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on Cognitive and Behavioural Economics |
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Issue of 2024‒09‒30
three papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Kovacs, Roxanne; Dunaiski, Maurice; Galizzi, Matteo M.; Grimalda, Gianluca; Hortala-Vallve, Rafael; Murtin, Fabrice; Putterman, Louis |
| Abstract: | Trust is key for economic and social development. But why do we trust others? We study the motives behind trust in strangers using an experimental trust game played by 7236 participants, in six samples representative of the general populations of Germany, Italy, Japan, Luxembourg, the UK and the USA. We examine the broadest range of potential determinants of trustor sending to date, including risk tolerance, preferences for redistribution, and conformity. We find that even though self-interest, indicated by expected returns, is relevant for trustor behaviour, the most important correlate of sending is participants' altruism or fairness concerns, as measured by giving in a dictator game. We also find that in our large and representative sample, behaviour in the trust game and responses in a trust survey are significantly correlated, and that similar correlates—altruism in particular—are relevant for both. |
| Keywords: | Wiley deal |
| JEL: | D90 C91 D01 |
| Date: | 2024–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124608 |
| By: | Holger Gerhardt (University of Bonn); Rafael Suchy (University of Oxford, UK) |
| Abstract: | We propose an easy-to-use method for estimating preference parameters experimentally: choices from strictly concave budget restrictions (SCBRs). SCBRs generalize the popular method of analyzing choices from linear budget restrictions (LBRs). SCBRs promise (i) to improve the informational content of individual choices by reducing the number of corner allocations and (ii) to increase the range of identifiable behavioral types. Two online studies on risk and time preferences confirm the benefits of SCBRs vis-à-vis LBRs: (i) They reduce corner allocations drastically and make more participants estimable individually. (ii) They elicit a richer distribution of preference parameters, specifically, distinguishing linear from convex utility. |
| Keywords: | Preference elicitation, time preferences, risk preferences, budget constraints |
| JEL: | C91 D01 D81 D90 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:336 |
| By: | Rusch, Hannes (RS: GSBE UM-BIC, Microeconomics & Public Economics, RS: GSBE other - not theme-related research); Vostroknutov, Alexander (RS: GSBE UM-BIC, RS: GSBE other - not theme-related research, Microeconomics & Public Economics) |
| Abstract: | Social norms have become a conceptual cornerstone in the study of human decision making across the social sciences. The functions of social norms in guiding individual and collective decision-making have been extensively scrutinized empirically, too. However, possible evolutionary origins of the psychological mechanisms required to carry out these functions are less well understood. In particular, trajectories from individually adaptive to socially functional heuristics for norm formation have rarely been studied. Here, we trace such a trajectory. We present a model that allows for the comparison of two heuristics broadly applicable across individual and social decision contexts: ‘rejoicing’ own achievements vs. ‘regretting’ missed opportunities. We find that (i) both perform better than the homo oeconomicus benchmark in individual decision problems under plausible ecological assumptions and (ii) each is adaptive in different environments. We argue that observation (i) provides a potent microfoundation for social norms as a product of co-optation of individually evolved heuristics, i.e., a reduction of social norm formation to the evolution of individual traits. Moreover, observation (ii) lends itself to empirical testing, thus laying the ground for a new wave of studies in the literature fascinated with human norm psychology. |
| Date: | 2024–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2024011 |