nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2023‒05‒22
six papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. The Evolution of Ostracism in Human Societies By Noblit, Graham Alexander; Henrich, Joseph
  2. Financial Literacy, Experimental Preference Measures and Field Behavior – A Randomized Educational Intervention By Matthias Sutter; Michael Weyland; Anna Untertrifaller; Manuel Froitzheim; Sebastian O. Schneider
  3. The Importance of Reciprocity: Investigating Individual Differences Underlying Conditional Cooperation By Léon Bartosch; Dorothee Mischkowski
  4. Scarcity and Intertemporal Choice By Eesha Sharma; Stephanie Tully; Xiang Wang
  5. Designing incentives and performance measurement for advisors: How to make decision-makers listen to advice By Robert M. Gillenkirch; Julia Ortner; Sebastian Robert; Louis Velthuis
  6. Emotion- versus Reasoning-Based Drivers of Misinformation Sharing: A Field Experiment Using Text Message Courses in Kenya By Athey, Susan; Cersosimo, Matias; Koutout, Kristine; Li, Zelin

  1. By: Noblit, Graham Alexander; Henrich, Joseph
    Abstract: Understanding how humans successfully stabilize public good contributions is a major ongoing question in the social and behavioral sciences. The use of targeted sanctions against defecting strategies is an important solution to this problem. However, ethnographic and behavioral evidence suggest that punishment is sometimes not used against defectors to stabilize cooperation. Sanctions instead are either light and insufficient to coerce cooperation or take the form of verbal repudiations, urging defectors to reform their behavior. Should defectors not reform, they are then ostracized from groups. We construct a cultural evolutionary game-theoretic model to study the evolution of ostracizing strategies in public goods games. We demonstrate that simple ostracizing strategies are unlikely to be evolutionarily viable and can neither encourage the evolution of contrite-defectors, who respond to punishment with cooperation, nor can invade recalcitrant-defecting populations, which ignore punishment. Motivated by the ethnographic literature, we then consider a hybrid sanctioning-ostracizing strategy that lightly-sanctions defectors before ostracizing repeat defectors. Such a strategy demonstrates clear advantages over simple sanctioning strategies. It can afford to impose light-sanctions when common because these sanctions are irrelevant when coercing future cooperation from defectors. More so, when recalcitrant defecting strategies have some possibility of arising in a population, sanctioning-ostracizing strategies dominate pure sanctioning ones, stabilizing cooperation with greater efficiency. Finally, our model makes psychological predictions concerning the reasoning processes that defectors will go through when defectors are coerced to cooperate by the threat of ostracism as opposed to sanctioning.
    Date: 2023–04–15
  2. By: Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, University of Innsbruck, IZA Bonn, and CESifo Munich); Michael Weyland (Ludwigsburg University of Education); Anna Untertrifaller (University of Cologne); Manuel Froitzheim (University of Siegen); Sebastian O. Schneider (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We present the results of a randomized intervention to study how teaching financial literacy to 16-year old high-school students affects their behavior in risk and time preference tasks. Compared to two different control treatments, we find that teaching financial literacy makes subjects behave more patiently, more time-consistent, and more risk-averse. These effects persist for up to almost 5 years after our intervention. Behavior in the risk and time preference tasks is related to financial behavior outside the lab, in particular spending patterns. This shows that teaching financial literacy affects economic decision-making which in turn is important for field behavior.
    Keywords: Financial literacy, randomized intervention, risk preferences, time preferences, financial behavior, field experiment
    JEL: C93 D14 I21
    Date: 2023–05
  3. By: Léon Bartosch (Max Planck Institute for Research on Collective Goods, Bonn); Dorothee Mischkowski (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: Several models of social preferences have been developed at the intersection of social psychology and behavioral economics, such as social value orientation (SVO) and conditional cooperation. Whereas SVO is well researched in its dispositional and situational correlates, we aim to locate conditional cooperation within the HEXACO personality model, particularly expecting a relation to reactive vs. active prosociality (i.e., Agreeableness vs. Honesty-Humility). Contrary to our expectations, however, in two preregistered, incentivized studies (n total = 521) conditional cooperation was neither related to Agreeableness nor to Honesty-Humility. When investigating the relation between SVO and conditional cooperation, we conceptually replicate a positive relation between both (pro-)social preferences. Surprisingly, while prosocials coincide with conditional cooperators, even most individualists who maximize their outcome in unilateral giving turn to conditionally cooperative behavior in strategic interactions. This underlines the importance of shaping situations as reciprocal acts to elicit cooperative behavior from originally self-interested individuals.
    Keywords: Conditional Cooperation, Social Value Orientation, Basic Personality Traits, HEXACO, Reciprocity
    JEL: C93 D01 D91 I12
    Date: 2023–01
  4. By: Eesha Sharma; Stephanie Tully; Xiang Wang
    Abstract: Scarcity is a ubiquitous experience, and existing evidence largely suggests that people become more myopic when they feel their resources are scarce. Importantly, evidence for this proposition comes primarily from contexts in which scarcity threatens needs that require resources imminently. The current work examines instances in which scarcity threatens needs along a broader time horizon. Archival data from the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute and five pre-registered studies (N = 7, 728) show that the time horizon of threatened needs is an important determinant of scarcity’s effect on intertemporal choice. Studies 1 and 2 measure perceptions of scarcity and demonstrate that scarcity’s effect on intertemporal choice is moderated by the time horizon of people's needs. Study 3 experimentally manipulates perceptions of scarcity and demonstrates a polarizing effect of scarcity on intertemporal choice. When scarcity threatens needs with shorter time horizons, scarcity increases choices of smaller, sooner outcomes; however, this effect attenuates and sometimes reverses when scarcity threatens needs with longer time horizons. Studies 4-6 examine process evidence and find that the effect of scarcity on intertemporal choice is driven at least in part by differences in the perceived relative marginal utility of intertemporal choice options, rather than other factors such as a general change in time preference. Our findings suggest that scarcity does not inherently lead to myopic decisions and contribute to the ongoing debate regarding how and why scarcity influences intertemporal choice.
    Keywords: scarcity; myopia; intertemporal choice; financial decision-making; economic psychology
    JEL: D11 D15 D91 G51
    Date: 2022–09–01
  5. By: Robert M. Gillenkirch (University of Osnabrueck); Julia Ortner (Johannes Gutenberg University Mainz); Sebastian Robert (Rosenheim University of Applied Sciences); Louis Velthuis (Johannes Gutenberg University Mainz)
    Abstract: In a sequence of experiments, this study investigates how the design of an advisor’s performance-dependent pay affects a decision-maker’s reliance on advice. In all experiments, the decision-maker forms an initial judgment, receives advice and then makes a final judgment. The advisor’s compensation is manipulated to be fixed, based on individual performance, or based on group performance. We find that performancedependent pay does not affect the decision-maker’s reliance on advice unless performance measurement relates to group performance. Path model analyses show that the advisor’s performance measurement affects the decision-maker’s perceptions of responsibility and power, and that responsibility is the main driver of the decision-maker’s cooperativeness, which mediates the relationship between performance measurement and reliance on advice. In contrast, a decision-maker’s beliefs in the incentive effects of financial compensation on the quality of advice do not drive the results.
    Keywords: performance measurement, incentive design, reliance on advice; goal relatedness, incentives beliefs
    JEL: D83 D91 M52
    Date: 2023–05–03
  6. By: Athey, Susan (Stanford U); Cersosimo, Matias (Stanford U); Koutout, Kristine (Stanford U); Li, Zelin (MIT)
    Abstract: Two leading hypotheses for why individuals unintentionally share misinformation are that 1) they are unable to recognize that a post contains misinformation, and 2) they make impulsive, emotional sharing decisions without thinking about whether a post contains misinformation. Much of the literature on interventions to counter misinformation focuses on the first hypothesis and tests interventions that educate social media users about reasoning-based techniques employed in social media posts to mislead them; however, other work shows that emotions are important for the spread of and belief in misinformation, supporting a focus on the second hypothesis and emotion-based techniques. To learn whether interventions to counter reasoning- or emotion-based techniques are more effective, or whether the approaches are complementary, we evaluate three distinct versions of a five-day, low-cost, and scalable text message educational course in a field experiment with approximately 9, 000 participants in Kenya. We assess the impact of the courses through a pre-post survey design eliciting intentions to share, finding that all treatment courses work, decreasing misinformation sharing 28% on average relative to no text message course. Treating the emotional drivers of misinformation sharing in the "Emotions" course is more effective than teaching about reasoning-based techniques either alone in the "Reasoning" course or in combination with emotion-based techniques in the "Combo" course. Moreover, the Emotions course performs best on misinformation posts that use emotion-based techniques, and does no worse than the Reasoning or Combo courses on misinformation posts that use reasoning-based techniques. In a follow-up experiment approximately two months later, 88% of the treatment effect of the three courses on misinformation sharing persists.
    Date: 2022–11

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