nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2023‒06‒12
nine papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. (Un)Trustworthy Pledges and Cooperation in Social Dilemmas By Goeschl, Timo; Soldà, Alice
  2. To request or not to request: charitable giving, social information, and spillover By Valeria Fanghella; Lisette Ibanez; John Thøgersen
  3. Self-nudging is more ethical, but less efficient than social nudging By Diederich, Johannes; Goeschl, Timo; Waichman, Israel
  4. Social learning under ambiguity - an experimental study By Fabian Bopp; Sara le Roux
  5. Does room for reflection reduce ignorance and increase pro-social behavior? An experimental study By Fabian Bopp; Wendelin Schnedler
  6. Financial Risk-Taking under Health Risk By Björn Bos; Moritz A. Drupp; Jasper N. Meya; Martin F. Quaas
  7. Motivated Beliefs, Independence and Cooperation By Wei Huang; Yu Wang; Xiaojian Zhao
  8. Nudging in complex environments By Alexander K. Koch; Dan Mønster; Julia Nafziger
  9. When Workplace Democracy Backfires. Lab Evidence on Honesty and Cooperation By José J. Domínguez; Giulio Ecchia; Natalia Montinari; Raimondello Orsini

  1. By: Goeschl, Timo; Soldà, Alice
    Abstract: Pledges feature in international climate cooperation since the 2015 Paris Agreement. We explore how differences in pledgers' trustworthiness affect outcomes in a social dilemma that parallels climate change. In an online experiment, two participants interact with a randomly matched third player in a repeat maintenance game with a pledge stage. Treatments vary whether participants are matched with a player that is more or less trustworthy as revealed by behavior in a promise-keeping game; and whether they observe that trustworthiness. We find that participants knowingly matched with more trustworthy players cooperate more than participants matched with less trustworthy players (knowingly or unknowingly), but also more than participants unknowingly matched with more trustworthy players. In contrast, participants knowingly matched with less trustworthy players do not cooperate less than participants who are unknowingly so. Our findings suggest that the use of pledges, as per the Paris Agreement, can leverage the power of trustworthiness to enhance cooperation.
    Keywords: social dilemmas; pre-play communication; pledges; cooperation; credibility; group formation
    Date: 2023–05–15
  2. By: Valeria Fanghella (EESC-GEM Grenoble Ecole de Management); Lisette Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); John Thøgersen (Aarhus University [Aarhus])
    Abstract: Prosocial behavior is important for a well-functioning society, but many people try to avoid situations where they could act prosocially. This paper studies the avoidance of a prosocial request, how it is affected by social pressure, and whether request avoidance and social pressure generate spillover effects on following prosocial behaviors. To this aim, we conduct an incentivized online experiment (N=1400), where participants play two consecutive dictator games with a charity. In the first game, we vary the type of game and information provided in a 2 x 2 between-subject design: (i) standard dictator game or dictator game with costly opt-out; (ii) with or without social information (mean donation in a previous session). The second game is a standard dictator game for all and aims to capture spillover effects from the first decision. We find that the opt-out option leads to significantly lower donations, especially when social information is present (but this effect is not statistically significant). The negative effect of the opt-out option spills over to the second donation decision. We also observe a negative spillover effect after a standard dictator game. Social information reduces donations in a standard dictator game, but also allows to mitigate the negative spillover effect from the first to the second behavior.
    Keywords: prosocial behavior, opt-out option, social information, spillover, charitable giving, selfimage
    Date: 2023
  3. By: Diederich, Johannes; Goeschl, Timo; Waichman, Israel
    Abstract: Manipulating choice architectures to achieve social ends (‘social nudges’) raises problems of ethicality. Giving individuals control over their default choice (‘selfnudges’) is a possible remedy, but the trade-offs with efficiency are poorly understood. We examine under four different information structures how subjects set own defaults in social dilemmas and whether outcomes differ between the self-nudge and two exogenous defaults, a social (full cooperation) and a selfish (perfect free-riding) nudge. Subjects recruited from the general population (n = 1, 080) play a ten-round, ten-day voluntary contribution mechanism online, with defaults triggered by the absence of an active contribution on the day. We find that individuals’ own choice of defaults structurally differs from full cooperation, empirically affirming the ethicality problem of social nudges. Allowing for self-nudges instead of social nudges reduces efficiency at the group level, however. When individual control over nudges is non-negotiable, self-nudges need to be made public to minimize the ethicality-efficiency trade-off.
    Keywords: choice architecture; defaults; choice architecture; public goods; self-nudge; online experiment; nudging; behavioral economics
    Date: 2023–05–05
  4. By: Fabian Bopp (Paderborn University); Sara le Roux (Oxford Brookes Business School)
    Abstract: The social media age has meant that many behaviours spread through contact with others. The extent to which people adopt/imitate behaviour they observe, can critically affect whether policymakers are successful when introducing new initiatives. In many situations people can either make decisions based on their own intuitive signals or follow a social signal. Depending on the quality of the signals one might be more informative than the other. This project aims to better understand how people use social information to learn and imitate others in ambiguous situations, when both the private and the social signal are not perfectly informative. We conduct an experimental study that observes whether people are prone to imitate others in risky and ambiguous environments, and in gain and loss domain settings. We find that individuals do significantly learn from social information, independent of the framing. Social learning behaviour is not significantly affected by ambiguity. (abstract of the paper)
    Keywords: risk; ambiguity; imitating; social learning
    JEL: C91 D81 D82 D83
    Date: 2023–04
  5. By: Fabian Bopp (Paderborn University); Wendelin Schnedler (Paderborn University)
    Abstract: A lot of harm comes about because people ignore the consequences of their behavior on others. Experimental evidence suggests that people might even willfully ignore consequences so that they can act selfishly without a `bad conscience'. In essence, such people `kid themselves'. If I care about the consequences of my acts on others, I should not ignore them. Upon reflection, people may discover this inconsistency. De-biasing people may thus be an effective tool to prevent harm. We examine this idea experimentally. Ee find that inviting subjects to describe their aims and means makes them more likely to inform themselves and ultimately act more pro-socially.
    Keywords: willful ignorance, strategic ignorance, social preferences, de-biasing
    JEL: C91
    Date: 2023–04
  6. By: Björn Bos; Moritz A. Drupp; Jasper N. Meya; Martin F. Quaas
    Abstract: We study how background health risk affects financial risk-taking. We elicit financial risk-taking behavior of a representative sample of more than 5, 000 Germans in five panel waves during the COVID-19 pandemic. Exploiting variation in local infections across time and space, we find that an increase in infections affecting background health risk translates into higher levels of self-reported fear and decreases financial investments in a risky asset. Once vaccines become available as a self-insurance device, the tempering effect on investments ceases. Our results provide evidence that non-financial background risks affect financial risk-taking, and for the alleviating effect of self-insurance devices.
    JEL: D14 D91 G11 G41 G51
    Date: 2023
  7. By: Wei Huang (CUHK Business School, Chinese University of Hong Kong); Yu Wang (China Center For Behavioral Economics and Finance, Southwestern University of Finance and Economics); Xiaojian Zhao (Department of Economics, Monash Business School, Monash University)
    Abstract: Humans are social animals but sometimes stay alone. The paper theoretically investigates the connection between an intraperson game and an interperson interaction. Motivated beliefs supplied from memory management due to present bias in the individual investment problem give rise to a positive spillover on others through social interactions, suggesting that a high frequency of social interactions reduces an individual’s tendency to cooperate with others, exacerbating the free-riding problem. We also establish a positive relationship between overconfidence and prosocial behaviors. Evidence from cross-country observational data and cross-sectional data collected from an online experiment is largely consistent with our theoretical implications.
    Keywords: motivated beliefs, self-confidence, present bias, cooperation, cultural difference
    JEL: C91 D01 D91 O57 Z10
    Date: 2023–05
  8. By: Alexander K. Koch (Department of Economics and Business Economics, Aarhus University); Dan Mønster (Department of Economics and Business Economics, Aarhus University); Julia Nafziger (Department of Economics and Business Economics, Aarhus University)
    Abstract: To study the effects of reminder nudges in complex environments, we apply a novel experimental approach based on a computer game in which decision makers have to pay attention to and perform multiple actions within a short period of time. The set-up allows us, first, to test the effect of reminders both on reminded and non-reminded actions and thus to observe whether reminders have (positive or negative) spillovers. Second, we investigate spillovers between multiple nudges by testing the effect of scaling up the number of reminded actions. Third, we study intertemporal spillovers by investigating whether the effects of having been exposed to reminders persist after reminders are withdrawn. We observe that reminders have positive effects in the short run - multiple reminders more so than single reminders: while reminders lead to crowding-out of non-reminded actions, the positive effect on the reminded actions dominates. After withdrawal of the reminders, the negative spillover effect persists, while the positive effect partially fades out so that, overall, reminders have no effect.
    Keywords: Nudging, spillover effects, attention, reminders, persistence, game-based experiments
    JEL: C9 D91
    Date: 2023–05–12
  9. By: José J. Domínguez (Department of Economic Theory and Economic History, University of Granada.); Giulio Ecchia (Department of Economics, University of Bologna.); Natalia Montinari (Department of Economics, University of Bologna.); Raimondello Orsini (Department of Economics, University of Bologna.)
    Abstract: Democracy in the workplace often involves employee participation in decision-making and financial matters, both of which have been shown to increase employee effort. However, it is unclear whether these forms of participation also affect other important attitudes that are correlated with the spirit of democratic workplaces such as honesty and cooperation. To address this question, we conducted a laboratory experiment to examine the effects of employee participation on these attitudes. Our results show that both employees’ participation in decision-making and profit-sharing decrease honesty. This effect is stronger for employees involved in financial participation. Additionally, we found that the different treatments also affect productivity in the first and third tertiles of the productivity distribution. On the one side, employees in the first tertile are more productive and more cooperative when they are allowed to choose the type of organization compared to the one who are assigned to the no-participation treatment. On the other side, employees in the third tertile of the productivity distribution are more likely to free ride and reduce cooperation in settings with participation compared to the no-participation. Our study sheds light on the complex effects that participatory practices may have in modern workplaces.
    Keywords: Employee Participation, Attitudes, Honesty, Cooperation, Lab Experiment.
    Date: 2023–05–03

This nep-cbe issue is ©2023 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.