nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2018‒07‒23
eight papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Risky Choices and Solidarity: Why Experimental Design Matters By Strobl, Renate; Wunsch, Conny
  2. An experimental method for the elicitation of implicit attitudes to privacy risk By Frik, Alisa; Gaudeul, Alexia
  3. Green, yellow or red lemons? Framed field experiment on houses energy labels perception. By Edouard Civel; Nathaly Cruz-Garcia
  4. Inclusive Cognitive Hierarchy in Collective Decisions By Yukio Koriyama; Ali Ozkes
  5. Decision Under Psychological Pressure: The Shooter's Anxiety at the Penalty Kick By Luc Arrondel; Richard Duhautois; Jean-François Laslier
  6. The Economic Relevancy of Risk Preferences Elicited Online and With Low Stakes By Gibson, John; Johnson, David
  7. Is joy an emotional function of age and gender? By Alvi, Mohsin; Mirza, Mohammad Haris; Ikram, Midra; Khoso, Ameer Bux; Mukhtar, Amber
  8. Less cheating? The effects of prefilled forms on compliance behavior By Fochmann, Martin; Müller, Nadja; Overesch, Michael

  1. By: Strobl, Renate (University of Basel); Wunsch, Conny (University of Basel)
    Abstract: Negative income shocks can either be the consequence of risky choices or random events. A growing literature analyzes the role of responsibility for neediness for informal financial support of individuals facing negative income shocks based on randomized experiments. In this paper, we show that studying this question involves a number of challenges that existing studies either have not been aware of, or have been unable to address satisfactorily. We show that the average effect of free choice of risk on sharing, i.e. the comparison of mean sharing across randomized treatments, is not informative about the behavioural effects and that it is not possible to ensure by the experimental design that the average treatment effect equals the behavioural effect. Instead, isolating the behavioural effect requires conditioning on risk exposure. We show that a design that measures subjects preferred level of risk in all treatments allows isolating this effect without additional assumptions. Another advantage of our design is that it allows disentangling changes in giving behaviour due to attributions of responsibility for neediness from other explanations. We implement our design in a lab experiment we conducted with slum dwellers in Nairobi that measures subjects’ transfers to a worse-off partner both in a setting where participants could either deliberately choose or were randomly assigned to a safe or a risky project. We find that free choice matters for giving and that the effects depend on donors’ risk preferences but that attributions of responsibility play a negligible role in this context.
    Keywords: Solidarity; risk taking; experimental design
    JEL: C91 D63 D81 O12
    Date: 2018–06–14
  2. By: Frik, Alisa; Gaudeul, Alexia
    Abstract: We test an experimental method for the elicitation of implicit attitudes to privacy risk. We ask individuals to decide whether to incur the risk of revealing private information to other participants. This type of risk that involves a social component corresponds to privacy threats that individuals may face in the field. We derive a measure of individual attitudes to privacy risk with our method. We empirically test the validity of this measure by running a laboratory experiment with 148 participants. Our results confirm that the willingness to incur a privacy risk is driven by a complex array of factors including risk attitudes, self-reported value for private information, and general attitudes to privacy (derived from survey methods in our study). We also observe that attitudes to privacy risk depend on the order in which measures of risk attitude are elicited, but do not depend on whether there is a preexisting threat to privacy, over which participants have no control. We explain how our method can be simplified and extended for use in eliciting attitudes to a wide range of privacy risks and various types of private information.
    Keywords: privacy; attitudes; disclosure; risk; control; personal information; laboratory experiment
    JEL: C91 D18 D81 O30
    Date: 2018–07–11
  3. By: Edouard Civel; Nathaly Cruz-Garcia
    Abstract: Labels are increasingly popular among policy-makers, companies and NGOs to improve consumers awareness, especially about environmental footprints. Yet, the efficiency of these informational tools is mostly looked as their ability to shift behaviors, whereas their first goal is to enable people to discriminate labelled goods. This paper studies how the complex information displayed by houses' Energy Performance Certificates is processed by real economic agents. Through a randomized framed field experiment on 3,000 French subjects, we test the impact of these labels on people's perception of a home energy performance. Results evidence that 24% of subjects did not take heed of the energy label. Unexpectedly, we find out that gender is the most differentiating characteristic in this changing sensitivity to energy performance certificates. We interpret this effect by the Selectivity Hypothesis: energy labels design engages more male subjects.Among sensitive subjects, energy labels' efficiency to transmit information is mixed, as our results indicate a Bayesian reading of houses energy labels. Subjects identify separately each label's grades, and their perception is not systematically biased by individual characteristics, but idiosyncratic features blur their judgment. Moreover, this perception exhibits strong asymmetries. While worsening grades induce decreasing judgments, upgrading label's class do not strongly enhance people's evaluation of energy quality: on the contrary, top level quality label seems to undergo skepticism and intensifies idiosyncratic noise.
    Keywords: Information treatment ; Experimental economics ; Cognitive psychology ; Green Value ; Energy efficiency.
    JEL: D03 D12 D83 L15
    Date: 2018
  4. By: Yukio Koriyama (Department of Economics, Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Ali Ozkes (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)
    Abstract: We study the implications of structural models of non-equilibrium thinking, in which players best respond while holding heterogeneous beliefs on the cognitive levels of others. We introduce an inclusive cognitive hierarchy model, in which players are capable of projecting the self to others in regard to their cognitive level. The model is tested in a laboratory experiment of collective decision-making, which supports inclusiveness. Our theoretical results show that inclusiveness is a key factor for asymptotic properties of deviations from equilibrium behavior. Asymptotic behavior can be categorized into three distinct types: naïve, Savage rational with inconsistent beliefs, and sophisticated.
    Keywords: collective decision-making,bounded rationality,cognitive hierarchy,information aggregation
    Date: 2018–06
  5. By: Luc Arrondel (PSE - Paris School of Economics, 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); Richard Duhautois (LIRSA - Laboratoire Interdisciplinaire de Recherche en Sciences de l'Action - CNAM - Conservatoire National des Arts et Métiers [CNAM], CEET - Centre d'études de l'emploi et du travail - CNAM - Conservatoire National des Arts et Métiers [CNAM] - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé); Jean-François Laslier (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: The paper studies sequences of penalty kicks during football shout-outs in French cup competitions. We seek to analyze in detail the psychological effects to which the kicker responds: fear of winning, fear of losing, expected outcomes or how much is at stake. The main conclusion of our study is that the performance (the probability of scoring) is impacted negatively by both what is at stake (the impact of my scoring on the expected probability that my team eventually wins) and by the difficulty of the situation (the ex ante probability of my team eventually losing). We find no advantage for a team to take the first kick.
    Date: 2018–05
  6. By: Gibson, John; Johnson, David
    Abstract: We explore the relevancy of subjects' risk preferences recovered using a subjective risk question to those recovered from the incentivized lottery experiments of Holt and Laury (2002), Gneezy and Potters (1997), and Johnson and Webb (2016). While a statistically significant relationship between subjective and incentivized risk measures has been documented, existing papers utilize laboratory (or lab-in-field) experiments with moderately large stakes. We investigate whether this relationship is preserved in an online environment with small stakes. Our results are consistent with the previous literature, suggesting that the correlation between subjective and incentivized risk measures is preserved online and with small stakes.
    Keywords: Subjective Risk Preferences; Incentivized Risk Measures; Online Experiments
    JEL: C90 D01 D03
    Date: 2018–06–08
  7. By: Alvi, Mohsin; Mirza, Mohammad Haris; Ikram, Midra; Khoso, Ameer Bux; Mukhtar, Amber
    Abstract: Historically, psychological researches on emotion were focused more on negative emotions. Recently, researchers have directed their attention towards positive emotion because of positive emotions is in crises throughout the globe (Fredrickson et al, 2003). So, it is an emerging field of study, many areas of which are under developed. The present research is aimed at exploring two of such areas: gender and age differences in positive emotions. Because of the suggested importance of studying discrete units of positive emotion, only one emotion i.e. joy was selected for the study. Dispositional Positive Emotion Scale-Joy sub scale was administered on 479 participants (331 men, 148 women), age ranging between 20 and 49. Following two hypotheses were generated: first, women feel lesser joy than men; and second, intensity of joy feeling varies with age. The results were consistent with the first hypothesis. For the second hypothesis, no significant differences are found in the feeling of joy among people belonging to different age groups.
    Keywords: Dispositional Positive Emotion Scale (DPES), Gender, Age, Independent Sample T-test, Anova
    JEL: A14 D03 M5 Y1 Z1
    Date: 2017–09–25
  8. By: Fochmann, Martin; Müller, Nadja; Overesch, Michael
    Abstract: As a consequence of the digital transformation, individuals are often confronted with prefilled forms or prefilled data entry masks. In situations where cheating and lying are of concern, prefilling and defaults might reduce dishonest behavior. In a controlled experiment, we investigate how correctly and incorrectly prefilled forms influence compliance behavior. We frame our experiment as filing the annual income tax return. We show that correct prefilling enhances compliance. However, in cases of incorrect prefilling, we observe asymmetric effects. If prefilled income is lower than true income, we find no positive compliance effect, and compliance is on the same level as with blank forms. If prefilled income is higher than true income, prefilling still has a positive effect on compliance. In that case, compliance is on the same level as with correctly prefilled forms and higher than with blank forms. Our study contributes to the literature on cheating and lying by showing that prefilled forms and defaults affect compliance by changing the moral costs of dishonest behavior.
    Keywords: Dishonesty,Defaults,Prefilled Forms,Tax Compliance,Behavioral Economics
    JEL: C91 D14 H26
    Date: 2018

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