nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2019‒12‒09
six papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Incorporating Conditional Morality into Economic Decisions By David Masclet; David L. Dickinson
  2. Selection into Experiments: Evidence from a Population of Students By Schulz, Jonathan F.; Sunde, Uwe; Thiemann, Petra; Thöni, Christian
  3. Nudge, Boost, or Design? Limitations of behaviorally informed policy under social interaction By Reijula, Samuli; Kuorikoski, Jaakko; Ehrig, Timo; Katsikopoulos, Konstantinos; Sunder, Shyam
  4. Nudging Physical Activity:A Randomized Controlled Field Experiment By Takunori ISHIHARA; Taro TOMIZUKA; Rei GOTO; Takanori IDA
  5. Requiem for a Nudge: Framing Effects in Nudging Honesty By Eugen Dimant; Gerben A. van Kleef; Shaul Shalvi
  6. Future imperfect: behavioural economics and government paternalism By Le Grand, Julian

  1. By: David Masclet; David L. Dickinson
    Abstract: We present a framework that incorporates both moral motivations and fairness considerations into utility. The main idea is that individuals face a preference trade-off between their material individual interest and their desire to follow moral norms. In our model, we assume that moral motivation is conditional and may be influenced by others’ actions. Specifically, in our framework moral obligation is a combination of two main components: an autonomous component and a social influence component that captures the influence of others. Our framework is able to explain many stylized results in the literature and to improve theories of economic behavior. Key Words: Fairness, Ethical Decision Making, Moral Motivation, Behavioral Economics
    JEL: B3 D6 D9
    Date: 2019
  2. By: Schulz, Jonathan F. (George Mason University); Sunde, Uwe (University of Munich); Thiemann, Petra (Lund University); Thöni, Christian (University of Lausanne)
    Abstract: This study investigates the selection into lab experiments among university students based on data from two cohorts of a university's first-year students. The analysis combines two experiments: a classroom experiment in which we elicited measures for risk, time, social preferences, confidence, and cognitive skills using standard measures from the experimental literature; and a recruitment experiment that varied information provided in a typical e-mail recruitment procedure for lab participants. In the recruitment experiment, students were randomly assigned to four conditions that highlighted altruistic motives or financial incentives. We find significant treatment effects: mentioning financial incentives boosts the participation rate in lab experiments by 50 percent. In terms of selection, we find that more selfish individuals and individuals with higher cognitive reflection scores are more likely to participate in experiments, but we find little evidence for selection along risk preferences, time preferences, and overconfidence. Although the recruitment conditions affect participation rates, they do not alter the composition of the participant sample in terms of behavioral measures and cognitive skills.
    Keywords: classroom experiment, selection, recruitment, preferences, cognitive abilities
    JEL: C93 D64 H41 L3
    Date: 2019–11
  3. By: Reijula, Samuli; Kuorikoski, Jaakko; Ehrig, Timo; Katsikopoulos, Konstantinos; Sunder, Shyam
    Abstract: Nudge and boost are two competing approaches to applying the psychology of reasoning and decision making to improve policy. Whereas nudges rely on manipulation of choice architecture to steer people towards better choices, the objective of boosts is to develop good decision-making competences. Proponents of both approaches claim capacity to enhance social welfare through better individual decisions. We suggest that such efforts should involve a more careful analysis of how individual and social welfare are related in the policy context. First, individual rationality is not always sufficient or necessary for improving collective outcomes. Second, collective outcomes of complex social interactions among individuals are largely ignored by the focus of both nudge and boost on individual decisions. We suggest that the design of mechanisms and social norms can sometimes lead to better collective outcomes than nudge and boost, and present conditions under which the three approaches (nudge, boost, and design) can be expected to enhance social welfare.
    Date: 2018–03–20
  4. By: Takunori ISHIHARA; Taro TOMIZUKA; Rei GOTO; Takanori IDA
    Abstract: In this paper, we discuss a field experiment for encouraging behavioral changes that could result in engagement in physical activity using two types of “nudges”: private information and social comparison information. In our experiment, the information provision group was notified solely about their own average step number. The social comparison group received information about their own average steps and a frequency distribution table describing both the relative ranking of each person and the distribution of steps in the group. Our findings are summarized as follows. First, we found the positive effects by private information and social comparison information. Second, we found the effect of social comparison in addition to information provision treatment was larger than the private information treatment only. Finally, we found the effects of treatments do not decrease or vanish during our experiment.
    Keywords: Randomized Controlled Trial (RCT), Physical Activity (PA), Information Provision, Social Comparison.
    JEL: C93 D91 I1
    Date: 2019–11
  5. By: Eugen Dimant (University of Pennsylvania); Gerben A. van Kleef (University of Amsterdam); Shaul Shalvi (University of Amsterdam)
    Abstract: We examine framing effects in nudging honesty in the spirit of the growing norm-nudge literature by utilizing a high-powered and pre-registered study. Across four treatments, participants received one random truthful norm-nudge that emphasized 'moral suasion' based on either what other participants previously did (empirical message) or approved of doing (normative message) and varied in the framing (positive or negative) in which it was presented. Subsequently, participants repeatedly played the 'mind game' in which they were first asked to think of a number, then roll a digital die, and then reported whether the two numbers coincide, in which case a bonus was paid. Hence, whether or not the report was truthful remained unobservable to the experimenters. We find compelling null effects with tight confidence intervals showing that none of the norm-nudge interventions worked. A follow-up experiment reveals the reason for these convincing null-effects: the information norm-nudges did not actually change norms. Notably, our secondary results suggest that a substantial portion of individuals misremembered norm-nudges such that they conveniently supported deviant behavior. This subset of participants indeed displayed significantly higher deviance levels, a behavior pattern in line with literature on motivated misremembering and belief distortion. We discuss the importance of this high-powered null finding for the flourishing norm-nudge literature and derive policy implications.
    Keywords: Norm-Nudges, Nudge, Social Information, Social Norms
    Date: 2019
  6. By: Le Grand, Julian
    Abstract: Economists and others have used the results from behavioral economics to justify paternalistic government policies, aimed at changing an individual’s behavior in the present so as to improve that individual’s well-being in the future. Examples include the automatic enrollment in pension schemes and anti-smoking measures, such as banning smoking in public places or proposals for a smoking license. But these - and the economic analyses underlying them – have been challenged on the grounds that they arbitrarily privilege one set of preferences over another. The privileged preferences include those of an ‘inner rational agent’ and those of the future over the present. This paper addresses this criticism and puts forward two new conceptions of - and justifications for – these kinds of policy.
    Keywords: behavioral economics; government paternalism
    JEL: J1
    Date: 2018–12–31

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