nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2020‒08‒17
seven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Confidence and career choices: An experiment By Barron, Kai; Gravert, Christina
  2. Children's GrI-Creativity: Effects of Limited Resources in Creative Drawing By Giuseppe Attanasi; Michela Chessa; Carlo Ciucani; Sara Gil Gallen
  3. Non-selfish behaviour: Are social preferences or social norms revealed in distribution decisions? By Heap, Shaun P. Hargreaves; Matakos, Konstantinos; Weber, Nina Sophie
  4. Creativity under Pressure: Performance Payments, Task Type and Productivity* By Joaquin Artes; Jennifer Graves; Meryl Motika
  5. Motivating Risky Choices Increases Risk Taking By Ennio Bilancini; Leonardo Boncinelli; Lorenzo Spadoni
  6. Experimental effects of an absent crowd on performances and refereeing decisions during Covid-19 By Alex Bryson; Peter Dolton; J. James Reade; Dominik Schreyer; Carl Singleton
  7. Communication, Expectations and Trust: an Experiment with Three Media By Anna Lou Abatayo; John Lynham; Katerina Sherstyuk

  1. By: Barron, Kai; Gravert, Christina
    Abstract: Confidence in one's own abilities is often seen as an important determinant of being successful. Empirical evidence about how such beliefs about one's own abilities causally influence choices is, however, sparse. In this paper, we use a stylized laboratory experiment to investigate the causal effect of an increase in confidence on two important choices made by workers in the labor market: (i) choosing between jobs with a payment scheme that depends heavily on ability [high earnings risk] and those that pay a fixed wage [low earnings risk], and (ii) the subsequent choice of how much effort to exert within the job. We find that an exogenous increase in confidence leads to an increase in subjects' propensity to choose payment schemes that depend heavily on ability. This is detrimental for low ability workers due to high baseline levels of confidence.
    Keywords: overconfidence,experiment,beliefs,real-effort,career choices
    JEL: C91 D03 M50 J24
    Date: 2020
  2. By: Giuseppe Attanasi (Université Côte d'Azur, France; GREDEG CNRS); Michela Chessa (Université Côte d'Azur, France; GREDEG CNRS); Carlo Ciucani (LUISS University, Rome, Italy); Sara Gil Gallen (Università degli studi di Bari "Aldo Moro", Italy)
    Abstract: We define GrI-creativity as the specific creative cognition process resulting in green innovation, i.e., directed toward the generation of green rather than non-green products. In this work, we developed an operational way to investigate the GrI-creativity process and its determinants through a lab-in-the-field experiment with primary school children aged from 7 to 11 years old. Subjects performed a common drawing task, but with different means: only a black marker, any color among twelve (including black), or three among the same twelve color set. Our findings show that (i) freedom of choice in the used tools is boosting creativity, (ii) limited resources do not boost creativity, but they are not detrimental either. According to our results, GrI-creativity can be enhanced by providing fewer resources, but ensuring that individuals are given some discretion when it comes to choosing which of them to use. Therefore, we combine our experimental method with insights from social psychology. We provide evidence of a highly significant positive effect on creativity of three personal traits of the subjects, namely: a high score at the Cognitive Reflection Test, self-perception of creativity and the practice of sport in daily life. All these results are in line with the existing literature investigating the determinants of creativity. More surprisingly, we do not find evidence of a role of the risk preferences.
    Keywords: Creativity, Green Innovation, Experimental Economics, Social Psychology
    JEL: C91 D91 O31 Q50
    Date: 2020–07
  3. By: Heap, Shaun P. Hargreaves; Matakos, Konstantinos; Weber, Nina Sophie
    Abstract: People frequently behave non-selfishly in situations where they can reduce their own payoff to help others. It is typically assumed that such pro-social behaviour arises because people are motivated by a social preference. An alternative explanation is that they follow a social norm. We test with two survey experiments (N=2,408) which of these two explanations can better explain decisions people make in a simple distribution game under three different elicitation mechanisms. Unlike previous studies, we elicit preferences and perceived social norms directly for each subject. We find that i) norm-following better explains people’s distributive choices compared to social preferences and ii) lack of confidence in one’s social preference –itself explained by weaker social identification— predicts norm-following. Our findings imply that the Pareto criterion has weaker (than previously thought) foundations for welfare evaluations, but this effect may be attenuated in societies with stronger social identification. Perhaps unexpectedly, but unsurprisingly given i) above, we find that different mechanisms for eliciting social preferences have no effect on distribution decisions.
    Date: 2020–07–23
  4. By: Joaquin Artes; Jennifer Graves; Meryl Motika (Division of Social Science)
    Abstract: When incentivizing a worker with performance pay, does the effectiveness of the pay type used vary by the type of task being completed? To answer this question, we run an experiment to test the task-specific productivity effects of various types of performance-based payments, each intended to incentivize productivity. The incentives we use are competition, high-stakes pay, time pressure and piece rate pay, each evaluated against a non-performance-based flat rate payment. Each of these incentives are applied in situations with participants completing three types of tasks: a routine task, a purely creative task and a creative problem-solving task. By testing these various tasks and pressures in the same experimental design, we are able to make comparisons across task types that have not been possible in previous studies. Our results show that productivity indeed does differ across task type and incentive combinations. We find that, for routine tasks, all incentivizing payment schemes improve productivity relative to flat rate payment. In contrast, for both the purely creative and the creative problem-solving tasks, none of the payment types of piece rate, timed goals nor high stakes pay impact productivity relative to a flat rate payment, with the high pay incentive even decreasing performance on the problemsolving task. We find competition to be the one incentive-based pay scheme that boosts productivity. Participants performed as well or better under competition across all task types, with a notable increase in their performance on pure creative tasks.
    Date: 2019–10
  5. By: Ennio Bilancini; Leonardo Boncinelli; Lorenzo Spadoni
    Abstract: We study the impact of the mode of cognition on risk taking. In an online experiment we ask participants to make a simple decision involving risk. In the control group no manipulation is made, while in the treatment group we exogenously manipulate the mode of cognition by asking subjects to write down a text that motivates their risky choice before any decision is actually made. Such motivation treatment is meant to induce more reflection upon the decision to be made. Our results show an effect of the motivation treatment on risk taking, suggesting that higher reflection makes subjects more prone to risk taking. The effect is stronger if we consider only subjects who imperfectly understand the probability distribution implied by the simple choice task. Based on our experimental findings, we suggest that reflection and comprehension might be substitutes when individuals make decisions involving risk.
    Keywords: dual process; risk taking; motivation; deliberation; intuition; bomb risk elicitation task
    JEL: D01 D81
    Date: 2020
  6. By: Alex Bryson (Department of Quantitative Social Science, Institute of Education); Peter Dolton (Department of Economics, University of Sussex); J. James Reade (Department of Economics, University of Reading); Dominik Schreyer (Wissenschaftliche Hochschule für Unternehmensführung (WHU)); Carl Singleton (Department of Economics, University of Reading)
    Abstract: The Covid-19 pandemic has induced worldwide natural experiments on the effects of crowds. We exploit one of these experiments currently taking place over several countries in almost identical settings: professional football matches played behind closed doors. We find large and statistically significant effects on the number of yellow cards issued by referees. Without a crowd, fewer cards were awarded to the away teams, reducing home advantage. These results have implications for the influence of social pressure and crowds on the neutrality of refereeing decisions.
    Keywords: Attendance, Coronavirus, Covid-19, Home advantage, Natural Experiments, Referee Bias, Social Pressure
    JEL: C90 D91 L83 Z20
    Date: 2020–08–06
  7. By: Anna Lou Abatayo (Bocconi University, University of Hawaii at Manoa and University of Guelph); John Lynham (University of Hawaii at Manoa); Katerina Sherstyuk (University of Hawaii at Manoa)
    Abstract: We study how communication under differ popular media affects trust game play. Three communication media are considered: traditional face-to- face, Facebook groups, and anonymous online chat. We consider post-communication changes in player expectations and preferences, and further analyze the contents of group communications to understand the channels though which communication enhances sender and receiver behavior. For senders, social, emotional and game-relevant contents of communication all matter, significantly influencing both their expectations of fair return and preferences towards receivers. Receiver increased trustworthiness is mostly explained by their adherence to the social norm of sending back a fair share in return for the full amount received. Remarkably, these results do not qualitatively differ among the three communication media; while face-to-face had the largest volume of messages, all three media proved equally effective in enhancing trust and trustworthiness.
    Keywords: communication technology; laboratory experiments; trust games; contents analysis
    JEL: C72 C92 D83
    Date: 2020–07

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