nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2022‒01‒17
four papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. RISK IN TIME: The Intertwined Nature of Risk Taking and Time Discounting By Thomas Epper; Helga Fehr-Duda
  2. Self-control and unhealthy body weight: The role of impulsivity and restraint By Cobb-Clark, Deborah A.; Dahmann, Sarah Christina; Kamhöfer, Daniel A.; Schildberg-Hörisch, Hannah
  3. Risk, Temptation, and Efficiency in the One-Shot Prisoner's Dilemma By Simon Gaechter; Kyeongtae Lee; Martin Sefton; Till O. Weber
  4. Stationary social learning in a changing environment By Rapha\"el L\'evy; Marcin P\k{e}ski; Nicolas Vieille

  1. By: Thomas Epper (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, IÉSEG School Of Management [Puteaux]); Helga Fehr-Duda (University of Zurich, Department of Banking and Finance)
    Abstract: Standard economic models view risk taking and time discounting as two independent dimensions of decision making. However, mounting experimental evidence demonstrates striking parallels in patterns of risk taking and time discounting behavior and systematic interaction effects, which suggests that there may be common underlying forces driving these interactions. Here we show that the inherent uncertainty associated with future prospects together with individuals' proneness to probability weighting generates a unifying framework for explaining a large number of puzzling behavioral regularities: delay-dependent risk tolerance, aversion to sequential resolution of uncertainty, preferences for the timing of the resolution of uncertainty, the differential discounting of risky and certain outcomes, hyperbolic discounting, subadditive discounting, and the order dependence of prospect valuation. Furthermore, all these phenomena can be predicted simultaneously with the same set of preference parameters.
    Keywords: risk preferences,time preferences,preference interaction,increasing risk tolerance
    Date: 2021–12–09
  2. By: Cobb-Clark, Deborah A.; Dahmann, Sarah Christina; Kamhöfer, Daniel A.; Schildberg-Hörisch, Hannah
    Abstract: We examine the relationship between trait self-control and body weight. Data from a population representative household survey reveal that limited self-control is strongly associated with both objective and subjective measures of unhealthy body weight. Those with limited self-control are characterized by reduced exercising, repeated dieting, unhealthier eating habits, and poorer nutrition. We propose an empirical method to isolate two facets of self-control limitations-high impulsivity and low restraint. Each has differential predictive power. Physical activity, dieting, and overall body weight are more strongly associated with restraint; impulsivity is more predictive of when, where, and what people eat.
    Keywords: Brief Self-Control Scale,Obesity,Body Mass Index,Diet,Exercise
    JEL: D91 I12
    Date: 2021
  3. By: Simon Gaechter; Kyeongtae Lee; Martin Sefton; Till O. Weber
    Abstract: The prisoner’s dilemma (PD) is arguably the most important model of social dilemmas, but our knowledge about how a PD’s material payoff structure affects cooperation is incomplete. In this paper we investigate the effect of variation in material payoffs on cooperation, focussing on one-shot PD games where efficiency requires mutual cooperation. Following Mengel (2018) we vary three payoff indices. Indices of risk and temptation capture the unilateral incentives to defect against defectors and co-operators respectively, while an index of efficiency captures the gains from cooperation. We conduct two studies: first, varying the payoff indices over a large range and, second, in a novel orthogonal design that allows us to measure the effect of one payoff index while holding the others constant. In the second study we also compare a student and non-student subject pool, which allows us to assess generalizability of results. In both studies we find that temptation reduces cooperation. In neither study, nor in either subject pool of our second study, do we find a significant effect of risk.
    Keywords: prisoner’s dilemma, cooperation, temptation, risk, efficiency
    JEL: A13 C91
    Date: 2021
  4. By: Rapha\"el L\'evy; Marcin P\k{e}ski; Nicolas Vieille
    Abstract: We consider social learning in a changing world. Society can remain responsive to state changes only if agents regularly act upon fresh information, which limits the value of social learning. When the state is close to persistent, a consensus whereby most agents choose the same action typically emerges. The consensus action is not perfectly correlated with the state though, because the society exhibits inertia following state changes. Phases of inertia may be longer when signals are more precise, even if agents draw large samples of past actions, as actions then become too correlated within samples, thereby reducing informativeness and welfare.
    Date: 2022–01

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