|
on Cognitive and Behavioural Economics |
|
Issue of 2024‒01‒01
four papers chosen by |
| By: | Taisuke Imai (Osaka University, CESifo); Klaus Schmidt (LMU Munich, CESifo) |
| Abstract: | Loss aversion postulates that people prefer avoiding losses over acquiring gains of equal size. It is a central part of prospect theory and, according to Daniel Kahneman, “the most significant contribution of psychology to behavioral economics” (Kahneman, 2011, p. 300). It has powerful implications for decision theory and has been fruitfully applied in many subfields of economics. However, because the reference point is often not well defined and loss aversion interacts with other behavioral biases, there is some controversy about the concept. |
| Keywords: | loss aversion; reference point; prospect theory; endowment effect; decision theory; risk; |
| Date: | 2023–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:461&r=cbe |
| By: | Bernold, Elizabeth; Gsottbauer, Elisabeth; Ackermann, Kurt A.; Murphy, Ryan |
| Abstract: | Past experiments show systematic differences in contributions to public goods under various framing conditions. Several explanations of these differences have been presented. Some suggest that social frames affect subjects' preferences, while others suggest that framing changes subjects' beliefs about others, and thus in turn affects behavior. In this paper, we test the effect of framing on the level of contributions in a series of public goods games designed to separate the impact of preferences from beliefs in shaping cooperative decisions. This is achieved by implementing a social value orientation measure to elicit social preferences from decision makers, which are then analyzed in concert with reported beliefs about others’ cooperation and own contribution decisions from the linear public goods games. While we find mixed results on framing effects, our study demonstrates that preferences and beliefs are significant predictors of cooperation. Furthermore, the degree to which they influence cooperation is either strengthened or weakened by framing. |
| Keywords: | cooperation; framing; public good game; social value orientation (svo); beliefs; 100014 143199/1 |
| JEL: | M40 J1 |
| Date: | 2023–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:119353&r=cbe |
| By: | Evan M. Calford; Timothy N. Cason |
| Abstract: | Contributions toward public goods often reveal information that is useful to others considering their own contributions. This experiment compares static and dynamic contribution decisions to determine how contingent reasoning differs in dynamic decisions where equilibrium requires understanding how future information can inform about prior events. This identifies partially cursed individuals who can only extract partial information from contingent events, others who are better at extracting information from past rather than future or concurrent events, and Nash players who effectively perform contingent thinking. Contrary to equilibrium, the dynamic provision mechanism does not lead to lower contributions than the static mechanism. |
| Keywords: | Cursed equilibrium; Voluntary contributions; Club goods; Laboratory experiment |
| JEL: | C91 D71 D91 H41 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1336&r=cbe |
| By: | Aljoscha Minnich; Hauke Roggenkamp; Andreas Lange |
| Abstract: | This paper investigates ambiguity attitudes for natural events (temperatures) and how they are updated following new information. Using a general population sample, we first obtain baseline ambiguity attitudes for future weather events based on real temperatures over several past days. Second, we study the influence of different communication types on updating the ambiguity attitudes: participants are given either point estimators, interval estimators, or the combination of both as weather forecasts. We further vary whether the forecast is surprising or in line with the initially received information. In contrast to claims that ambiguity aversion may increase in response to surprising news, we find that ambiguity attitudes are rather robust to new information and variants of their communication. Yet, different variants of communicating new information significantly change the belief updating process and affect the matching probabilities given to specific events. Our sample allows us to analyze sociodemographic correlates of ambiguity attitudes and the updating of ambiguity attitudes to new information. |
| Keywords: | ambiguity attitude, belief updating, expert forecasts, survey experiment |
| JEL: | D81 D83 C93 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10783&r=cbe |