nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2020‒11‒23
eleven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Are people conditionally honest? The effects of stakes and information about others' behavior By Necker, Sarah; Le Maux, Benoit; Masclet, David
  2. Lying for Others: The Impact of Agency on Misreporting By Georgia E. Buckle; Sascha Füllbrunn; Wolfgang J. Luhan
  3. The Influence of Self and Social Image Concerns on Lying By Bašic, Zvonimir; Simone Quercia
  4. Renewable Resource Use with Imperfect Self-Control By Werner, Katharina; Strulik, Holger
  5. Inequality in minimum-effort coordination By Feldhaus, Christoph; Rockenbach, Bettina; Zeppenfeld, Christopher
  6. Identifying and debunking environmental-related false news stories – An experimental study By Grüner, Sven
  7. Generosity during Covid-19 the effect of social distancing and framing on donations in dictator games By Lotti, Lorenzo
  8. Higher Order Risk Preferences: New Experimental Measures, Determinants and Field Behavior By Sebastian Schneider; Matthias Sutter
  9. Psychological pressure and the right to determine the moves in dynamic tournaments – Evidence from a natural field experiment By Mark Kassis; Sascha L. Schmidt; Dominik Schreyer; Matthias Sutter
  10. To Condemn is Not to Punish: An Experiment on Hypocrisy By Jauernig, Johanna; von Grundherr, Michael; Uhl, Matthias
  11. Higher Order Risk Preferences: Experimental Measures, Determinants and Related Field Behavior By Schneider, Sebastian O.; Sutter, Matthias

  1. By: Necker, Sarah; Le Maux, Benoit; Masclet, David
    Abstract: We study theoretically and empirically how monetary incentives and information about others' behavior affects dishonesty. We ran a laboratory experiment with 560 participants inspired by the "observed game" developed by Kajackaite and Gneezy (2017). We find that the extensive (the fraction of liars) and intensive (the size of the lie) margin of dishonesty decrease when stakes are very high. On average, information about others slightly increases the fraction of liars but has no effect on the size of the lie. Distinguishing subjects by their belief on others' behavior, we find that information decreases the fraction of liars among over-estimators and increases the fraction among under-estimators. This pattern is the same across payoff levels.
    Keywords: Laboratory experiment,theory,cheating,incentives,information,moral costs,lying costs
    JEL: C91 D03 D78
    Date: 2020
  2. By: Georgia E. Buckle (University of Portsmouth); Sascha Füllbrunn (Radboud University); Wolfgang J. Luhan (University of Portsmouth)
    Abstract: We extend the experimental design by Fischbacher and Föllmi-Heusi (2013) to examine lying behavior on behalf of others, eliminating all possible incentives apart from social preferences. We compare the prevalence of misreporting in situations where the monetary gain either goes to the decision-maker or to an anonymous other participant. Overall we observe lower levels of lying for others compared to for oneself, however, a significant number of participants were willing to lie to increase another participant’s payoff, with no economic incentive to do so. We find no partial lying for others but rather two extremes: either complete honesty or maximal lying.
    Keywords: lying aversion, decision making for others, prosocial lying, experiment
    JEL: C91 D63 D82
    Date: 2020–11–08
  3. By: Bašic, Zvonimir (Max Planck Institute for Research on Collective Goods, Bonn); Simone Quercia (University of Verona)
    Abstract: We investigate the influence of self and social image concerns as potential sources of lying costs. In a standard die-rolling experiment, we exogenously manipulate self-awareness and observability, which mediate the focus of a person on their private and public selves, respectively. First, we show that an increase in self-awareness has no effect on reporting private information. This suggests that self-image concerns may be less important than previously hypothesized in the literature on lying costs. Second, we show that increasing subjects' observability, while still maintaining private information, significantly decreases the subjects' reports. We finally show in a survey experiment that respondents believe that the likelihood of a lie increases with the reported outcome and attribute negative traits to people who make high reports. This further supports reputational concerns as the explanation behind the results of our social image treatment.
    Keywords: honesty, truth-telling, lying, private information, self-image concerns, social image concerns, reputation
    JEL: C91 D63 D82 D91
    Date: 2020–08
  4. By: Werner, Katharina; Strulik, Holger
    Abstract: We investigate renewable resources when the harvesting agents face self-control problems. Individuals are conceptualized as dual selves. The rational long-run self plans for the infinite future while the affective short-run self desires to maximize instantaneous profits. Depending on the degree of self-control, actual behavior is partly driven by short-run desires. This modeling represents impatience and present bias without causing time inconsistent decision making. In a model of a single harvesting agent (e.g. a fishery), we discuss how self-control problems affect harvesting behavior, resource conservation, and sustainability and discuss policies to curb overuse and potential collapse of the resource due to present-biased harvesting behavior. We then extend the model to several harvesting agents and show how limited self-control exacerbates the common pool problem. Finally, we investigate heterogenous agents and show that there are spillover effects of limited self-control in the sense that perfectly rational agents also behave less conservatively when they interact with agents afflicted by imperfect self-control.
    Keywords: self-control,temptation,renewable resource use,sustainability,common pool resource management.
    JEL: Q20
    Date: 2020
  5. By: Feldhaus, Christoph; Rockenbach, Bettina; Zeppenfeld, Christopher
    Abstract: Successful coordination is key for economic and societal wealth. The rich literature on the minimum-effort game (MEG) has provided valuable insights into coordination, both theoretically and empirically. Yet, although real-world scenarios often involve asymmetric benefits and/or costs from coordination, most previous studies rely on symmetric MEGs. We investigate the effect of unequal equilibrium pay-offs in the MEG. In two experiments, we observe that players are better able to coordinate on an equal rather than an unequal Pareto-dominant equilibrium. We find that the ability to coordinate on the unequal Pareto-dominant equilibrium critically hinges on the costs of miscoordination for the player who benefits most from successful coordination: when her costs are low, she seems able to stabilize the Pareto-dominant equilibrium even if payoffs are highly unequal, whereas coordination success worsens substantially when her costs are high.
    Keywords: minimum effort game,coordination,social comparison,potential games,lab experiment
    JEL: C72 C92
    Date: 2020
  6. By: Grüner, Sven
    Abstract: Informed decisions are the cornerstone of a functioning democracy. The goal of this paper is twofold. First, to explore who is good at distinguishing between true and false, and, second, to learn something about mechanisms to debunk false news stories. In an experimental study, subjects were shown several news studies and asked to rate them as true or false. After this exercise, the subjects received systematically varied information about the correctness of the news stories depending on the experimental condition they had been assigned to. After a delay of three weeks, the subjects were shown the news studies again to find out which one works best. Our main findings are (i) The perceived familiarity with news stories increases the propensity to accept them as true. Actively open-minded thinking helps to distinguish between true and false. But the willingness to think deliberately does not seem to be important. (ii) By repeating false news stories, subjects are more likely to adequately identify them later (i.e., no evidence for a familiarity backfire effect). However, it decreased the ability to adequately identify correct news stories. A somewhat reverse, but weaker effect occurs when true stories are repeated: the correct identification of correct news stories is more successful, but the opposite holds for the identification of false news stories. Detailed explanations of why the false news stories contain false content increases the correct identification of false news stories, but the ability to correctly identify correct news stories is detrimental.
    Keywords: False news stories,narratives,cognitive reflection test,actively open-minded thinking,environmental economics,experimental economics
    JEL: C91 D91 Q50
    Date: 2020
  7. By: Lotti, Lorenzo
    Abstract: This paper investigates the impact of prolonged social distancing on generosity by analyzing the responses of 1255 US citizens to dictator games spread out over eight weeks of the early stages of the COVID-19 pandemic. Despite the isolation and the negative effects on employment and household finances, individuals became more generous over this time period. There is significant heterogeneity in the effect of additional regressors,such as perceived contagion risk, on the likelihood and amount donated to strangers,family members, or the government. At the same time, significant effects of the position of games with respect to the others highlight the significant role of framing on generous behaviours.
    Keywords: Generosity, Dictator Game, Social Preferences, Framing, Altruism, Covid-19
    JEL: C71 D63 D64 D71 D91 I14
    Date: 2020–10–28
  8. By: Sebastian Schneider (Max Planck Institute for Research on Collective Goods, Bonn); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We use a novel method to elicit and measure higher order risk preferences (prudence and temperance) in an experiment with 658 adolescents. In line with theoretical predictions, we find that higher order risk preferences – particularly prudence – are strongly related to adolescents' field behavior, including their financial decision making, eco-friendly behavior, and health status, including addictive behavior. Most importantly, we show that dropping prudence and temperance from the analysis of students' field behavior would yield largely misleading conclusions about the relation of risk aversion to these domains of field behavior. Thus our paper puts previous work that ignored higher order risk preferences into an encompassing perspective and clarifies which orders of risk preferences can help understand field behavior of adolescents.
    Keywords: Higher order risk preferences, prudence, temperance, risk aversion, field behavior, adolescents, health, addictive behavior, smartphone addiction, experiment
    JEL: C93 D81 D91 J13
    Date: 2020–08
  9. By: Mark Kassis; Sascha L. Schmidt; Dominik Schreyer; Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: In this paper, we show that the right to determine the sequence of moves in a dynamic team tournament improves the chances of winning the contest. Because studying dynamic team tournaments – like R&D races – with interim feedback is difficult with company data, we examine decisions of highly paid professionals in soccer penalty shootouts and show that teams whose captains can decide about the shooting sequence are more likely to win the shootout. So, managerial decisions matter for outcomes of dynamic tournaments and we discuss potential reasons for this finding.
    Keywords: Dynamic tournament, sports professionals, psychological pressure, value of decision rights, penalty shoot-outs, behavioral economics
    JEL: C93 D00 D81 D91 Z20
    Date: 2020–08
  10. By: Jauernig, Johanna; von Grundherr, Michael; Uhl, Matthias
    Abstract: Hypocrisy is the act of claiming moral standards to which one's own behavior does conform. Instances of hypocrisy, such as supposedly green car manufacturer Volkswagen's emissions-related scandal, are frequently reported in the media. In a controlled and incentivized experiment, we find that observers do, indeed, condemn hypocritical behavior strongly. The aversion to deceptive behavior is, in fact, so strong that even purely self-deceptive behavior is regarded as blameworthy. Observers who score high in the moral identity test have particularly strong reactions to acts of hypocrisy. The moral condemnation of hypocritical behavior, however, fails to produce a proportional amount of punishment. Punishment seems to be driven more by the violation of the norm of fair distribution than by moral pretense. If a broad societal consensus exists with regard to the moral reprehensibility of hypocrisy, it may be necessary to implement institutional sanctions, given the widespread behavioral reluctance to punish hypocrites.
    JEL: C91 D91
    Date: 2020
  11. By: Schneider, Sebastian O.; Sutter, Matthias
    Abstract: Higher order risk preferences are well-known for their relation with precautionary saving or portfolio allocation. Theoretically, they are also connected with other important behavior, such as health-related or eco-friendly behavior, but these relations have never been investigated with field data. In a large-scale experiment with 658 adolescents, we relate experimental measures of higher order risk preferences with field behavior. Field behavior is collected in an extensive survey, where we focus on general risk taking, the environmental and the health domain, particularly on addictive behavior. Using a novel method allowing the experimental elicitation of intensities of prudence and temperance, we find females behaving more risk averse, prudent and temperant, and high-ability students behaving less risk averse and temperant. We confirm previous findings on financial decision making and higher order risk preferences, and find that prudence is a strong predictor for health-related behavior: An index capturing the obsessive use of smartphones is predicted significantly by prudence, but not by risk aversion or temperance.
    Keywords: Higher order risk,prudence,temperance,field behavior,adolescents,health,addictive behavior,smartphone addiction
    JEL: C93 D81 D91 J13
    Date: 2020

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