nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2022‒11‒07
six papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. The impact on nudge acceptability judgements of framing and consultation of the targeted population By Ismaël Rafaï; Arthur Ribaillier; Dorian Jullien
  2. Beware the performance of an algorithm before relying on it: Evidence from a stock price forecasting experiment By Tiffany Tsz Kwan TSE; Nobuyuki HANAKI; Bolin MAO
  3. Behavioral Insights in Infrastructure Sectors : A Survey By Joseph,George; Ayling,Sophie Charlotte Emi; Miquel-Florensa,Pepita; Bejarano,Hernán D.; Cardona,Alejandra Quevedo
  4. Do emotional carryover effects carry over? By Nikhil Masters; Chris Starmer
  5. Norm-Signalling Punishment By Daniele Nosenzo; Erte Xiao; Nina Xue
  6. Do Behavioral Interventions Enhance the Effects of Cash on Early Childhood Development and Its Determinants ? Evidence from a Cluster-Randomized Trial in Madagascar By Datta,Saugato; Martin,Joshua Bader; MacLeod,Catherine; Rawlings,Laura B.; Vermehren,Andrea

  1. By: Ismaël Rafaï (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Arthur Ribaillier (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Dorian Jullien (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The aim of this article is to better understand how judgements about nudge acceptability are formed and whether they can be manipulated. We conducted a randomized experiment with N = 171 participants to test whether acceptability judgements could be (1) more favourable when the decision to implement the nudges was made following a consultation with the targeted population and (2) influenced by the joint framing of the nudge's purpose and effectiveness (in terms of an increase in desirable behaviour versus decrease in undesirable behaviour). We tested these hypotheses on various nudge scenarios and obtained mixed results that do not clearly support our hypotheses for all nudge scenarios. A surprising result that calls for further work is that by mentioning that a nudge had been implemented through a consultation with the targeted population its acceptability could be lowered.
    Keywords: behavioural public policies,nudges,acceptability,framing,consultation
    Date: 2022
  2. By: Tiffany Tsz Kwan TSE; Nobuyuki HANAKI; Bolin MAO
    Abstract: We experimentally investigated the relationship between participants' reliance on algorithms, their familiarity with the task, and the performance level of the algorithm. We found that when participants could freely decide on their final forecast after observing the one produced by the algorithm (a condition found to mitigate algorithm aversion), the average degree of reliance on high and low performing algorithms did not significantly differ for participants with little experience in the task. Experienced participants relied less on the algorithm than inexperienced participants, regardless of its performance level. The reliance on the low performing algorithm was positive even when participants could infer that they outperformed the algorithm. Indeed, participants would have done better without relying on the low performing algorithm at all. Our results suggest that, at least in some domains, excessive reliance on algorithms, rather than algorithm aversion, should be a concern.
    Date: 2022–10
  3. By: Joseph,George; Ayling,Sophie Charlotte Emi; Miquel-Florensa,Pepita; Bejarano,Hernán D.; Cardona,Alejandra Quevedo
    Abstract: In the past two decades, insights from behavioral sciences, particularly behavioral economics, have been widely applied in the design of social programs such as pensions, social security, and taxation. This paper provides a survey of the existing literature in economics on the application of behavioral insights to infrastructure sectors, focusing on water and energy. Various applications of behavioral insights in the literature are examined from the perspectives of the three main actors in the infrastructure sectors: policy makers, service providers, and consumers. Evidence is presented from the literature on how behavioral regularities, such as imperfect optimization, limited self-control, and nonstandard preferences, affect the strategies, decisions, and actions of policy makers, service providers, and consumers, often leading to suboptimal outcomes for service investment, delivery, access, and use. The paper also highlights how behavioral interventions such as anchoring, framing, nonpecuniary incentives, and altering the choice architecture can lead to improvements in performance, adoption, consumption, and other outcomes of interest in the infrastructure sectors.
    Keywords: Hydrology,Sanitary Environmental Engineering,Water Supply and Sanitation Economics,Town Water Supply and Sanitation,Small Private Water Supply Providers,Engineering,Sanitation and Sewerage,Water and Human Health,Health and Sanitation,Environmental Engineering,Energy and Mining,Energy and Environment,Energy Demand,Private Sector Economics
    Date: 2021–06–21
  4. By: Nikhil Masters (University of Essex; Bournemouth University); Chris Starmer (University of Nottingham)
    Abstract: Existing research has demonstrated carryover effects whereby emotions generated in one context influence decisions in other, unrelated ones. We examine the carryover effect in relation to valuations of risky and ambiguous lotteries with a novel focus on comparing the carryovers arising from a targeted stimulus (designed to elicit a specific emotion) with those arising from a naturalistic stimulus (expected to produce a more complex emotional response). We find carryover effects using both a standard targeted stimulus and a naturalistic one, but they are stronger for the naturalistic stimulus and in the context of ambiguity. These effects are also highly gender-specific with only males being susceptible. To probe the emotional foundations of behaviour, we conduct analysis relating individual self-reports of emotions to incentivised valuation behaviour. Our results cast doubt on the interpretation of some evidence purporting to establish links between specific incidental emotions and risk taking.
    Keywords: Incidental emotions; Emotional carryover; risk; ambiguity; Naturalistic; Structural equation modelling
    Date: 2022
  5. By: Daniele Nosenzo (Department of Economics and Business Economics, Aarhus University); Erte Xiao (Monash University); Nina Xue (Monash University)
    Abstract: The literature on punishment and prosocial behavior has presented conflicting findings. In some settings, punishment crowds out prosocial behavior and backfires, in others, however, it promotes prosociality. We examine whether the punisher’s motives can help reconcile these results through a novel experiment in which the agent’s outcomes are identical in two environments, but in one punishment is self-serving (i.e., potentially benefits the punisher) while in the other it is other-regarding (i.e., potentially benefits a third party). We find that self-regarding punishment reduces the social stigma of selfish behavior, while other-regarding punishment does not. As a result, self-serving punishment is less effective at encouraging compliance and is more likely to backfire compared to other-regarding punishment. Our findings have implications for the design of punishment mechanisms and highlight the importance of the punisher’s motives in the norm-signalling function of punishment.
    Keywords: Punishment, norms, stigma, crowd out, experiment
    JEL: C91 C72 D02
    Date: 2022–10–19
  6. By: Datta,Saugato; Martin,Joshua Bader; MacLeod,Catherine; Rawlings,Laura B.; Vermehren,Andrea
    Abstract: This paper evaluates the effects of interventions based on behavioral science on measures of early childhood socio-cognitive development (and related household-level outcomes) for children from households receiving cash transfers in Madagascar, using a multi-arm cluster-randomized trial. Three behavioral interventions (a Mother Leaders group and associated activities, by itself or augmented with a self-affirmation or a plan-making nudge) are layered onto a child-focused cash transfer program targeting children from birth to age six years. Approximately 18 months into the implementation of these interventions and 20 months since baseline, the study finds evidence that households in the behaviorally enhanced arms undertake more desirable parenting behaviors, interact more with their children, prepare more (and more diverse) meals at home, and report lower food insecurity than households that received only cash. Children from households in several of the behaviorally enhanced arms also perform better than children from households in the cash-only arm on several measures of socio-cognitive development, including language learning and social skills.
    Keywords: Disability,Services&Transfers to Poor,Access of Poor to Social Services,Economic Assistance,Social Protections&Assistance,Reproductive Health,Children and Youth,Early Child and Children's Health,Nutrition,Early Childhood Development,Inequality
    Date: 2021–08–09

This nep-cbe issue is ©2022 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.