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on Cognitive and Behavioural Economics |
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Issue of 2017‒12‒11
fourteen papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Peter Hoeschler (University of Zurich); Simone Balestra (University of St. Gallen); Uschi Backes-Gellner (University of Zurich) |
| Abstract: | We use a unique longitudinal data set to study the development of non-cognitive skills in adolescence. We measure-for the first time-the development over six years of the recently introduced non-cognitive skill “Grit.“ We also measure the traditional Big Five personality traits. For Grit, we find significant within-person mean-level increases of about .5 standard deviation units for our sample of adolescent students. These increases are comparable with increases in the Big Five, where conscientiousness, agreeableness, and emotional stability also increase with similar magnitude. We show that these changes are heterogeneous and robust to reasonable measurement error. |
| Keywords: | non-cognitive skills, Grit, Big Five personality traits, vocational education and training |
| JEL: | I21 J24 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0138&r=cbe |
| By: | Davide Dottori; Caterina Giannetti |
| Abstract: | We study the effect of time preference on donations relying on a panel dataset of Italian households. After developing an intertemporal model to derive theorethical implications on the relationship between impatience and altruistic donation, we address the issue empirically, relying on a quasiexperimental setting. We find that both the amount and the probability of donating (i.e. altruism) vary non linearly with impatience in intertemporal choice, eventually declining at higher level of impatience. Consistent with previous experimental evidence, these results support the view that psychological discounting matters for altruistic behaviour and, more in general, that individual parameters, often not directly observable, add up to tax policies to determine altruistic behaviours. |
| Keywords: | Two-limit Tobit, Generalized Propensity Score, Quasi-experiment, Altruism, Discounting |
| JEL: | C21 D03 D64 |
| Date: | 2017–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2017/226&r=cbe |
| By: | David Fielding (Department of Economics, University of Otago, New Zealand); Stephen Knowles (Department of Economics, University of Otago, New Zealand); Kirsten Robertson (Department of Marketing, University of Otago, New Zealand) |
| Abstract: | Existing studies suggest that alcohol dependency (or recovery from alcohol dependency) is associated with lower levels of empathy and generosity. We present results from a charitable donation experiment which shows that in a student population, higher levels of alcohol expenditure are associated with significantly less generosity. However, there is no significant association between alcohol expenditure and empathy (as measured by the Empathy Quotient Scale), which suggests that the relationship between alcohol expenditure on generosity is mediated through some other channel. |
| Keywords: | alcohol; generosity; empathy; Dictator Game |
| JEL: | D64 I19 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:otg:wpaper:1711&r=cbe |
| By: | N. Montinari; E. Runnemark; E. Wengström |
| Abstract: | Payment and checkout at retail stores is increasingly being replaced by automated systems. One recent technological invention in this area is mobile self-scanning in which customers carry a mobile scanner while shopping. Mobile self-scanners give real-time feedback on spending. The device increases price saliency and enables customers to keep track of the total amount spent. Using a field experiment, we test if mobile self-scanning affects shopping behavior. Consumers of two grocery stores were allocated randomly to use a mobile self-scanner or not. Overall, we find that using the self-scanner has a negative but insignificant effect on total amount spent. However, the response to using the scanner is heterogeneous and for customers with low self-control, it significantly reduces both their spending and number of items bought when using the mobile scanner. Moreover, we find that consumers with low self-control are more likely to use the self-scanner than individuals with high self-control. Taken together, our results suggest that sophisticated individuals, that is, individuals who are aware of their self-control problem, use the scanner to control their spending. |
| JEL: | D01 D12 M30 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1115&r=cbe |
| By: | Gaudeul, Alexia; Keser, Claudia |
| Abstract: | We run a laboratory experiment where some participants are selected to make investment decisions on behalf of others. We test whether a democratic context influences the social preferences of decision makers in terms of efficiency, altruism and concern for inequality. We find that decision makers who are selected democratically are generally more efficiency-oriented, but also more altruistic, than leaders who are selected at random or by ability. Because wealth generation and distribution sometime conflict, efficiency is no higher with democratic leaders, although payoffs are more equal. We interpret our results in terms of a democratic norm that mitigates how elections may otherwise lead to an enhanced feeling of entitlement to one's role. We exclude a selection effect and discuss the drivers of our results in terms of belief in the legitimacy of the selection procedure and reduced social distance. |
| Keywords: | altruism,democracy,earned role,efficiency,elitism,entitlement effect,inequality,majority-rule,meritocracy,social preferences |
| JEL: | C91 D63 D64 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:327&r=cbe |
| By: | Cappelen, Alexander W (The Choice Lab); Charness, Gary (University of California); Ekström, Mathias (The Choice Lab); Gneezy, Uri (University of California); Tungodden, Bertil (The Choice Lab) |
| Abstract: | We report the results of a randomized controlled trial testing whether incentivizing physical exercise improves the academic performance of college students. As expected, the intervention increases physical activity. The main result is that it generates a strong and significant improvement in academic performance, particularly for students who struggled at the baseline in terms of lifestyle habits. We also provide evidence on the underlying mechanisms: Students who were incentivized to exercise have a healthier life style and improved self-control. Overall, the study demonstrates that incentivizing students to exercise can be an important tool in improving educational achievements. |
| Keywords: | C93; I12; I18; I21; Z20 |
| JEL: | C93 I12 I18 I21 |
| Date: | 2017–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1180&r=cbe |
| By: | Angela Ambrosino |
| Abstract: | This paper analyses institutional change and Veblen’s work (1907, 1914, 1919) under the perspective of cognitive economics. Particularly it focuses on two interesting issues of Veblen’s theory of economic change: 1. in Veblen’s view habits are both mental habits and behavioral habits and they play a twofold role in economic change because they are particularly relevant both as elements of propensity, and as forces resisting to change. 2 Veblen gives an exhaustive definition of instincts and habits but he does not completely explain the cognitive processes that bring changes and evolution in social habits. He develops an economic theory at the base of which there is an evolutionary view of reality and a deep awareness of the role of the human mind within the decision-making processes of choice. This paper is aimed at analyzing both issues using the interpretive tools offered by psychology and discussing the role of agents psychological propensity toward conformity and independence in explaining institutional change. The central idea is that if we better encompass the theory of conformity and independence developed in psychology (starting from Asch, 1952) in the analysis of economic institutions, we can better explain institutional change. Conformity is the effect of the pressure of social group on agents’ behavior. That concept contributes to explain resistance to change. On the other hand, psychology shows that agents are also subject to mechanisms of independence. These are key elements in explaining behavioral change. The analysis of Veblen’s instinct-habit concept under conformity-independence perspective shows interesting connections between Veblen and Hayek’s ideas of economic change. Hayek’s concept of evolution based on psychological and neurobiological aspect, in fact, is a contribution of great significance both in explaining the dual role of habits in institutional change and in understanding individual mechanisms that bring changes in social habits. |
| Keywords: | Institutional change, old institutional economics, cognitive economics, Veblen, Hayek |
| JEL: | B15 B20 B25 B52 B53 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hpo:wpaper:1_2017&r=cbe |
| By: | Kažukauskas, Andrius (CERE and the Department of Economics, Umeå University); Broberg, Thomas (CERE and the Department of Economics, Umeå University); Jaraite, Jurate (CERE and the Department of Economics, Umeå University) |
| Abstract: | A large body of literature shows that the provision of social comparisons can cause households to reduce residential energy and water use. In this paper, we carry out a field experiment that contributes to this literature in two important ways. First, we study a social comparison treatment that is continuous and communicated via pre-installed in-home displays, which are salient and updated in real time. Second, we estimate the effects of provision of social comparisons on two distinguished resources – electricity and water – in the same experimental setting. We find that, on average, our social comparison reduces daily residential energy consumption by 6.7 percent but has no effect on overall residential water use. The electricity savings are impersistent and occur in the evening hours, which only slightly overlap with peak hours. We argue that electricity conservation due to social comparisons is driven by short-run changes in households’ electricity saving behavior. |
| Keywords: | Consumer economics; Electricity; Field experiment; Real-time displays; Comparison information; Water |
| JEL: | D12 D83 L94 Q41 |
| Date: | 2017–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2017_008&r=cbe |
| By: | Armenak Antinyan (International Academy of Business and Economics, Tianjin University of Finance and Economics); Luca Corazzini (Department of Economics, University of Venice \"Ca’ Foscari\"); Elena D\'Agosotino (Department of Economics (SEAM), University of Messina.); Filippo Pavesi (Department of Economics (University of Verona)) |
| Abstract: | We consider a principal-agent relationship, and study the interplay between communication and the opportunity cost of delegation in influencing the principal’s choice to delegate and the agent’s propensity to prove worthy of trust. In order to this, we adopt a lost-wallet game in which the agent that wishes to be trusted can send a free-form message to his counterpart in the initial stage of the game. We find that communication is effective since it attenuates the effect of the opportunity cost of delegation on the principal’s choice. In particular, when the opportunity cost of delegation is high, communication increases beliefs on the amount that the agent will return in case of delegation. Moreover, we find that non-precise statements of intent are more frequent in the presence of lower opportunity costs of delegation, in which case we document an illusion effect: the agent incorrectly expects non-precise communication to exert positive effects on principal’s beliefs and her propensity to delegate. |
| Keywords: | Communication, Promises, Trust, Delegation, Guilt, Lost-Wallet Game, Language Precision |
| JEL: | C7 C9 D03 D8 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:18/2017&r=cbe |
| By: | Andrea Morone; Francesco Nemore; Tiziana Temerario |
| Abstract: | In this paper we investigated group size impact on risk aversion when a majority rule is applied. Drawing on the widely used Holt and Laury’s (2002) lottery pairs, we observed a risky shift for both individual and groups regardless of their size. However, groups choices are shown to be closer to the risk-neutrality prediction. More interestingly, whereas smaller groups attitudes can be safely approximated by individual choices, larger groups reveal a statistically different risk-loving attitude. This risky shift becomes more prominent as group size increases. |
| Keywords: | Preferences; Group; Risk Attitude; Majority Rule; Laboratory. |
| JEL: | C91 C92 D01 |
| Date: | 2017–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2017_12&r=cbe |
| By: | Sven Christens (University of Kassel); Astrid Dannenberg (University of Kassel); Florian Sachs (University of Magdeburg) |
| Abstract: | Revealing the identities of contributors has been shown to increase cooperation in public goods games. In this paper we experimentally investigate whether this finding holds true when decisions are made by groups rather than individuals. We distinguish between groups in which members can discuss face-to-face to reach a decision and groups in which members communicate via computer chat. The results confirm the positive effect of identification on cooperation among individuals. For groups, however, we only find a small and temporary effect of identification, irrespective of the type of communication. The reason for this is that the sensitivity to others’ opinions plays an important role for individual decisions but not for group decisions. |
| Keywords: | Climate change; public goods experiment; cooperation; group decisions; face-to-face communication; computer chat communication; identification; shame |
| JEL: | C72 C91 C92 H41 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201755&r=cbe |
| By: | Deckers, Thomas; Falk, Armin; Kosse, Fabian; Pinger, Pia; Schildberg-Hörisch, Hannah |
| Abstract: | This paper explores inequalities in IQ and economic preferences between children from high and low socio-economic status (SES) families. We document that children from high SES families are more intelligent, patient and altruistic, as well as less likely to be risk-seeking. To understand the underlying causes and mechanisms, we propose a framework of how parental investments as well as maternal IQ and economic preferences influence a child's IQ and preferences. Within this framework, we allow SES to influence both the level of parental time and parenting style investments, as well as the productivity of the investment process. Our results indicate that disparities in the level of parental investments hold substantial importance for SES gaps in economic preferences and, to a lesser extent, IQ. The systematic variations in IQ and preferences by SES might offer an explanation for socio-economic disparities in economic decision-making and social immobility. |
| Keywords: | socio-economic status,time preferences,risk preferences,altruism,experiments with children,origins of preferences,human capital |
| JEL: | C90 D64 D90 D81 J13 J24 J62 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:274&r=cbe |
| By: | Laure Kuhfuss (School of Geography and Sustainable Development, University of St. Andrews); Raphaële Préget (INRA, UMR 1135 LAMETA, F-34000 Montpellier, France); Sophie Thoyer (Montpellier Supagro, UMR 1135 LAMETA, F-34000 Montpellier, France); Frans P. de Vries (Division of Economics, University of Stirling Management School, Stirling FK9 4LA, Scotland, UK); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews) |
| Abstract: | The environmental benefits from Payment for Environmental Service (PES) schemes can often be enhanced if landowners can be induced to enrol land in a spatially - coordinated manner. This is because the achievement of many targets for biodiversity conservation policy or water quality improvements are increasing in the spatial connectedness of enrolled land. One incentive mechanism which has been proposed by economists to achieve such connectedness is the Agglomeration Bonus (AB). There has also been an interest within the literature on PES design in using “nudges” to enhance participation and scheme performance. This paper explores whether a specific nudge in the form of information provided to participants on the relative environmental performance of their group can improve participation and spatial coordination, and enhance the AB performance. We design a laboratory experiment whereby the environmental benefits generated by a PES scheme are materialized by real contributions to an environmental charity, mirroring the situation in actual PES schemes where participants derive utility from contributing to the environmental outputs of the scheme, in addition to the monetary payoffs they receive. The experimental results confirm positive environmental outcomes derived under an AB, but the impact of the nudge is less environmentally effective. Interestingly, we find that the nudge does not significantly supercharge the AB, and can even worsen its performance |
| Keywords: | Social norms; Laboratory experiments; Coordination games; Agricultural policy;Environmental performance; Agri-environmental schemes; Charity |
| JEL: | C91 C92 Q15 Q18 Q57 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:2017-11&r=cbe |
| By: | Montinari, Natalia (Department of Economics, Bologna University, Italy); Runnemark, Emma (Department of Economics, Lund University); Wengström, Erik (Department of Economics, Lund University) |
| Abstract: | Payment and checkout at retail stores is increasingly being replaced by automated systems. One recent technological invention in this area is mobile self-scanning in which customers carry a mobile scanner while shopping. Mobile self-scanners give real-time feedback on spending. The device increases price saliency and enables customers to keep track of the total amount spent. Using a field experiment, we test if mobile self-scanning affects shopping behavior. Consumers of two grocery stores were allocated randomly to use a mobile self-scanner or not. Overall, we find that using the self-scanner has a negative but insignificant effect on total amount spent. However, the response to using the scanner is heterogeneous and for customers with low self-control, it significantly reduces both their spending and number of items bought when using the mobile scanner. Moreover, we find that consumers with low self-control are more likely to use the self-scanner than individuals with high self-control. Taken together, our results suggest that sophisticated individuals, that is, individuals who are aware of their self-control problem, use the scanner to control their spending. |
| Keywords: | Self-scanning; Self-control; Shopping Behavior; Real-time Feedback; Field Experiment |
| JEL: | D01 D12 M30 |
| Date: | 2017–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2017_015&r=cbe |