nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2021‒03‒08
seven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Incentives and intertemporal behavioral spillovers: A two-period experiment on charitable giving By Alt, Marius; Gallier, Carlo
  2. Social Norms and Elections: How Elected Rules Can Make Behavior (In)Appropriate By Arno Apffelstaedt; Jana Freundt; Christoph Oslislo
  3. Does How We Measure Altruism Matter? Playing Both Roles in Dictator Games By Wei Zhan; Catherine C. Eckel; Philip J. Grossman
  4. A Behavioral Economics Assessment of SSDI Earnings Reporting Documents By Denise Hoffman; Jonah Deutsch; Britta Seifert
  5. Menu-Dependent Food Choices and Food Waste By Hongxing Liu; Joaquín Gómez-Miñambres; Danyi Qi
  6. Impact of Social Identity and Inequality on Antisocial Behaviour By Lata Gangadharan; Philip J. Grossman; Mana Komai; Joe Vecci
  7. The social psychology of economic inequality By Matthew J. Easterbrook

  1. By: Alt, Marius; Gallier, Carlo
    Abstract: We test whether and, if so, how incentives to promote pro-social behavior affect the extent to which it spills over to subsequent charitable giving. To do so, we conduct a two-period artefactual field experiment to study repeated donation decisions of more than 700 participants. We vary how participants' first pro-social behavior is incentivized by a wide range of fundraising interventions ranging from soft to hard paternalism. Our design allows us to decompose spillover effects into a pure spillover effect, which identifies the impact of previous pro-social behavior on subsequent donation decisions and a crowding effect, which captures the extent to which the spillover effects are affected by the incentives exerted on the previous pro-social behavior. We find evidence for negative spillover effects. Participants donate less if they completed a pro-social task prior to the donation decision. Most importantly, we find that the spillover effects depend on how the initial pro-social behavior has been incentivized. Especially participants who are incentivized to donate through social comparisons are more willing to give to charity thereafter compared to participants whose initial pro-social behavior is incentivized by monetary rewards. The variations in spillover effects are driven by participants' perceived external pressure in the first pro-social decision.
    Keywords: Charitable giving,Social preferences,Experimental economics,Behavioral spillovers,Policy-making,Economic incentives
    JEL: C91 C93 D01 H41 D04
    Date: 2021
  2. By: Arno Apffelstaedt (University of Cologne, Center for Social and Economic Behavior (C-SEB) and ECONtribute; Albertus-Magnus-Platz, 50931 Cologne, Germany); Jana Freundt (University of Fribourg, Department of Economics and University of Pennsylvania, School of Arts and Sciences; University of Fribourg, Boulevard de Perolles 90, 1700 Fribourg, Switzerland); Christoph Oslislo (University of Cologne, Institute for Economic Policy; Pohligstraße 1, 50969 Cologne, Germany)
    Abstract: Can elections change people’s ideas about what is ethically right and what is wrong? A number of recent observations suggest that social norms can change rapidly as a result of election outcomes. We explore this conjecture using a controlled online experiment. In our experiment, participants rate the social appropriateness of sharing income with poorer individuals. We compare situations in which a rule has been elected that asks people to share or not to share, respectively, with situations in which no rule has been elected. In the absence of an election, sharing is widely considered socially appropriate, while not sharing is considered socially inappropriate. We show that elections can change this social norm: They shift the modal appropriateness perception of actions and, depending on the elected rule, increase their dispersion, i.e. erode previously existing consensus. As a result, actions previously judged socially inappropriate (not sharing) can become socially appropriate. This power prevails, albeit in weaker form, even if the election is subject to controversial practices such as vote buying or voter disenfranchisement. Drawing on behavioral data from another experiment, we demonstrate that election-induced norm shifts predict behavior change.
    Keywords: social norms, elections, prosocial behavior, rule compliance
    JEL: D02 D91 C91
    Date: 2021–02
  3. By: Wei Zhan; Catherine C. Eckel; Philip J. Grossman
    Abstract: Two protocols have been used in the lab to measure altruism using dictator games that vary both the endowment and the relative price of giving. In single-role games, subjects are designated either dictator or recipient and are paid for one decision in that role. In dual-role games, subjects are paid for two decisions, once in each role. It is unclear what is the effect of this change in procedure.The dual-role protocol may prompt dictators to empathize with their recipients and give more. Alternatively, feeling less responsibility for their partners, dictators may give less. We test whether the protocol affects altruistic preferences. Our results suggest that the dual-role design enhances the preference for efficiency at the expense of equality in allocations. Fur-thermore, only measures derived from the single-role data are correlated with subjects’ past giving behavior. This suggests that the single-role protocol is a more accurate measure of altruistic preferences.
    Keywords: : Dictator Game, Dual Role, Efficiency, Inequality;
    Date: 2020–12
  4. By: Denise Hoffman; Jonah Deutsch; Britta Seifert
    Abstract: This study uses insights from the behavioral economics literature to provide a comprehensive diagnosis of seven SSA written communications that include information on earnings reporting. We conducted a behavioral assessment of the documentsÕ contents on earnings reporting to identify bottlenecks that may prevent beneficiaries from taking desired actions in four key domains: notice and open the document, locate and read the material on earnings reporting, decide to act, and act. The findings from this exercise are only suggestive and the extent to which modifying any of the components reviewed would affect earnings reporting is unknown. The paper found that: ¥ Only one of the reviewed documents is sent at a time when the reporting requirement is likely to be actionable. ¥ Although the documents are generally formatted so that readers can locate material on earnings reporting, much of the text is dense and key content could be missed. ¥ The guidance on earnings reporting varies in clarity and salience; no document includes a concrete reporting deadline that would help beneficiaries avoid overpayments. ¥ Three of the seven documents provide comprehensive, accessible, and actionable information to facilitate earnings reporting. ¥ None of the seven documents reviewed contain communication strategies that are likely to be effective in all four categories. The policy implications of the findings are: ¥ In our assessment, potential shortcomings in SSA communications on earnings reporting may contribute to beneficiary lack of awareness about reporting, which other research has linked to overpayments. ¥ We provide sample reporting reminders, designed based on behavioral economics insights, as a potential starting point for SSA to consider and test earnings reporting reminders.
    Date: 2020–11
  5. By: Hongxing Liu (Department of Economics, Lafayette College); Joaquín Gómez-Miñambres (Department of Economics, Lafayette College; Economic Science Institute, Chapman University); Danyi Qi (Department of Agricultural Economics and Agribusiness, Louisiana State University)
    Abstract: We use a combination of randomized field experiments and online surveys to test how the menu design affects food choices and food waste. In our field experiment, participants face one of two menus a narrow menu that only displays a small portion of food, or a broad menu that also contains bigger portions. While all options are equally available in both menus, they differ in how easy and fast the different choices can be made. Our results show that, compared to the broad menu, participants in the narrow menu ordered smaller portions of food. Importantly, food intake was similar across conditions, leading to significant food waste reduction under the narrow menu. Our online survey suggest that these results are consistent with a combination of anchoring and menu-dependent self-control theories. We discuss the implication of our results to menu design in real world settings.
    Keywords: food waste; food choice; menu design; nudge; anchoring; self-control
    Date: 2020
  6. By: Lata Gangadharan; Philip J. Grossman; Mana Komai; Joe Vecci
    Abstract: Antisocial behaviour can be observed in response to social comparisons with advantaged others. This paper uses a laboratory experiment to examine if social group affiliation mitigates or increases antisocial behaviour in the presence of inequality. While research has documented the harmful effects of inequality, less is known about how social identity may interact with income inequality to influence antisocial behaviour. In our experiment, participants play a modified version of an investment game in which they can reduce others’ payoff at a cost to themselves. Participants are identified by their income groups and/or social groups. We use naturally occurring, exogenous social groups to capture social identity and vary the combination of income identity and social identity. We find little difference in rates of antisocial behaviour across the environments. However, in a setting with revealed social identity and income identity we observe a redirection in antisocial behaviour relative to a setting in which social identity is not revealed. We find that low income participants are more likely to be antisocial towards someone from a different income or social group. In contrast, high income participants do not vary their behaviour. The targeting of antisocial behaviour by low income individuals is consistent with our theoretical framework and suggests that identity politics causes low income people who are already in conflict with one another to shift their blame culturally. Our findings suggest that the context in which inequality exists may have important effects on antisocial behaviour. Classification-JEL Codes: C91, D003, D6
    Keywords: Social Identity, Income inequality, Antisocial behaviour, Experiment, Natural groups
    Date: 2019–06
  7. By: Matthew J. Easterbrook
    Abstract: In this review, I provide an overview of the literature investigating the social psychology of economic inequality, focusing on individuals' understandings, perceptions, and reactions to inequality. I begin by describing different ways of measuring perceptions of inequality, and conclude that absolute measures?which ask respondents to estimate inequality in more concrete terms?tend to be more useful and accurate than relative measures.
    Keywords: Inequality, Economic inequality, Psychological aspects (Economics), Inequality measurement, review
    Date: 2021

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