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on Cognitive and Behavioural Economics |
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Issue of 2024‒02‒19
five papers chosen by |
| By: | Ivan Soraperra; Joël van der Weele; Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique); Shaul Shalvi |
| Abstract: | We experimentally study the social transmission of "inconvenient" information about the externalities generated by one's own decision. In the laboratory, we pair uninformed decision makers with informed senders. Compared to a setting where subjects can choose their information directly, we find that social interactions increase selfish decisions. On the supply side, senders suppress almost 30 percent of "inconvenient" information, driven by their own preferences for information and their beliefs about the decision maker's preferences. On the demand side, about one-third of decision makers avoids senders who transmit inconvenient information ("shooting the messenger"), which leads to assortative matching between information-suppressing senders and information-avoiding decision makers. Having more control over information generates opposing effects on behavior: selfish decision makers remain ignorant more often and donate less, while altruistic decision makers seek out informative senders and give more. We discuss applications to information sharing in social networks and to organizational design |
| Keywords: | Social interactions, Information avoidance, Assortative matching, Ethical behavior, Experiment |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04369898&r=cbe |
| By: | Genakos, Christos; Roumanias, Costas; Valletti, Tommaso |
| Abstract: | We present novel evidence from a large panel of UK consumers who receive personalized reminders from a specialist price-comparison website about the precise amount they could save by switching to their best-suited alternative mobile telephony plan. We document three phenomena. First, even self-registered consumers with positive savings exhibit inertia. Second, we show that being informed about potential savings has a positive and significant effect on switching. Third, controlling for savings, the effect of incurring overage payments is significant and similar in magnitude to the effect of savings: paying an amount that exceeds the recurrent monthly fee weighs more on the switching decision than being informed that one can save that same amount by switching to a less inclusive plan. We interpret this asymmetric reaction on switching behavior as potential evidence of loss aversion. In other words, when facing complex and recurrent tariff plan choices, consumers care about savings but also seem to be willing to pay upfront fees in order to get "peace of mind". |
| Keywords: | tariff/plan choice; inertia; switching; loss aversion; mobile telephony |
| JEL: | D91 D12 D81 L96 M30 |
| Date: | 2023–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121294&r=cbe |
| By: | Emmanuel Kemel (GREGHEC - Groupement de Recherche et d'Etudes en Gestion - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique); Corina Paraschiv (LIRAES (URP_ 4470) - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UPCité - Université Paris Cité) |
| Abstract: | This paper presents an experiment that investigates differences in risk attitudes in decisions with immediate versus delayed consequences. Our experimental design allows to control for the effects of discounting and timing of risk resolution. We show that individuals are more risk tolerant in situations involving delayed consequences. Investigations based on rank-dependent utility show that this finding is mainly driven by probability weighting. More precisely, probability weighting is more elevated for delayed consequences. This suggests an overall increase in decision-makers' optimism regarding the chances of success when consequences materialize in the future. |
| Keywords: | Risk Attitudes, Time, Rank Dependent Utility, Delay, Future Consequences |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04385738&r=cbe |
| By: | Fabian Dvorak; Regina Stumpf; Sebastian Fehrler; Urs Fischbacher |
| Abstract: | Generative artificial intelligence (AI) is poised to reshape the way individuals communicate and interact. While this form of AI has the potential to efficiently make numerous human decisions, there is limited understanding of how individuals respond to its use in social interaction. In particular, it remains unclear how individuals engage with algorithms when the interaction entails consequences for other people. Here, we report the results of a large-scale pre-registered online experiment (N = 3, 552) indicating diminished fairness, trust, trustworthiness, cooperation, and coordination by human players in economic twoplayer games, when the decision of the interaction partner is taken over by ChatGPT. On the contrary, we observe no adverse welfare effects when individuals are uncertain about whether they are interacting with a human or generative AI. Therefore, the promotion of AI transparency, often suggested as a solution to mitigate the negative impacts of generative AI on society, shows a detrimental effect on welfare in our study. Concurrently, participants frequently delegate decisions to ChatGPT, particularly when the AI's involvement is undisclosed, and individuals struggle to discern between AI and human decisions. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.12773&r=cbe |
| By: | Scott E. Allen; Ren\'e F. Kizilcec; A. David Redish |
| Abstract: | More than 30 years of research has firmly established the vital role of trust in human organizations and relationships, but the underlying mechanisms by which people build, lose, and rebuild trust remains incompletely understood. We propose a mechanistic model of trust that is grounded in the modern neuroscience of decision making. Since trust requires anticipating the future actions of others, any mechanistic model must be built upon up-to-date theories on how the brain learns, represents, and processes information about the future within its decision-making systems. Contemporary neuroscience has revealed that decision making arises from multiple parallel systems that perform distinct, complementary information processing. Each system represents information in different forms, and therefore learns via different mechanisms. When an act of trust is reciprocated or violated, this provides new information that can be used to anticipate future actions. The taxonomy of neural information representations that is the basis for the system boundaries between neural decision-making systems provides a taxonomy for categorizing different forms of trust and generating mechanistic predictions about how these forms of trust are learned and manifested in human behavior. Three key predictions arising from our model are (1) strategic risk-taking can reveal how to best proceed in a relationship, (2) human organizations and environments can be intentionally designed to encourage trust among their members, and (3) violations of trust need not always degrade trust, but can also provide opportunities to build trust. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.08064&r=cbe |