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on Cognitive and Behavioural Economics |
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Issue of 2020‒06‒29
ten papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Ronayne, David (University of Oxford and Nuffield College); Sgroi, Daniel (University of Warwick, ESRC CAGE Centre and IZA Bonn); Tuckwell, Anthony (University of Warwick, ESRC CAGE Centre and the Alan Turing Institute) |
| Abstract: | We provide experimental evidence of behavior consistent with the sunk cost effect. Subjects who earned a lottery via a real-effort task were given an opportunity to switch to a dominant lottery; yet 23% chose to stick with their dominated lottery. The endowment effect accounts for roughly only one third of the effect. Subjects’ capacity for cognitive reflection is a significant determinant of sunk cost behavior. We also find stocks of knowledge or experience (crystallized intelligence) predict sunk cost behavior, rather than algorithmic thinking (fluid intelligence) or the personality trait of openness. We construct and validate a scale, the “SCE-8”, which encompasses many resources individuals can spend, and offers researchers an efficient way to measure susceptibility to the sunk cost effect. |
| Keywords: | sunk cost effect, sunk cost fallacy, endowment effect, cognitive ability, fluid intelligence, crystallized intelligence, reflective thinking, online experiment, online survey, psychological scales, scale validation, Raven’s progressive matrices, international cognitive ability resource, cognitive reflection test, openness. JEL Classification: D91, C83, C90 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:475&r=all |
| By: | Shoji, Masahiro |
| Abstract: | This study conducted a lab-in-the-field experiment in rural Bangladesh to disentangle motives for conformity in antisocial behavior. In a take-away game, the previous participants’ choice is revealed before a decision is made. Conformism is measured by the correlation between the information and own choice. This design allows conformism via learning about social norms, changing social preference, and changing the belief about the opponent’s expected amount of take-away. To disentangle the effect of belief, the participants in the treatment group are also informed about the opponent’s expected amount to be taken away. The results show conformism only in the control group, suggesting the channel through the belief. These results are consistent with the broken windows theory and also support the relevance of belief-dependent social preference in decision making. |
| Keywords: | Conformism; guilt aversion; belief-dependent preference; antisocial behavior; broken windows theory |
| JEL: | C91 K42 |
| Date: | 2020–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100735&r=all |
| By: | Fries, Tilman; Parra, Daniel |
| Abstract: | This paper studies, theoretically and experimentally, whether the entitlement effect created by deservingness affects the willingness to lie. In a laboratory experiment, we compare the lying behavior of high-endowment participants with low-endowment participants. In one treatment, the allocation of the endowment is decided by participants' effort, and in the other, it is determined by a random draw. When participants lie to keep money directly determined by their effort, those who receive the high endowment lie more than those who receive the low endowment. In contrast, when income is determined by a random draw, lying is the same regardless of the endowment. These findings are consistent with our model of relative entitlement concerns where less deserving individuals are discouraged from lying because they believe that other individuals are more deserving than themselves. |
| Keywords: | Lying,Dishonesty,Deservingness,Reference points,Psychological game theory |
| JEL: | C91 D02 D90 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbebe:spii2020401&r=all |
| By: | michel Beine (Department of Economics and Management, Université du Luxembourg); Gary Charness (Department of Economics, University of California, Santa Barbara, USA); Anaud Dupuy (Department of Economics and Management, Université du Luxembourg); Majlinda Joxhe (Department of Economics and Management, Université du Luxembourg) |
| Abstract: | We conduct a survey and incentivized lab-in-the-field experimental tasks in Tirana, Albania. While the original purpose of our study was to examine whether and how deep parameters such as time and risk preferences affect the intention to migrate, our study was transformed into a natural experiment owing to two large earthquakes that shook the Tirana area during our data-collection period. These events provide us with a rare opportunity to gather evidence (including a pre-earthquake control) on the effect of natural disasters on time and risk preferences. We find unambiguous effects towards more risk aversion and impatience for affected individuals. Moreover, as it turns out, the second earthquake amplified the effect of the first one, suggesting that experiences cumulate in their influence on these preferences. |
| Keywords: | Time preferences, risk preferences, natural disaster, Albania, migration |
| JEL: | B49 C90 D91 F22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:20-09&r=all |
| By: | Caliendo, Marco (University of Potsdam); Hennecke, Juliane (Auckland University of Technology) |
| Abstract: | Unhealthy behavior can be extremely costly from a micro- and macroeconomic perspective and exploring the determinants of such behavior is highly important from an economist's point of view. We examine whether locus of control (LOC) can explain alcohol consumption as an important domain of health behavior. LOC measures how much an individual believes that she is in control of the consequences of her own actions for her life's future outcomes. While earlier literature showed that an increasing internal LOC is associated with increased health-conscious behavior in domains such as smoking, exercise or diets, we find that drinking seems to be different. Using German panel data from the Socio-Economic Panel (SOEP) we find a significant positive effect of having an internal LOC on the probability of moderate and regular drinking. We suggest and discuss two likely mechanisms for this relationship and find interesting gender dierences. While social investments play an important role for both men and women, risk perceptions are especially relevant for men. |
| Keywords: | locus of control, alcohol consumption, health behavior, risk perception, social investment |
| JEL: | I12 D91 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13273&r=all |
| By: | Nils K\"obis; Luca Mossink |
| Abstract: | The release of openly available, robust text generation algorithms has spurred much public attention and debate, due to algorithm's purported ability to generate human-like text across various domains. Yet, empirical evidence using incentivized tasks to assess human behavioral reactions to such algorithms is lacking. We conducted two experiments assessing behavioral reactions to the state-of-the-art Natural Language Generation algorithm GPT-2 (Ntotal = 830). Using the identical starting lines of human poems, GPT-2 produced samples of multiple algorithmically-generated poems. From these samples, either a random poem was chosen (Human-out-of-the-loop) or the best one was selected (Human-in-the-loop) and in turn matched with a human written poem. Taking part in a new incentivized version of the Turing Test, participants failed to reliably detect the algorithmically-generated poems in the human-in-the-loop treatment, yet succeeded in the Human-out-of-the-loop treatment. Further, the results reveal a general aversion towards algorithmic poetry, independent on whether participants were informed about the algorithmic origin of the poem (Transparency) or not (Opacity). We discuss what these results convey about the performance of NLG algorithms to produce human-like text and propose methodologies to study such learning algorithms in experimental settings. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.09980&r=all |
| By: | Sylvain Chabe-Ferret (TSE - Toulouse School of Economics - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UT1 - Université Toulouse 1 Capitole); Philippe Le Coent (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Arnaud Reynaud (TSE - Toulouse School of Economics - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UT1 - Université Toulouse 1 Capitole); Subervie Julie (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Daniel Lepercq (CACG - Compagnie d'Aménagement des Côteaux de Gascogne) |
| Abstract: | Improving water efficiency is a growing challenge for the Common Agricultural Policy. In this article, we test whether social comparison nudges can promote water-saving behavior among farmers. We report on a pilot Randomized Controlled Trial, in which information on individual and group water consumption were sent every week to farmers equipped with smartmeters. We do not detect an effect of nudges on average water consumption. We however find that the nudge decreases water consumption at the top of the distribution while it increases consumption at the bottom. This study highlights the potential of nudges as an agricultural policy tool. |
| Keywords: | nudges,behavioral economics,irrigation water use,government policy |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02791612&r=all |
| By: | Rau, Holger A. |
| Abstract: | This paper analyzes in a within-subjects experiment time preferences when peopledecide for themselves and on behalf of others. The data show that subjects becomemore impatient when making decisions, which affect the payoff of others. Thechange can be explained by altruistic subjects who increase their focus on earlyconsumption when responsible for others' payoffs |
| Keywords: | Decisions fo rOthers,Experiment,Time Preferences |
| JEL: | C91 D14 D81 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:395&r=all |
| By: | Francesco Fallucchi (Luxembourg Institute of Socio-Economic Research (LISER), Luxembourg); Daniele Nosenzo (Department of Economics and Business Economics, Aarhus University) |
| Abstract: | A popular empirical technique to measure norms uses coordination games to elicit what subjects in an experiment consider appropriate behavior in a given situation (Krupka and Weber, 2013). The Krupka-Weber method works under the assumption that subjects use their normative expectations to solve the coordination game. However, subjects might use alternative focal points to coordinate, in which case the method may deliver distorted measurements of the social norm. We test the vulnerability of the Krupka-Weber method to the presence of alternative salient focal points. We find that the method is robust as long as there are clear normative expectations about what constitutes appropriate behavior. In settings where there is a less clear consensus about the social norm, the method is more vulnerable. |
| Keywords: | Social norms, Krupka-Weber method, Coordination, Focal point, Saliency, Dictator game |
| JEL: | C72 C91 |
| Date: | 2020–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2020-06&r=all |
| By: | Gilles Grolleau (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier - INRA - Institut National de la Recherche Agronomique - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - UM1 - Université Montpellier 1 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques, Département Sciences Economiques, Sociales et de Gestion - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques, Laboratoire d'Expérimentation en Sciences Sociales et Analyse des Comportements (LESSAC) - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)); Guillermo Mateu (Laboratoire d'Expérimentation en Sciences Sociales et Analyse des Comportements (LESSAC) - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)); Angela Sutan (Laboratoire d'Expérimentation en Sciences Sociales et Analyse des Comportements (LESSAC) - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)); Radu Vranceanu (Business School - UAB - University of Alabama at Birmingham [ Birmingham], THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - UCP - Université de Cergy Pontoise - Université Paris-Seine) |
| Abstract: | This paper builds an experiment to investigate whether asking people to state how much they will donate to a charity (to pledge) can increase their actual donation. Individuals' endowment is either certain or a random variable. We study different types of pledges, namely private, public and irrevocable ones, which differ in individual cost of not keeping a promise. Public pledges appear to be associated to lower donation levels. Irrevocable pledges ensure an amount of donations equal to donations in absence of pledges. Moreover, a significant number of individuals keep their promises, in presence of either private or public pledges. A higher risk attached to the endowment increases donations. |
| Keywords: | charity giving,commitment,communication,experiments,pledge |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02799567&r=all |