|
on Cognitive and Behavioural Economics |
|
Issue of 2024‒06‒10
five papers chosen by |
| By: | Barron, Kai; Fries, Tilman |
| Abstract: | We study how one person may shape the way another person interprets objective information. They do this by proposing a sense-making explanation (or narrative). Using a theory-driven experiment, we investigate the mechanics of such narrative persuasion. Our results reveal several insights. First, narratives are persuasive: We find that they systematically shift beliefs. Second, narrative fit (coherence with the facts) is a key determinant of persuasiveness. Third, this fit-heuristic is anticipated by narrative-senders, who systematically tailor their narratives to the facts. Fourth, the features of a competing narrative predictably influence both narrative construction and adoption. |
| Keywords: | Narratives, beliefs, explanations, mental models, experiment, financial advice |
| JEL: | D83 G40 G50 C90 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:295066&r= |
| By: | Gergely Hajdu (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | I investigate whether people distort beliefs about third parties – such as the ability of scientists to offset one’s environmental impact – to excuse self interested behavior. In a laboratory experiment, participants choose how much money to take. The money is either taken from passive participants or comes from another source. Which one it is depends on the success of a third party in solving a riddle. I use a between-subject design with two treatment conditions that only differ in whether it is the success or the failure that results in taking the chosen amount from passive participants. After choosing the amount, participants report beliefs about the success of the third party. Indeed, beliefs are 13 percentage points higher when it is the failure that results in taking the chosen amount from passive participants. With monetary incentives for correct guesses the inference is inconclusive. Nevertheless, the difference in beliefs decreases to 6 percentage points and becomes statistically insignifiant. The results suggest that people use belief-based excuses about third-party success. |
| Keywords: | motivated beliefs, excuse, prosociality |
| JEL: | D91 C91 D83 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp362&r= |
| By: | De Vera, Micole (University College London); Garcia-Brazales, Javier (CEMFI); Rello, Luz (IE University) |
| Abstract: | We evaluate a reading intervention involving 600 third-grade students in Chilean schools catering to disadvantaged populations. The intervention features an adaptive computer game designed to identify and improve weaknesses in literacy and cognitive skills, and is complemented by a mobile library and advice to parents to increase student's interest and parental involvement. We first quantify the impact on non-cognitive skills and academic perceptions. We find that, after just three months of intervention, treated students are 20–30 percent of a standard deviation more likely to believe that their performance is better than that of their peers, to like school, to have stronger grit, and to have a more internal locus-of-control. Gains in aspirations and self-confidence are particularly large for students that we identify as at-risk-of-dyslexia. These improvements are reflected in better performance on a nation-wide, standardized language test. Our results show that non-cognitive skills, particularly of at-risk-of-dyslexia students, can be changed through a short, light-touch, and cost-effective education technology intervention. |
| Keywords: | field experiment, computer-based reading intervention, non-cognitive skills, Chile, dyslexia |
| JEL: | I24 I31 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16937&r= |
| By: | Robert Akerlof (University of Warwick); Richard Holden (UNSW Business School); Hongyi Li (UNSW Business School) |
| Abstract: | In the early 20th century, Gestalt psychologists seriously challenged prevailing notions regarding human perception. They showed that there is a difference between seeing the pixels that make up a picture and understanding what a picture represents. We have all had that “aha” moment, for instance, where a scene suddenly becomes clear (e.g. “oh, it’s a smiley face”). The more general point is that people may have all of the information needed to draw a conclusion yet---in contrast to standard economic models---they fail to connect the dots. We build a model that conceptualizes this idea. An agent’s task is to learn whether a picture possesses some feature (such as whether it depicts a smiley face). They have a knowledge set consisting of “codewords” that they think apply to the picture. This set initially contains codewords for each pixel’s color, but no codewords describing the larger picture. The agent adds to their knowledge set by loading existing codewords into working memory and drawing conclusions. Importantly, the agent has limited working memory, which bounds their ability to draw conclusions. We show that the model captures a number of important phenomena, such as multi-stable perception, and provides a useful conceptualization of narratives as “big-picture statements.” We explore several applications, including to the politics of persuasion. |
| Keywords: | cognition, reasoning, perception, narratives |
| JEL: | D01 D80 D90 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2024-02&r= |
| By: | Ozili, Peterson K |
| Abstract: | Central banks are considering the issuance of a central bank digital currency to serve as a payment tool to support economic activities. A central bank digital currency can also serve secondary purposes that are related or unrelated to the statutory objectives of a central bank which is monetary and price stability. Many central banks are thinking too fast about central bank digital currencies – they are very optimistic about the potential benefits of central bank digital currencies. While such optimism is good, central banks also need to think slowly about central bank digital currency by paying serious attention to known risks and whether there is a unique use case for CBDC. This calls for cautious optimism and a need for central banks to think fast and slow about central bank digital currencies. |
| Keywords: | CBDC, central bank digital currency, cryptocurrency, digital payment, thinking fast and slow |
| JEL: | E40 E42 E49 E50 E52 E58 E59 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120774&r= |