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on Cognitive and Behavioural Economics |
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Issue of 2022‒03‒21
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Nobuyuki Hanaki; Takayuki Hoshino; Kohei Kubota; Fabrice Murtin; Masao Ogaki; Fumio Ohtake; Naoko Okuyama |
| Abstract: | This paper compares the results of an experiment conducted both in the laboratory and online with participants recruited from the same subject pool using the Trustlab platform. This platform has been used to obtain incentivized and internationally comparable behavioral economics measures of altruism, cooperation, reciprocity, trust, and trustworthiness, employing representative samples in many countries. We find no significant difference between the results from sessions conducted in the laboratory and online. While the existing literature shows that the choice between laboratory and online experiments can cause differences in results in some cases, our findings support the hypothesis that they do not cause differences in the behavioral economics measures when using the Trustlab platform. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1168&r= |
| By: | Marina Agranov (California Institute of Technology); Pietro Ortoleva (Princeton University) |
| Abstract: | A growing literature has shown how people sometimes prefer to randomize between two options. We study how prevalent this behavior is in an experiment using a novel and simple method. We allow subjects to randomize between options in a series of questions in which one of the alternatives is fixed and the other varies, capturing the range of values for which subjects want to randomize. We find that most subjects choose to randomize in most questions. Crucially, they do so for ranges of values are ‘very large’: for example, when comparing a fixed amount $x with a lottery that pays $20 or $0 with equal chances, subjects typically randomize for all xs between $5.3 and $12. Large ranges are found in other questions as well, showing how prevalent the desire to randomization is. We connect ranges to standard choices, Certainty-Bias, and non-Monotonicity. |
| Keywords: | Preference for Randomization, Incomplete Preferences, Non-Expected Utility |
| JEL: | C91 D81 D90 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2021-72&r= |
| By: | Ben Grodeck (Monash University, Department of Economics); Philipp Schoenegger (University of St Andrews, School of Economics and Finance & School of Philosophical, Anthropological and Film Studies) |
| Abstract: | What are the effects of confronting people with moral arguments and morally demanding statements to perform certain actions, such as donating to charity? To investigate this question, we conduct an online randomized experiment via Prolific (n=2500) where participants can donate to charity. Using a between-subject design, we provide some participants with a moral argument as to why they should donate. We then add a single sentence on top of the moral argument that expresses and varies moral demandingness at different levels. In a follow-up experiment (n=1200) we provide the moral argument and demandingness via an external party’s website—the non-profit Giving What We Can. In both experiments, we find that moral arguments significantly increase both the frequency and amount of donations compared to the control. However, we fail to find evidence that increasing the level of the moral demandingness affects donation behavior in either experiment. Our findings suggest that charities should employ moral arguments to increase giving, but not morally demanding statements. |
| Keywords: | Charitable Giving, Experiment, Morality, Obligation, Pro-Social Behavior |
| JEL: | D64 D91 H41 C90 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2022-03&r= |
| By: | Roland Bénabou (Princeton University); Armin Falk (Institute on Behavior and Inequality (briq) and University of Bonn); Luca Henkel (University of Bonn); Jean Tirole (University of Toulouse Capitole) |
| Abstract: | We examine to what extent a person’s moral preferences can be inferred from observing their choices, for instance via experiments, and in particular, how one should interpret certain behaviors that appear deontologically motivated. Comparing the performance of the direct elicitation (DE) and multiple-price list (MPL) mechanisms, we characterize in each case how (social or self) image motives inflate the extent to which agents behave prosocially. More surprisingly, this signaling bias is shown to depend on the elicitation method, both per se and interacted with the level of visibility: it is greater under DE for low reputation concerns, and greater under MPL when they become high enough. We then test the model’s predictions in an experiment in which nearly 700 subjects choose between money for themselves and implementing a 350e donation that will, in expectation, save one human life. Interacting the elicitation method with the decision’s level of visibility and salience, we find the key crossing effect predicted by the model. We also show theoretically that certain Kantian postures, turning down all prices in the offered range, easily emerge under MPL when reputation becomes important enough. |
| Keywords: | Morals, Choices, Decision-making |
| JEL: | D90 D91 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-17&r= |
| By: | Faruk R. Gul (Princeton University); Paulo Natenzon (Washington University in St. Louis); Erkut Y. Ozbay (University of Maryland); Wolfgang Pesendorfer (Princeton University) |
| Abstract: | We report on an experiment that shows subjects prefer a gradual resolution of uncertainty when information about winning yields decisive bad news but inconclusive good news. This behavior is difficult to reconcile with existing theories of choice under uncertainty, including the Kreps-Porteus model. We show how the behavioral patterns uncovered by our experiment can be understood as arising from subjects’ special emphasis on their best (peak) and worst (trough) experiences along the realized path of uncertainty. |
| Keywords: | uncertainty |
| JEL: | D80 D81 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-8&r= |
| By: | Michele Fioretti (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Alexander Vostroknutov (Maastricht University [Maastricht]); Giorgio Coricelli (USC - University of Southern California) |
| Abstract: | In a stock market experiment, we examine how regret avoidance influences the decision to sell an asset while its price changes over time. Participants know beforehand whether they will observe the future prices after they sell the asset or not. Without future prices, participants are affected only by regret about previously observed high prices (past regret), but when future prices are available, they also avoid regret about expected after-sale high prices (future regret). Moreover, as the relative sizes of past and future regret change, participants dynamically switch between them. This demonstrates how multiple reference points dynamically influence sales. (JEL C91, G12, G41) |
| Keywords: | stock market behavior,behavioral finance,regret avoidance,dynamic regret,dynamic discrete choice,structural models,experiments,multiple reference points |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03562318&r= |
| By: | Callaghan, Bennett; Delgadillo, Quinton Michael; Kraus, Michael W. (Yale University) |
| Abstract: | A field experiment (N = 4,537) examined how signs of social class influence prosocial behavior. In the experiment, pedestrians were exposed to a target wearing symbols of relatively high or low social class in two major urban cities in the USA who was presumably requesting money to help the homeless. Pedestrians gave more than twice (2.55 times) as much to the target wearing high social class symbols than they did to the one wearing lower-class symbols. A follow-up perceptual study exposed participants to images of this panhandler wearing the same higher- or lower-class symbols, finding that higher-class symbols elicited perceptions of elevated competence, trustworthiness, similarity to the self, and perceived humanity compared to lower-class symbols. These results indicate that perceivers use visible signs of social class as a basis for judging others’ traits and attributes, and in decisions to directly share resources. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2022–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:z8dn7&r= |
| By: | Phu Nguyen-Van; Thierry Blayac; Dimitri Dubois; Sebastien Duchene; Ismael Rafai; Bruno Ventelou; Marc Willinger |
| Abstract: | We test the effectiveness of a social comparison nudge to enhance lockdown compliance during the Covid-19 pandemic, using a French representative sample (N=1154). Respondents were randomly assigned to a favourable/unfavourable informational feedback (daily road traffic mobility patterns, in Normandy - a region of France) on peer lockdown compliance. Our dependent variable was the intention to comply with a possible future lockdown. We controlled for risk, time, and social preferences and tested the effectiveness of the nudge. We found no evidence of the effectiveness of the social comparison nudge among the whole French population, but the nudge was effective when its recipient and the reference population shared the same geographical location (Normandy). Exploratory results on this subsample (N=52) suggest that this effectiveness could be driven by non-cooperative individuals. |
| Keywords: | COVID-19; Lockdown compliance; Social Comparison; Nudge; Risk preferences; Time preferences; Social preferences |
| JEL: | C90 D90 I10 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2022-5&r= |