nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2023‒11‒06
five papers chosen by
Marco Novarese, Università degli Studi del Piemonte Orientale

  1. Mindfulness Training, Cognitive Performance and Stress Reduction By Charness, Gary; Le Bihan, Yves; Villeval, Marie Claire
  2. Choice-induced Sticky Learning By Hajdu, Gergely; Krusper, Balázs
  3. Do groups fight more? Experimental evidence on conflict initiation By Changxia Ke; Florian Morath; Sophia Seelos
  4. Spoiling the party. Experimental evidence on the willingness to transmit inconvenient ethical information By Jantsje M. Mol; Ivan Soraperra; Joël J. van der Weele
  5. The fundamental properties, stability and predictive power of distributional preferences By Ernst Fehr; Thomas Epper; Julien Senn

  1. By: Charness, Gary (University of California, Santa Barbara); Le Bihan, Yves (Institut Français du Leadership Positif); Villeval, Marie Claire (CNRS, GATE)
    Abstract: Improving cognitive function and reducing stress may yield important benefits to individuals' health and to society. We conduct an experiment involving a three-month within-firm training program based on the principles of mindfulness and positive psychology at three large companies. We find an improvement in the difference-in-differences across the training and control groups in all five non-incentivized measures and in seven of the eight incentivized tasks but only the non-incentivized measures and one of the incentivized measures reached a standard level of significance (above 5%), showing strong evidence of its impact on both reducing perceived stress and increasing self-reported cognitive flexibility and mindfulness. At the aggregate level, we identify an average treatment effect on the treated for the non-incentivized measures and some effect for the incentivized measures. Remarkably, the treatment effects persisted three months after the training sessions ended. Overall, mindfulness training seems to provide benefits for psychological and cognitive health in adults.
    Keywords: mindfulness, attention, cognition, stress, lab-in-the-field experiment
    JEL: C91 I12
    Date: 2023–09
  2. By: Hajdu, Gergely; Krusper, Balázs
    Abstract: Consumers are constantly exposed to new information that compels them to update their beliefs about products, thereby influencing future buying and selling decisions. This process does not simply stop with a product choice. We study how choosing a product affects learning about products in the choice set after the choice has been made. We design an experiment, where we have control over the objective ranking of the options in the choice set. Specifically, participants learn about the fundamental quality of financial investments by observing price changes in multiple rounds. Participants either choose some of the investments themselves (Choice condition) or have some of the investments assigned to them (Allocation condition). We find that learning is stickier after making a choice: participants respond less to price changes in the Choice condition than in the Allocation condition. This result holds for both own and non-owned investments and for both good news and bad news. The effect is unlikely to be driven by attention: we find no difference between the conditions in the amount of attention paid to the investments. We estimate a structural model and show that learning aligns closely with the Bayesian benchmark after exogenous product allocation, while it is too sticky after making a choice. Our model characterizes sticky learning in a tractable way that is easily portable, making it simple to analyze its consequences in other contexts.
    Keywords: biased beliefs; attention; sticky learning; choice effect
    Date: 2023–09
  3. By: Changxia Ke; Florian Morath; Sophia Seelos
    Abstract: This paper investigates whether distributional conflicts become more likely when groups are involved in the fight. We present results from a laboratory experiment in which two parties can appropriate resources via a contest or, alternatively, take an outside option. Keeping monetary gains expected from fighting constant across all treatments, the experiment compares conflict choices of players in two-against-two, one-against-one, and two-against-one settings. Overall, we find evidence for a higher propensity to opt for conflict when entering the fight in a group than when having to fight as a single player. The effects are strongest in endogenously maintained groups and in the presence of group size advantages (i.e., in two-against-one). The results can be explained by a stronger non-monetary utility from fighting in (endogenous) groups and coincide with a biased perception of the fighting strength in asymmetric conflict.
    Keywords: Conflict, contest, conflict resolution, group decision-making, group identity, alliance, experiment
    JEL: C92 D70 D72 D74 D91
    Date: 2023
  4. By: Jantsje M. Mol (University of Amsterdam); Ivan Soraperra (Max Planck Institute for Human Development); Joël J. van der Weele (University of Amsterdam)
    Abstract: Information about the consequences of our consumption choices can be unwelcome, and people sometimes avoid it. We investigate a situation where one person possesses information that is inconvenient for another, and study why and when they decide to transmit that information. We introduce a simple and portable experimental game to analyze transmission of inconvenient information. In this game, a Sender can inform a Receiver at a small cost about a negative externality associated with a tempting and profitable action for the Receiver. The results from our online experiment (N = 1, 512) show that Senders transmit more information for large negative externalities. Sender’s decisions are largely driven by their own preferences for information. However, some Senders take the Receiver’s feelings into account, by transmitting evidence of positive externalities or by suppressing negative information upon the Receiver’s request. Understanding the decision to share inconvenient information matters, as it will affect the personal and political will to address important externalities and can inform strategies to encourage the transmission of inconvenient information within organizations.
    Keywords: willful ignorance, information avoidance, unethical behavior, lab experiment
    JEL: B41 C91 C93
    Date: 2023–10–12
  5. By: Ernst Fehr; Thomas Epper; Julien Senn
    Abstract: Parsimony is a desirable feature of economic models but almost all human behaviors are characterized by vast individual variation that appears to defy parsimony. How much parsimony do we need to give up to capture the fundamental aspects of a population’s distributional preferences and to maintain high predictive ability? Using a Bayesian nonparametric clustering method that makes the trade-off between parsimony and descriptive accuracy explicit, we show that three preference types—an inequality averse, an altruistic and a predominantly selfish type—capture the essence of behavioral heterogeneity. These types independently emerge in four different data sets and are strikingly stable over time. They predict out-of-sample behavior equally well as a model that permits all individuals to differ and substantially better than a representative agent model and a state-of-the-art machine learning algorithm. Thus, a parsimonious model with three stable types captures key characteristics of distributional preferences and has excellent predictive power.
    Keywords: Distributional preferences, altruism, inequality aversion, preference heterogeneity, stability, out-of-sample prediction, parsimony, bayesian nonparametrics
    JEL: D31 D63 C49 C90
    Date: 2023–10

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