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on Cognitive and Behavioural Economics |
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Issue of 2021‒12‒06
nine papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Santorsola, Marco; Caferra, Rocco; Morone, Andrea |
| Abstract: | During the last decade, scholars and policy makers have increasingly concentrated on investors’ excessive risk taking. By conducting an online pair-wise lottery choice experiment, we assess for variations in the level of risk taken when altering the research frame. For instance, in our experimental treatments we affect subjects’ awareness about the risk-taking decision by displaying or not displaying (financial) risk warning messages with different intensity. We also carry out additional robustness checks searching for possible relations between risk aversion, cognitive ability and questionnaire- based risk aversion scores. Our results provide statical evidence for the efficacy of informative and very salient messages in mitigating risky decision, offering several policy implications. The intuitions, deriving from a 177-subject sample, could indeed provide useful insights for designing effective risk reduction policies and maybe be applicable not only to a financial market context but also by extension to other risk-taking activities, i.e., online betting and gambling. |
| Keywords: | Individual decision-making; risk; experimental economics; Information effect; Finance. |
| JEL: | C9 |
| Date: | 2021–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110619&r= |
| By: | Morone, Andrea; Santorsola, Marco; Tiranzoni, Paola |
| Abstract: | This work building on well-established economics literature on TV game shows aims, in an innovative manner, to provide further noteworthy insights. We compare individual, group and couple choices in the risky choice context provided by the Italian version of the international TV show “Deal or no Deal”. After analyzing contestant’s behaviour during the standard edition episodes plus two special editions we calculate a risk index showing that couples (affianced couples) display a greater degree of risk aversion while no statically significant difference is present between individuals’ and groups’ actions. This paper could be a starting point for future research investigating the rationale behind such conduct to examine whether such pattern would also be observed in a context different from that of TV game shows (e.g. financial decisions). |
| Keywords: | Deal or no Deal, risky context, risk aversion, group and individual risk preferences, TV game shows |
| JEL: | C9 |
| Date: | 2021–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110618&r= |
| By: | Heinz, Nicolai; Koessler, Ann-Kathrin; Engel, Stefanie |
| Abstract: | Adverse consequences of climate change often affect people and places far away from those that have the greatest capacity for mitigation. Several correlational and some experimental studies suggest that the willingness to take mitigation actions may diminish with increasing distance. However, the empirical findings are ambiguous. In order to investigate if and how socio-spatial distance to climate change effects plays a role for the willingness to engage in mitigation actions, we conducted an online experiment with a German population sample (n=383). We find that the willingness to sign a petition for climate protection was significantly reduced when a person in India with a name of Indian origin was affected by flooding as compared to a person in Germany with a name of German origin. Distance did not affect donating money to climate protection or approving of mitigation policies. Our results provide evidence for the existence of a negative effect of distance to climate change consequences on the willingness to engage in low-cost mitigation actions. Investigating explanations for such an effect, we find that it can be attributed to the spatial distance dimension, which reduced participants’ perception of being personally affected by climate change. Moreover, we found some cautious evidence that people with strong racist attitudes react differently to the distance manipulations, suggesting a form of environmental racism that could also reduce mitigation action in the case of climate change. |
| Keywords: | psychological distance,social distance,climate change,spatial distance,mitigation,economic experiment,environmental racism |
| JEL: | D91 C93 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:246815&r= |
| By: | Anastasia A. Anufrieva (National Research University Higher School of Economics); Elena S. Gorbunova (National Research University Higher School of Economics) |
| Abstract: | The digital environment surrounds us everywhere and influences our cognitive system. However, there is a lack of theoretical models in the human-digital domain, and there are few studies aimed at finding the precise mechanisms of how the digital environment influences cognitive functions, namely attention and working memory. The present work is aimed at a consideration of the theoretical approaches and empirical studies related to the marked domain. Two experiments on working memory and attention were carried out. In the present paper, we have compared the attention and working memory processes under real and digital conditions within the comprehensible task like usage of the organizer (Experiment 1). As a result, we clarified the presence of differences in attention and WM within these two environments of performance. After that, the focus was shifted on digital properties: Experiment 2 focuses on such digital properties as saturation and were aimed at clarifying the attention process (shifting and sustainability of attention) under digital conditions. So if the digital system has feedback, the rates of attention sustainability will be higher than in the absence of feedback. Thus, within the result of the second experiment, it can be supposed that the digital environment might be considered as a system of cues improving the performance of complex tasks |
| Keywords: | a digital system, a cognitive system, attention sustainability, attention shifting, working memory, the complexity of the digital system |
| JEL: | Z |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:129psy2021&r= |
| By: | Bergolo, Marcelo (IECON, Universidad de la República); Burdin, Gabriel (Leeds University Business School); Burone, Santiago (University of Antwerp); De Rosa, Mauricio (Universidad de la República, Uruguay); Giaccobasso, Matias (University of California, Los Angeles); Leites, Martin (Universidad de la República, Uruguay) |
| Abstract: | Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1800 first-year undergraduate economics and business students in Uruguay to understand why people are inequality averse. We elicited inequality aversion by asking participants to make a sequence of choices between hypothetical societies characterized by varying levels of average income and income inequality. In addition, we use randomized information treatments to prime participants into competing narratives regarding the sources of inequality in society. The main findings are that (1) the prevalence of inequality aversion is high: most participants' choices revealed inequality-averse preferences; (2) the extent of inequality aversion depends on the individual's position in the income distribution; (3) individuals are more likely to accept inequality when it comes from effort rather than luck regardless of their income position; (4) the effect of social mobility on inequality aversion is conditional on individual's income position: preferences for mobility reduces inequality aversion for individuals located at the bottom of the income distribution, where risk aversion cannot play any role. |
| Keywords: | inequality aversion, fairness, risk, effort, luck, redistribution, questionnaire-experiments |
| JEL: | D63 D64 D81 C13 C91 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14828&r= |
| By: | Antinyan, Armenak (Cardiff Business School, Cardiff University.); Corazzini, Luca (Department of Economic Science and VERA, University of Venice) |
| Abstract: | Little is known about the impact of policy interventions other than taxes and bans aimed at reducing the demand for single-use plastic bags. We report results from a natural field experiment conducted in a large supermarket chain to test interventions based on nudges (information provision), financial bonuses (which are assigned through a competitive scheme) and free provision of reusable bags. We manipulate the type of the intervention, i.e., either a financial bonus or a nudge, and the presence of a reusable bag, i.e., either provided for free or not provided. Relative to the baseline with no intervention, both the bonus and the nudge considerably reduce the demand for single-use plastic bags. Free reusable bags are effective when combined with the bonus, albeit not effective when combined with the nudge. Finally, the bonus is more powerful than the nudge, irrespective of the absence or presence of reusable bags. |
| Keywords: | pro-environmental behavior, nudge, financial bonus, reusable bag, single-use plastic bag, randomized controlled trial. |
| JEL: | C93 D12 D91 H23 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2021/29&r= |
| By: | Bogliacino, Francesco; Grimalda, Gianluca; Pipke, David |
| Abstract: | The gift exchange hypothesis postulates that workers reciprocate above market-clearing wages with above-minimum effort. This hypothesis has received mixed support in dyadic employer-worker relationships. We present a field-experimental test to assess this hypothesis in the context of a triadic relationship in which only one out of two workers receives a pay increase. We conjecture that inequality aversion motivations may thwart positive reciprocity motivations and analyze the interaction between such motivations theoretically. Across three treatments, the pay increase is justified to workers based on either relative merit or relative need or was arbitrary as no justification was offered. Two conditions in which either none or both workers receive a bonus serve as the reference. In contrast to the gift exchange hypothesis, we find that pay increases lead to a decrease in productivity. Such a decrease is most sizable in the condition where both workers receive the bonus. A post-diction of this result is that workers interpret the monetary bonus as a signal of the employer's contentment with their effort, which makes them feel entitled to reduce their effort. In other treatments, receiving the pay increase while the coworker does not has a positive effect on productivity, especially when the pay increase is based on merit. This result is consistent with statusseeking preferences rather than aversion against advantageous inequality. Conversely, not receiving the pay increase while the coworker does, leads to lower productivity, especially when the pay increase is assigned based on relative needs. |
| Keywords: | Gift exchange,employer-worker relationship,pay inequality,field experiment,reciprocity,labor market,effort provision,fairness,wage inequality |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2199&r= |
| By: | Cao, Yiming (Boston University); Enke, Benjamin (University of Bonn); Falk, Armin (briq, University of Bonn); Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University) |
| Abstract: | According to the widely known 'culture of honor' hypothesis from social psychology, traditional herding practices are believed to have generated a value system that is conducive to revenge-taking and violence. We test this idea at a global scale using a combination of ethnographic records, historical folklore information, global data on contemporary conflict events, and large-scale surveys. The data show systematic links between traditional herding practices and a culture of honor. First, the culture of pre-industrial societies that relied on animal herding emphasizes violence, punishment, and revenge-taking. Second, contemporary ethnolinguistic groups that historically subsisted more strongly on herding have more frequent and severe conflict today. Third, the contemporary descendants of herders report being more willing to take revenge and punish unfair behavior in the globally representative Global Preferences Survey. In all, the evidence supports the idea that this form of economic subsistence generated a functional psychology that has persisted until today and plays a role in shaping conflict across the globe. |
| Keywords: | culture of honor, conflict, punishment, revenge |
| JEL: | N0 Z1 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14738&r= |
| By: | Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur) |
| Abstract: | Cognition is critical for finding different solutions to problems and providing new, robust patterns of action for the performance of routines. Routine Dynamics research provides significant empirical evidence about patterns and performance, and reveals how practices are permanently co-shaped using the notions of artefacts, reflection, replication of knowledge and intentionality. The notions of reflective action and reflective thinking have been identified as critical for current patterns of interdependent actions, thus offering an opportunity to reshape both cognition and the representation of routines that is far from the original conception of the Carnegie School. |
| Keywords: | Routines,Cognition,organizational dynamics |
| Date: | 2021–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03402421&r= |