nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2017‒11‒26
eleven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Temptation and Commitment in the Laboratory By Daniel Houser; Daniel Schunk; Joachim Winter; Erte Xiao
  2. Object and Spatial Working Memory in Visual Search for Multiple Targets By Elena S. Gorbunova; Kirill S. Kozlov; Sofia Tkhan Tin Le; Ivan M. Makarov
  3. On the external validity of social preference games: a systematic lab-field study By Galizzi, Matteo M.; Navarro-Martínez, Daniel
  4. How do risk attitudes affect pro-social behavior? Theory and experiment By Sean Fahle; Santiago Sautua
  5. The task composition and work-related mental health - a descriptive study By Pikos, Anna Katharina
  6. Fairness, social norms and the cultural demand for redistribution By Gilles Le Garrec
  7. Conditional generosity and uncertain income: Evidence from five experiments By Christian Kellner; David Reinstein; Gerhard Riener
  8. Motivating Innovation: The Effect of Loss Aversion on the Willingness to Persist By Yaroslav Rosokha; Kenneth Younge
  9. Reasoning about Others’ Reasoning By Larbi Alaoui; Antonio Penta
  11. Motivated reasoning during recruitment By Kappes, Heather Barry; Balcetis, Emily; De Cremer, David

  1. By: Daniel Houser (George Mason University); Daniel Schunk (Johannes Gutenberg-University Mainz, Germany); Joachim Winter (Ludwig-Maximilians-Universität München); Erte Xiao (Monash University, Australia)
    Abstract: We report data from a novel laboratory experiment on economic decisions under persistent temptations. This type of temptation is ubiquitous, as it refers to any temptation that is present until one either gives in or makes a costly commitment decision to have it removed. Subjects in our experiment are repeatedly offered an option with instantaneous benefit that also entails a substantial reduction to overall earnings. We show that this option is tempting in the sense that a substantial fraction of our subjects incur pecuniary costs to eliminate the choice, and thus commit not to choose this alternative. We find that commitment and giving in to temptation generally occur at the first opportunity, though a non-negligible fraction of subjects delay either making the commitment decision or giving in to temptation. This delay is consistent with the costs of self-control increasing with its use.
    Keywords: self-control; willpower; temptation; commitment; laboratory experiment
    JEL: D11 C91
    Date: 2017–11
  2. By: Elena S. Gorbunova (National Research University Higher School of Economics); Kirill S. Kozlov (National Research University Higher School of Economics); Sofia Tkhan Tin Le (National Research University Higher School of Economics); Ivan M. Makarov (National Research University Higher School of Economics)
    Abstract: Visual search for multiple targets is especially error prone. One of these errors is called subsequent search misses (SSM) and represents a decrease in accuracy at detecting a second target after a first target has been found. One of the possible explanations of SSM errors is working memory resource depletion. Four experiments investigated the role of different kinds of working memory in SSM errors. The first experiment investigated the role of object working memory using a classical color change detection task. In the second and the third experiments, a modified change detection task was applied, using shape as the relevant feature. In the fourth experiment, a spatial working memory task was used to reveal the role of spatial working memory in SSM. The second and the third experiments revealed interference between working memory and visual search tasks, whereas in the first and the fourth experiments interference was not found. The results are discussed in terms of specific working memory deficit in SSM errors
    Keywords: visual attention, visual search, multiple targets, working memory, subsequent search misses
    JEL: Z
    Date: 2017
  3. By: Galizzi, Matteo M.; Navarro-Martínez, Daniel
    Abstract: We present a lab-field experiment designed to systematically assess the external validity of social preferences elicited in a variety of experimental games. We do this by comparing behavior in the different games with several behaviors elicited in the field and with self-reported behaviors exhibited in the past, using the same sample of participants. Our results show that the experimental social preference games do a poor job explaining both social behaviors in the field and social behaviors from the past. We also include a systematic review and meta-analysis of previous literature on the external validity of social preference games.
    JEL: J50
    Date: 2017–07–28
  4. By: Sean Fahle; Santiago Sautua
    Abstract: We explore how risk preferences affect pro-social behavior in risky environments. We analyze a modified dictator game in which the dictator could, by reducing her own sure payoff, increase the odds that an unknown recipient wins a lottery. We first augment a standard social preferences model with reference-dependent risk attitudes and then test the model’s predictions for the dictator’s giving behavior using a laboratory experiment. As predicted by the model, giving behavior in the experiment is affected by the baseline risk faced by the recipient, the effectiveness of transfers in reducing baseline risk, and the dictator’s degree of loss aversion
    Keywords: other-regarding preferences; pro-social behavior; reference-dependent preferences; risk
    JEL: C91 D81 D91
    Date: 2017–11–02
  5. By: Pikos, Anna Katharina
    Abstract: This paper analyzes the relationship between work-related mental health problems and multitasking (the number of different tasks at work) in two cross sections from the German working population in 2006 and 2012. The analysis is exploratory and hence, descriptive. For an additional task, medium severe and severe work-related mental health problems increase by 0.02 standard deviations. Absenteeism and presenteeism due to work-related mental health problems rise by one percentage point. This is driven by tasks that require interaction with other human beings but not by the simultaneity of tasks. The estimates appear small at first sight but multitasking increased by nearly one task from 2006 to 2012. The loss in gross value added due to the rise in absenteeism and presenteeism amounts to roughly 1 billion euro.
    Keywords: work-related mental health; multitasking; job satisfaction
    JEL: I10 J28
    Date: 2017–11
  6. By: Gilles Le Garrec (OFCE Sciences Po)
    Keywords: Redistribution, fairness, majority rule, social norms, endogenous preferences
    JEL: H53 D63 D72 D03
    Date: 2017–09
  7. By: Christian Kellner (University of Southampton); David Reinstein (Department of Economics, University of Exeter); Gerhard Riener (Heinrich Heine University Düsseldorf)
    Abstract: We study how other-regarding behavior extends to environments with income uncertainty and conditional commitments. Should fundraisers ask a banker to donate “if he earns a bonus” or wait and ask after the bonus is known? Standard EU theory predicts these are equivalent; loss-aversion and signaling models predict a larger commitment before the bonus is known; theories of affect predict the reverse. In five experiments incorporating lab and field elements (N=1363), we solicited charitable donations from lottery winnings worth between $10 and $30, varying the conditionality of donations between participants. While the results suggest some heterogeneity across experimental contexts and demographic groups, in each experiment conditional donations (“if you win”) were higher than ex-post donations. Pooling across experiments, this is strongly statistically significant; we find a 23% greater likelihood of donating and a 25% larger average donation commitment in the Before treatment. Our findings add to our understanding of pro-social behavior and have implications for charitable fundraising, for effective altruism giving pledges, and for experimental methodology.
    Keywords: Social preferences, contingent decision-making, signaling, field experiments, charitable giving.
    JEL: D64 C91 C93 L30 D01 D03 D84
    Date: 2017
  8. By: Yaroslav Rosokha; Kenneth Younge
    Abstract: We investigate the willingness of individuals to persist at exploration in the face of failure. Prior research suggests that the organization's \tolerance for failure" may motivate greater exploration by the individual. Little is known, however, about how individuals persist at exploration in an uncertain environment when confronted by prolonged periods of negative feedback. To examine this question, we design a two-dimensional maze game and run a series of randomized experiments with human subjects in the game. We develop predictions for the game using computational models of reinforcement learning. Our methods extend beyond two-period models of decision-making under uncertainty to account for repeated behavior in longer-running, dynamic contexts. Our results suggest that individuals explore more when they are reminded of the incremental cost of their actions, a result that extends prior research on loss aversion and prospect theory to environments characterized by model uncertainty. We discuss implications for future research and for managers.
    Keywords: Experiments, Innovation, Persistence, Loss Aversion, Model Uncertainty
    Date: 2017–08
  9. By: Larbi Alaoui; Antonio Penta
    Abstract: Recent experiments suggest that level-k behavior is often driven by subjects' beliefs, rather than their binding cognitive bounds. But the extent to which this is true in general is not completely understood, mainly because disentangling 'cognitive' and 'behavioral' levels is challenging experimentally and theoretically. In this paper we provide a simple experimental design strategy (the 'tutorial method') to disentangle the two concepts purely based on subjects' choices. We also provide a 'replacement method' to assess whether the increased sophistication observed when stakes are higher is due to an increase in subjects' own understanding or their beliefs over others' increased incentives to reason. We find evidence that, in some of our treatments, the cognitive bound is indeed binding for a large fraction of subjects. Furthermore, a significant fraction of subjects do take into account others' incentives to reason. Our findings also suggest that in general, level-k behavior should not be taken as driven either by cognitive limits alone or beliefs alone. Rather, there is an interaction between own cognitive bound and reasoning about the opponent's reasoning process. From a methodological viewpoint, the tutorial and replacement methods have broader applicability, and can be used to study the beliefs-cognition dichotomy and higher order beliefs e ects in non level-k settings as well.
    Keywords: cognitive bound, depth of reasoning, higher-order beliefs. level-k reasoning, replacement method, tutorial method
    JEL: C72 C92 D80
    Date: 2017–11
  10. By: Çi?dem Kaya (Istanbul Arel University); Göksel Ataman (Marmara University); Birsen Yener Ayd?n (Department of Management and Organization, Marmara University, Istanbul)
    Abstract: This study investigates the relationship between workplace ostracism and work engagement of the employees in the local governments and whether neuroticism, one of the personality traits, has a role on this relationship. Convenience sampling was used and data were obtained from a sample of 369 employees from two municipalities. The results show that there is a negative relationship between workplace ostracism and work engagement. Moreover, neuroticism moderates the negative relationship between workplace ostracism and work engagement. Overall, the results show that work engagement decreases as workplace ostracism increases, and highly neurotic employees are more negatively affected by workplace ostracism. Local governments may utilize the results in their efforts to create an environment fostering work engagement. Leaders may apply the study outcomes about the role of employee personality and workplace ostracism to improve their service performance.
    Keywords: Workplace ostracism, Work engagement, Neuroticism, Local governments
    JEL: M10 M12 M19
    Date: 2017–10
  11. By: Kappes, Heather Barry; Balcetis, Emily; De Cremer, David
    Abstract: This research shows how job postings can lead job candidates to see themselves as particularly deserving of hiring and high salary. We propose that these entitlement beliefs entail both personal motivations to see oneself as deserving and the ability to justify those motivated judgments. Accordingly, we predict that people feel more deserving when qualifications for a job are vague and thus amenable to motivated reasoning, whereby people use information selectively to reach a desired conclusion. We tested this hypothesis with a two-phase experiment (N = 892) using materials drawn from real online job postings. In the first phase of the experiment, participants believed themselves to be more deserving of hiring and deserving of higher pay after reading postings composed of vaguer types of qualifications. In the second phase, yoked observers believed that participants were less entitled overall, but did not selectively discount endorsement of vaguer qualifications, suggesting they were unaware of this effect. A follow-up pre-registered experiment (N = 905) using postings with mixed qualification types replicated the effect of including more vague qualifications on participants’ entitlement beliefs. Entitlement beliefs are widely seen as problematic for recruitment and retention, and these results suggest that reducing the inclusion of vague qualifications in job postings would dampen the emergence of these beliefs in applicants, albeit at the cost of decreasing application rates and lowering applicants’ confidence.
    Keywords: entitlement; deservingness; motivated reasoning; recruitment practice; selection
    JEL: R14 J01 J50
    Date: 2017–08–15

This nep-cbe issue is ©2017 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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