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on Cognitive and Behavioural Economics |
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Issue of 2021‒07‒12
nine papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Sergio Almeida; Mauro Rodrigues |
| Abstract: | Several studies report that the brain evaluates prospects and executes decisions as the outcome of two mental processing types: one described as slow and reflective and the other as fast and intuitive. We investigate how these two mental processes affect risk-taking behavior by using time pressure to establish an intuitive response. We observe that time constraints do not change risk attitudes. Furthermore, it is only when subjects are given ample time to decide and instructed to reflect that they show the well-documented shift of risk preferences across the domain of losses and gains. |
| Keywords: | Risk-taking; time scarcity; dual-process cognition; fast-thinking; gain-loss framing |
| JEL: | D91 D90 C91 D81 |
| Date: | 2021–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2021wpecon18&r= |
| By: | David L. Dickinson; David Masclet |
| Abstract: | Recent examinations into the cognitive underpinnings of ethical decision making has focused on understanding whether honesty is more likely to result from deliberative or unconscious decision processes. We randomly assigned participants to a multi-night sleep manipulation, after which they completed 3 tasks of interest: imperfectly identifiable dishonesty (the Coin Flip task), identifiable dishonesty (the Matrix task), and anti-social allocation choices (the Money Burning game). We document the validity of the sleep protocol via significantly reduced nightly sleep levels (objectively measured using validated instrumentation) and significantly higher sleepiness ratings in the sleep-restricted (SR) group compared to the wellrested (WR) group. We report that money burning decisions are not statistically different between SR and WR participants. However, regarding honesty, we find significant and robust effects of SR on honesty. In total, given the connection between sleepiness and deliberation, these results add to the literature that has identified conditions under which deliberation impacts ethical choice. When dishonesty harms an abstract “other” person (e.g., the researcher’s budget), reduced deliberation more likely increases dishonesty compared to when harm is done to someone at closer social distance (e.g., another subject). Key Words: Ethical choice, dishonesty, antisocial behavior, sleep. |
| JEL: | C91 D91 D63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:21-09&r= |
| By: | Chiara Scarampi (University of Geneva); Richard Fairchild (University of Bath); Luca Fumarco (Tulane University); Alberto Palermo (Trier University); Neal Hinvest (University of Bath) |
| Abstract: | This study reports a laboratory experiment wherein we investigate the role of social metacognition– i.e., the ability to monitor and control one’s own and others’ mental states – in a chicken game. In the first part of the experiment, we try to implement a correlated equilibrium, a generalisation of the Nash equilibrium where players’ strategies are correlated by a third party/mechanism/choreographer. We find that social metacognition is a signif- icant predictor of subjects’ strategy choices. The experiment proceeds without third party recommendations. We find evidence that subjects with high social metacognition are more likely to play a correlated equilibrium; that is, social metacognition acts “as if” it is the correlating mechanism. We relate our findings to the individual social metacognitive ability as well as to the group composition. |
| Keywords: | Correlated Equilibrium, Social Metacognition, Experimental Economics |
| JEL: | C72 C92 D91 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:2111&r= |
| By: | Ong, David |
| Abstract: | A large body of chiefly laboratory research has attempted to demonstrate that people can exhibit choice-averse behavior from cognitive overload when faced with many options. However, meta-analyses of these studies, which are generally of one or two product lines, reveal conflicting results. Findings of choice-averse behavior are balanced by findings of choice-loving behavior. Unexplored is the possibility that many consumers may purchase to reveal their tastes for unfamiliar products, rather than attempt to forecast their tastes before purchase. I model such ‘sampling-search’ behavior and predict that the purchases of unfamiliar consumers increase with the available number of varieties for popular/mainstream product lines and decrease for niche product lines. To test these predictions, I develop a measure of popularity based on a survey of 1,440 shoppers for their preferences over 24 product lines with 339 varieties at a large supermarket in China. 35,694 shoppers were video recorded after the varieties they faced on shelves were randomly reduced. As found in the meta-studies, choice-averse behavior was balanced by choice-loving behavior. However, as predicted, the probability of choice-loving behavior increases with the number of available varieties for popular product lines, whereas choice-averse behavior increases with available varieties for niche product lines. These findings suggest that increasing the number of varieties has predictable opposing effects on sales, depending upon the popularity of the product line, and opens the possibility of reconciling apparently conflicting prior results. |
| Keywords: | field experiment, choice overload, choice-aversion, consumer search |
| JEL: | C93 D83 M31 |
| Date: | 2021–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:108384&r= |
| By: | Jeworrek, Sabrina; Waibel, Joschka |
| Abstract: | Around the globe, the COVID-19 pandemic has turned daily live upside down since social distancing is probably the most effective means of containing the virus until herd immunity is reached. Social norms have been shown to be an important determinant of social distancing behaviors. By conducting two experiments and using the priming method to manipulate social isolation recollections, we study whether social distancing has in turn affected norms of prosociality and norm compliance. The normative expectations of what behaviors others would approve or disapprove in our experimental setting did not change. Looking at actual behavior, however, we find that persistent social distancing indeed caused a decline in prosociality - even after the relaxation of social distancing rules and in times of optimism. At the same time, our results contain some good news since subjects seem still to care for norms and become more prosocial once again after we draw their attention to the empirical norm of how others have previously behaved in a similar situation. |
| Keywords: | COVID-19,human behavior,norm compliance,post-COVID,priming,pro-sociality,social expectations |
| JEL: | C91 D64 D91 H12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:82021&r= |
| By: | Basic, Zvonimir (University of Bonn); Bindra, Parampreet C. (University of Innsbruck); Glätzle-Rützler, Daniela (University of Innsbruck); Romano, Angelo (Leiden University); Sutter, Matthias (Max Planck Institute for Research on Collective Goods); Zoller, Claudia (Management Center Innsbruck) |
| 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: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14467&r= |
| By: | Andre, Peter (University of Bonn); Boneva, Teodora (University of Bonn); Chopra, Felix (University of Bonn); Falk, Armin (briq, University of Bonn) |
| Abstract: | We document individual willingness to fight climate change and its behavioral determinants in a large representative sample of US adults. Willingness to fight climate change – as measured through an incentivized donation decision – is highly heterogeneous across the population. Individual beliefs about social norms, economic preferences such as patience and altruism, as well as universal moral values positively predict climate preferences. Moreover, we document systematic misperceptions of prevalent social norms. Respondents vastly underestimate the prevalence of climate-friendly behaviors and norms among their fellow citizens. Providing respondents with correct information causally raises individual willingness to fight climate change as well as individual support for climate policies. The effects are strongest for individuals who are skeptical about the existence and threat of global warming. |
| Keywords: | climate change, climate behavior, climate policies, social norms, economic preferences, moral values, beliefs, survey experiments |
| JEL: | D64 D83 D91 Q51 Z13 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14518&r= |
| By: | Guilhem Lecouteux (Université Côte d'Azur; GREDEG CNRS) |
| Abstract: | Behavioural economics has challenged the normative consensus that agents ought to choose following their own preferences. I argue that normative economists implicitly defended a criterion of the sovereignty of the autonomous consumer, and that current debates in normative behavioural economics arise from disagreements about the nature of the threats to autonomy that are highlighted by behavioural economics. I argue that those disagreements result from diverging ontological conceptions of the ‘self’ in the literature. I distinguish between the unitary, psychodynamic, and socio-historical conceptions of the self, and show how different positive theories about preferences and the nature of the agent may determine normative positions in normative behavioural economics. |
| Keywords: | preference satisfaction, autonomy, welfare, reconciliation problem, sociohistorical self |
| JEL: | B40 D02 D60 D91 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-27&r= |
| By: | Driss Ezzine de Blas (Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, UPR Forêts et Sociétés - Forêts et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement) |
| Abstract: | How can we design conservation and development projects that produce lasting changes? How can we increase their effectiveness and legitimacy? The classical economic incentives of environmental policies (certification, sustainable forest management, payments for environmental services, green loans, etc.) are effective in the short term, but their environmental performance is not necessarily guaranteed in the long term. However, when the intrinsic motivations of beneficiaries are activated, these beneficiaries take greater ownership of the objectives of actions: they demonstrate more lasting behavioural change. Recent research combining behavioural economics and social psychology, conducted for such projects, is opening a rich and complementary avenue to mobilise this latent human potential. Considering intrinsic motivations implies recognising the importance of the psychological dimension of any action. Research and development decision-makers and donors can and ensure their calls for projects incorporate methods to identify and activate these motivations. |
| Keywords: | Incentive,motivation,value system,psychology,human behaviour,psychological factor,payments for ecosystem services,agriculture,conservation,environment,biodiversity,forest,theory of change,development policy,Tropical zone,Southeast Asia,Latin America,Africa,Madagascar,Mediterranean |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:cirad-03261909&r= |