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on Cognitive and Behavioural Economics |
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Issue of 2018‒10‒08
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Matthew Robson; John Bone |
| Abstract: | Within a modified N person dictator game, we test the extent to which giving behaviour changes as the number of recipients varies. Using a within-subject design, in an incentivised laboratory experiment, individual-level preference parameters are estimated within five alternative utility functions. Both goodness-of-fit and predictive accuracy of each model are analysed, with the "best" model identified for each individual. The Dirichlet distribution is proposed as a random behavioural model to rationalise noise; with parameters accounting for differential error arising from the complexity of decision problems. Results show that, on average, participants are willing to give more total payoffs to others as the number of players increase, but not maintain average payoffs to others. Extensive heterogeneity is found in individual preferences, with no model "best" fitting all individuals. |
| Keywords: | Distributional Preferences, Prosocial Behaviour, Group Size, Experimental Economics, Altruism, Social Welfare Function. |
| JEL: | C72 C91 D63 D64 I31 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:18/11&r=cbe |
| By: | Adrian Bruhin; Ernst Fehr; Daniel Schunk |
| Abstract: | There is vast heterogeneity in the human willingness to weigh others’ interests in decision making. This heterogeneity concerns the motivational intricacies as well as the strength of other-regarding behaviors, and raises the question how one can parsimoniously model and characterize heterogeneity across several dimensions of social preferences while still being able to predict behavior over time and across situations. We tackle this task with an experiment and a structural model of preferences that allows us to simultaneously estimate outcome-based and reciprocity-based social preferences. We find that non-selfish preferences are the rule rather than the exception. Neither at the level of the representative agent nor when we allow for several preference types do purely selfish types emerge in our sample. Instead, three temporally stable and qualitatively different other-regarding types emerge endogenously, i.e., without pre-specifying assumptions about the characteristics of types. When ahead, all three types value others’ payoffs significantly more than when behind. The first type, which we denote as strongly altruistic type, is characterized by a relatively large weight on others’ payoffs – even when behind – and moderate levels of reciprocity. The second type, denoted as moderately altruistic type, also puts positive weight on others’ payoff, yet at a considerable lower level, and displays no positive reciprocity, while the third type is behindness averse, i.e., puts a large negative weight on others’ payoffs when behind and behaves selfishly otherwise. We also find that there is an unambiguous and temporally stable assignment of individuals to types. In addition, we show that individual-specific estimates of preferences offer only very modest improvements in out-of-sample predictions compared to our three-type model. Thus, a parsimonious model with only three types captures the bulk of the information about subjects’ social preferences. |
| Keywords: | social preferences, heterogeneity, stability, finite mixture models |
| JEL: | C49 C91 D03 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7240&r=cbe |
| By: | Zarah Murad (University of Portsmouth); Charitini Stavropoulou (City University of London); Graham Cookson (Surrey Business School) |
| Abstract: | This paper investigates the behavioural effects of competitive, social and image incentives on men’s and women’s allocation of effort in a multitask environment. Specifically, using two real-effort laboratory tasks, we investigate how competitive prizes, social value generation and public awards affect effort allocation decisions between the tasks. We find that all three types of incentives significantly focus effort allocation towards the task they are applied in, but the effect varies significantly between men and women. The highest effort distortion lies with competitive incentives, which is due to the effort allocation decision of men. Women exert similar amount of effort across the three incentive conditions, with slightly lower effort levels in the social-image incentivized tasks. Our results inform how and why genders differences may persist in competitive workplaces. |
| Keywords: | Incentives, Gender Differences, Multitasking, Experiments |
| JEL: | C91 C92 |
| Date: | 2018–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2018-07&r=cbe |
| By: | Lingbo Huang (Monash University); Zarah Murad (University of Portsmouth) |
| Abstract: | People who compete alone may entertain different psychological motivations from those who compete for a team. Using a real-effort experiment, we examine the behavioural consequences of these psychological motivations, absent strategic interdependence and uncertainty among team members. We exploit a dynamic pairwise team contest in which strategic uncertainties among team members play a minimised role in individual rational behaviour; and we create strategically-equivalent individual contests to isolate the pure psychological effects of team situation on individual competitive behaviour. We find that behaviour in individual contests and in sterile team contests follows a psychological momentum effect in which leaders work harder than trailers. In contrast, in team contests enriched with intra-team communication, behaviour follows a neutral effect. We discuss the implications of our results for theoretical modelling of contests and practical implications for the optimal design of team incentive schemes and personnel management. |
| Keywords: | individual versus team behaviour, real-effort experiment, pairwise team contest, best-of-three team contest, communication, psychological momentum effect |
| JEL: | C33 C72 D79 C91 C92 |
| Date: | 2018–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2018-06&r=cbe |
| By: | Sophie Clot; Gilles Grolleau; Lisette Ibanez |
| Abstract: | Rather than just examining moral licensing and cleansing at an aggregate level, we investigate experimentally the moral dynamics at an individual level. We also propose a formal definition of moral consistency or inconsistency (i.e., moral licensing and/or moral cleansing). We found that half our sample present inconsistent pro-environmental behaviour, independently of the way behavior is elicited (positive or negative framing). Men seem to behave more consistently over time, but when they compensate, they license (respectively cleanse) in a higher (respectively lesser) extent than women. We suggest that policies can improve their performances by avoiding a ‘one size fits all approach’ and take into account this heterogeneity of moral dynamics.. |
| Keywords: | cleansing, dictator game, licensing, moral in(consistency), taking game |
| JEL: | C91 D03 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpceem:18-17&r=cbe |
| By: | Brade, Raphael; Himmler, Oliver; Jäckle, Robert |
| Abstract: | Feedback can help individuals put their performance into perspective, especially when transitioning into a new environment such as university or a different job. In a randomized field experiment we give first-year university students normatively framed relative performance feedback about their accumulated course credits. We find an increase in subsequent performance, but only when the feedback is positive. Using a regression discontinuity design, we show that the improved performance is not driven by unobserved characteristics of those receiving positive feedback, but that it is indeed due to the positive rather than negative nature of the feedback. We administer a replication experiment with the next wave of first-year students one year later and reproduce the results. Survey data provides suggestive evidence that positive feedback has an effect on behavior when students underestimate their relative performance, and that consistent with a mechanism of selective information processing, individuals focus on positive feedback to adjust their beliefs. |
| Keywords: | Relative Performance Feedback; Higher Education; Randomized Field Experiment; Replication; Selective Information Processing |
| JEL: | C93 I23 |
| Date: | 2018–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88830&r=cbe |
| By: | Roman Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University) |
| Abstract: | Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review of such studies. |
| Keywords: | Contest; All-pay auction; Tournament; Dynamic Contest; Multi-battle Contest; Multidimensional Contest; Group Contest; Rent-seeking; Experiment; Overbidding; Over-dissipation; Incentive Effect; Size Effect; Discouragement Effect; Strategic Momentum |
| JEL: | C7 C9 D4 D7 D9 H4 J4 K4 L2 M5 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:18-07&r=cbe |
| By: | Davidson, Kelly A.; Kropp, Jaclyn D.; Mullally, Conner C.; Rahman, M. Wakilur |
| Keywords: | Behavioral & Institutional Economics, International Development, Food and Agricultural Marketing |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274134&r=cbe |