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on Cognitive and Behavioural Economics |
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Issue of 2019‒06‒24
five papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Jordi Brandts (Institute for Economic Analysis, CSIC, Barcelona); Klarita Gërxhani (European University Institute); Arthur Schram (University of Amsterdam) |
| Abstract: | Competition involves two dimensions, rivalry for resources and social-status ranking. In our experiment we exclude the first dimension and investigate gender differences in the preference for status ranking. Participants perform a task under non-rivalry incentives. Before doing so, individuals indicate whether they prefer to do the task in an environment with social-status ranking or one without, knowing whether or not the choice will be imposed upon the whole group (as opposed to being personal) and whether the ranking will be done by a man or a woman. We find no gender difference in mean status-ranking aversion when the ranking is personal. When the ranking is imposed, there are still no gender differences in the preferences for social ranking when the ranker is a women, and women are not affected by the ranker’s gender. With a male ranker, however, men have a much stronger desire to be ranked than with a female ranker. |
| Keywords: | status ranking, competition, gender |
| JEL: | C91 J16 |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190041&r=all |
| By: | Miura, Takahiro (Kansai University); Inukai, Kengo (Meiji Gakuin University); Sasaki, Masaru (Osaka University) |
| Abstract: | Our paper conducts laboratory experiments with the sequential search model to test whether participants engage in search activities in line with theoretical predictions derived from the expected utility model or the reference-dependent model, without assuming any specific formulation rule for a reference point. Our experimental results showed that the participants' search behavior did not align with the reference-dependent model. In addition, the correlation between individual preferences and search behavior reinforced our experimental results; that is, loss aversions were not significantly correlated with search behavior. |
| Keywords: | risk preference, loss aversion, sequential search |
| JEL: | D81 D83 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12378&r=all |
| By: | Guillermo Alves (CAF, Banco de Desarrollo de América Latina); Pablo Blanchard (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Burdín (The University of Leeds); Mariana Chávez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | A growing body of research has been investigating the role of management practices and managerial behaviour in conventional private firms and public sector organizations. However, little is known about managers’ behavioural profile in noninvestor-owned firms. This paper aims to fill this gap by providing a comprehensive behavioural characterization of managers employed in cooperatives. We gathered incentive-compatible measures of risk preferences, time preferences, reciprocity, altruism, and trust from 196 Uruguayan managers (half of them employed in worker cooperatives) and 92 first-year undergraduate students. To do this, we conducted a high-stakes lab-in-the-field experiment in which participants played a series of online experimental games and made incentivised decisions. The average payoff in the experiment was approximately 2.5 times higher than the average local managerial wage in the private sector. Our key findings are that (1) the fraction of risk loving subjects is lower among co-op managers compared to conventional managers, and (2) co-op managers appear to be more altruistic than their conventional counterparts. Interestingly, we do not observe significant differences between the two groups across other preference domains, such as impatience, trust, and reciprocity. |
| Keywords: | risk-aversion, time preferences, altruism, reciprocity, trust, lab-in-the-field experiment, managers, cooperatives |
| JEL: | C90 D81 J54 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-08-19&r=all |
| By: | Maxime Menuet (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Petros Sekeris (Montpellier Business School - Montpellier Business School) |
| Abstract: | The present paper studies the causes and duration of wars by building a war of attrition game, and explores the effect of overconfidence in such settings. During the fight, each player infers his opponent's inclination in surrendering given two psychological biases jointly capturing overconfidence: illusory superiority (overestimation), and over-self-confidence (overprecision). We demonstrate that overconfidence is neither necessary, nor suffcient to have war. Yet, overconfident decision-makers are nevertheless more likely to initiate war, and to remain active longer in a conflict. Moreover, we show that the effect of overestimation on war duration may be non-monotonic, with the duration of wars increasing in overconfidence for lowly overconfident players, and decreasing for highly overconfident ones. We argue that this simple model helps understanding a host of real-world conflictive situations. |
| Keywords: | Overconfidence,Imperfect information,War of attrition,Illusory superiority |
| Date: | 2019–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02155286&r=all |
| By: | Gary Charness; Francesco Feri; Miguel A. Meléndez-Jiménez; Matthias Sutter |
| Abstract: | The effectiveness of social interaction depends strongly on an ability to coordinate actions efficiently. In large networks, such coordination may be very difficult to achieve and may depend on the communication technology and the network structure. We examine how pre-play communication and clustering within networks affect coordination in a challenging experimental game on eight-person networks. Free-form chat is enormously effective in achieving the non-equilibrium efficient outcome in our game, but restricted communication (where subjects can only indicate their intended action) is almost entirely ineffective. We can rationalize this result with a novel model about the credibility of cheap-talk messages. This credibility is much larger with freeform message communication than with restricted communication. We are the first to model this credibility and show, both theoretically and experimentally, an interaction effect of network structure and communication technologies. We also provide a model of message diffusion, which indeed predicts that diffusion will be more rapid without clustering and is consistent with our data. |
| Keywords: | networks, clustering, communication, credibility, cheap talk, experiment |
| JEL: | C71 C91 D03 D85 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7659&r=all |