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on Cognitive and Behavioural Economics |
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Issue of 2026–04–27
three papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Peter Andre (SAFE & Goethe University Frankfurt); Felix Chopra (Frankfurt School of Finance & Management); Luca Michels (University of Bonn); Johannes Wohlfart (University of Cologne) |
| Abstract: | Expectations are central to models of economic and financial decision-making. Yet in practice, individuals are often inattentive and, when asked, report fragile, context-dependent expectations that are only weakly linked to decisions. This raises the question to what extent they hold such expectations in the first place. Against this backdrop, we ask two questions: When people think about an economic issue, can they build on expectations they formed before? And does it matter if they cannot? We develop and validate a survey measure that distinguishes between individuals who can recall expectations formed in the past and those who must form expectations from scratch. We show that while many households have expectations about key economic variables, a large share of households do not — even among those close to decisions for which the expectation should be relevant. This matters: individuals without a previously-formed expectation (i) express expectations that are more context-dependent, (ii) update expectations more strongly but less persistently in response to new information, (iii) report expectations that are less relevant to decisions, and (iv) rely more on heuristics that do not require expectations when making economic decisions. |
| Keywords: | Expectations, Belief Formation, Previously-Formed, Context-Dependence, Learning, Decision Relevance, Heuristics |
| JEL: | C83 C91 D83 D84 D91 E71 G41 G53 |
| Date: | 2026–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2607 |
| By: | Cheikbossian, Guillaume; Peña, Jorge |
| Abstract: | We study the evolution of other-regarding preferences in a public goods game where the production function exhibits varying degrees of complementarity between individual efforts. Individuals are rational agents who play a Nash equilibrium, but differ in the weight they assign to others’ payoffs, capturing varying degrees of prosocial or anti-social preferences. This preference trait evolves through payoff-based biased social learning, modeled within an adaptive dynamics framework. Because material payoffs induced by the equilibrium contributions may be non-concave in the preference parameter, evolutionary branching can arise. We show that monomorphic populations are evolutionarily stable only when complementarity between individual efforts is sufficiently strong, in which case preferences converge toward either prosociality or anti-sociality depending on the nature of strategic interactions between players. By contrast, when contributions are highly substitutable, monomorphic populations can become unstable, giving rise to polymorphic populations in which multiple preference types coexist. These results highlight how the structure of the public goods environment shapes the evolution and diversity of other-regarding motivations in culturally evolving populations. |
| Keywords: | Adaptive dynamics; other-regarding preferences; public goods games |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131681 |
| By: | Fabio Galeotti (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique); Jona Krutaj (UON - University of Nottingham, UK); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Abandoning detrimental social norms is complex due to the strong pressure to conform. We examine how leaders can guide norm change in heterogeneous societies where individual preferences evolve at different rates. Inspired by the model and experimental design of [J. Andreoni, N. Nikiforakis, and S. Siegenthaler, Proc. Natl. Acad. Sci. U.S.A. 118 , e2014893118 (2021)], we conduct a large-scale laboratory experiment in which we manipulate the speed at which preferences change within a society and introduce leaders with different, evolving preferences. Without leaders, a minority of citizens with rapidly changing preferences cannot overturn an existing norm in a society where most individuals have slow-changing preferences. When fast-changing citizens form the majority, norm change occurs in most groups, but at high welfare costs. In contrast, exogenously selected leaders are highly effective at coordinating expectations and shifting heterogeneous societies toward a more efficient norm—at lower welfare costs and regardless of the underlying distribution of preference evolution across individuals. However, the timing of norm change depends on whether leaders prioritize their preferences (autocratic leadership) or those of the majority (democratic leadership). A follow-up experiment shows that peer-to-peer communication encourages leaders to adopt a more democratic leadership style. These results highlight the pivotal role of leadership in driving norm change and the importance of public voice in shaping leaders' behavior. |
| Keywords: | Laboratory experiment, Tipping threshold, Coordination, Leadership, Social norm |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05595719 |