nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2021‒06‒21
eight papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Gain and loss framing to encourage effort provision: An experiment By Buckley, P.; Roussillon, B.; Teyssier, S.
  2. The Resilience of FDI to Natural Disasters through Industrial Linkages By Shusaku Sasaki; Tomoya Saito; Fumio Ohtake
  3. How safe is safe enough? Psychological mechanisms underlying extreme safety demands for self-driving cars By Azim Shariff; Jean-François Bonnefon; Iyad Rahwan
  4. The roots of cooperation By Zvonimir Bašić; Parampreet C. Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
  5. How (un-)informative are experiments with “standard subjects” for other social groups? – The case of agricultural students and farmers By Gruener, Sven; Lehberger, Mira; Hirschauer, Norbert; Mußhoff, Oliver
  6. Children's Patience and School-Track Choices Several Years Later: Linking Experimental and Field Data By Silvia Angerer; Jana Bolvashenkova; Daniela Glätzle-Rützler; Philipp Lergetporer; Matthias Sutter
  7. The Influence of Empirical and Normative Expectations on Cooperation By Felix Kölle; Simone Quercia
  8. The Experience Is (Not) Everything: Sequential Outcomes and Social Decision-Making By Johannes Buckenmaier; Eugen Dimant

  1. By: Buckley, P.; Roussillon, B.; Teyssier, S.
    Abstract: In this paper we compare the impact of a gain framing with a loss framing on a simple and repetitive task. Based on the expectation of higher reference points in the loss framing than in the gain framing, we expected to generate higher effort in the former. Instead, we find no evidence of loss framing effect on participants’ efforts over the experiment. Our results suggest that time pressure on a task kills the loss framing effect. However, experimental sessions without time pressure confirm that the potential effect of loss framing as a nudge is minimal in our context. Nowadays where nudges seem to be the king way for changing behavior we find that monetary incentives are still very powerful to incentive behaviour especially with students.
    JEL: C91 D91
    Date: 2021
  2. By: Shusaku Sasaki (Faculty of Economics, Tohoku Gakuin University, and Center for Infectious Disease Education and Research (CiDER), Osaka University); Tomoya Saito (Center for Emergency Preparedness and Response, National Institute of Infectious Diseases); Fumio Ohtake (Center for Infectious Disease Education and Research (CiDER) and Graduate School of Economics, Osaka University)
    Abstract: Promoting vaccination is a crucial strategy to end the COVID-19 pandemic; however, individual autonomy should be respected at the same time. This study aimed to discover behavioral economics nudges that can reinforce people fs intention to receive the COVID-19 vaccine without impeding their autonomous decision-making. In March 2021, we conducted a pre-registered, online experiment with 1,595 Japanese nationwide sample, and randomly assigned them to one of a control group and three treatment groups that provided the following other-regarding messages: Message A ( gX out of 10 people in your age group answered they would receive this vaccine h), Message B ( gYour vaccination behavior can encourage the vaccination behavior of the people around you h), or Message C ( gIf you do not receive the vaccine, the people around you also may not do so h). By comparing the messages f effects on vaccination intention, autonomous decisionmaking, and emotional burden, we found that Message B was effective in increasing the number of older adults who newly decided to receive the vaccine. Messages A and C further reinforced the intention of older adults who had already planned to receive it. However, Message C, which conveys similar information to Message B with loss-framing, increased viewers f emotional burden. These three messages had no promoting effect for young adults with lower vaccination intentions at baseline. Based on the above findings, we propose that governments should use different messages depending on their purposes and targets, such as Message A instead of Message C, to encourage voluntary vaccination behavior.
    Keywords: Herd immunity, Behavioral public policy, Nudge, Framing effect, Autonomy
    JEL: I12 D91 C90
    Date: 2021–06
  3. By: Azim Shariff (Unknown); Jean-François Bonnefon (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Iyad Rahwan (Unknown)
    Abstract: Autonomous Vehicles (AVs) promise of a multi-trillion-dollar industry that revolutionizes transportation safety and convenience depends as much on overcoming the psychological barriers to their widespread use as the technological and legal challenges. The first AV-related traffic fatalities have pushed manufacturers and regulators towards decisions about how mature AV technology should be before the cars are rolled out in large numbers. We discuss the psychological factors underlying the question of how safe AVs need to be to compel consumers away from relying on the abilities of human drivers. For consumers, how safe is safe enough? Three preregistered studies (N = 4,566) reveal that the established psychological biases of algorithm aversion and the better-than-average effect leave consumers averse to adopting AVs unless the cars meet extremely potentially unrealistically high safety standards. Moreover, these biases prove stubbornly hard to overcome, and risk substantially delaying the adoption of life-saving autonomous driving technology. We end by proposing that, from a psychological perspective, the emphasis AV advocates have put on safety may be misplaced.
    Keywords: autonomous vehicles,automation,algorithm aversion,safety,illusory superiority
    Date: 2021–05
  4. By: Zvonimir Bašić; Parampreet C. Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
    Abstract: Understanding the roots of human cooperation among strangers is of great importance for solving pressing social dilemmas and maintening public goods in human societies. We study the development of cooperation in 929 young children, aged 3 to 6. In a unified experimental framework, we examine which of three fundamental pillars of human cooperation - direct and indirect reciprocity as well as third-party punishment - emerges earliest as an effective means to increase cooperation in a repeated prisoner's dilemma game. We find that third-party punishment exhibits a strikingly positive effect on cooperation rates by doubling them in comparison to a control condition. It promotes cooperative behavior even before punishment of defectors is applied. Children also engage in reciprocating others, showing that reciprocity strategies are already prevalent at a very young age. However, direct and indirect reciprocity treatments do not increase overall cooperation rates, as young children fail to anticipate the benefits of reputation building. We also show that the cognitive skills of children and the socioeconomic background of parents play a vital role in the early development of human cooperation.
    Keywords: Cooperation, reciprocity, third-party punishment, reputation, children, parents, cognitive abilities, socioeconomic status, prisoner's dilemma game, experiment
    JEL: C91 C93 D01 D91 H41
    Date: 2021
  5. By: Gruener, Sven; Lehberger, Mira; Hirschauer, Norbert; Mußhoff, Oliver
    Abstract: This paper analyzes whether there is a gap between agricultural students’ and non-students’ (farmers’) behaviors in economic experiments which are often used to measure risk aversion, impatience, positive reciprocity, negative reciprocity, altruism, and trust. A further question is whether monetary incentives matter in this respect. We use the Holt and Laury procedure (2002) to elicit risk aversion, the procedure according to Laury et al. (2012) to measure impatience, a gift exchange game (Charness et al. 2004) to capture positive reciprocity, an ultimatum bargaining game (Güth et al. 1982) to assess negative reciprocity, a dictator experiment (Engel 2011) to gauge altruism, and a trust game (Kosfeld et al. 2005) to assess trust in others. We find no differences between agricultural students and farmers in their risk aversion, whereas the latter are fund to be considerably more impatient than the former. Positive and negative reciprocity is slightly more pronounced with farmers. Findings regarding altruism in the two groups are mixed and trust is somewhat more pronounced with farmers. The paper challenges approaches that assume that students can be used as standard experimental subjects whose behaviors can be generalized towards other populations.
    Date: 2021–06–02
  6. By: Silvia Angerer; Jana Bolvashenkova; Daniela Glätzle-Rützler; Philipp Lergetporer; Matthias Sutter
    Abstract: We present direct evidence on the link between children’s patience and educational-track choices years later. Combining an incentivized patience measure of 493 primary-school children with their high-school track choices taken at least three years later at the end of middle school, we find that patience significantly predicts choosing an academic track. This relationship remains robust after controlling for a rich set of covariates, such as family background, school-class fixed effects, risk preferences, and cognitive abilities, and is not driven by sample attrition. Accounting for middle-school GPA as a potential mediating factor suggests a direct link between patience and educational-track choice.
    Keywords: patience, education, school track choice, children, lab-in-field experiment
    JEL: C91 D90 I21 J20
    Date: 2021
  7. By: Felix Kölle (University of Cologne, Albertus Magnus Platz, 50923 Cologne, Germany); Simone Quercia (University of Verona ,via Cantarane 24, 37129 Verona, Italy)
    Abstract: In this paper, we investigate the joint influence of empirical and normative expectations on cooperative behavior. We conduct two experimental studies (n = 243) in which we separately elicit (i) behavior in a public goods game and (ii) social norms under the form of normative and empirical expectations. In a situation where individuals can decide conditionally on others' contributions, we find a strong norm of conditional cooperation whereby people find it socially appropriate to match others contribution and believe others to comply with such rule of behavior. In contrast, when there is strategic uncertainty regarding others' behavior, empirical and normative expectations diverge substantially. While individuals believe that contributing fully to the public good is the most appropriate action, they expect others to contribute only half of their resources. This renders normative expectations unpredictive for average behavior and underlines the importance of a close alignment of empirical and normative expectations for the influence of social norms on behavior.
    Keywords: Cooperation, social norms, expectations, public goods, experiment
    JEL: H41 D63 C92
    Date: 2021–06
  8. By: Johannes Buckenmaier; Eugen Dimant
    Abstract: In multiple pre-registered experiments, we examine the effect of sequences of positive and negative experiences on altruism, trust, trustworthiness, and cooperation. For non-social experiences, we find no effect on subsequent behavior in any of these social domains. However, when experiences are social in nature, we find more cooperation after gains than after losses. For neutral experiences with gains equalizing losses, we find no evidence for a differential effect of experiences irrespective of whether the experience is social or not. Our findings are in line with recent evidence on decision making under risk, showing that the effect of prior experiences depends on task similarity. Beyond that, we extend these findings to various forms of social decision making. Our results suggest that the overall valence of an experience (gain or loss) matters, whereas its dynamic trend (improving or deteriorating) does not.
    Keywords: altruism, cooperativeness, sequential decisions, trust
    JEL: C72 C91 D80 D90
    Date: 2021

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