nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2021‒09‒13
seven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Procrastination and the Non-Monotonic Effect of Deadlines on Task Completion By Knowles, Stephen; Servátka, Maroš; Sullivan, Trudy; Genç, Murat
  2. Overcoming coordination failure in games with focal points By David Rojo Arjona; Stefania Sitzia; Jiwei Zheng
  3. Ingroup Bias with Multiple Identities: The Case of Religion and Attitudes Towards Government Size By Sgroi, Daniel; Yeo, Jonathan; Zhuo, Shi
  4. Conflict in the Pool: A Field Experiment By Loukas Balafoutas; Marco Faravelli; Roman Sheremeta
  5. Ultimatum Game Behavior in a Social-Preferences Vacuum Chamber By Volker Benndorf; Thomas Große Brinkhaus; Ferdinand von Siemens
  6. An Effective and Simple Tool for Measuring Loss Aversion By Olivier L'Haridon; Craig S. Webb; Horst Zank
  7. Privacy Decision-Making in Digital Markets: Eliciting Individuals' Preferences for Transparency By Fast, Victoria; Sachs, Nikolai; Schnurr, Daniel

  1. By: Knowles, Stephen; Servátka, Maroš; Sullivan, Trudy; Genç, Murat
    Abstract: We conduct a field experiment to test the non-monotonic effect of deadline length on task completion. Participants are invited to complete an online survey in which a donation goes to charity. They are given either one week, one month or no deadline to respond. Responses are lowest for the one-month deadline and highest when no deadline is specified. No deadline and the one-week deadline feature a large number of early responses, while providing a one-month deadline appears to give people permission to procrastinate. If they are inattentive, they might forget to complete the task.
    Keywords: deadlines; task completion; charitable tasks; charitable giving; inattention; procrastination; forgetting; field experiment
    JEL: C9 C93 D03 D64
    Date: 2021–08–13
  2. By: David Rojo Arjona; Stefania Sitzia; Jiwei Zheng
    Abstract: Focal points (Schelling, 1960) have shown limitations as coordination devices in games with conflict, such as the battle of the sexes games. We experimentally test whether an increase in their salience can counteract the negative impact of conflict on coordination. The intuition is that, in the presence of conflict, the solution to the coordination dilemma offered by the focal point loses importance. Increasing its salience increases its relevance and therefore coordination success. Our results provide strong support for this conjecture. Furthermore, when games feature outcomes with different degrees of payoffs’ inequality (i.e. the difference of players’ payoffs) and efficiency (i.e. the sum of players’ payoffs), increasing salience does not lead to an obvious increase in coordination, unless the salience of the focal point is maximal.
    Keywords: coordination games, focal points, salience, conflict of interests, battle-of-the-sexes, intermixed-blocked effect
    JEL: C72 C78 C91 D91
    Date: 2021
  3. By: Sgroi, Daniel (University of Warwick); Yeo, Jonathan (Nanyang Technological University, Singapore); Zhuo, Shi (University of Warwick)
    Abstract: Group identity is known to exert a powerful socio-psychological influence on behaviour but to date has been largely explored as a uni-dimensional phenomenon. We consider the role of multiple dimensions of identity, asking what might happen to ingroup and outgroup perceptions and the resulting implications for cooperation. Carefully selecting two politically charged identity dimensions documented to have similar strength and to be largely orthogonal (religious belief and views about government size), we find that priming individuals to consider both dimensions rather than one has a noticeable effect on behaviour. Moving from one to two dimensions can produce a significant increase in ingroup allocations at the expense of fairness to outgroup individuals, although the effect varies as we switch from primarily considering religion to government size. Evidence suggests that the heterogeneity of such effects is related to the degree of "harmony" between groups in the dimensions concerned.
    Keywords: group identity, multiple identities, religion, government size, experiment, behavioural economics
    JEL: D91 C91
    Date: 2021–09
  4. By: Loukas Balafoutas (University of Innsbruck, Department of Public Finance); Marco Faravelli (University of Queensland, School of Economics); Roman Sheremeta (Case Western University, Weatherhead School of Management, Department of Economics)
    Abstract: We conduct a field experiment on conflict in swimming pools. When all lanes are occupied, an actor joins the least crowded lane and asks one of the swimmers to move to another lane. The lane represents a contested scarce resource. We vary the actor’s valuation (high and low) for the good through the message they deliver. Also, we take advantage of the natural variation in the number of swimmers to proxy for their valuation. Consistent with theoretical predictions, a swimmer’s propensity to engage in conflict increases in scarcity (incentive effect) and decreases in the actor’s valuation (discouragement effect). We complement the results with survey evidence.
    Keywords: conflict; conflict resolution; field experiment
    JEL: C72 C93 D74 D91
    Date: 2021
  5. By: Volker Benndorf; Thomas Große Brinkhaus; Ferdinand von Siemens
    Abstract: We study strategic interaction in an experimental social-preferences vacuum chamber. We mute social preferences by letting participants knowingly interact with computers. Our new design allows for indirect strategic interaction: there are several waves in which computer players inherit the behavior of human players from the previous wave. We apply our method to investigate trembling-hand perfection in a normal-form version of the ultimatum game. We find that behavior remains far off from a trembling-hand perfect equilibrium under selfish preferences even towards the end of our experiment. The likely reasons for our findings are strategic uncertainty and incomplete learning.
    Keywords: social preferences, induced-value theory, learning, ultimatum game, strategic interaction
    JEL: C92 C72 D91
    Date: 2021
  6. By: Olivier L'Haridon; Craig S. Webb; Horst Zank
    Abstract: In prospect theory (PT) the loss aversion index, lambda, measures the size of the concave kink of the gain-loss utility function at the reference point. A truth-telling mechanism for assessing personal beliefs, the quadratic scoring rule, is extended to measure loss aversion. We control for the bias captured by decision weights in PT and quantify lambda efficiently with only three quadratic scores. In an experiment, we demonstrate these features for risk and extend the tool to ambiguity. We find median values of lambda = 1 at the aggregate level for both sources of uncertainty. Probability and event weighting are less pronounced but accord with earlier findings from the literature. These weights depend on the sign of the corresponding outcomes, which is implication of reference-dependent preferences. Event weighting is also observed at the individual level. After controlling for these weights, we find very few subjects who are loss averse or gain seeking.
    JEL: C78 C91 D81 D90
    Date: 2021
  7. By: Fast, Victoria; Sachs, Nikolai; Schnurr, Daniel
    Abstract: Consumers often lack information about how online services collect, use and protect their data. Therefore, transparency is frequently touted as an essential instrument to support consumers in assessing privacy risks and making more informed decisions. In this context, empirical studies have investigated the effectiveness of transparency in different privacy contexts. However, whether individuals actually prefer transparency when given a chance to avoid information about privacy risks is less clear. Thus, we investigate how individuals choose between options with more and less transparency about an uncertain data loss. In this paper, we present the design of an online experiment where student subjects choose between a situation of risk, where a loss of personal data will occur with a known probability, and a situation of ambiguity, where a data loss will occur with an unknown probability. Previous experiments on uncertain money losses show that individuals may not universally prefer the more transparent option where information about risks is made explicit. Therefore, our study sheds light on individuals' transparency preferences when facing privacy risks and provides insights into privacy decision-making under uncertainty. Thus, we contribute to a better understanding of digital service providers' incentives to offer consumers more transparency about their data use, which has direct implications for transparency regulation in data-driven digital markets.
    Keywords: Privacy,Transparency,Privacy uncertainty,Privacy risks,Ambiguity attitudes,Data losses,Online experiment,GDPR,Digital policy
    Date: 2021

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