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on Cognitive and Behavioural Economics |
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Issue of 2024‒05‒06
eight papers chosen by |
| By: | Halkos, George; Gkargkavouzi, Anastasia |
| Abstract: | Behavioral environmental economics (BEE) is an emerging field that combines principles from behavioral and environmental economics along with psychological theory to study how human behavior influences environmental issues. It recognizes that human behavior often deviates from the rational actor model assumed in traditional environmental economics and seeks to understand the psychological, social, and emotional factors that influence people's decisions related to the environment. By gaining insights intothe human decision-making mechanism, BEE can better explain economically relevant environmental behavior and increase the predictive power of existing models. The fieldguidesthe design of effective and tailored-specific policy interventions that work with human behavioral tendencies, such as using defaults, framing, and social reinforcement to "nudge" people toward environmentally friendly choices. While behavioral insights can complement traditional policy tools, broader reforms are also needed to achieve sustainability. New trends derived from interdisciplinary research combining Environmental Psychology and Behavioral Economics are discussed. Overall, BEE offers a more realistic understanding of human decision-making and can help maximize the environmental benefits achieved through limited resources. |
| Keywords: | Behavioral environmental economics; Human decision-making; Environmentalism; Environmental policy; Sustainability. |
| JEL: | I30 Q00 Q51 Q59 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120752&r=cbe |
| By: | Steffen Altmann (University of Duiburg-Essen, University of Copenhagen); Andreas Grunewald (Frankfurt School of Finance and Management); Jonas Radbruch (Humboldt University Berlin) |
| Abstract: | Nudge-based policies are an important instrument for many policymakers. Based on a laboratory experiment featuring a dual-task paradigm, we examine the effects of two common types of nudge interventions—the simplification of complex decisions and the implementation of high-quality defaults. We find that these interventions do not only improve choices in the targeted domain, but also yield substantial positive indirect effects on non-targeted domains. The latter emerge through a reallocation of cognitive resources. Furthermore, the relative importance of direct and indirect effects varies systematically across the population. Evaluations that focus only on the targeted domain therefore significantly underestimate the interventions’ overall effectiveness and provide a biased assessment of their distributional consequences. |
| Keywords: | nudges; default options; administrative burden; limited attention; limited cognitive resources; behavioral economics; laboratory experiment; |
| Date: | 2024–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:503&r=cbe |
| By: | Antonio Alfonso (LoyolaBehLab/Universidad Loyola Andalucía); Pablo Brañas-Garza (LoyolaBehLab/Universidad Loyola Andalucía); Diego Jorrat (LoyolaBehLab/Universidad Loyola Andalucía); Benjamín Prissé (Singapore University of Technology and Design); María José Vázquez-De Francisco (Fundación ETEA-Development Institute/Universidad Loyola Andalucía) |
| Abstract: | The purpose of this study is to examine whether girls and boys exhibit different risk and timepreferences and how this difference evolves during the critical phase of adolescence. To achievethis, we use a large and powered sample of 4830 non-self-selected teenagers from 207 classesacross 22 Spanish schools with very different socioeconomic backgrounds. Alongside time andrisk preferences, we also collected additional information about class attributes, social networkmeasures, students’ characteristics, and the average level of economic preferences of friends.These measures enable us to account for potentially omitted variables that were not consideredin previous studies. The results indicate that there are no significant gender differences intime and risk preferences, but older subjects exhibit more sophisticated time preferences andhigher risk aversion. We also perform an exploratory heterogeneity analysis, which unveils twoimportant results: first, cognitive abilities play a critical role in the development of time andrisk preferences; second, interaction within the class social network does matter. |
| Keywords: | Developmental Decision-Making, Field Experiment, Economic Preferences, Teenagers. |
| JEL: | C91 D81 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:316&r=cbe |
| By: | Ashvin Gandhi; Paola Giuliano; Eric Guan; Quinn Keefer; Chase McDonald; Michaela Pagel; Joshua Tasoff |
| 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. |
| JEL: | D8 D9 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32295&r=cbe |
| By: | Gächter, Simon (University of Nottingham); Kaiser, Esther (Zurich University of Applied Sciences (ZHAW)); Königstein, Manfred (University of Erfurt) |
| Abstract: | Explicit and implicit incentives and opportunities for mutually beneficial voluntary cooperation co-exist in many contractual relationships. In a series of eight laboratory gift-exchange experiments, we show that incentive contracts can lead to crowding out of voluntary cooperation even after incentives have been abolished. This crowding out occurs also in repeated relationships, which otherwise strongly increase effort compared to one-shot interactions. Using a unified econometric framework, we unpack these results as a function of positive and negative reciprocity, as well as the principals' wage offer and the incentive-compatibility of the contract. Crowding out is mostly due to reduced wages and not a change in reciprocal wage-effort relationships. Our systematic analysis also replicates established results on gift exchange, incentives, and crowding out of voluntary cooperation while exposed to incentives. Overall, our findings show that the behavioral consequences of explicit incentives strongly depend on the features of the situation in which they are embedded. |
| Keywords: | principal-agent games, gift-exchange experiments, incomplete contracts, explicit incentives, implicit incentives, repeated games, crowding out |
| JEL: | C70 C90 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16872&r=cbe |
| By: | Cosmin Ilut; Rosen Valchev |
| Abstract: | We develop a novel framework of bounded rationality under cognitive frictions that studies learning over optimal behavior through both deliberative reasoning and accumulated experiences. Using both types of information, agents engage in Bayesian non-parametric estimation of the unknown action value function. Reasoning signals are produced internally through mental deliberation, subject to a cognitive cost. Experience signals are the observed utility outcomes at previous actions. Agents' subjective estimation uncertainty, which evolves through information accumulation, modulates the two modes of learning in a state- and history-dependent way. We discuss how the model draws on and bridges conceptual, methodological and empirical insights from both economics and the cognitive sciences literature on reinforcement learning. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.18185&r=cbe |
| By: | David L. Dickinson (Appalachian State University - UNC - University of North Carolina System, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); David Masclet (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal) |
| Abstract: | Insufficient sleep is costly to organizations (e.g., direct health costs, cognitive errors, accident risk, and lower labor productivity). In this current study, we examine another more hidden cost associated with insufficient sleep- unethical behaviors. Using a hybrid field/lab experimental approach, participants were randomly assigned to a week of sleep -restriction or well-rested sleep levels in their at-home (naturalistic) environment prior to decision making. We found that sleep restricted participants cheated significantly more in two honesty tasks, while anti-social choices were, surprisingly, not affected. Because sleep restriction promotes reduced deliberation, these results contribute to our understanding of the cognitive underpinnings of decision making. Importantly, these findings have practical implications to managers who want to reduce dishonesty in the workplace. For example, our results suggest that workplace health promotion programs focused on good sleep hygiene would additionally benefit the company in terms of indirectly promoting ethical conduct in the workplace.and COPY; 2023 Elsevier Inc. All rights reserved. |
| Keywords: | Ethical choice, Dishonesty, Antisocial behavior, Sleep |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04223180&r=cbe |
| By: | Valerio Capraro |
| Abstract: | Over the last two decades, a growing body of experimental research has provided evidence that linguistic frames influence human behaviour in economic games, beyond the economic consequences of the available actions. This article proposes a novel framework that transcends the traditional confines of outcome-based preference models. According to the LENS model, the Linguistic description of the decision problem triggers Emotional responses and suggests potential Norms of behaviour, which then interact to shape an individual's Strategic choice. The article reviews experimental evidence that supports each path of the LENS model. Furthermore, it identifies and discusses several critical research questions that arise from this model, pointing towards avenues for future inquiry. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.15293&r=cbe |