nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2023‒08‒14
six papers chosen by
Marco Novarese
Università degli Studi del Piemonte Orientale

  1. Corrupted by Algorithms? How AI-Generated and Human-Written Advice Shape (Dis)Honesty By Leib, Margarita; Köbis, Nils; Rilke, Rainer Michael; Hagens, Marloes; Irlenbusch, Bernd
  2. Experimental Evidence on the Relationship Between Perceived Ambiguity and Likelihood Insensitivity By Luca Henkel
  3. Consumer behavior and decision making from officed- based doctors A systematic literature review By Claudia, Pitterle
  4. Incentive Complexity, Bounded Rationality and Effort Provision By Abeler, Johannes; Huffman, David B.; Raymond, Collin
  6. Loss Aversion and Reference Prices in Consumer Demand for Meat By Tonsor, Glynn T.

  1. By: Leib, Margarita (Tilburg University); Köbis, Nils (Max Planck Institute for Human Development); Rilke, Rainer Michael (WHU Vallendar); Hagens, Marloes (Erasmus University Rotterdam); Irlenbusch, Bernd (University of Cologne)
    Abstract: Artificial Intelligence (AI) increasingly becomes an indispensable advisor. New ethical concerns arise if AI persuades people to behave dishonestly. In an experiment, we study how AI advice (generated by a Natural-Language-processing algorithm) affects (dis)honesty, compare it to equivalent human advice, and test whether transparency about advice source matters. We find that dishonesty-promoting advice increases dishonesty, whereas honesty-promoting advice does not increase honesty. This is the case for both AI and human advice. Algorithmic transparency, a commonly proposed policy to mitigate AI risks, does not affect behaviour. The findings mark the first steps towards managing AI advice responsibly.
    Keywords: Artificial Intelligence, machine behaviour, behavioural ethics, advice
    JEL: C91 D90 D91
    Date: 2023–07
  2. By: Luca Henkel
    Abstract: Observed individual behavior in the presence of ambiguity shows insufficient responsiveness to changes in subjective likelihoods. Despite being integral to theoretical models and relevant in many domains, evidence on the causes and determining factors of such likelihood insensitive behavior is scarce. This paper investigates the role of beliefs in the form of ambiguity perception – the extent to which a decision-maker has difficulties assigning a single probability to each possible event – as a potential determinant. Using an experiment, I elicit measures of ambiguity perception and likelihood insensitivity and exogenously vary the level of perceived ambiguity. The results provide strong support for a perception-based explanation of likelihood insensitivity. The two measures are highly correlated at the individual level, and exogenously increasing ambiguity perception increases insensitivity, suggesting a causal relationship. In contrast, ambiguity perception is unrelated to ambiguity aversion – the extent to which a decision-maker dislikes the presence of ambiguity.
    Keywords: Ambiguity, decision-making under uncertainty, likelihood insensitivity, multiple prior models
    JEL: D81 D83 D91 C91
    Date: 2023–07
  3. By: Claudia, Pitterle
    Abstract: The aim of this literature review is to systematically summarize the existing knowledge and theories on the subject of decision-making behavior in general and in particular, when doctors have to decide for or against insurance for their own practice. Publications on decision psychology, behavioral economics, consumer behavior and modern brain research were evaluated. Special interest was paid to studies with regard to insurance demand and the regulatory framework. Each branch of science deals with decisions that people make consciously and unconsciously. Conducted worldwide studies of insurance demand have been directed to try to confirm or disprove certain theories using experiments. In summary, research in recent years has been increasingly in the area of behavioral economics in particular behavioral patterns. It has been confirmed that decision behavior related to insurance demand is very much shaped by determinants such as risk, uncertainty, and cognitive systems. Insurance consulting must continue to take these determinants into account in a more targeted manner in the future.
    Keywords: decision-making, doctors in private practice, insurance demand, behavioral patterns
    JEL: D83 D86 D91
    Date: 2022
  4. By: Abeler, Johannes (University of Oxford); Huffman, David B. (University of Pittsburgh); Raymond, Collin (Purdue University)
    Abstract: Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to over-provide effort relative to a fully rational benchmark, and improves efficiency. We identify contract features, and facets of worker cognitive ability, that matter for shrouding. We find that even relatively small degrees of shrouding can cause large shifts in behavior. Our results illustrate important implications of complexity for designing and regulating workplace incentive contracts.
    Keywords: complexity, bounded rationality, shrouded attribute, ratchet effect, dynamic incentives, field experiments
    JEL: D8 D9 J2 J3
    Date: 2023–07
  5. By: Nebojsa Janicijevic (University of Belgrade, Faculty of Economics)
    Abstract: The paper explores the impact of organizational culture on control of organization members? behavior. Every organization must develop a certain method of behavior control in order to provide coordinated and effective collective action in accomplishing of its goals. Organizational culture with its assumptions, values and norms defines how an organization understands the nature of human behavior in social groups, and thus a suitable manner of control of this behavior. The paper uses Mintzberg?s classification of five methods of organizational behavior control which are differentiated according to two basic criteria: the level of restrictiveness and the level of formalization or personalization. On the other hand, organizational culture classification by Handy recognizes four types of culture, which can be differentiated according to two criteria: distribution of power and orientation towards work or social structure. Based on matching of the criteria for organizational culture types differentiation and methods of behavior control, the hypotheses on causal relations between them are established in the paper. The conclusion is that role culture implies standardization of processes, power culture requires direct supervision, task culture requires standardization of outputs, and human culture imposes standardization of knowledge or direct interpersonal communication as a method of behavioral control.
    Keywords: organization, control, organizational culture, organizational behavior, management, personnel management
    JEL: M10 M14
    Date: 2022–10
  6. By: Tonsor, Glynn T.
    Keywords: Marketing, Research Methods/Statistical Methods, Institutional and Behavioral Economics
    Date: 2023

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