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on Cognitive and Behavioural Economics |
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Issue of 2021‒03‒29
six papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Le Maux, Benoît; Masclet, David; Necker, Sarah |
| Abstract: | We analyze both theoretically and empirically how monetary incentives and information about others' behavior affect dishonesty. We run a laboratory experiment with 560 participants, each of whom observes a number from one to six with there being a payoff associated with each number. They can either truthfully report the number they see or lie about it in order to increase their payoff. We vary both the size of the payoff (Low, High, and Very High) and the amount of information about others' dishonesty (With and Without Information). We first find that dishonesty falls in the Very High treatment. Second, while social information has on average at most a weak positive effect, there is a strong effect if the accuracy of individuals' beliefs is accounted for. Third, social information and payoffs do not interact with each other. |
| Keywords: | Laboratory experiment,theory,cheating,monetary incentives,information on others' behavior,lying costs |
| JEL: | C91 D03 D78 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:2103&r=all |
| By: | Tomoki Fujii (Singapore Management University); Christine Ho (Singapore Management University); Rohan Ray (Singapore Management University); Abu S. Shonchoy (Department of Economics, Florida International University) |
| Abstract: | Conditional cash transfers (CCTs) have become one of the most common policy interventions to increase school attendance, but the cost-effectiveness of such interventions has not attracted the attention it deserves. Hence, in addition to a standard CCT implementation, our rich unique dataset on daily attendance allows us to experimentally study two potential ways to improve the cost-effectiveness of school attendance interventions: (i) SMS information nudges and (ii) loss framing in CCTs. The former provides school attendance information to parents and the latter exploits the endowment effect. Consistent with the existing literature, CCT intervention significantly increases school attendance. Though the difference between gain and loss framing is not statistically significant, the point estimate of the Loss treatment is consistently higher than that of the Gain treatment.The SMS treatment has a modest impact on school attendance but the overall cost of treatment is low. We also find diminishing marginal impact of cash transfer amount on attendance, indicating that the intensive margin matters. Thus, both loss framing and SMS nudges can be considered as alternative cost-effective approaches to promote attendance in schools in developing and less developed economies where resources are typically limited. |
| Keywords: | conditional cash transfers, loss aversion, peer effect, information treatment, Bangladesh |
| JEL: | D91 H75 I21 I28 O22 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:2109&r=all |
| By: | Enste, Dominik; Altenhöner, Sarah-Nell |
| Abstract: | The difference between existing intentions and actual behavior occurs in various forms, such as procrastination or companies not being able to implement planned changes, which may lead to competitive disadvantages in ever dynamic business environments. While current research is strongly focused on attitudes, motivation, and the formation of intentions, particularly with regards to ethical consumerism, this study aims to explain the specific discrepancy between intentions and behavior. Based on a review of social psychology, behavioral economics and management literature, the intention-behavior gap and the reasons for the failed translation are examined and room for improvement is outlined. The derived findings are then applied to the examination of the transformational and transactional leadership styles and existing management tools. Within the framework of the model of behavioral formation, the intention-behavior gap can be defined as the discrepancy between an individual's willingness and effort to perform an action and the actual performance or omission of said action. Three types of barriers can be identified: cognitive, situational and environmental. Based on dual systems theories, this study finds that the intention-behavior gap occurs whenever the short-sighted, intuitive system dominates cog-nitive processing. The main causes for this are the effects of cognitive strain, ego depletion, decision fatigue and choice overload. This study determines the status quo bias, social norms and availability heuristic as the main biases of the intuitive system, which lead to a failure to implement intentions. The third section applies these insights to develop a model of behavioralpatterns in employees - the Five-Employee Typology, which highlights the importance of adaptive leadership. Subsequently, this study suggests management activities based on behavioral economics to enhance existing tools, with a special focus on effective leadership as an instrument. |
| JEL: | D23 D91 M12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkrep:72021&r=all |
| By: | Erwin Bulte; John List; Daan van Soest |
| Abstract: | Incomplete contracts are the rule rather than the exception, and any incentive scheme faces the risk of improving performance on incented aspects of a task at the detriment of performance on non-incented aspects. Recent research documents the effect of loss-framed versus gain-framed incentives on incentivized behavior, but how do such incentives affect overall performance? We explore potential trade-offs by conducting field experiments in an artificial "workplace". We explore two types of incentive spillovers: those contemporaneous to the incented task and those subsequent to the incented task. We report three main results. First, consonant with the extant literature, a loss aversion incentive induces greater effort on the incented task. Second, offsetting this productivity gain, we find that the quality of work decreases if quality is not specified in the incentive contract. Third, we find no evidence of harmful spillover effects to subsequent tasks; if anything, the loss aversion incentive induces more effort in subsequent tasks. Taken together, our results highlight that measuring and accounting for incentive spillovers are important when considering their overall impact. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00727&r=all |
| By: | Matteo M. Marini (Department of Economics and Management, University of Florence, Italy) |
| Abstract: | This paper is a meta-analysis of experimental studies dealing with the impact of incidental emotions on risky choices, so as to explain traditional heterogeneity of outcomes in the literature. After devising a standard search strategy and filtering out studies that do not comply with a list of eligibility criteria, we include 24 articles from which 109 observations are drawn at the treatment level. At this point, we code a set of moderator variables representing experimental protocols and adopt Hedges’s g as comparable metric. Subgroup analysis and metaregressions find causal impact of both sadness and fear on risk aversion, albeit to a small extent, as well as highly contrasting patterns depending on the nature of incentives offered in the experiments. The use of monetary incentives turns out to reduce data variability and affects information processing by making subjects more susceptible to emotions. When studies provide real stakes, our results also show that emotions lead to take more risks in individualist countries than in collectivist societies. We discuss possible interpretations of our findings. |
| Keywords: | meta-analysis, experimental design, emotions, risky decision making, monetary incentives |
| JEL: | C90 C91 D81 D91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2021/04&r=all |
| By: | Arthur Ribaillier (Université Côte d'Azur, France; GREDEG CNRS); Ismaël Rafaï (CEE-M, Univ. Montpellier, CNRS, INRAE, Institut Agro; Université Côte d'Azur, France; GREDEG CNRS); Dorian Jullien (Centre d’Economie de la Sorbonne; Université Paris I - Panthéon Sorbonne) |
| Abstract: | The aim of this article is to better understand how judgments of nudges’ acceptability are formed and whether they can be manipulated. We conduct a randomized experiment to test whether acceptability judgments can be (i) enhanced when the decision to implement the nudges have been made following a consultation with the targeted population and (ii) influenced by the joint framing of the goal and effectiveness of the nudge (in terms of an increase in desirable behaviour vs. decrease in undesirable behaviour). We test those hypotheses for various nudges’ scenarios and obtain mixed results that do not clearly support our hypotheses. A surprising result that calls for further work is that mentioning that a nudge has been implemented through a consultation with the targeted population can lower its acceptability. |
| Keywords: | behavioural public policies, nudges, acceptability, framing, consultation |
| JEL: | C91 D90 D04 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-12&r=all |