nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2023‒04‒17
four papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Complexity and Time By Benjamin Enke; Thomas Graeber; Ryan Oprea
  2. An experiment on Donations, Personal Stories, and Bad Luck By Avichai Snir; Ronen Bar-El; Limor Hatsor
  3. Homophily and Transmission of Behavioral Traits in Social Networks By Palaash Bhargava; Daniel L. Chen; Matthias Sutter; Camille Terrier
  4. Seven types of ambiguity By John Quiggin

  1. By: Benjamin Enke; Thomas Graeber; Ryan Oprea
    Abstract: We provide experimental evidence that core intertemporal choice anomalies -- including extreme short-run impatience, structural estimates of present bias, hyperbolicity and transitivity violations -- are driven by complexity rather than time or risk preferences. First, all anomalies also arise in structurally similar atemporal decision problems involving valuation of iteratively discounted (but immediately paid) rewards. These computational errors are strongly predictive of intertemporal decisions. Second, intertemporal choice anomalies are highly correlated with indices of complexity responses including cognitive uncertainty and choice inconsistency. We show that model misspecification resulting from ignoring behavioral responses to complexity severely inflates structural estimates of present bias.
    JEL: D03
    Date: 2023–03
  2. By: Avichai Snir (Bar-Ilan University); Ronen Bar-El; Limor Hatsor
    Abstract: We conducted two fundraising experiments to study the effects (1) of compassion towards the beneficiary, and (2) of giving participants an opportunity to attribute small donations to luck. We find that exposing the participants to a plea to help the beneficiary increases the average donation. Giving participants an opportunity to attribute small donations to luck decreases the average donation. We find that in our setting, the latter effect dominates.
    Keywords: Charity, Donations, Experiment, Fundraising, Expressive Behavior, lottery
    JEL: C91 D64 D91 L31
    Date: 2023–01
  3. By: Palaash Bhargava (Columbia University); Daniel L. Chen (Toulouse School of Economics); Matthias Sutter (Max-Planck Institute for Research on Collective Goods Bonn, University of Cologne and University of Innsbruck IZA Bonn, CESifoMunich); Camille Terrier (Queen Mary University London)
    Abstract: Social networks are segmented on gender, ethnicity, and other demographic characteristics. We present evidence on an understudied source of homophily: behavioral traits. Based on unique data from incentivized experiments with more than 2, 500 French high-school students, we find high levels of homophily across ten behavioral traits. Notably, homophily depends on similarities in demographic characteristics, in particular gender. Using network econometrics, we show that homophily is not only an outcome of endogenous network formation, but also driven by peer effects. The latter are larger when students share demographic characteristics, have longer periods of friendship, or are friends with more popular individuals.
    Keywords: Homophily, social networks, behavioral traits, peer effects, experiments
    JEL: D85 C91 D01 D90
    Date: 2023–04
  4. By: John Quiggin (School of Economics, University of Queensland, Brisbane, Australia)
    Abstract: Reducing ambiguity to a purely technical property of preferences misses much of the insight in Ellsberg’s (1961) paper, as well as in more recent developments in the study of differential awareness. In this paper, syntac- tic approaches to ambiguity are used to illustrate the point that Reducing ambiguity to a purely technical property of preferences misses much of the insight in Ellsberg’s (1961) paper, as well as in more recent developments in the study of differential awareness.
    Date: 2023–02

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