nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2021‒12‒13
seven papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. The Roots of Cooperation By Zvonimir Bašic; Parampreet Christopher Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
  2. Moral awareness polarizes people's fairness judgments By Michael Kurschilgen
  3. On the Stability of Risk Preferences: Measurement Matters By Adema, Joop; Nikolka, Till; Poutvaara, Panu; Sunde, Uwe
  4. The “Human Factor” in Prisoner’s Dilemma Cooperation By Iván Barreda-Tarrazona; Ainhoa Jaramillo-Gutiérrez; Marina Pavan; Gerardo Sabater-Grande
  5. Reducing consumption of electricity: A field experiment in Monaco with boosts and goal setting By Nathalie Lazaric; Mira Toumi
  6. The Heritability of Trust and Trustworthiness Depends on the Measure of Trust By Kettlewell, Nathan; Tymula, Agnieszka
  7. Social and Moral Distance in Risky Settings By Anastasios Koukoumelis; Maria Vittoria Levati; Chiara Nardi

  1. By: Zvonimir Bašic; Parampreet Christopher Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
    Abstract: We study the development of cooperation in 929 young children, aged 3 to 6. In a unified experimental framework, we examine pre-registered hypotheses about which of three fundamental pillars of human cooperation – direct and indirect reciprocity, and third-party punishment – emerges earliest as a means to increase cooperation in a repeated prisoner’s dilemma game. We find that third-party punishment doubles cooperation rates in comparison to a control condition. Children also reciprocate others’ behavior, yet direct and indirect reciprocity do not increase overall cooperation rates. We also examine the influence of children’s cognitive skills and parents’ socioeconomic background on 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
  2. By: Michael Kurschilgen (Technical University of Munich and the Max Planck Institute for Research on Collective Goods)
    Abstract: How does moral awareness affect people's fairness judgments? Models of identity utility predict that if individuals differ in their personal fairness ideals (equality versus effciency), higher moral awareness should not only make people's choices less selfish but also more polarized. On the other hand, people's desire for conforming with the behavior of their peers should help mitigate polarization. I test these conjectures in a laboratory experiment, in which participants can pursue different fairness ideals. I exogenously vary (i) whether participants are prompted to state their moral opinions behind the veil of ignorance, and (ii) whether they are informed about the behavior of their peers. I find that moral introspection makes choices more polarized, reflecting even more divergent moral opinions. The increase in polarization coincides largely with a widening of revealed gender differences as introspection makes men's choices more welfarist and women's more egalitarian. Disclosing the descriptive norm of the situation is not capable of mitigating the polarization.
    Keywords: Moral Introspection; Social Information; Identity; Normative Ambivalence; Equality; Efficiency; Polarization; Experiment.
    JEL: C91 D63
    Date: 2021–11
  3. By: Adema, Joop (University of Munich); Nikolka, Till (German Youth Institute (DJI)); Poutvaara, Panu (University of Munich); Sunde, Uwe (University of Munich)
    Abstract: We exploit the unique design of a repeated survey experiment among students in four countries to explore the stability of risk preferences in the context of the COVID-19 pandemic. Relative to a baseline before the pandemic, we find that self-assessed willingness to take risks decreased while the willingness to take risks in an incentivized lottery task increased, for the same sample of respondents. These findings suggest domain specificity of preferences that is partly reflected in the different measures.
    Keywords: stability of risk preferences, measurement of risk aversion, COVID-19
    JEL: D12 D91 G50
    Date: 2021–09
  4. By: Iván Barreda-Tarrazona (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Ainhoa Jaramillo-Gutiérrez (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Marina Pavan (LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Gerardo Sabater-Grande (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: We design a rich setting to study cooperation in the finitely Repeated Prisoners’ Dilemma (RPD), controlling for beliefs, emotions, and personal characteristics. In the baseline, the subjects play one-shot and repeated games with other human subjects. In the treatment, participants play against an artificial intelligence (AI) trained upon data from the previous “all human” sessions to mimic human decisions. We design the experiment so that our sessions are homogeneous in terms of gender composition, altruism, and reasoning ability. In all games, we elicit players’ beliefs regarding cooperation using an incentive compatible method. Besides, after each individual decision, we collect self-reported information on the main reason for it (rational or emotional). We find that expectations of partner cooperation at the beginning of each task are not significantly different between treatments. Despite this, we observe that initial human cooperation is actually much higher with other humans than with an AI. Cooperation continues to be higher in all periods of the RPD tasks: cooperation rates range between 60% and 80% in the baseline, while they range between 20% and 40% in the AI treatment. Last, decisions appear to be less emotion-driven in the AI treatment. Lack of empathy with, rather than fear of, the machine seems to be driving the results.
    Keywords: cooperation, prisoner’s dilemma, artificial intelligence, experiment
    JEL: C91 C73
    Date: 2021
  5. 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); Mira Toumi (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: We investigate the complementarity among different treatments which involved "boosts" (provision of information) and "goals" (ambitious or modest goals) by means of a field experiment conducted in the Principality of Monaco between December 2018 and May 2019. We collected data from 77 households in four groups: ambitious electricity reduction goal combined with information (Treatment 1), modest electricity reduction goal combined with information (Treatment 2), only information (Treatment 3), and a control group (CG). Treatments 1 and 2 increased the chances of reduced electricity consumption. We show that a modest, more realistic electricity saving goal when combined with a "boost" generates better electricity conservation performance (T2). We explore the link between behavioral strategies and the household's concern for the environment in the context of the new ecological paradigm (NEP). Our results show that treatments T1 and T2 are efficient for reducing electricity consumption only in households with high levels of environmental concern; those whose level of concern about the environment is low will not respond to any of the behavioral interventions. We provide some recommendations for the implementation of behavioral tools and "boosts".
    Keywords: Boost,nudges,goal setting,electricity consumption,field experiment,environmental profile
    Date: 2022–01
  6. By: Kettlewell, Nathan (University of Technology, Sydney); Tymula, Agnieszka (University of Sydney)
    Abstract: Using a large sample of 1,120 twins, we estimated the heritability of trust using four distinct measures of trust – domain-specific political trust, general self-reported trust, and incentivized behavioral trust and trustworthiness. Our results highlight the importance of measuring trust in a context because its heritability differs substantially across the four measures, from 0% to 37%. Moreover, we provide the first evidence on the heritability of political trust which we estimate to be 37%. Furthermore, like the heritability, the environmental correlates of trust also vary across the different measures with political trust having the largest set of environmental covariates. The perceptions of COVID-19 health and income risks are among the unique correlates of political trust, with participants who are more worried about financial and health consequences of COVID-19, trusting politicians less, stressing the importance of trust in political leaders during a health crisis.
    Keywords: trust, heritability, genetics, twin study
    JEL: D91 Z13
    Date: 2021–09
  7. By: Anastasios Koukoumelis (Department of Economics, University of Bath); Maria Vittoria Levati (Department of Economics (University of Verona)); Chiara Nardi (Department of Economics (University of Verona))
    Abstract: Many socially desirable actions are subject to risk and occur in situations where the others are not anonymous. Assessing whether lower subject-subject anonymity affects behavior when outcomes are risky is likely important but has not been studied in depth so far. Herein, we provide evidence on this issue. In a series of allocation tasks, all of them variations of the dictator game, we systematically vary the party who is exposed to risk and manipulate recipient anonymity by reducing the social and/or moral distance between the two parties. We propose a model that extends previous work by allowing not only for ex ante and ex post fairness but also for altruism. The model is consistent with observed behavior. In particular, a reduction in social and moral distance significantly increases the likelihood of equal split and more than equal split choices.
    Keywords: Risk; Fairness; Altruism; Anonymity; Experiment
    JEL: C90 D63 D64 D81
    Date: 2021–12

This nep-cbe issue is ©2021 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.