|
on Cognitive and Behavioural Economics |
|
Issue of 2019‒03‒11
ten papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Alice Soldà (Univ Lyon, Université Lyon 2, GATE UMR 5824, 93 Chemin des Mouilles, F-69130, Ecully, France ; Queensland University of Technology, Brisbane, QLD 4000, Australia); Changxia Ke (Queensland University of Technology, Brisbane, QLD 4000, Australia); Lionel Page (University of Technology Sydney, Ultimo, NSW 2007, Australia); William von Hippel (University of Queensland, Brisbane, QLD 4000, Australia) |
| Abstract: | We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. We design an experiment in which participants are incentivised either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results provide, the different empirical links of von Hippel and Trivers’ (2011) theory of strategic overconfidence. First, we find that participants are more likely to overestimate their performance when they anticipate that they will try to persuade others. Second, when offered the possibility to gather information about their performance, they bias their information search in a manner conducive to receiving more positive feedback. Third, the increase in confidence generated by this motivated reasoning has a positive effect on their persuasiveness. |
| Keywords: | Overconfidence, motivated cognition, self-deception, persuasion, information sampling, experiment |
| JEL: | C91 D03 D83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1908&r=all |
| By: | Lambert, Thomas |
| Abstract: | In the field of philosophy of mind, the concepts of rational behavior, rational choice theory, and instrumental rationality (the “practical reasoning” version of rationality) are important in trying to make statements and conclusions about human thinking and behavior in general. Rational choice theory is also considered a normative but not a descriptive or positive theory. Much of economic theory is based on the principle that economic agents usually or always behave rationally in maximizing the benefits and/or minimizing the costs of their decisions. Developments in behavioral economics over the last several decades have begun to question this principle with much of the questioning about rationality and rational behavior centering on whether individuals can correctly and adequately assess probabilities and risk/reward. The inability to correctly assess risk/reward limits rational behavior and can yield sub-optimal outcomes for economic agents. This exploratory paper examines the linkages between schooling in a capitalist society and limits on rationality in a monopoly capital economic system. |
| Keywords: | behavioral economics, capitalist schooling, monopoly capital, rationality, rational choice |
| JEL: | B51 I24 |
| Date: | 2019–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92594&r=all |
| By: | Olivier Droulers (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Karine Gallopel-Morvan (EHESP - École des Hautes Études en Santé Publique [EHESP]); Sophie Lacoste-Badie (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Mathieu Lajante (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The first aim of this research was to assess the effectiveness, in terms of emotional and behavioral reactions, of moderately vs. highly TVWs (Threatening Visual Warnings) displayed on tobacco packs. Given the key role that emotional reactions play in explaining the effect of TVWs on behaviors, psychophysiological and self-report methods were used–for the first time in this context–to measure the emotions provoked by TVWs. The second aim of this research was to determine whether increasing the size of warnings, and their display on plain packaging (compared with branded packaging) would improve their effectiveness. A within-subjects experiment was conducted. Three variables were manipulated: health warning threat level (high vs. moderate), image size (40% vs. 75%) and pack type (plain vs. branded). A convenience sample of 48 French daily smokers participated. They were exposed to eight different packs of cigarettes in a research lab at the University of Rennes. Smokers' emotions and behavioral intentions were recorded through self-reports. Emotions were also evaluated using psychophysiological measurements: electrodermal activity and facial electromyography. The results revealed that TVWs with a high threat level are the most effective in increasing negative emotions (fear, disgust, valence, arousal) and behavioral intentions conducive to public health (desire to quit, etc.). They also highlight the appeal of increasing the size of the warnings and displaying them on plain packs, because this influences emotions, which is the first step toward behavioral change. Increasing the threat level of TVWs from moderate to high seems beneficial for public health. Our results also confirm the relevance of recent governmental decisions to adopt plain packaging and larger TVWs (in the UK, France, Ireland, Canada, New Zealand, Hungary, etc.). |
| Keywords: | Electromyography,Face,Public and occupational health,Emotions,Behavior,Smoking habits,Fear,Electrophysiology |
| Date: | 2017–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02024739&r=all |
| By: | Daniel Horn (Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Hungary and Eötvös Loránd University); Hubert Janos Kiss (Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Hungary and Eötvös Loránd University) |
| Abstract: | We collect data on time preferences of a representative sample of the Hungarian population in a non-incentivized way and investigate how patience and present bias associate with important life outcomes in five domains: i) educational attainment, ii) unemployment, iii) income and wealth, iv) financial decisions and difficulties, and v) health. Based on the literature, we formulate the broad hypotheses that patience fosters, while present bias hinders positive outcomes in the domains under study. We document a consistent and often significant positive effect of patience in almost all areas (except unemployment), with the strongest effects in escaping low educational attainment, wealth and financial decisions. We find that present bias associates significantly with saving decisions and financial troubles. |
| Keywords: | educational attainment, financial decisions and difficulties, income and wealth, patience, present bias, risk preferences. |
| JEL: | D12 D14 D31 D90 I12 I21 J6 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:1901&r=all |
| By: | Nicolas Brisset (Université Côte d'Azur, France; GREDEG CNRS); Dorian Jullien (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | The goal of this paper is to provide a methodological perspective on economic models that accounts for some sociological dimensions of economics, in two senses. Firstly, we are interested in how modeling is an activity that is constrained by the (implicit and explicit) rules underlying the accumulation of academic prestige within economics and at the same time can be a means to change these rules. Secondly, we are interested in how, for a given model, this dynamic can be influenced by the use(s) of that model outside of economics. We first provide a restatement of Brisset’s (2018) original contribution. We then put this clarified methodological perspective to work on a new case study, i.e., on the dual models at the frontier between behavioral and standard economics. |
| Keywords: | Models, financial economics, behavioral economics, economic methodology, sociology of economics |
| JEL: | B41 B26 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2019-09&r=all |
| By: | Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper employs survey experiments to examine the relationship between personality characteristics and positional concerns across a wide range of “goods,” e.g., income and market value of a car, and “bads,” e.g., infant mortality and poverty rates. Personality characteristics are measured using the five-factor model (Big-5), the locus of control, and the reciprocity. We demonstrate that there are significant relationships between personality types and positional concerns, which differ both by the type of personality and by the nature of a good. The results are highly consistent with the predictions presented in the field of personality psychology. That is, while agreeableness is negatively associated, conscientiousness, neuroticism, and external locus of control are positively associated with positional concerns for most goods. Importantly, there is also a substantial heterogeneity in the mean degree of positional concerns across the low and high values of most personality characteristics and goods. |
| Keywords: | Personality Characteristics; Survey Experiments; Positional Concerns |
| JEL: | C90 D63 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0753&r=all |
| By: | Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Stephane Luchini (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); Julie Rosaz (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Jason Shogren (Departement of Economics and Finance, University of Wyoming - UW - University of Wyoming) |
| Abstract: | Oath-taking for senior executives has been promoted as a mean to enhance honesty within and towards organizations. Herein we explore whether people who voluntarily sign a solemn truth-telling oath are more committed to sincere behavior when offered the chance to lie. We design an experiment to test how the oath affects truth-telling in two contexts: a neutral context replicating the typical experiment in the literature, and a "loaded" context in which we remind subjects that "a lie is a lie." We consider four payoff configurations, with differential monetary incentives to lie, implemented as within-subjects treatment variables. The results are reinforced by robustness investigations in which each subject made only one lying decision. Our results show that the oath reduces lying, especially in the loaded environment-falsehoods are reduced by fifty percent. The oath, however, have a weaker effect on lying in the neutral environment. The oath did affect decision times in all instances: the average person takes significantly more time deciding whether to lie under oath. |
| Keywords: | Lies,Truth-telling oath,Deception,Laboratory Experiment |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-02018089&r=all |
| By: | Cécile Bazart (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Mathieu Lefebvre (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Julie Rosaz (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | In a series of experiments, we test the relative efficiency of persuasion and commitment schemes to increase and sustain contribution levels in a Voluntary Contribution Game. The design allows to compare a baseline consisting of a repeated public good game to, respectively, four manipulation treatments relying on: an information strategy, a low commitment strategy, a high commitment strategy and a promise strategy. We confirm the advantages of psychologically orientated policies as they increase the overall level of contribution and for some, that is commitment and promises, question the decreasing trend traditionally observed in long term contributions to public goods. |
| Keywords: | Experiment,Persuasion,Commitment,Voluntary Contribution Mechanism |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02016069&r=all |
| By: | Shachat, Jason; Pan, Jinrui; Wei, Sijia |
| Abstract: | We use laboratory experiments to evaluate the effects of individuals' cognitive abilities on their behavior in a finite horizon Economic Order Quantity model. Participants' abilities to balance intuitive judgement with cognitive deliberations are measured by the Cognitive Reflection Test (CRT). Participants then complete a sequence of five “annual” inventory management tasks with monthly ordering decisions. Our results show that participants with higher CRT scores on average earn greater profit and choose more effective inventory management policies. However these gaps are transitory as participants with lower CRT scores exhibit faster learning. We also find a significant gender effect on CRT scores. This suggests hiring practices incorporating CRT type of instruments can lead to an unjustified bias. |
| Keywords: | inventory management; economic order quantity; cognitive reflection; Markov learning |
| JEL: | C91 D92 M11 |
| Date: | 2019–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92554&r=all |
| By: | Niklas Potrafke |
| Abstract: | Using the new macro data on risk aversion and patience by Falk et al. (2018), I show that risk aversion and patience are related to intelligence: high-IQ populations are more patient and more risk averse than low-IQ populations. The correlation between patience and intelligence corroborates previous results based on micro data. Intelligent people tend to be patient because they have long time horizons. The correlation between risk aversion and intelligence supports new micro data studies based on dynamically optimized sequential experimentation (Chapman et al. 2018). |
| Keywords: | Risk aversion, patience, intelligence |
| JEL: | D00 D81 D90 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_295&r=all |