nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2021‒02‒15
four papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Expected Utility Theory with Probability Grids and Preference Formation By Mamoru Kaneko
  2. Attitudes, Personality and Organizational Behavior By Maria-Daniela Pipas
  3. The effect of mindfulness and job demands on motivation and performance trajectories across the workweek: an entrainment theory perspective By Dust, Scott B.; Liu, Haiyang; Wang, Siting; Reina, Christopher
  4. Meta-Analysis of Empirical Estimates of Loss-Aversion By Alexander, L. Brown; Taisuke Imai; Ferdinand M. Vieider; Colin Camerer

  1. By: Mamoru Kaneko (Waseda University)
    Abstract: We reformulate expected utility theory, from the viewpoint of bounded rationality, by introducing probability grids and a cognitive bound; we restrict permissible probabilities only to decimal (`-ary in general) fractions of Önite depths up to a given cognitive bound. We distinguish between measurements of utilities from pure alternatives and their extensions to lotteries involving more risks. Our theory is constructive, from the viewpoint of the decision maker. When a cognitive bound is small, the preference relation involves many incomparabilities, but these diminish as the cognitive bound is is relaxed. Similarly, the EU hypothesis would hold more for a weaker cognitive bound. The main part of the paper is a study of preferences including incomparabilities in cases with Önite cogntive bounds; we give representation theorems in terms of a 2-dimensional vector-valued utility functions. We exemplify the theory with one experimental result reported by Kahneman-Tversky.
    Keywords: Expected Utility; Measurement of Utility; Bounded Rationality; Probability
    JEL: C72 C79 C91
    Date: 2019–04
  2. By: Maria-Daniela Pipas (Bogdan Vodă University of Cluj-Napoca, Cluj-Napoca, Romania)
    Abstract: An interesting topic, often approached in scientific studies and followed insistently by the human resources departments of large companies is represented by the relationship between attitudes, personality and organizational behavior. Given that personality means diversity and is determined by both genetic factors and the individual's past learning, we can argue that during the process of gaining experience, with age, personality is susceptible to change which leads to changes in attitude and organizational behavior. In general, the sociological approach to attitude relates to social values. Psychological points of view investigate attitudes according to certain aspects of the personality: motivation, emotional states, cognition or behavioral dispositions. It is well known that attitudes precede behaviors. Of interest to those who lead groups is to know to what extent attitudes foreshadow behaviors and what is the connection between motivation, attitude and behavior. Regarding the organizational behavior, we are especially interested in the attitude towards work, respectively the satisfaction of the employees and the connection between it and the organizational performance.
    Keywords: personality, attitudes, organizational behavior, employees, change
    Date: 2020–10
  3. By: Dust, Scott B.; Liu, Haiyang; Wang, Siting; Reina, Christopher
    Abstract: Employee performance is commonly investigated as a static, one-time snapshot of prior employee behaviors. For the studies that do acknowledge that performance fluctuates over time, the timeframe decision is disconnected from theoretical underpinnings. To make this connection clearer, we draw on entrainment theory and investigate trajectories in motivation and performance across the five-day workweek. We hypothesize that both motivational control (i.e., staying on course and sustaining effort in pursuit of goals through the redirection of attention) and performance have a declining trajectory across the workweek. Drawing on self-determination theory, we also hypothesize that trait-based mindfulness (i.e., non-judgmental present moment attention and awareness) negatively relates to the downward trajectory in performance across the workweek via its effect on the trajectory of motivational control. Finally, we take a trait activation theory perspective, hypothesizing that mindfulness is relevant as an indirect influence on performance trajectories through motivational control trajectories only when job demands are high. We test our model using 151 full-time employees in a medical device company. We collected data from participants twice daily across the five-day workweek. We then use these daily scores to create between-person (e.g., person-centric) trajectories to investigate the proposed relationships. The hypotheses are generally supported. There is a downward trajectory of both motivational control and performance across the workweek. Further, job demands conditionally moderate the indirect effect of mindfulness on performance trajectories through motivational control trajectories. Theoretical and practical implications specific to dynamic motivation and performance, entrainment, and mindfulness literature are discussed.
    Keywords: Mindfulness; motivational control; motivational trajectory; job demands; entrainment theory
    JEL: R14 J01
    Date: 2020–12–24
  4. By: Alexander, L. Brown; Taisuke Imai; Ferdinand M. Vieider; Colin Camerer
    Abstract: Loss aversion is one of the most widely used concepts in behavioral economics. We conduct a large-scale interdisciplinary meta-analysis, to systematically accumulate knowledge from numerous empirical estimates of the loss aversion coefficient reported during the past couple of decades. We examine 607 empirical estimates of loss aversion from 150 articles in economics, psychology, neuroscience, and several other disciplines. Our analysis indicates that the mean loss aversion coefficient is between 1.8 and 2.1. We also document how reported estimates vary depending on the observable characteristics of the study design.
    Keywords: loss aversion, prospect theory, meta-analysis
    JEL: D81 D90 C90 C11
    Date: 2021

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