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on Cognitive and Behavioural Economics |
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Issue of 2025–01–20
six papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Philipp Doerrenberg; Christoph Feldhaus; Felix Kölle; Axel Ockenfels |
| Abstract: | Using a series of controlled laboratory experiments involving decisions to intervene in others’ choice opportunities; we find that groups grant more autonomy to others than individuals. This finding is robust across two decision contexts, one involving individual decision-making (Internality) and one involving social decision-making (Externality). Analyses of the group chat logs and two additional experiments show that participants tend to shy away from proposing interventions in social contexts, even when they intervene individually. We conclude that interventions differ systematically between individual and social contexts, and that transferring decision-making power to groups can lead to a “liberal shift”. |
| Keywords: | teams, decision making, autonomy, interventions, experiment |
| JEL: | C92 D70 D91 M21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11575 |
| By: | Simeon Schudy; Susanna Grundmann; Lisa Spantig |
| Abstract: | Contrary to the traditional economic view that individuals misreport private information to maximize material payoffs, recent evidence highlights robust preferences for truth-telling among many decision-makers. Theoretical models that align with aggregate behavioral patterns posit that these preferences arise from both an intrinsic motivation to be honest and a desire to be perceived as honest. We propose a novel incentivized measure to independently capture these two motives at the individual level for the first time. We validate the measure’s properties experimentally and show that it predicts behavior in other commonly studied situations that allow for (dis)honesty. The measure enables the classification of individual preference types, revealing systematic heterogeneity and fairly stable type distributions across different samples. Additionally, we propose an experimentally validated 2-minute survey module that proxies both motives and predicts behavior in a typical reporting task. Including this module in a large panel, we offer first insights into how early-life experiences may shape preferences for being and being seen as honest. |
| Keywords: | honesty, lying costs, social image concerns, intentions, individual preferences |
| JEL: | C91 D01 D82 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11521 |
| By: | Christoph Feldhaus; Lukas Reinhardt; Matthias Sutter |
| Abstract: | In a democracy, it is essential that citizens accept rules and laws, regardless of which party is in power. We study why citizens in polarized societies resist rules implemented by political opponents. This may be due to the rules’ specific content, but also because of a general preference against being restricted by political opponents. We develop a method to measure the latter channel. In our experiment with almost 1, 300 supporters and opponents of Donald Trump, we show that polarization undermines rule-following behaviour significantly, independent of the rules’ content. Subjects perceive the intentions behind (identical) rules as much more malevolent if they were imposed by a political opponent rather than a political ally. |
| Keywords: | political polarization, social identity, outgroup, economic preferences, experiment |
| JEL: | C91 D90 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11485 |
| By: | Michalis Drouvelis; Zeyu Qiu |
| Abstract: | This paper investigates the effects of induced emotions on leading-by example. Using an online sample of more than 1, 000 participants, we observe behavior in a one-shot sequential voluntary contribution mechanism game where leaders and followers are induced to be either happy or angry. Our findings show that angry leaders contribute less than happy leaders. The same effect is observed when considering followers’ behavior. Crucially, controlling for leaders’ contributions, the mood effects on followers’ behavior disappear, implying that it is sufficient to induce emotions only on leaders in order to affect followers’ behaviour. Our findings further highlight the role of emotions as a causal force, suggesting that negative changes in well-being can bring about adverse effects on team cooperation. |
| Keywords: | induced emotions, anger, happiness, contribution, leading-by-example |
| JEL: | C92 H41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11531 |
| By: | Powdthavee, Nattavudh (Nanyang Technological University, Singapore); Riyanto, Yohanes E. (Nanyang Technological University, Singapore); Zhang, Xiaojie (Nanyang Technological University, Singapore) |
| Abstract: | This study examines whether complete transparency about the randomness of prediction-generating processes mitigates the hot hand fallacy and the conditions under which it may fail. In a pre-registered laboratory experiment (N=750), we showed that transparency about the prediction-generating processes reduced individuals' belief in the hot hand of fair coin flip predictions. However, this effect significantly weakened when we shifted from paying to donating for predictions. Participants exposed to streaks of accurate predictions under altruistic framing were more inclined to donate despite knowing the randomness involved. We explore underlying mechanisms and discuss implications for decision-making in economics and finance. |
| Keywords: | gambler's fallacy, hot hand, full information, altruism, random streaks, karmic investment |
| JEL: | C91 D03 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17484 |
| By: | Galkiewicz, Agata (University of Potsdam); Marcus, Jan (Free University of Berlin); Siedler, Thomas (University of Potsdam) |
| Abstract: | To reduce cheating in written tests and exams, assessors often randomly vary the order of questions across students. However, little is known about the potential unintended side effects of question order. This paper examines whether randomizing students to start with an easier or harder question makes a difference to overall assessment performance in incentivized testing situations under time pressure. Using data from more than 8, 000 online tests and exams administered in econometrics and statistics courses at two of Germany's largest universities, we find no evidence that the difficulty of the first question(s) has an effect on overall assessment performance. Our findings are good news for people designing (online) assessments, because randomizing the order of questions can be used as an effective tool to mitigate cheating, but does not affect students' overall performance. |
| Keywords: | education, university students, question order, randomization, e-learning, teaching of economics |
| JEL: | A22 I23 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17479 |