nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2019‒07‒15
six papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Teams promise but do not deliver By Nielsen, Kirby; Bhattacharya, Puja; Kagel, John H.; Sengupta, Arjun
  2. Experimental and self-reported measures of risk taking and digit ratio (2D:4D): evidence from a large, systematic study By Brañas-Garza, Pablo; Galizzi, Matteo M.; Nieboer, Jeroen
  3. Intermittent Discounting By Alexis Direr
  4. Cost misperceptions and energy consumption: Experimental evidence for present bias and biased price beliefs By Werthschulte, Madeline; Löschel, Andreas
  6. "Behavioral Theory of Repeated Prisoner’s Dilemma: Generous Tit-For-Tat Strategy" By Hitoshi Matsushima

  1. By: Nielsen, Kirby; Bhattacharya, Puja; Kagel, John H.; Sengupta, Arjun
    Abstract: Individuals and two-person teams play a hidden - action trust game with pre - play communication. We replicate previous results for individuals that non-binding promises increase cooperation rates. But this does not extend to teams. Wh ile teams make non-binding promises to cooperate at the same rate as individuals, they consistently renege on those promises. Additional treatments begin to explore the basis for the team outcome, ruling out explanations that team payoff structures drive b ehavior. Analysis of within-team discussions provides insight into the decision-making processes of first and second movers.
    Keywords: trust game,hidden-action,non-binding communication,teams versus individuals
    JEL: C72 C91 C92 D83
    Date: 2019
  2. By: Brañas-Garza, Pablo; Galizzi, Matteo M.; Nieboer, Jeroen
    Abstract: Using a large (n=704) sample of laboratory subjects, we systematically investigate the links between the digit ratio - a biomarker for pre-natal testosterone exposure - and two measures of individual risk taking: (i) risk preferences over lotteries with real monetary incentives, and (ii) self-reported risk attitude. The digit ratio (also called 2D:4D) is the ratio of the length of the index finger to the length of the ring finger, and we consider both hands’ digit ratios. Previous studies have found that the digit ratio correlates with risk taking in some subject samples, but not others. In our sample, we find that both the right-hand and the left-hand digit ratio are significantly associated with risk preferences: subjects with lower digit ratios tend to choose riskier lotteries. Neither digit ratio, however, is associated with self-reported risk attitude.
    Keywords: testosterone; 2D:4D ratio; risk preferences; risk attitudes; ES/K001965/1
    JEL: C90 C92 D44 D81
    Date: 2018–02–27
  3. By: Alexis Direr (LEO - Laboratoire d'Économie d'Orleans - CNRS - Centre National de la Recherche Scientifique - Université de Tours - UO - Université d'Orléans)
    Abstract: A novel theory of time discounting is proposed in which future consumption is less valuable than present consumption due to waiting costs. Waiting is intermittent as consumer's attention can be distracted away from future gratifications. The model satisfies and reinterprets several properties of intertemporal preference like present bias, decreasing impatience or sub-additive discounting. A quantitative puzzle is presented, supported by preliminary experimental evidence, which shows how impatience over short delays may translate into excessive impatience over long delays. The wait-based model offers a solution to the puzzle, contrary to usual models of discounting. J.E.L. codes: D8, E21
    Keywords: present bias,sub-additive dis- counting,time preferences,decreasing impatience
    Date: 2019–06–27
  4. By: Werthschulte, Madeline; Löschel, Andreas
    Abstract: The aim of this study is to link variation in energy cost misperceptions to variation in households' energy consumption. The focus is on two sorts of misperceptions: First, present biased discounting of future energy costs and second, biased energy price beliefs. By running an artefactual field experiment with a representative sample of 711 participants, we gather incentivized measures of these two misper- ceptions and observe participant's revealed electricity consumption. Our main finding is that participants with present bias are predicted to consume on average 9% more electricity than participants with time-consistent discounting. Our results further suggest that neither the true marginal electricity price nor the expected marginal electricity price can predict electricity consumption. Taken together our results raise doubt in the effectiveness of classical price based policies in reducing households' energy consumption.
    Keywords: energy consumption,present bias,price beliefs,field experiment
    JEL: C93 D81 D91 Q49
    Date: 2019
  5. By: Wei Meng
    Abstract: Each of us faces different people every day. It is especially important to communicate with others. Interpersonal relationships are necessary in life. Only when we are happy with others can we benefit our work, study or life. Then how should we get along with others before both parties are happy? I think we are all people with feelings and souls. As long as we treat others with sincerity, the other party will treat ourselves in the same way. The relationship between people is the collision of two hearts. Treating everyone with heart, you will be happy to get along with others. Of course, you should also pay attention to skills when you get along with others. First understand the other party's preferences, avoid the other people's hateful things, find the right way for two people to get along, follow some ways to get along, will definitely get good interpersonal relationships Key Words:communication, soft power, tool, interaction Policy
    Date: 2018–06
  6. By: Hitoshi Matsushima (Faculty of Economics, The University of Tokyo)
    Abstract: This study investigates infinitely repeated games of a prisoner’s dilemma with additive separability in which the monitoring technology is imperfect and private. Behavioral incentives indicate that, in this setting, a player is not only motivated by pure self-interest but also by reciprocity. Players often become naïve and select an action unconsciously. By focusing on generous tit-for-tat strategies, we characterize a Nash equilibrium with behavioral incentives, termed behavioral equilibrium, in an accuracy-contingent manner. By eliminating the gap between theory and evidence, this study argues that reciprocity plays a substantial role in motivating a player to consciously make decisions.
    Date: 2019–02

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