nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2017‒10‒08
ten papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Incentivizing Complex Problem Solving in Teams - Evidence from a Field Experiment By Englmaier, Florian; Grimm, Stefan; Schindler, David; Schudy, Simeon
  2. Entitlements and Loyalty in Groups: An Experimental Study By Paetzel, Fabian; Sausgruber, Rupert
  3. Does Loss Aversion Beat Procrastination ?A Behavioral Health Intervention at the Gym By Oliver März
  4. Gift exchange vs. repeated interaction as a source of reciprocal behavior By Fahn, Matthias; Schade, Anne; Schüßler, Katharina
  5. Choosing Who You Are: The Structure and Behavioral Effects of Revealed Identification Preferences By Hett, Florian; Kröll, Markus; Mechtel, Mario
  6. The circulation of worthless objects aids cooperation. An experiment inspired by the Kula By Giuseppe Danese; Luigi Mittone
  7. "The Influence of Ethics and Locus of Control to Do Whistleblowing Intention with Profession of Auditor and Non-Auditor as a Moderating Variable" By Atika Zarefar
  8. "The Application of Bandura’s Social Learning Theory in the Teaching of Academic Writing" By Zarihan Samsudin
  9. Time Discounting, Ambiguity Aversion, and Preferences for Future Environmental Policies: Evidence from Discrete Choice Experiments By Kenjiro Hirata; Shinsuke Ikeda; Masako Ikefuji; Myong-Il Kang; Katsunori Yamada
  10. Does Time Inconsistency Differ between Gain and Loss? An Intra-Personal Comparison Using a Non-Parametric Designed Experimen By Shotaro Shiba; Kazumi Shimizu

  1. By: Englmaier, Florian; Grimm, Stefan; Schindler, David; Schudy, Simeon
    Abstract: We study the role of bonuses, framed as gains and losses, in a unique environment that closely resembles many features of modern working environments: team work, knowledge re-combination and creative problem solving. We conduct a field experiment in cooperation with a provider of real life escape games. Bonuses significantly increase team performance in the field experiment whereas framing the bonus as a loss does not yield additional benefits as compared to the gain frame. We qualitatively replicate these findings with student participants in a lab-in-the field experiment that allows to study potential mechanisms underlying the productivity increase. Our findings suggest that the productivity increase among student participants result from two sources: First, single team members tend to become more dominant and to take more offten the initiative. Second, bonuses induce ”cutting corners” behavior among student participants. In contrast, teams in field experiment, who self-selected into the task, improve performance under bonus incentives without cutting corners more frequently. We discuss the implications of our findings for managers and firms designing contract structures in modern working environments.
    Keywords: team work,bonus,incentives,loss,gain,framing,creative
    JEL: C92 C93 J33 D03 M52
    Date: 2017
  2. By: Paetzel, Fabian; Sausgruber, Rupert
    Abstract: We study loyalty in groups that are exogenously assigned based on members' performances in a task. We observe that in-group bias is strong and significant among subjects who score high in performance, and that it is weak and insignificant among those who score low. This asymmetric pattern is mirrored in the punishment of disloyal subjects within groups. The results are consistent with an explanation according to which fairness judgments depend on entitlement considerations and provide a new perspective on theory and empirical research that argues that group identity increases with the status of the group.
    Keywords: entitlements,fairness,group loyalty,status,punishment,social norms,minimal groups
    JEL: C92 D31 D63
    Date: 2017
  3. By: Oliver März
    Abstract: Financial incentives are a common tool to encourage overcoming self-control problems and developing beneficial habits. There are different means by which such incentives can be provided, yet, up to date there is little empirical evidence on the relative effectiveness of different incentive designs. In this paper, we conduct a field experiment to explore whether and how incentives that are economically equivalent but framed differently affect the likelihood of exercising at a gym. We find that framing incentives in terms of losses, meaning individuals lose cash incentives by not exercising, encourages more frequent visits to the gym than framing incentives in terms of financial gains. After removing these incentives, we observe habit formation in gym exercise only if incentives were framed as losses rather than gains. The findings are consistent with the concept of loss aversion and suggest that cost reductions and performance improvements can be achieved if opting to frame incentives in terms of losses.
    Keywords: framing; self-control; financial incentives; habit formation; loss aversion
    JEL: C93 D30 I10
    Date: 2017–09
  4. By: Fahn, Matthias; Schade, Anne; Schüßler, Katharina
    Abstract: Humans reciprocate. We want to return favors we have received, but also respond appropriately to behavior that we regard as unfair against us. Whereas previous research has typically tried to isolate the most prominent explanations for reciprocal behavior - inherent preferences for reciprocity and repeated interaction - the present paper addresses the question if and how those interact. Developing a theoretical model of a long-term employment relationship, we first show that reciprocal preferences are more important when an employee is close to retirement. At earlier stages, repeated interaction is more important because more future rents (which increase players’ commitment in this case) can be used to provide incentives. Preferences for reciprocity still affect the structure of an employment relationship early on, though, because of two reasons. First, preferences for reciprocity effectively reduce the employee’s effort costs. Second, they allow to relax the enforceability constraint that determines the principal’s commitment in the repeated interaction. We test our main predictions using data from the German Socio-Economic Panel (SOEP) and find cross-sectional evidence for a stronger positive effect of positive reciprocity on effort and wages for older workers.
    Keywords: reciprocity,relational contracts,dynamic incentives
    JEL: C73 D03 D21 D22 D86
    Date: 2017
  5. By: Hett, Florian; Kröll, Markus; Mechtel, Mario
    Abstract: Social identity is an important driver of behavior. But where do difierences in social identity come from? We use a novel laboratory experiment based on a revealed preference approach to analyze how individuals choose their identity. Facing a trade-off between monetary payments and belonging to difierent groups, individuals are willing to forego significant earnings to avoid certain groups and thereby reveal their identification preferences. We then show that these identification preferences are systematically related to behavioral heterogeneity in group-specific social preferences. These results illustrate the importance of identification as a choice and its relevance for explaining individual behavior.
    Keywords: Social Identity,Identification,Social Preferences,Outgroup Discrimination
    JEL: C91 C92 D03
    Date: 2017
  6. By: Giuseppe Danese; Luigi Mittone
    Abstract: Many anthropological records exist of apparently worthless objects used in traditional societies, often part of larger institutional arrangements that were instrumental in favoring cooperation and reducing conflict. The most famous examples of such objects are probably the Kula necklaces and armbands first described by B. Malinowski. In our experiment subjects can send a token to another participant before each round of a repeated public good game. We use as tokens a bracelet built by the participants, a piece of cardboard provided by the experimenter, and an object brought from home by the participants. Contributions to the public good in the treatments featuring a bracelet and cardboard are significantly higher than in a control study. The home object was not equally useful in increasing contributions. Notwithstanding the cheap talk nature of the decision to send the token, both sending and receiving the token are associated with a significant increase in contributions.
    Keywords: Kula, worthless objects, cooperation, public goods games, signaling, kitoum
    JEL: C92 D01 H40
    Date: 2017
  7. By: Atika Zarefar (Accounting, Politeknik Caltex Riau, Indonesia. Author-2-Name: Arumega Zarefar Author-2-Workplace-Name: Department of Accounting, Universitas Riau, Indonesia)
    Abstract: "Objective – The purpose of this study is to know the influence of ethics and locus of control toward do whistleblowing intention with auditor and non-auditor profession as a moderating variable. Methodology/Technique – Model analysis used in this study is multiple linear regressions and based on the results of the questionnaire of 123 respondents; consist of 52 auditor respondents and 71 non auditor respondents. Findings – This study proves that ethics significantly give positive effect on the intention of doing whistleblowing, whereas locus of control significantly gives negative effect to the intention no whistleblowing. This study also proves that auditor and non-auditor profession can moderate the influence of ethics and locus of control to do whistleblowing intentions. Novelty – The study contribute literature with its original data."
    Keywords: Locus of control; Profession of Auditor and Non-Auditor; Whistleblowing Intention.
    JEL: J21 M41 M42
    Date: 2017–04–05
  8. By: Zarihan Samsudin (School of Humanities and Social Sciences, Kolej Universiti Poly-Tech MARA, Malaysia. Author-2-Name: Zainon Shamsudin Author-2-Workplace-Name: Faculty of Education and Social Sciences, Universiti Selangor (UNISEL), Malaysia. Author-3-Name: Mohd. Faisal Mohd Arif Author-3-Workplace-Name: School of Humanities and Social Sciences, Kolej Universiti Poly-Tech MARA, Malaysia.)
    Abstract: "Objective – This experimental study seeks to ascertain whether Bandura’s (1977) Social Learning Theory can be used to teach academic writing. Interpreted in terms of an approach to the teaching of writing, the theory suggests that students can learn to write a particular text by observing closely the structural as well as the linguistic features of that text. Methodology/Technique – By observing how the text is written, students obtain an idea of how it is formed, and on later occasions they can use this information as a guide to produce similar texts. The sample of this study consists of 100 students from College University Poly-Tech MARA, Kuala Lumpur. The study adopts a pre/post-assessment of the students’ writing performances for three types of academic essays. T-tests were used to compare the results of the 3 pretests with the results of the 3 post-tests which were administered to the participants after they underwent each of the 3 treatment sessions. Findings – The study reveals that the Social Learning Theory speaks the truth about the human natural learning process. Thus, this implies that this potent theory be used in designing varying approaches to teaching students the skills to write academic texts. Novelty – The study suggests that observational learning of sample texts provides students with guidance on how to improve their writing as it makes them aware of the different ways texts are organized for different communicative purposes, thereby promoting their confidence and positive attitude towards writing."
    Keywords: Academic Writing; Social Learning Theory; Observational Learning; Analyzing; Emulating; Model Text.
    JEL: I21 I25
    Date: 2017–04–20
  9. By: Kenjiro Hirata; Shinsuke Ikeda; Masako Ikefuji; Myong-Il Kang; Katsunori Yamada
    Abstract: Designing efficient environmental policies requires knowledge about households' preference parameters for their intertemporal decisions. By conducting an original Internet-based survey using Japanese participants (n=2,906) and a follow-up survey (n=1,407), we examine how people evaluate pro-environmental policies depending on their individual attributes. The discount rates for environmental outcomes are estimated by using a discrete choice experiment. We show that participants' discount rates in environmental policy choices are on average negative and future-biased. Those who are more ambiguity-averse and patient for money concerns, and anticipate more rapid increases in future temperatures are more willing to incur present-day tax burdens to ensure future environmental improvements. These results are highly robust against alternative estimation models and stable when using the follow-up survey data obtained 21 months later.
    Date: 2017–09
  10. By: Shotaro Shiba (Graduate School of Economics, Waseda University); Kazumi Shimizu (Department of Political Science and Economics, Waseda University)
    Abstract: Several studies in the time preference literature have found time inconsistencies (TIs) in both the gain and loss domain. However, their relationship within the same person remains unclear: that is, does an individual who demonstrates TI for gain outcomes also do so for loss? To investigate this relationship, we conducted a nonparametric designed experiment that requires only standard axioms and no parametric specification for people’s preferences. In the experiment, we allowed the measurement of TI to depend on character alternatives—such dependency has emerged as a crucial point in recent TI discussions. With these settings, we directly observed TI for gain and loss and found a so-called “future effect” for both outcomes. We also found a positive correlation between the degrees of TI for gain and loss within the same person, irrespective of character alternatives. In addition, in most cases, we found no significant differences between the degrees of TI for gain and loss. These results remained robust even when using another TI measurement. Our findings suggest that people’s TI regarding gain and loss may not differ and the source of TI among individuals is common between their preference for gain and loss.

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