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on Cognitive and Behavioural Economics |
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Issue of 2025–10–27
four papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Baranski, Andrzej (New York University, Abu Dhabi); Reuben, Ernesto (New York University, Abu Dhabi); Riedl, Arno (Maastricht University) |
| Abstract: | In a laboratory experiment, we study the role of fairness ideals as focal points in coordination problems in homogeneous and heterogeneous groups. We elicit the normatively preferred behavior about how a subsequent coordination game should be played. In homogeneous groups, people share a unique fairness ideal how to solve the coordination problem, whereas in heterogeneous groups, multiple conflicting fairness ideals prevail. In the coordination game, homogeneous groups are significantly more likely than their heterogeneous counterparts to sustain efficient coordination. The reason is that homogeneous groups coordinate on the unique fairness ideal, whereas heterogeneous groups disagree on the fairness ideal to be played. In both types of groups, equilibria consistent with fairness ideals are most stable. Hence, the difference in coordination success between homogeneous and heterogeneous groups occurs because of the normative disagreement in the latter types of group, making it much harder to reach an equilibrium at a fairness ideal. |
| Keywords: | cooperation, coordination, focal points, fairness ideals, experiment |
| JEL: | H41 C92 D63 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18200 |
| By: | Tiziana Assenza (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alberto Cardaci (Goethe University Frankfurt = Goethe-Universität Frankfurt am Main); D. Delli Gatti (Unicatt - Università cattolica del Sacro Cuore [Milano]) |
| Abstract: | Existing evidence suggests that individuals often misperceive the value of their wealth. We examine the existence, direction, and magnitude of these misperceptions through a laboratory experiment. Our findings indicate that variations in the leverage ratio (the ratio of liabilities to assets) influence how individuals rank financial profiles, even when net wealth remains constant. Most subjects perceive a given net worth as greater than its true value, and this misperception becomes more pronounced in financial profiles with lower leverage ratios. We further explore how cognitive sophistication and behavioral/economic attitudes shape wealth misperception. Experimental evidence shows that misperception is associated with lower cognitive sophistication and inattentive thinking. Moreover, it correlates with greater impatience, lower debt aversion, and higher marginal propensities to consume following positive (transitory) income shocks. |
| Keywords: | Perception, Metacognition, Market Psychology, Economic Psychology, Cognition, Behavioral Finance |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05300791 |
| By: | Komatsubara, Takashi |
| Abstract: | This paper investigates whether sports experience changes adolescents’ preferences. For this purpose, we conducted a survey of Japanese university students about their sports experiences, time preferences, and risk aversion. Our regression analysis shows that students’ sports experience does not significantly change their time preferences or risk aversion. This result implies that although students devote a lot of time to sports in Japan, sports still do not have a significant impact on students’ attitudes towards time and risk. |
| Keywords: | Sports Experience, Time Preferences, Risk Aversion, Student Survey |
| JEL: | D81 I21 |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126001 |
| By: | Ernst Fehr; Julien Senn; Thomas Epper; Aljosha Henkel |
| Abstract: | In this registered report, we investigate (i) whether incentives affect subjects’ willingness to pay to increase, and to decrease the payoff of others, (ii) whether they affect the distribution of social preference types, and (iii) whether they affect the strength and the precision of individuals’ structurally estimated social preference parameters. Using an online experiment with a general population sample, we show that the use of monetary incentives, as well as the size of the stakes, have little impact on subjects’ modal choices (descriptive analysis), as well as for the distribution of qualitatively distinct preference types in the population (clustering analysis). However, monetary incentives affect quantitative measures of the strength and the precision of social preferences. Indeed, a structural analysis reveals that the preference elicitation with merely hypothetical stakes leads to an overestimation and a less precise measurement of social preferences. Together, these results highlight that incentivizing the elicitation of social preferences is most useful when interested in quantitative estimates. For researchers interested in identifying merely qualitative preferences types, however, hypothetical stakes might suffice. |
| Keywords: | Social preferences, altruism, inequality aversion, incentives |
| JEL: | C80 C90 D30 D63 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:zur:econwp:482 |