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on Cognitive and Behavioural Economics |
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Issue of 2024‒01‒08
five papers chosen by |
| By: | Kettlewell, Nathan (University of Technology, Sydney); Tymula, Agnieszka (University of Sydney); Yoo, Hong Il (Loughborough University) |
| Abstract: | We study the heritability of risk, uncertainty, and time preferences using a field experiment with a large sample of adult twins. We also offer a meta-analysis of existing findings. Our field study introduces a novel empirical approach that marries behavioral genetics with structural econometrics. This allows us to, for the first time, quantify the heritability of economic preference parameters directly without employing proxy measures. Our incentive-compatible experiment is the first twin study to elicit all three types of preferences for the same individual. Compared to previous studies, we find a greater role of genes in explaining risk and uncertainty preferences, and of the shared familial environment in explaining time preferences. Time preferences appear more important from policy and parenting perspectives since they exhibit limited genetic variation and are more than twice as sensitive to the familial environment as risk and uncertainty preferences. |
| Keywords: | risk preferences, ambiguity aversion, time preferences, twin study, genetics |
| JEL: | C93 D15 D81 D91 Z13 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16633&r=cbe |
| By: | Ernst Fehr (Department of Economics, Zurich University. Blümlisalpstrasse 10, 8006 Zurich, Switzerland); Thomas Epper (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France; iRisk Center on Risk and Uncertainty); Julien Senn (Department of Economics, Zurich University. Blümlisalpstrasse 10, 8006 Zurich, Switzerland) |
| 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: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202310&r=cbe |
| By: | Tobias Cagala (Deutsche Bundesbank); Ulrich Glogowsky (University of Linz); Johannes Rincke (University of Erlangen-Nuremberg); Simeon Schudy (Ulm University) |
| Abstract: | Using a standard cheating game, we investigate whether the request to sign a no-cheating declaration affects truth-telling. Our design varies the content of a no-cheating declaration (reference to ethical behavior vs. reference to possible sanctions) and the type of experiment (online vs. offline). Irrespective of the declaration's content, commitment requests do not affect truth-telling, neither in the laboratory nor online. The inefficacy of commitment requests appears robust across different samples and does not depend on psychological measures of reactance. |
| Keywords: | cheating; lying; truth-telling; compliance; commitment; no-cheating rule; no-cheating declaration; commitment request; |
| JEL: | C91 C93 D03 |
| Date: | 2023–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:466&r=cbe |
| By: | Despoina Alempaki (Warwick Business School); Valeria Burdea (LMU Munich); Daniel Read (Warwick Business School) |
| Abstract: | In cases of conflict of interest, people can lie directly or evade the truth. We analyse this situation theoretically and test the key behavioural predictions in a novel sender-receiver game. We find senders prefer to deceive through evasion rather than direct lying, more so when evasion is a partial-truth. This is because they do not want to deceive others nor be seen as deceptive. Receivers are sensitive to the deceptive language and more likely to act in senders’ favour when these lie directly. Our findings suggest dishonesty is more prevalent and costlier than previous best estimates focusing on direct lies. |
| JEL: | C91 D82 D91 |
| Date: | 2023–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:444&r=cbe |
| By: | Roberto Brunetti (Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France and Univ Rennes, CNRS, CREM-UMR6211, F-35000 Rennes, France); Matthieu Pourieux (Univ Rennes, CNRS, CREM-UMR6211, F-35000 Rennes, France) |
| Abstract: | This study leverages an online behavioral experiment to analyze political representation—whether politicians’ decisions align with citizens’ preferences over the same issue—and behavioral representation—whether politicians’ decisions align with citizens’ decisions within the same decision environment. We recruited 760 local politicians and 655 non-politicians in France to participate as policy-makers in a taxation-redistribution game. In the game, two policy-makers compete to choose a flat tax rate for a group of citizens, who are selected from the French general population and state their preferred tax rate. We exogenously manipulate (i) the information provided to policy-makers about citizens’ preferred tax rates and (ii) the degree of competition between policy-makers. Finally, we measure policy-makers’ beliefs regarding both citizens’ preferences and their competitor’s choice. We observe that policy-makers positively react to the information, but they often deviate from it, which can be mostly explained by their beliefs about both citizens’ preferences and their competitor’s choices. Varying the degree of political competition has no impact on these results. Finally, we find that politicians believe citizens want lower tax rates and are more confident in their beliefs than non-politicians. Once beliefs are accounted for, we observe little differences between the two groups within the game. Our findings suggest that policy-makers act as pro-social agents who implement citizens’ preferences based on their beliefs when they lack information about these preferences. |
| Keywords: | Representation, Politicians’ Behavior, Online Experiment, Taxation-Redistribution |
| JEL: | D31 P19 H24 H79 C90 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2319&r=cbe |