nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2022‒03‒14
five papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Interactive Experiments in Toloka By Chapkovski, Philipp
  2. A Unified Model of Learning to Forecast By Evans, George; Gibbs, Christopher; McGough, Bruce
  3. Does Media Coverage of the Social Security Trust Fund Affect Claiming, Saving, and Benefit Expectations? By Laura D. Quinby; Gal Wettstein
  4. Top Ten Behavioral Biases in Project Management: An Overview By Bent Flyvbjerg
  5. Trust, the Pandemic, and Public Policies By James Alm

  1. By: Chapkovski, Philipp
    Abstract: The popularity of online behavioral experiments grew steadily even before the COVID-19 pandemic. With the start of lockdowns, online studies were often the only available option for the behavioral economists, sociologists and political scientists. The usage of most well-known platforms such as mTurk was so intensive that it harmed the quality of data. But even before the pandemics-induced quality crisis, online studies were limited in scope, since real-time interactions between participants were hard to achieve due to the large proportion of drop-outs and issues with creating stable groups. Using the crowdsourcing platform Toloka, we successfully ran several multi-round interactive experiments. Toloka’s large online audience, relatively low exposure of participants to sociological surveys and behavioral studies, and a convenient application programming interface makes it a perfect tool to run behavioral studies that require real-time interactions of participants.
    Keywords: Crowdsourcing,survey research,MTurk,online research
    JEL: C90 C92 C81 C88 B41
    Date: 2022
  2. By: Evans, George; Gibbs, Christopher; McGough, Bruce
    Abstract: We propose and experimentally test a model of boundedly rational and heterogeneous expectations that unifies adaptive learning, k-level reasoning, and replicator dynamics. Level-0 forecasts evolve over time via adaptive learning. Agents revise over time their depth of reasoning in response to forecast errors, observed and counterfactual. The unified model makes sharp predictions for when and how fast markets converge in Learning-to-Forecast Experiments, including novel predictions for individual and market behavior in response to announced events. The experimental results support these predictions. Our unified model is developed in a simple framework, but can clearly be extended to more general macroeconomic environments.
    Keywords: expectations; adaptive learning; level-k reasoning; behavioral macroeconomics; experiments
    Date: 2021–11
  3. By: Laura D. Quinby; Gal Wettstein
    Abstract: This study explores how workers respond to reports about Social Security’s finances, using an online experiment in which participants are shown identical articles with different headlines. The headline for the control group reports that Social Security has a “long-term financing shortfall,†but does not directly reference the trust fund. The headlines for the three treatment groups highlight the depletion of the trust fund. Two treatment groups saw headlines emphasizing the trust fund’s 2034 reserve depletion date – using increasingly sensationalist language – while a third treatment group saw a headline explaining that ongoing program revenues will cover three-quarters of scheduled benefits after 2034.
    Date: 2021–09
  4. By: Bent Flyvbjerg
    Abstract: Behavioral science has witnessed an explosion in the number of biases identified by behavioral scientists, to more than 200 at present. This article identifies the 10 most important behavioral biases for project management. First, we argue it is a mistake to equate behavioral bias with cognitive bias, as is common. Cognitive bias is half the story; political bias the other half. Second, we list the top 10 behavioral biases in project management: (1) strategic misrepresentation, (2) optimism bias, (3) uniqueness bias, (4) the planning fallacy, (5) overconfidence bias, (6) hindsight bias, (7) availability bias, (8) the base rate fallacy, (9) anchoring, and (10) escalation of commitment. Each bias is defined, and its impacts on project management are explained, with examples. Third, base rate neglect is identified as a primary reason that projects underperform. This is supported by presentation of the most comprehensive set of base rates that exist in project management scholarship, from 2,062 projects. Finally, recent findings of power law outcomes in project performance are identified as a possible first stage in discovering a general theory of project management, with more fundamental and more scientific explanations of project outcomes than found in conventional theory.
    Date: 2022–01
  5. By: James Alm (Tulane University)
    Abstract: What is the role of trust in designing public policies, especially during the current pandemic? In this paper I examine recent research that demonstrates the crucial effects of trust. This research suggests, I believe, two main conclusions. First, there is much emerging evidence that trust – and especially trust in government – is a major factor in shaping the effectiveness of public policies. In particular, when trust in government is weak, many government policies do not achieve their goals because people simply do not follow the government’s laws, regulations, and directives. Second, there is also much emerging evidence that trust is not fixed and given and immutable, mainly determined by a country’s history and culture and institutions, as was once believed. Instead, recent evidence indicates that trust can vary significantly, even over short periods of time. Indeed, there is growing research that trust in government can be affected in systematic ways by systematic policy interventions. These conclusions suggest that there are ways out of our current wilderness, even if these strategies will be neither easy nor quick.
    Keywords: Trust; public policy; tax compliance; experiments; pandemic.
    JEL: A13 H50 H70
    Date: 2022–02

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