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on Cognitive and Behavioural Economics |
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Issue of 2023‒04‒24
two papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Vessela Daskalova (University College Dublin, University of Toulouse Capitole); Nicolaas J.Vriend (Queen Mary University of London) |
| Abstract: | Players may categorize the strategies available to them. In many games there are different ways to categorize one’s strategies (different frames) and which ones players use has implications for the outcomes realized. This paper proposes a model of agents who learn which frames to use through reinforcement. As a case study we fit the model to existing experimental data from coordination games. The analysis shows that the model fits the data well as it matches the key stylized facts. It suggests a trade-off of using coarser versus finer representations of the strategy set when it comes to learning. |
| Keywords: | Variable Frame Theory, Coordination games, Categorization, Reinforcement learning, Focal points, Bounded rationality |
| JEL: | C63 C72 C91 D9 |
| Date: | 2021–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:929&r=cbe |
| By: | Etilé, Fabrice; Frijters, Paul; Johnston, David W.; Shields, Michael A. |
| Abstract: | There is great interest in understanding who in the population is resilient in the face of major life events, and who is not. In this paper we construct a revealed measure of adulthood psychological resilience by modelling individuals’ responses to ten adverse life events using a dynamic finite mixture regression model applied to 17 years of panel data. Our methodology accounts for non-random selection into events, and differences between individuals in anticipation, immediate response, and speed of adaptation. We find considerable heterogeneity in individuals’ responses to events such as major financial shocks, redundancy and bereavement. We also find that our measure of resilience is correlated with clinical measures of mental health, and that it significantly predicts the psychological response to out-of-sample events. The strongest predictor of our measure of resilience is internal locus of control, which is an individual's belief that life outcomes are under their control. |
| Keywords: | major life events; mixture model; panel data; psychological health; resilience |
| JEL: | I10 C20 C50 |
| Date: | 2021–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112526&r=cbe |