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on Cognitive and Behavioural Economics |
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Issue of 2025–02–03
four papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Diogo Geraldes; Franziska Heinicke; Duk Gyoo Kim |
| Abstract: | We conducted a lab experiment to examine (1) whether luck-based income influences honesty in a subsequent, unrelated decision, (2) whether the perceived agency over an uncertain event affects the interplay between luck and honesty, and (3) whether accumulated previous luck-based incomes influence honesty. Specifically, participants self-report a dice roll outcome after receiving an unrelated luck-based income. Additionally, we manipulated participants’ perceived control over the luck-based income. In the exogenous luck treatment, computerized coin tosses determine the luck-based income. In the endogenous luck treatment, computerized coin tosses also determine the luck-based income, but the participants choose the coin’s winning side beforehand. Our main findings are as follows: lying behavior increases when contemporaneous luck-based income is high, remains unaffected by perceived agency, and does not correlate with prior luck-based income. Furthermore, we find evidence suggesting that individual-specific heterogeneity may significantly influence dishonesty, contrasting with the common view that context is the primary driver. |
| Keywords: | laboratory experiment, lying, luck, honesty, agency |
| JEL: | C91 D03 D82 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11602 |
| By: | Kosfeld, Michael (Goethe University Frankfurt); Sharafi, Zahra (Frankfurt School of Finance and Management); Sontag González, Maíra (Goethe University Frankfurt); Zou, Na (University of Bath) |
| Abstract: | Developing reliable and practicable measures of economic preferences is a crucial task for empirical economic research with high value for both theory and applications. Here, we present results from a first comprehensive "behavioral validation analysis" of the Global Preference Survey Module (GPS) and the corresponding Preference Survey Module (PSM) developed by Falk et al. (2018, 2023) that have been widely used for the measurement and analysis of economic preferences on a global scale. Our key questions are how well GPS and PSM modules explain behavior in incentivized choice experiments in other countries than in the original validation in Germany, and to what extent survey items and modules developed from behavioral experiments in different countries and cultures resemble one another. Our current results, which are based on experiments in three very diverse countries—China, Iran, and Kenya—show that many GPS and PSM survey items predict behavior in incentivized choice experiments, but coefficients vary and are not always sizable. Quantitative items, which are based on hypothetical choice experiments, are consistently selected into survey modules, whereas the best qualitative items differ between countries. At the same time, the contribution in terms of explanatory power of these latter items is comparably lower. Our analysis provides a first empirical basis for the development of survey modules that reliably predict behavior in incentivized choice experiments and real-life situations across diverse countries and contexts. Additional results, including principal component analysis and prediction of real-life behavior, highlight important gaps that warrant further investigation in future research. |
| Keywords: | economic preference, measurement, experiment, survey |
| JEL: | C83 C91 D01 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17608 |
| By: | Viet Hoang Nguyen (Melbourne Institute: Applied Economic & Social Research, University of Melbourne); Edda Claus (Wilfrid Laurier University and CAMA) |
| Abstract: | Do emotions affect economic behavior? We identify two transmission channels of negative emotions to consumption, one predicted by economists and one predicted by psychologists. We use self-reported financial stress and mental distress to identify negative emotions and use current and expected spending to capture consumption behavior. We find that the psychology transmission channel dominates when budget constraints are not binding. As a coping mechanism, consumers increase consumption to regulate the negative emotions caused by stress. Our results are in line with appraisal models of emotions where the perceived cause of the emotion rather than its pleasantness drives behavior. |
| Keywords: | emotions, financial stress, mental distress, spending, appraisal models |
| JEL: | D12 D84 D91 E21 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2024n16 |
| By: | Michael Thaler; Mattie Toma; Victor Yaneng Wang |
| Abstract: | When communicating numeric estimates with policymakers, journalists, or the general public, experts must choose between using numbers or natural language. We run two experiments to study whether experts strategically use language to communicate numeric estimates in order to persuade receivers. In Study 1, senders communicate probabilities of abstract events to receivers on Prolific, and in Study 2 academic researchers communicate the effect sizes in research papers to government policymakers. When experts face incentives to directionally persuade instead of incentives to accurately inform receivers, they are 25-29 percentage points more likely to communicate using language rather than numbers. Experts with incentives to persuade are more likely to slant language messages than numeric messages in the direction of their incentives, and this effect is driven by those who prefer to use language. Our findings suggest that experts are strategically leveraging the imprecision of language to excuse themselves for slanting more. Receivers are persuaded by experts with directional incentives, particularly when language is used. |
| JEL: | C91 D83 D91 D73 I23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11600 |