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on Cognitive and Behavioural Economics |
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Issue of 2022‒08‒15
nine papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Héloise Cloléry (CREST-Ecole polytechnique, IP Paris); Guillaume Hollard (CREST-Ecole polytechnique, IP Paris and CNRS); Fabien Perez (CREST-Ensae, IP Paris); Inès Picard (CREST-Genes, IP Paris) |
| Abstract: | Trust is an important economic variable that may however be subject to measurement error, leading to econometric issues such as attenuation bias or spurious correlations. We use a test/retest protocol to assess the measurement error in the two main tasks that are used to elicit trust, namely survey questions and experimental games. We find that trust measures based on the trust game entail substantial measurement error (with up to 15% of noise), while there is virtually no noise in stated trust measures. Given the specificity of our subject pool (students in a top Engineering school) and the short period of time between the test and the retest, we consider these percentages of noise as lower bounds. We also provide a sub-group analysis based on measures of cognitive ability and effort. We find substantial heterogeneity across sub-groups in trust-game behavior, but none for the survey questions. We finally discuss which measure of trust should be used, and the estimation strategies that can be applied to limit the effect of measurement error. |
| Keywords: | Trust; Trust Game; Measurement Error; ORIV. |
| JEL: | C18 C26 C91 D91 |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2022-13&r= |
| By: | Leonard Hoeft (Humboldt University to Berlin); Michael Kurschilgen (Technical University of Munich, the Max Planck Institute for Research on Collective Goods, and the Stanford Graduate School of Business); Wladislaw Mill (University of Mannheim); Simone Vannuccini (Science Policy Research Unit, University of Sussex) |
| Abstract: | Economists model legal compliance as the process of maximizing utility while weighing the consequences from norm violation against other (monetary and non-monetary) considerations. Legal philosophers, on the other hand, believe that norms provide exclusionary reasons, i.e. that people apply the norm precisely to make a choice without weighing up on other issues. We test and compare both models in a controlled online experiment. We conduct a modified dictator game with partially unknown yet ascertainable payoffs, and vary between treatments the presence and content of authoritative norms. Our experimental results show that – in the presence of a norm – participants follow norms without searching for information that they deem important in the absence of a norm. This pattern is independent of the specific content of the norm. Our results are consistent with the legal model of norm compliance. |
| Keywords: | Norms, Information, Authority, Willful Ignorance, Dictator Game, Legal Theory, Experiment |
| JEL: | C91 D63 D81 D83 K10 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:aiw:wpaper:22&r= |
| By: | Giorgia Barboni; Juan Camilo Cárdenas; Nicolás de Roux |
| Abstract: | We use a randomized experiment involving 7,029 late-paying clients of a large Colombian bank to compare the effects on loan delinquency of text messages that encourage repayment through different behavioral angles { increased attention, reciprocity, social norms, moral norms, and environmental and sustainability concerns. We find that receiving a behavioral message decreases borrowers' average likelihood to be late by 4%. The effects are more pronounced when messages leverage social norms. Heterogeneity analysis shows that our results are concentrated among late- paying borrowers with a good credit history. We also find evidence that customers who are late on unsecured loan products respond more to the messages. Our intervention provides novel evidence that behavioral messages are most effective when borrowers are marginally struggling to repay and have preferences to be on a good repayment track. In a second experiment pushing the same messages to 8,019 on-time borrowers, we find precisely estimated zero effects, suggesting that these types of messages may not be the right tool to prevent on-time borrowers from falling into loan delinquency. |
| Keywords: | Loan Delinquency, Behavioral Messages, Personal loans, Field Experiments |
| JEL: | G51 D91 |
| Date: | 2022–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:020257&r= |
| By: | Islam, Marco (Department of Economics, Lund University) |
| Abstract: | How does delay in the realization of a prosocial decision affect prosocial choice? This paper first provides a meta-analysis that collects existing evidence on the temporal consistency of prosocial behavior. I show that the evidence on the delay effect on prosocial choice is contradicting but appears reconcilable by a moderating factor: repeated interaction. Motivated by this finding, I conduct an intertemporal donation experiment to closely investigate this moderation effect. I design an experiment that mimics a telephone fundraiser and vary both the timing of the donation (immediate vs. delayed) and the frequency of interaction (one-shot vs. repeated interaction). The results reveal that both under repeated and one-time interaction delayed donations increase relative to immediate donations but the increase is not statistically significant. This evidence suggests that repeated interaction (via telephone) does not provide the conditions for delay to increase prosocial behavior. |
| Keywords: | intertemporal choice; prosocial behavior; charitable giving; repeated interaction |
| JEL: | C91 D64 D90 |
| Date: | 2022–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2022_012&r= |
| By: | Brian Jabarian; Simon Lazarus |
| Abstract: | We conduct an incentivized experiment on a nationally representative US sample (N=708) to test how people prefer to avoid ambiguity even when the ambiguity improves the probability of receiving a fixed price. We find that subjects prefer non-ambiguous acts to similar ambiguous acts, even when the ambiguous acts provide larger win probabilities. Furthermore, this preference for avoiding ambiguity is not entirely due to a lack of understanding, as subjects "correctly" select the act with a larger win probability when comparing two similar ambiguous acts. Traditional models of ambiguity aversion cannot explain such preferences. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.04605&r= |
| By: | Lia Q. Flores (School of Economics and Management, University of Porto); Miguel A. Fonseca (University of Exeter and NIPE, Universidade do Minho) |
| Abstract: | Is the phenomenon of people overestimating their skill relative to their peers (overplacement) exacerbated by group affiliation? Social identity theory predicts people evaluate in-group members more positively than out-group members, and we hypothesized that this differential treatment may result in greater overplacement when interacting with an out-group member. We tested this hypothesis with 301 US voters affiliated with either the Republican or Democratic party in the run-up to the 2020 Presidential election, a time when political identities were salient and highly polarized. We found there is a higher tendency for overplacement when faced with an out-group opponent than with an in-group opponent. Decomposition analysis suggests this difference is due to underestimating the opponent, as opposed to overestimating one's own performance to a higher degree. Moreover, any tendency to incur in overplacement is mitigated when faced with an opponent with the same political identity relative to one with a neutral one. Group affiliation biases initial priors, and that effect is unchanged when participants are asked to update their beliefs. |
| Keywords: | Overconfidence; Belief updating; Motivated beliefs; Overplacement; Social identity; Political affiliation; Competition |
| JEL: | E62 I31 I38 O30 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:2202&r= |
| By: | Fahd Zulfiqar (Lecturer, Development Studies, PIDE) |
| Abstract: | In the webinar, Prof. Cass Sunstein talked about three important concepts: Nudge, FEAST framework for behavior change, and Sludge. Nudge focuses on the interventions which function as an impetus for individual behavioral change, in particular, the acts and actions which bring about normative change in the society. The idea of nudge comes from the ideas of humanity and species, based on the fact that human beings being part of an imperfect world are imperfect choosers. People can be imperfect choosers because of behavioral biases. For purposes of public policy concerns, it is imperative to study five biases. |
| Keywords: | Feast Framework, Behavior Change, |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wbrief:2021:15&r= |
| By: | Etienne Dagorn (Université Paris 1 Panthéon-Sorbonne, IEDES; CNRS, CREM—UMR 6211, F-35000 Rennes); David Masclet (Univ Rennes, France CNRS, CREM—UMR 6211, F-35000 Rennes and Cirano, Canada); Thierry Penard (Univ Rennes, France CNRS, CREM—UMR 6211, F-35000 Rennes) |
| Abstract: | In this paper, we investigate how soft skills are related to educational achievement. We run a lab in the field experiment with pupils in Middle Schools to ask whether altruism, cooperation, willingness to compete and intrinsic motivation influence educational attainment. We find that willingness to compete is a strong predictor of individual educational achievement, while altruism is on the contrary negatively correlated with pupils’ success. Family background is a strong predictor of educational attainment. After controlling for individual and social preferences, we find that girls outperform boys. |
| Keywords: | lab-in-the-field experiment; education; soft skills; preferences; cooperation; competition; teenagers |
| JEL: | C70 A13 C92 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2022-05&r= |
| By: | Christoph Buehren (Ruhr-University Bochum); Dominic Jung (Clausthal University of Technology) |
| Abstract: | We analyze the natural experiment of ghost games in the 2019/2020 season of the German football Bundesliga and confirm previous studies showing that the home advantage diminishes if the stadium is empty. However, our paper is the first that distinguishes between effort- and skill-based tasks in this setting. In line with behavioral economics, we observe that a supportive audience has a positive effect on effort-based performance but a negative effect on some offensive skill-based performance measures. |
| Keywords: | Ghost games; home advantage; effort vs. skill, Covid-19 |
| JEL: | C93 Z20 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202227&r= |