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on Cognitive and Behavioural Economics |
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Issue of 2023‒04‒10
six papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Thomas Dohmen (University of Bonn, Lennestrasse 43, 53113 Bonn, Germany; IZA Instituteo f Labor Economics; Maastricht University); Simone Quercia (University of Verona, Via Cantarane 24, 37129 Verona, Italy); Jana Willrodt (Duesseldorf Institute for Competition Economics (DICE), Universitaetsstrasse 1, 40225 Duesseldorf, Germany) |
| Abstract: | In this paper, we provide an explanation for why risk taking is related to optimism. Using a laboratory experiment, we show that the degree of optimism predicts whether people tend to focus on the positive or negative outcomes of risky decisions. While optimists tend to focus on the good outcomes, pessimists focus on the bad outcomes of risk. The tendency to focus on good or bad outcomes of risk in turn affects both the self-reported willingness to take risk and actual risk taking behavior. This suggests that dispositional optimism may affect risk taking mainly by shifting attention to specific outcomes rather than causing misperception of probabilities. In line with this, in a second studywe find evidence that dispositional optimism is related to elicited parameters of rank dependent utility theory suggesting that focusing may be among the psychological determinants of decision weights. Finally, we corroborate our findings with process data related to focusing showing that optimists tend to remember more and attend more to good outcomes and this in turn affects their risk taking. |
| Keywords: | Risk taking behavior, optimism, preference measure |
| JEL: | D91 C91 D81 D01 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:223&r=cbe |
| By: | Charles N Noussair (University of Arizona); Steven Tucker (University of Waikato); Yilong Xu (Utrecht University); Adriana Breaban (Erasmus University Rotterdam) |
| Abstract: | We consider the emotional correlates of activity in the Public Good game when monetary and non-monetary punishments are available, and when no punishment is possible. In our experiment, emotions are measured using Face Reading software that tracks the emotional content of facial expressions in real time. When no punishment is possible, greater anger and more negative emotional valence correlate with learning that one has contributed more than others. Lower valence and happiness, in turn, is associated with reducing one’s cooperation in the next period. When non-monetary punishment in the form of expressed disapproval is possible, positive emotional valence is associated with cooperation, punishment of free-riders, and an increase in cooperation from one period to the next. Negative valence, on the other hand, is associated with the receipt of punishment, suggesting that the expression of disapproval inherent in the non-monetary punishment was well understood and had an effect on the emotions of the recipient. The data support the conjecture that the reinforcement that positive emotion provides is what allows non-monetary punishment to increase cooperation. In contrast, when monetary punishment is available, emotional correlates are less consistent, suggesting that monetary punishment is less reliant on emotions to be effective. Instead, it appears to increase cooperation solely by reducing the monetary incentives to free-ride. |
| Keywords: | Public Goods, Sanctions, Emotions |
| JEL: | D91 H41 C91 |
| Date: | 2023–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:23/01&r=cbe |
| By: | Brunello, Giorgio (University of Padova); Esposito, Piero (University of Cassino); Rocco, Lorenzo (University of Padova); Scicchitano, Sergio (INAPP – Institute for Public Policy Analysis) |
| 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: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15985&r=cbe |
| By: | Thomas Dohmen (University of Bonn, IZA Institute of Labor Economics, and University of Maastricht); Tomáš Jagelka (ECONtribute Cluster of Excellence, IZA, Institute for Applied Microeconomics at the University of Bonn, and CREST) |
| Abstract: | Measures based on self-assessments, which are increasingly important in empirical economic research, are plagued by measurement error. This paper presents the first attempt at measuring both revealed and self-reported reliability of individuals’ answers on self-reports of latent characteristics. We show that measurement error on self-reports relevant to economists is heterogeneous across individuals and can be reasonably approximated by a distribution with two unobserved types. We propose a straightforward survey question which allows to distinguish individuals who give highly reliable answers from those who do not, using cross-sectional data. We demonstrate that it predicts revealed individual reliability over and above all measured characteristics, survey conditions, and experimental treatments. We show how our simple self-reported reliability measure can be used to cost-effectively reduce attenuation bias in estimates of cognitive and non-cognitive determinants of high school GPA, college graduation, unemployment, and life satisfaction. Without requiring panel data, the achieved correction is similar to some of the most effective reduced-form theory-based approaches in the existing literature. Finally, we clarify the role of effort and self-knowledge in generating measurement error and propose a simple model which rationalizes our findings. |
| Keywords: | Reliability, measurement error, personality traits, economic preferences, self-assessments |
| JEL: | D90 C83 C81 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:224&r=cbe |
| By: | Patrick Dylong; Paul Setzepfand; Silke Uebelmesser |
| Abstract: | Using data from two representative and large-scale population surveys with more than 4000 participants, we investigate the effect of randomized priming interventions on attitudes towards immigrants. We document robust null effects of these interventions under two experimental settings, across two surveys and for a range of specifications. Our results suggest that (economic) attitudes towards immigrants are less sensitive to priming than previous research indicates. We thus provide (i) a reference point for settings in which intentional priming interventions are ineffective, and (ii) an upper bound for unintended priming effects. We argue that researchers should not be overly concerned about confounding priming effects when designing surveys to elicit attitudes towards immigrants. |
| Keywords: | attitudes towards immigration, priming, experimental design |
| JEL: | C83 C90 J15 F22 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10306&r=cbe |
| By: | Thomas Dohmen (Institute for Applied Microeconomics, University of Bonn, Adenauerallee 24-42, 53113 Bonn, Germany); Elena Shvartsman (WHU – Otto Beisheim School of Management, Burgplatz 2, 56179 Vallendar, Germany) |
| Abstract: | Working time autonomy is often accompanied by output-based incentives to counterbalance the loss of monitoring that comes with granting autonomy. However, in such settings, overprovision of effort could arise if workers are uncertain whether their performance suffices to secure the output-based rewards. Performance feedback can reduce or eliminate such uncertainty. We develop an experiment to show that overprovision of costly effort is more likely to occur in work environments with working time autonomy in the absence of feedback. A key feature of our design is that it allows for a clean measurement of effort overprovision by keeping performance per unit of time fixed, which we achieve by calibrating subjects’ productivity on a real effort task ex ante. This novel design can serve as a workhorse for various experiments as it allows for exogenous variation of performance certainty (i.e., by providing feedback), working time autonomy, productivity, effort costs, and the general incentive structure. We find that subjects provide significantly more costly effort beyond a level necessary to meet their performance targets in the presence of uncertainty, i.e., the absence of feedback, which suggests that feedback shields workers from overprovision of costly effort. |
| Keywords: | working time autonomy, performance uncertainty, feedback provision, incentives, effort, subjective stress |
| JEL: | C91 D90 I10 J81 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:222&r=cbe |