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on Cognitive and Behavioural Economics |
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Issue of 2019‒11‒25
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Christoph March |
| Abstract: | Artificial intelligence (AI) is starting to pervade the economic and social life rendering strategic interactions with artificial agents more and more common. At the same time, experimental economic research has increasingly employed computer players to advance our understanding of strategic interaction in general. What can this strand of research teach us about an AI-shaped future? I review 90 experimental studies using computer players. I find that, in a nutshell, humans act more selfishly and more rational in the presence of computer players, and they are often able to exploit these players. Still, many open questions prevail. |
| Keywords: | experiment, robots, computer players, survey |
| JEL: | C90 C92 O33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7926&r=all |
| By: | Stüber, Robert |
| Abstract: | Altruistic punishment is often thought to be a major enforcement mechanism of social norms. I present experimental results from a modified version of the dictator game with third-party punishment, in which third parties can remain ignorant about the choice of the dictator. I find that a substantial fraction of subjects choose not to reveal the dictator's choice and not to punish the dictator. I show that this behavior is in line with the social norms that prevail in a situation of initial ignorance. Remaining ignorant and choosing not to punish is not inappropriate. As a result, altruistic punishment is significantly lower when the dictator's choice is initially hidden. The decrease in altruistic punishment leads to more selfish dictator behavior only if dictators are explicitly informed about the effect of willful ignorance on punishment rates. Hence, in scenarios in which third parties can ignore information and dictators know what this implies, third-party punishment may only ineffectively enforce social norms. |
| Keywords: | Third-party punishment,Willful ignorance,Sorting,Social preference |
| JEL: | C91 D01 D63 D83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2019215&r=all |
| By: | Kvarven, Amanda; Strømland, Eirik; Wollbrant, Conny Ernst-Peter (University of Gothenburg); Andersson, David; Johannesson, Magnus; Tinghög, Gustav (Linköping University); Västfjäll, Daniel; Myrseth, Kristian Ove R. (Trinity College Dublin) |
| Abstract: | The hypothesis that intuition promotes cooperation has attracted considerable attention. We address the question with a meta-analysis of 82 cooperation experiments, spanning four different types of intuition manipulations—time pressure, cognitive load, depletion, and induction—including 29,087 participants in total. To our knowledge, this is the largest and most comprehensive data set to date. We obtain a positive overall effect of intuition on cooperation, though substantially weaker than that reported in prior meta-analyses, and between studies the effect exhibits a substantial degree of systematic variation. We find that this overall effect depends exclusively on the inclusion of six experiments featuring emotion-induction manipulations, which prompt participants to rely on emotion over reason when making allocation decisions. Upon excluding from the total data set experiments featuring this class of manipulations, between-study variation in the meta-analysis is reduced substantially—and we observed no statistically discernable effect of intuition on cooperation. |
| Date: | 2019–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:osf:metaar:kvzg3&r=all |
| By: | Takanori Ida; Ryo Okui |
| Abstract: | In this study, we examine how information provision affects the degree of overcon dence using an online experiment. The 4,210 experimental participants engaged in stock market prediction exercises in 2014 were asked to evaluate their absolute and relative performance. We conducted a randomized controlled trial such that randomly selected participants obtained information about their own performance and/or the distribution of others' performances before evaluating their performances. We find that while participants exhibit overconfidence bias, this can be alleviated by information provision and that the effect of the elimination of overconfidence is stronger when only partial information, rather than complete information, is provided. Further, we show that the mere provision of information, even if it is consistent with prior beliefs, decreases the degree of overconfidence. |
| Keywords: | Overconfi dence; information provision; randomized controlled trial; online experiment; stock market prediction |
| JEL: | C91 D83 D91 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:snu:ioerwp:no126&r=all |
| By: | Syngjoo Choi; Jeongbin Kim; Eungik Lee; Jungmin Lee |
| Abstract: | Probability weighting is a major concept for accommodating systemic departures from expected utility theory. We examine the relation between probability weighting and cognitive ability by conducting laboratory experiments with a pool of subjects with unusually large variation in cognitive ability; native-born South Koreans and North Korean refugees. We find that cognitive ability is related to two distinct features of probability weighting-likelihood insensitivity and optimism. Particularly, the negative association between likelihood insensitivity and cognitive ability is robust to potential confounders and stronger among lower cognitive-ability subjects. Our findings shed light on the sources of anomalous choices against expected utility theory. |
| Keywords: | probability weighting; cognitive ability; likelihood insensitivity; North Korean refugees |
| JEL: | C91 D01 D81 D91 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:snu:ioerwp:no121&r=all |
| By: | Syngjoo Choi; Booyuel Kim; Minseon Park; Yoonsoo Park |
| Abstract: | This paper investigates the impact of a student-centered teaching pedagogy program on cooperative behaviors of 610 students in five middle schools. We combine the school- level program of changing teaching practice with laboratory experiments, implemented before and after the program, measuring changes of students¡¯ cooperation. We show that the program increased students¡¯ voluntary contributions in a linear public goods experiment and raised teamwork performance in a real-effort task where members pursue a common interest. Our findings support the idea that teaching practices stimulating interpersonal interaction among students affect the formation of cooperative norms among students. |
| Keywords: | teaching practices; project-based learning; cooperation; field experiment; laboratory experiments |
| JEL: | C91 C92 C93 I21 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:snu:ioerwp:no122&r=all |
| By: | Jianxin Wang (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University) |
| Abstract: | Alcohol consumption is an important component of business negotiations across many cultures, yet this behavior remains unmodeled and its potential implications untested. This paper is a step towards filling that gap. We develop a theory that combines guilt-aversion with a canonical alcohol myopia framework. Our GAAM (guilt aversion and alcohol myopia) model predicts that intoxication increases promise-making but has no effect on promise-breaking. We test these predictions using a prisoner’s dilemma game with pre-play communication in a lab-in-the-field experiment. Among males, we find behavior consistent with predictions: intoxication promotes promise-making behavior but does not impact the rate at which promises are trusted or broken. Consequently, intoxication increases communication efficiency. We do not observe intoxication to impact female promise-making, trusting, or promise-breaking behaviors. This is consistent with previous empirical findings that females are substantially less sensitive than males to alcohol- induced myopia. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1074&r=all |
| By: | Epper, Thomas; Fehr, Ernst; Fehr-Duda, Helga; Thustrup Kreiner, Claus; Dreyer Lassen, David; Leth-Petersen, Søren; Nytoft Rasmussen, Gregers |
| Abstract: | This paper documents a large association between individuals’ time discounting in incentivized experiments and their positions in the real-life wealth distribution derived from Danish highquality administrative data for a large sample of middle-aged individuals. The association is stable over time, exists through the wealth distribution and remains large after controlling for education, income profile, school grades, initial wealth, parental wealth, credit constraints, demographics, risk preferences and additional behavioral parameters. Our results suggest that savings behavior is a driver of the observed association between patience and wealth inequality as predicted by standard savings theory. |
| Keywords: | Wealth inequality, savings behavior, time discounting, experimental methods, administrative data |
| JEL: | C91 D31 E21 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2019:16&r=all |