nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2023‒03‒27
five papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Guilt Aversion in (New) Games: Does Partners' Payoff Vulnerability Matter? By Attanasi, Giuseppe; Rimbaud, Claire; Villeval, Marie Claire
  2. When merit breeds luck (or not): an experimental study on distributive justice By Michele Bernasconi; Enrico Longo; Valeria Maggian
  3. Automating Automaticity: How the Context of Human Choice Affects the Extent of Algorithmic Bias By Amanda Y. Agan; Diag Davenport; Jens Ludwig; Sendhil Mullainathan
  4. Motivated Skepticism By Jeanne Hagenbach; Charlotte Saucet
  5. Do Classical Studies Open your Mind? By Brunello, Giorgio; Esposito, Piero; Rocco, Lorenzo; Scicchitano, Sergio

  1. By: Attanasi, Giuseppe (University of Nice Sophia-Antipolis); Rimbaud, Claire (University of Lyon 2); Villeval, Marie Claire (CNRS, GATE)
    Abstract: We investigate whether a player's guilt aversion is modulated by the co-players' vulnerability. To this goal, we introduce new variations of a three-player Trust game in which we manipulate payoff vulnerability and endowment vulnerability. The former is the traditional vulnerability which arises when a player's material payoff depends on another player's action (e.g., recipient's payoff in a Dictator game). The latter arises when a player's initial endowment is entrusted to another player (e.g., trustor's endowment in a Trust game). Treatments vary whether trustees can condition their decision on the belief of a co-player who is payoff-vulnerable and/or endowment-vulnerable, or not vulnerable at all, and the decision rights of the vulnerable player. We find that trustees' guilt aversion is insensitive to the dimension of the co-player's vulnerability and to the decision rights of the co-player. Guilt is activated even absent vulnerability of the co-player whose beliefs are disappointed. It is triggered by the willingness to respond to the co-player's beliefs on his strategy, regardless of whether this strategy concerns this player or a third player's vulnerability, that is, indirect vulnerability.
    Keywords: guilt aversion, vulnerability, psychological game theory, Dictator game, Trust game, experiment
    JEL: C72 C91 D91
    Date: 2023–02
  2. By: Michele Bernasconi (Department of Economics, University Of Venice CÃ Foscari); Enrico Longo (University of Hamburg); Valeria Maggian (Department of Economics, University Of Venice CÃ Foscari)
    Abstract: We experimentally investigate subjects’ preferences for redistribution depending on i) their personal stake in the outcome (either absent or not), ii) the effect of luck in strengthening or weakening the income inequality as derived from merit, and iii) whether individuals are informed about their relative wealth position in the society or not. We find that self-interest is the main driver of subjects’ redistributive choices when they have direct monetary interests in the outcome. Leaving subjects under the veil of ignorance about their relative gross income position reduces selfish behavior, also controlling for beliefs and risk attitude. Inequality aversion and fairness mostly affect redistributive choices of impartial spectators when recipients of redistribution are not informed about their initial endowments, suggesting that the luck vs. merit effect is not the only driver of redistribution on behalf of others.
    Keywords: Income redistribution, Inequality aversion, Fairness, Experiment
    JEL: D31 D63 D81 C91
    Date: 2023
  3. By: Amanda Y. Agan; Diag Davenport; Jens Ludwig; Sendhil Mullainathan
    Abstract: Consumer choices are increasingly mediated by algorithms, which use data on those past choices to infer consumer preferences and then curate future choice sets. Behavioral economics suggests one reason these algorithms so often fail: choices can systematically deviate from preferences. For example, research shows that prejudice can arise not just from preferences and beliefs, but also from the context in which people choose. When people behave automatically, biases creep in; snap decisions are typically more prejudiced than slow, deliberate ones, and can lead to behaviors that users themselves do not consciously want or intend. As a result, algorithms trained on automatic behaviors can misunderstand the prejudice of users: the more automatic the behavior, the greater the error. We empirically test these ideas in a lab experiment, and find that more automatic behavior does indeed seem to lead to more biased algorithms. We then explore the large-scale consequences of this idea by carrying out algorithmic audits of Facebook in its two biggest markets, the US and India, focusing on two algorithms that differ in how users engage with them: News Feed (people interact with friends' posts fairly automatically) and People You May Know (people choose friends fairly deliberately). We find significant out-group bias in the News Feed algorithm (e.g., whites are less likely to be shown Black friends' posts, and Muslims less likely to be shown Hindu friends' posts), but no detectable bias in the PYMK algorithm. Together, these results suggest a need to rethink how large-scale algorithms use data on human behavior, especially in online contexts where so much of the measured behavior might be quite automatic.
    JEL: A12 D63 D83
    Date: 2023–02
  4. By: Jeanne Hagenbach (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Charlotte Saucet (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We experimentally study how individuals read strategically-transmitted information when they have preferences over what they will learn. Subjects play disclosure games in which Receivers should interpret messages skeptically. We vary whether the state that Senders communicate about is ego-relevant or neutral for Receivers, and whether skeptical beliefs are aligned or not with what Receivers prefer believing. Skepticism is lower when skeptical beliefs are self-threatening than in neutral settings. When skeptical beliefs are self-serving, skepticism is not enhanced compared to neutral settings. These results demonstrate that individuals' exercise of skepticism depends on the conclusions of skeptical inferences.
    Keywords: Disclosure games, Hard information, Unraveling result, Skepticism, Motivated beliefs
    Date: 2022–07–15
  5. By: Brunello, Giorgio; Esposito, Piero; Rocco, Lorenzo; Scicchitano, Sergio
    Abstract: We investigate whether classical studies in high school - that emphasize in Italy the study of ancient languages such as Latin and Greek - affect personality traits. Using Italian survey data, we compare individuals who did classical studies in high school with similar individuals who completed a more scientific academic curriculum. We find that having done classical studies does not affect conscientiousness and openness but increases neuroticism and self-reported unhappiness.
    Keywords: school choice, education, classical studies, Big-5, non-cognitive skills, personality traits
    JEL: I21 I26
    Date: 2023

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