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on Cognitive and Behavioural Economics |
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Issue of 2024‒04‒29
five papers chosen by |
| By: | Sebastian Bachler; Armando Holzknecht; Jürgen Huber; Michael Kirchler |
| Abstract: | While headline news frequently report cases of large-scale fraud, corruption, and other immoral behavior, laboratory experiments often show prosocial behavior in strategic games. To reconcile and explain these seemingly conflicting observations, Alós-Ferrer et al. (2022) introduced the Big Robber Game — an altered dictator game where one robber can take money from multiple victims. They reported low prosocial behavior among a pool of student subjects who behaved more prosocial in bilateral games than in the Big Robber Game. In our study, we employ the Big Robber Game within a 2x2 factorial design, engaging over 860 participants to examine the behaviors of financial professionals versus students. Moreover, inspired by the four-eyes principle, a common practice in the finance industry, we investigate decision-making both individually and in pairs. We find overall support for the results of Alós-Ferrer et al. (2022) and that finance professionals rob less than students. Accounting for a multitude of specifications, socio-demographic characteristics and individual preferences, we report that treatment differences disappear, indicating similar behavior across individuals, pairs, finance professionals, and students. Finally, in a series of non-pre-registered exploratory analyses, we show that victims expect finance professionals to rob significantly more than student robbers, implying that finance professionals are considered to be less pro-social than students’ peers. |
| Keywords: | Selfishness, Social Preferences, Finance Professionals, Group decisions, Experimental Finance |
| JEL: | C91 C93 D91 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2024-04&r=cbe |
| By: | Cui, Chi; Dai, Ming; Schwieren, Christiane |
| Abstract: | In this paper, we experimentally investigate how sending a signal of following social norms impacts people’s cooperative behavior in a repeated public goods game, where we disentangle the effect of strategy and internalization of social norms on cooperation. We find that under the signaling mechanism, less cooperative players disguise themselves in the rule-following game, but this does not decrease cooperation overall. More importantly, the signaling mechanism has a heterogeneous effect on cooperation in rule-following and rule-breaking groups: It increases cooperation in rule-following groups but decreases cooperation in rule-breaking groups. Finally, the signaling mechanism tends to offset the decline of contributions among participants in rule-breaking groups rather than rule-following groups. Overall, this paper provides a feasible way to improve social cooperation and enriches the literature on cooperation in the public goods game. |
| Keywords: | public goods game; cooperation; signaling; internalization of social norms |
| Date: | 2024–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0746&r=cbe |
| By: | Erika Domotor; Adrien Fillon; Kenzo Nera; Zacharias Maniadis |
| Abstract: | The prevalence of conspiracy theories is a concern in western countries, yet the phenomenon is rarely addressed in experimental economics. In two preregistered online studies (NStudy 1 = 97, NStudy 2 = 203) we examine the relationship between exposure to conspiracy modes of thinking, self-reported conspiracy mentality, and behaviour in an economic game that measures strategic sophistication. Part of our design was based on Balafoutas, Libman, Selamis, and Vollan (2021), who found a positive relationship between exposure to conspiracy modes of thinking and strategic sophistication. Our results did not corroborate their findings in an online setting. Our measures of conspiracy mentality were modestly correlated with strategic sophistication in Study 2, but not in Study 1. Conspiracy mentality was also correlated with manipulativeness. |
| Keywords: | Conspiracy theory, k-level reasoning, trust, strategic sophistication |
| JEL: | D91 C90 C72 |
| Date: | 2024–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:01-2024&r=cbe |
| By: | Gandhi, Ashvin (NBER); Giuliano, Paola (University of California, Los Angeles); Guan, Eric (Riot Games); Keefer, Quinn (California State University San Marcos); McDonald, Chase (Riot Games); Pagel, Michaela (NBER); Tasoff, Joshua (Claremont Graduate University) |
| Abstract: | Economic research on entertainment is scant despite its large share of time use. We test economic theories of belief-based utility in the context of video-game engagement. Using data on 2.8 million matches from League of Legends, we find evidence supporting reference-dependent preferences, loss aversion, preferences for surprise and suspense, preferences for clumped surprise, and flow theory from psychology. We then leverage our estimated model and an evolutionary algorithm to find the information-revealing process that maximizes player engagement. We find that the optimal version of the game has increased game play equivalent to 43% of the winner-loser gap. |
| Keywords: | belief-based utility, reference-dependent utility, suspense and surprise, loss aversion, video games, entertainment design |
| JEL: | D8 D9 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16877&r=cbe |
| By: | Epper, Thomas (CNRS); Senn, Julien (University of Zurich); Fehr, Ernst (University of Zurich) |
| Abstract: | The empirical evidence on the existence of social preferences - or lack thereof - is predominantly based on student samples. Yet, knowledge about whether these findings can be extended to the general population is still scarce. In this paper, we compare the distribution of social preferences in a student and in a representative sample. Using descriptive analysis and a rigorous clustering approach, we show that the distribution of the general population's social preferences fundamentally differs from the students' distribution. In the general population, three types emerge: an inequality averse, an altruistic, and a selfish type. In contrast, only the altruistic and the selfish types emerge in the student population. The absence of an inequality averse type in the student population is particularly striking considering the fact that this type comprises about 50 percent of the individuals in the general population sample. Using structural estimation, we show that differences in age and education are likely to explain these results. Younger and more educated individuals - which typically characterize students - not only tend to have lower degrees of other-regardingness but this reduction in other-regardingness basically nullifies behindness aversion among students. Differences in income, however, do not seem to affect social preferences. These findings provide a new cautionary tale that insights from student populations might not extrapolate to the general population. |
| Keywords: | social preferences, altruism, inequality aversion, preference heterogeneity, subject pools, sample selection |
| JEL: | C80 C90 D30 D63 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16865&r=cbe |