical model predicts (i) that weekly goals create incentives to compensate for a lower than desired performance today with the promise to work harder tomorrow, whereas daily goals exclude such excuses; (ii) that subjects with daily goals set higher goals in aggregate and work harder than those with weekly goals. Our data support these predictions. Surprisingly, however, when goals are combined with an externally enforced commitment that requires subjects to spend less than a minute each day on the task to get started working, performance deteriorates because of high dropout rates from the task. |
| Keywords: | self-control, goals, narrow bracketing, commitment devices, real effort, online experiment |
| JEL: | D03 D81 D91 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10955&r=cbe |
| By: | Steven Martin |
| Abstract: | In this chapter, I review the rational economic man model and con- trast it with evidence of bounded rationality that has emerged since the last quarter of the previous century. I discuss the implications of bounded rationality for research in industrial economics, with par- ticular attention to the analysis of predation, collusion, and entry. I conclude by drawing implications for the antitrust rules toward domi- nant ?rm behavior that come out of the Matsushita and Brooke Group decisions. |
| Keywords: | behavioral economics; antitrust; predation; collusion; entry. |
| JEL: | L1 L4 D9 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1297&r=cbe |
| By: | Philippe Jehiel (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | Investors of new projects consider the returns of implemented projects delivering the same impression, and invest if the empirical mean return exceeds the cost. The steady states of such economies result in suboptimal investment decisions due to the selection bias in the sampling procedure and the dispersion of impressions across investors. Assuming better impressions are associated with higher returns, investors assessments of their projects are overoptimistic, and there is overinvestment as compared with the rational benchmark. The presence of rational investors aggravates the overoptimism bias of sampling investors, thereby illustrating a negative externality imposed by rational investors. |
| Keywords: | overoptimism,Investment strategy |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01557560&r=cbe |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods); Lars Freund (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Under common law, the standard remedy for breach of contract is expectation damages. Under continental law, the standard is specific performance. The common law solution is ex post efficient. But is it also ex ante efficient? We use experimental methods to test whether knowing that non-fulfilment will only lead to damages deters mutually beneficial trade. The design excludes aversion against others willfully breaking their promises. We find that there is indeed less trade if specific performance is not guaranteed, provided the preference for the traded commodity is sufficiently pronounced. |
| Keywords: | remedies, breach of contract, specific performance, expectation damages, reliance damages, donation, experiment |
| JEL: | C91 D02 D03 D61 D62 D64 H23 K12 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_17&r=cbe |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods); André Schmelzer (Max Planck Institute for Research on Collective Goods) |
| Abstract: | On the doctrinal surface, there is a deep divide between common and continental law when it comes to the origin of contractual obligations. Under continental law, in principle a unilateral promise suffices. Common law by contrast requires consideration. When it comes to deciding cases, the divide is much less pronounced. But for the most part the law does not govern people's lives through adjudication. It matches or molds their moral intuitions. We test these intuitions in the lab. If consideration is required, participants believe that all participants make more ambitious promises. But they themselves make a more cautious promise. These two effects cancel out, so that promises are not more likely to be kept with consideration. |
| Keywords: | contract, obligation, promise, consideration, experiment, modified dictator game |
| JEL: | C91 D02 D03 D12 D64 H41 K12 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_16&r=cbe |
| By: | Estelle Bellity (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Fabrice Gilles (LEM - Lille - Economie et Management - Université de Lille, Sciences et Technologies - Université Catholique de Lille - Université de Lille, Sciences Humaines et Sociales - CNRS - Centre National de la Recherche Scientifique, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique); Yannick L'Horty (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12) |
| Abstract: | We evaluate the impact of encouraging students to practice literacy skills, as well as improvement in these skills, on academic performance in first-year university students. Several previous studies have attempted to understand drivers for academic success in university students. To our knowledge, none focus on directly analyzing the relations between such factors and students’ academic performance. We used a randomized experiment based on an encouragement design with a group of first-year students in Economics and Management in two French universities. For measuring the effects of encouragement, we included an innovative pedagogical tool for practicing literacy skills via a web platform, called Projet Voltaire. This tool also allowed us to get a good measure of the literacy skills of the students, both at the beginning and at the end of the first term of the academic year. During the entire semester, students had the opportunity to practice literacy skills using Projet Voltaire. To evaluate the impact of literacy on different final grades or final exam scores, and particularly on first-year grade averages, we distinguished between two randomly selected groups of students: some were encouraged to practice literacy skills, while others were only made aware of the option. As a measure of improvement in literacy skills, we use the difference between scores on the two literacy tests. Estimating intention to treat and local average treatment effect, we show that both encouragement to practice literacy skills and an improvement in literacy test scores over the first term are positively correlated with the academic performance of first-year university students, and in particular the probability that they will complete one or both semesters of the academic year. |
| Keywords: | orthographe, échec en licence, expérimentation |
| Date: | 2017–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01522002&r=cbe |