nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2018‒04‒23
nine papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Designing Feedback in Voluntary Contribution Games - The Role of Transparency By Bernd Irlenbusch; Rainer Michael Rilke; Gari Walkowitz
  2. Environmental attitudes and place identity as simultaneous determinants of preferences for environmental goods By Michela Faccioli; Mikołaj Czajkowski; Klaus Glenk; Julia Martin-Ortega
  3. Mine, Ours or Yours? Unintended Framing Effects in Dictator Games By Bergh, Andreas; Wichardt, Philipp C.
  4. Gender differences in altruism on mechanical turk: Expectations and actual behaviour By Brañas-Garza, Pablo; Capraro, Valerio; Rascon-Ramirez, Ericka
  5. The Strength of Weak Leaders - An Experiment on Social Influence and Social Learning in Teams By Berno Büchel; Stefan Klößner; Martin Lochmüller; Heiko Rauhut
  6. Dishonesty in healthcare practice: A behavioral experiment on upcoding in neonatology By Hennig-Schmidt, Heike; Jürges, Hendrik; Wiesen, Daniel
  7. Self Confidence Spillovers and Motivated Beliefs By Ritwik Banerjee; Nabanita Datta Gupta; Marie Claire Villeval
  8. An Empirical Investigation of the Emergence of Money: Contrasting Temporal Difference and Opportunity Cost Reinforcement Learning By Lefebvre, Germain; Nioche, Aurélien; Bourgeois-Gironde, Sacha; Palminteri, Stefano
  9. Indefinitely Repeated Contests: An Experimental Study By Philip Brookins; Dmitry Ryvkin; Andrew Smyth

  1. By: Bernd Irlenbusch; Rainer Michael Rilke; Gari Walkowitz
    Abstract: We analyze the effects of limited feedback on beliefs and contributions in a repeated public goods game setting. In a first experiment, we test whether exogenously determined feedback about a good example (i.e., the maximum contribution in a period) in contrast to a bad example (i.e., the minimum contribution in a period) induces higher contributions. We find that when the type of feedback is not transparent to the group members, good examples boost cooperation while bad examples hamper it. There is no difference when the type of feedback is transparent. In a second experiment, feedback is endogenously chosen by a group leader. The results show that a large majority of the group leaders count on the positive effect of providing a good example. This is true regardless whether they choose the feedback type to be transparent or non-transparent. Half of the group leaders make the type of feedback transparent. With endogenously chosen feedback about good examples no difference in contributions can be observed among transparent and non-transparent feedback selection. In both experiments feedback shapes subjects’ beliefs. With exogenously chosen feedback, transparent feedback tends to reduce beliefs when good examples are provided as feedback and tends to increase beliefs in when bad examples are provided as feedback compared to the respective non-transparent cases. Our results shed new light on the design of feedback provision in public goods settings.
    Keywords: Feedback Design, Transparency, Public Goods, Imperfect Conditional Cooperation, Experiment
    JEL: H41 C92 D82
    Date: 2018–04–04
  2. By: Michela Faccioli (: Land, Environment, Economics and Policy Institute (LEEP), University of Exeter); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Klaus Glenk (Land Economy & Environment, Scotland’s Rural College); Julia Martin-Ortega (Sustainability Research Institute, University of Leeds)
    Abstract: Economic valuation is frequently employed to provide evidence of people's preferences for environmental goods. However, it is also often criticised for providing a simplified representation of preferences, with many factors that affect value formation not accounted for. This is the case of environmental attitudes and especially place identity perceptions, which have been largely overlooked in economic valuation, despite representing amongst the most important drivers of people's behaviour towards the environment, according to the environmental psychology and sociology literature. To address this gap, we designed and conducted a choice experiment where we explored the simultaneous role of environmental attitudes and place identity perceptions on willingness to pay (WTP), taking peatland restoration in Scotland as a case study. This study adds to the existing literature in that no valuation study to date has simultaneously integrated both aspects in preference modelling. Given that both factors are potentially strong drivers of preferences, focusing only on one or the other provides a partial picture of the determinants of WTP. Moreover, we do not just look at 'generic' environmental attitudes, but also at ‘specific’ environmental attitudes. Our results, estimated through a novel and econometrically robust approach based on the hybrid choice model, show that people with more positive environmental attitudes and those who feel attached to Scotland and think that peatlands are an important part of Scotland's identity and landscape tend to display higher WTP. These findings are important to provide a richer understanding of the determinants of preferences for environmental goods. Our results also open up new insights to the discipline in relation to the spatial heterogeneity of preferences: we have shown that people do not only relate with the space around them by focusing on the distance to the improvement site, as most frequently postulated in valuation studies. The idea that place can be understood as a space with emotional and cultural meanings also plays a critical role in shaping preferences. All these are critical elements to better inform policy-makers in the design of more socially acceptable and effective environmental policies.
    Keywords: environmental valuation, discrete choice experiment, environmental attitudes, place identity, hybrid choice models, peatlands, Scotland
    JEL: Q51 D6 D91 Q20
    Date: 2018
  3. By: Bergh, Andreas (Research Institute of Industrial Economics (IFN)); Wichardt, Philipp C. (Kiel Institute for the World Economy)
    Abstract: This paper reports results from a classroom dictator game comparing the effects of three different sets of standard instructions. As was shown by Oxoby and Spraggon (2008), inducing a feeling of entitlement – one subject earning the endowment – strongly affects allocations in dictator games towards the owner of the money (both dictator and receiver). The present results show that seemingly small differences in instructions induce fundamentally different perceptions regarding entitlement. Behavior is affected accordingly, i.e. instructions inducing subjects to perceive the task as distributive rather than a task of generosity lead to higher allocations to receivers (average 52% vs. 35%). A theoretical explanation integrating monetary as well as social incentives and emphasizing potential effects of uncertainty about the latter is discussed (cf. Bergh and Wichardt, 2018).
    Keywords: Dictator games; Framing effects; Property rights; Social preferences
    JEL: C70 C91 D63
    Date: 2018–03–28
  4. By: Brañas-Garza, Pablo; Capraro, Valerio; Rascon-Ramirez, Ericka
    Abstract: Whether or not there are gender differences in altruistic behaviour in Dictator Game experiments has attracted considerable attention in recent years. Earlier studies found women to be more altruistic than men. However, this conclusion has been challenged by more recent accounts, which have argued that gender differences in altruistic behaviour may be a peculiarity of student samples and may not extend to random samples. Here we study gender differences in altruistic behaviour and, additionally, in expectations of altruistic behaviour, in a sample of Amazon Mechanical Turk crowdworkers living in the US. In Study 1, we report a mega-analysis of more than 3,500 observations and we show that women are significantly more altruistic than men. In Study 2, we show that both women and men expect women to be more altruistic than men.
    Keywords: dictator game, gender differences, altruism, expectations.
    JEL: C93 C99 J7 J71
    Date: 2018–04–01
  5. By: Berno Büchel (University of Fribourg, Economics); Stefan Klößner (Saarland University, Statistics and Econometrics); Martin Lochmüller (Saarland University, Statistics and Econometrics); Heiko Rauhut (University of Zurich, Sociology)
    Abstract: We investigate how the selection process of a leader affects team performance with respect to social learning. We use a lab experiment in which an incentivized guessing task is repeated in a star network with the leader at the center. Leader selection is either based on competence, on self-confidence, or made at random. Teams with random leaders do not underperform compared to competent leaders, and they even outperform teams whose leader is selected based on self-confidence. The reason is that random leaders are better able to use the knowledge within the team. We can show that it is the declaration of the selection procedure which makes non-random leaders overly influential. We set up a horse race between several rational and naïve models of social learning to investigate the micro-level mechanisms. We find that overconfidence and conservatism contribute to the fact that overly influential leaders mislead their team.
    Keywords: Social Networks, Social Influence, Confidence, Overconfidence, Bayesian Updating, Naïve Learning, Sortition, Wisdom of Crowds
    JEL: D83 D85 C91
    Date: 2018–02
  6. By: Hennig-Schmidt, Heike (Department of Health Management and Health Economics); Jürges, Hendrik (Schumpeter School of Business and Economics); Wiesen, Daniel (Department of Business Administration and Health Care Management)
    Abstract: We introduce a controlled behavioral experiment framed in a neonatal care context to analyze the effect of introducing a random audit and fines on individuals' honesty in a simple reporting task. Our behavioral data provide new evidence on dishonesty and upcoding in health care. We find that introducing audits combined with a fine significantly reduces dishonesty on aggregate. The effect is driven by a significant reduction in upcoding. At the same time, dishonest choices that cannot be detected as fraudulent by an audit (partial dishonesty) increase. We also find evidence that individual characteristics such as gender, medical background, and integrity are related to dishonest behavior.
    Keywords: Dishonesty; audits and fines; neonatology; medically framed experiment; reporting of birth weights
    JEL: D03 I11 I18
    Date: 2018–04–04
  7. By: Ritwik Banerjee (Indian Institute of Management Bangalore and IZA); Nabanita Datta Gupta (Department of Economics and Business Economics, Aarhus University, Denmark); Marie Claire Villeval (University of Lyon)
    Abstract: Is success in a task used strategically by individuals to motivate their beliefs prior to taking action in a subsequent, unrelated, task? Also, is the distortion of beliefs reinforced for individuals who have lower status in society? Conducting an artefactual field experiment in India, we show that success when competing in a task increases the performers’ self-confidence and competitiveness in the subsequent task. We also find that such spillovers affect the self-confidence of low-status individuals more than that of high-status individuals. Receiving good news under Affirmative Action, however, boosts confidence across tasks regardless of the caste status.
    Keywords: Motivated beliefs, spillovers, self-confidence, competitiveness, Affirmative Action, experiment
    JEL: C91 J15 M52
    Date: 2018–04–09
  8. By: Lefebvre, Germain; Nioche, Aurélien; Bourgeois-Gironde, Sacha; Palminteri, Stefano
    Abstract: Money is a fundamental and ubiquitous institution in modern economies. However, the question of its emergence remains a central one for economists. The monetary search-theoretic approach studies the conditions under which commodity money emerges as a solution to override frictions inherent to inter-individual exchanges in a decentralized economy. Although among these conditions, agents' rationality is classically essential and a prerequisite to any theoretical monetary equilibrium, human subjects often fail to adopt optimal strategies in tasks implementing a search-theoretic paradigm when these strategies are speculative, i.e., involve the use of a costly medium of exchange to increase the probability of subsequent and successful trades. In the present work, we hypothesize that implementing such speculative behaviors relies on reinforcement learning instead of lifetime utility calculations, as supposed by classical economic theory. To test this hypothesis, we operationalized the Kiyotaki and Wright paradigm of money emergence in a multi-step exchange task and fitted behavioral data regarding human subjects performing this task with two reinforcement learning models. Each of them implements a distinct cognitive hypothesis regarding the weight of future or counterfactual rewards in current decisions. We found that both models outperformed theoretical predictions about subjects' behaviors regarding the implementation of speculative strategies and that the latter relies on the degree of the opportunity costs consideration in the learning process. Speculating about the marketability advantage of money thus seems to depend on mental simulations of counterfactual events that agents are performing in exchange situations.
    Keywords: Money, Speculative Behaviours, Reinforcement Learning
    JEL: C91 D83
    Date: 2018
  9. By: Philip Brookins (Max Planck Institute for Research on Collective Goods and Crowd Innovation Lab, Harvard University); Dmitry Ryvkin (Department of Economics,Florida State University); Andrew Smyth (Department of Economics, Marquette University and Economic Science Institute, Chapman University)
    Abstract: We experimentally explore indefinitely repeated contests. Theory predicts more cooperation, in the form of lower expenditures, in indefinitely repeated contests with a longer expected time horizon, yet our data do not support this prediction. Theory also predicts more cooperation in indefinitely repeated contests compared to finitely repeated contests of the same expected length, but we find no significant difference empirically. When controlling for risk and gender, we actually find significantly higher long-run expenditure in some indefinite contests relative to finite contests. Finally, theory predicts no difference in cooperation across indefinitely repeated winner-take-all and proportional-prize contests. We find significantly less cooperation in the latter, because female participants expend more on average than their male counterparts in our data. Our paper extends the experimental literature on indefinitely repeated games to contests and, more generally, contributes to an infant empirical literature on behavior in indefinitely repeated games with “large” strategy spaces.
    Keywords: contest, repeated game, cooperation, experiment
    JEL: C72 C73 C91 D72
    Date: 2018

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