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on Cognitive and Behavioural Economics |
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Issue of 2024‒02‒26
five papers chosen by |
| By: | Roland Bénabou; Armin Falk; Luca Henkel |
| Abstract: | Choosing what is morally right can be based on the consequences (ends) resulting from the decision – the Consequentialist view – or on the conformity of the means involved with some overarching notion of duty – the Deontological view. Using a series of experiments, we investigate the overall prevalence and the consistency of consequentialist and deontological decision-making, when these two moral principles come into conflict. Our design includes a real-stakes version of the classical trolley dilemma, four novel games that induce ends-versus-means tradeoffs, and a rule-following task. These six main games are supplemented with six classical self-versus-other choice tasks, allowing us to relate consequential/deontological behavior to standard measures of prosociality. Across the six main games, we find a sizeable prevalence (20 to 44%) of nonconsequentialist choices by subjects, but no evidence of stable individual preference types across situations. In particular, trolley behavior predicts no other ends-versus-means choices. Instead, which moral principle prevails appears to be context-dependent. In contrast, we find a substantial level of consistency across self-versus-other decisions, but individuals’ degree of prosociality is unrelated to how they choose in ends-versus-means tradeoffs |
| Keywords: | morality, deontological, consequentialist, Kantian, ends-versus-means, trolley dilemma, prosocial, altruism, social preferences |
| JEL: | C91 D01 D64 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_499&r=cbe |
| By: | Yigit Oezcelik; Michel Tolksdorf |
| Abstract: | Inaccurate online ratings can be harmful to both consumers and firms. We perform an experiment to assess the effect of the anchoring bias on consumer ratings. Our rating task is a framed variation of the slider task. We diverge from the literature by implementing non-numerical (visual) anchors. We compare three anchoring conditions, with either high, low, or socially derived anchors present, against two control conditions – one without anchors and an unframed slider task. High and socially derived anchors lead to significant overrating compared to both control conditions. We find no difference between low anchors and the control condition without anchors, whereas both exhibit overrating compared with the unframed slider task. Participants place higher trust in socially derived anchors compared with high and low anchors. When there is a social context, the trust participants exhibit towards the socially derived anchors explains the anchoring bias. |
| Keywords: | Anchoring, online ratings, laboratory experiment |
| JEL: | C91 D80 D91 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:liv:livedp:202319&r=cbe |
| By: | Benjamin Enke; Thomas Graeber; Ryan Oprea; Thomas W. Graeber |
| Abstract: | A large literature shows that people discount financial rewards hyperbolically instead of exponentially. While discounting of money has been questioned as a measure of time preferences, it continues to be highly relevant in empirical practice and predicts a wide range of real-world behaviors, creating a need to understand what generates the hyperbolic pattern. We provide evidence that hyperbolic discounting reflects mistakes that are driven by the complexity of evaluating delayed payoffs. In particular, we document that hyperbolicity (i) is strongly associated with choice inconsistency and cognitive uncertainty, (ii) increases in overt complexity manipulations and (iii) arises nearly identically in computationally similar tasks that involve no actual payoff delays. Our results suggest that even if people had exponential discount functions, complexity-driven mistakes would cause them to make hyperbolic choices. We examine which experimental techniques to estimate present bias are (not) confounded by complexity. |
| Keywords: | hyperbolic discounting, present bias, bounded rationality, cognitive uncertainty |
| JEL: | C91 D91 G00 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10861&r=cbe |
| By: | Timm Opitz (MPI-IC) |
| Abstract: | Organizations increasingly rely on teams to solve complex problems. The ability of teams to work well together is critical to their success. I experimentally test whether team performance is affected by whether team members like each other. I find that teams in which partners like each other do not outperform teams in which partners dislike each other. However, teams in which one partner likes the other more than the other perform best. The performance differences result directly from changes in collaborative behavior when learning the team partner's interpersonal preferences, not indirectly from interacting with different individuals. Participants do not anticipate this pattern and expect to be most successful in a team where partners like each other. This provides insights into how teams should be optimally composed, when self-selection may be detrimental to performance, and what information about others' interpersonal preferences should be revealed. |
| Keywords: | interpersonal preferences; teamwork; liking; complex problem solving; non-routine tasks; |
| JEL: | C92 D23 D83 D91 |
| Date: | 2024–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:492&r=cbe |
| By: | Miles S. Kimball; Daniel Reck; Fudong Zhang; Fumio Ohtake; Yoshiro Tsutsui |
| Abstract: | How quickly does marginal utility fall with increasing consumption? It depends on the dimension along which we consider concavity of the utility function. This paper estimates the distribution of heterogeneous curvature parameters in individuals’ utility functions from hypothetical choice data, while accounting for survey response error. Types of curvature examined include relative risk aversion, intertemporal substitution, the reciprocal of the altruism elasticity, and a new measure of inequality aversion, which queries how much more a dollar means to a poor family than to a rich family. Median values of curvature parameters ranging from 0.6 to 13.2. Utility functions are most concave for situations involving altruism, followed by risk aversion, inequality aversion, and intertemporal substitution. Heterogeneity of curvature in the population also varies: altruism is the most heterogeneous, followed by risk aversion, the elasticity of intertemporal substitution, and inequality aversion. Nonetheless, curvature parameters are highly correlated (ρ > .8) over different elicitations within parameter type, and modestly correlated across dimensions in some cases, including inequality aversion and risk aversion (ρ ≈ 0.3), altruism and risk aversion (ρ ≈ 0.3), and altruism and inequality aversion (ρ ≈ 0.14). |
| JEL: | D01 D03 D15 D19 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32077&r=cbe |