nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2019‒12‒02
five papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Some Contributions of Economics to the Study of Personality By Heckman, James J.; Jagelka, Tomás; Kautz, Tim
  2. Health shocks and risk aversion: Panel and experimental evidence from Vietnam By Priebe, Jan; Rink, Ute; Stemmler, Henry
  3. Learning to cooperate in the shadow of the law By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet
  4. Self-nudging and the citizen choice architect By Reijula, Samuli; Hertwig, Ralph
  5. Cooperatives exhibit greater cooperation than comparable businesses: experimental evidence By Tremblay, Ethan; Hupper, Afton; Waring, Timothy

  1. By: Heckman, James J. (University of Chicago); Jagelka, Tomás (University of Bonn); Kautz, Tim (Mathematica Policy Research)
    Abstract: This paper synthesizes recent research in economics and psychology on the measurement and empirical importance of personality skills and preferences. They predict and cause important life outcomes such as wages, health, and longevity. Skills develop over the life cycle and can be enhanced by education, parenting, and environmental influences to different degrees at different ages. Economic analysis clarifies psychological studies by establishing that personality is measured by performance on tasks which depends on incentives and multiple skills. Identification of any single skill therefore requires isolation of confounding factors, accounting for measurement error using rich data and application of appropriate statistical techniques. Skills can be inferred not only by questionnaires and experiments but also from observed behavior. Economists advance the analysis of human differences by providing anchored measures of economic preferences and studying their links to personality and cognitive skills. Connecting the research from the two disciplines promotes understanding of the number and nature of skills and preferences required to characterize essential differences.
    Keywords: preferences, psychology, behavioral economics, human diversity
    JEL: D91 D12 C93 C91 D9
    Date: 2019–11
  2. By: Priebe, Jan; Rink, Ute; Stemmler, Henry
    Abstract: This paper looks at individual risk behavior and disability in Vietnam, where many households live with a disabled family member. Due to the Vietnam war, disability is a common phenomenon and shapes individuals’ daily life and decision making. Using longitudinal data of 2200 households in Vietnam and an instrumental variable strategy, we show that individuals who live with a disabled family member are more risk averse than others. In addition we employ field experiments and psychological primes to elicit risk and loss behavior of individuals living in the Vietnam province Ha-Thinh. The experimental results, underpin our panel results. We show in addition that a negative recollection of health issues, leads to a lower risk attitude of individuals who do not live with a disabled family member and that individuals who live with a disabled family member are less loss averse. Our findings are causal and contribute to existing studies showing that households who are characterized by higher backward risks are more risk averse than others.
    Keywords: Risk, Disability, Vietnam
    JEL: D1 I14 Z1
    Date: 2019–08
  3. By: Roberto Galbiati (OSC - Observatoire sociologique du changement - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: How does the exposure to past institutions affect current cooperation? While a growing literature focuses on behavioral channels, we show how cooperation-enforcing institutions affect rational learning about the group's value. Strong institutions, by inducing members to cooperate , may hinder learning about intrinsic values in the group. We show, using a lab experiment with independent interactions and random rematching, that participants behave in accordance with a learning model, and in particular react differently to actions of past partners whether they were played in an environment with coercive enforcement or not.
    Keywords: Enforcement,social values,cooperation,learning,spillovers,persistence of insti- tutions,repeated games,experiments
    Date: 2019–06–03
  4. By: Reijula, Samuli; Hertwig, Ralph
    Abstract: This article argues that nudges can often be turned into self-nudges: empowering interventions that enable people to design and structure their own decision environments—that is, to act as citizen choice architects. Self-nudging applies insights from behavioral science in a way that is practicable and cost-effective but that sidesteps concerns about paternalism or manipulation. It can potentially expand the scope of application of behavioral insights from the public to the personal sphere (e.g., homes, offices, families). It provides a tool for reducing failures of self-control and enhancing personal autonomy. Specifically, self-nudging can mean designing one’s proximate choice architecture to alleviate the effects of self-control problems, engaging in education to understand the nature and causes of self-control problems, and employing simple educational nudges to improve goal attainment in various domains. It can even mean self-paternalistic interventions such as winnowing down one’s choice set by, for instance, removing options. Policy makers could promote self-nudging by sharing knowledge about nudges and how they work. The ultimate goal of enabling citizens to become choice architects is to enable efficient self-governance and the self-determined arbitration of conflicts between mutually exclusive goals and preferences within the individual.
    Date: 2019–06–12
  5. By: Tremblay, Ethan; Hupper, Afton; Waring, Timothy
    Abstract: Cooperatives as can be presumed to rely on the economic cooperation of their members. However, game-theoretic and institutional models suggest that cooperatives may be inherently fragile due to the individual costs of cooperation. Because of this it is widely believed that organizations which rely less on cooperation may be more stable, while organizations that require cooperation may be at higher risk of folding. Therefore, if cooperatively owned or managed businesses do in fact require higher levels of prosocial and cooperative behavior than hierarchically managed firms, they must attract and maintain cooperation among participants in order to function. We hypothesized that successful consumer food cooperatives will exhibit greater generalized cooperation than conventional grocery stores. We employed an experimental dictator game to measure altruistic cooperation among consumers at a food cooperative and a comparable conventional grocery. Cooperative customers exhibit a higher base rate of cooperation than similar conventional food shoppers, and this relationship holds even when taking demographic factors such as income, education, and age into account. We conclude that, when successful, consumer food cooperatives exhibit greater levels of cooperation than comparable traditional businesses.
    Date: 2019–01–25

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