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on Cognitive and Behavioural Economics |
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Issue of 2026–08–10
eight papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Christoph Drobner (Central European University); Sebastian J. Goerg (Nürnberg Institut für Marktentscheidungen); Orestis Kopsacheilis (Technical University Munich) |
| Abstract: | Incentivizing behavior, a core principle of economic experiments, is currently under scrutiny due to a series of papers that find little to no difference in choices made under real or hypothetical incentives. We experimentally assess the effectiveness of hypothetical incentives to induce participants’ real effort – an integral aspect of reliable experimental data. We find that although linking behavior to hypothetical incentives generates modest additional effort compared to no reference to such incentives, hypothetical incentives fall substantially short of real ones, even when their nominal value is radically inflated. To understand the mechanism behind these effects, we systematically vary base pay and piece-rate magnitudes across incentive conditions and structurally estimate a model of costly effort. Although higher base pay increases effort both by increasing non-pecuniary motivation and by enhancing responsiveness to hypothetical incentives, incentive-compatible real payments are far more cost-effective. |
| Keywords: | Real Incentives, Hypothetical Incentives, No Incentives, Real Effort |
| JEL: | C90 C91 D01 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:eoh:wpaper:wpaper-001 |
| By: | Cristoph Drobner; Sebastian Goerg; Orestis Kopsacheilis |
| Abstract: | Incentivizing behavior, a core principle of economic experiments, is currently under scrutiny due to a series of papers that find little to no difference in choices made under real or hypothetical incentives. We experimentally assess the effectiveness of hypothetical incentives to induce participants' real effort -- an integral aspect of reliable experimental data. We find that although linking behavior to hypothetical incentives generates modest additional effort compared to no reference to such incentives, hypothetical incentives fall substantially short of real ones, even when their nominal value is radically inflated. To understand the mechanism behind these effects, we systematically vary base pay and piece-rate magnitudes across incentive conditions and structurally estimate a model of costly effort. Although higher base pay increases effort both by increasing non-pecuniary motivation and by enhancing responsiveness to hypothetical incentives, incentive-compatible real paymen |
| Keywords: | Real Incentives, Hypothetical Incentives, No Incentives, Real Effort |
| JEL: | C90 C91 D01 |
| Date: | 2026–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:crt:wpaper:2606 |
| By: | Bordalo, Pedro; Gennaioli, Nicola; Lanzani, Giacomo; Shleifer, Andrei |
| Abstract: | Abstract We present a theory of choice in which attention to the features of options is determined by the decision maker’s categorization of the current problem in a set of problems she solved in the past. Categorization depends on goal-relevant and contextual problem-level features. The model yields heterogeneity in attention and choice in a given problem based on different past experiences and instability when changes in irrelevant context cause recategorization. We show that heterogeneous and unstable representations of a choice problem unify major biases in judgment and decision making. |
| Keywords: | 38 Economics (for-2020), 3801 Applied Economics (for-2020), 3802 Econometrics (for-2020), 3803 Economic Theory (for-2020), Behavioral and Social Science (rcdc), Mental Health (rcdc), 14 Economics (for), Economics (science-metrix), 3801 Applied economics (for-2020), 3802 Econometrics (for-2020), 3803 Economic theory (for-2020) |
| Date: | 2026–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:econwp:qt2hc7c06v |
| By: | David L. Dickinson; Jacob Norwood |
| Abstract: | Food insecurity affects roughly 18 million people in the United States and 2.3 billion globally. Given its prevalence, this study aims to examine how food insecurity and resulting anxiety affect cognitive control and decision-making. Samples of n=102 food-insecure and n=102 food-secure individuals were recruited from the Prolific online subject pool to complete an incentivized Stroop Task and a Monetary Risk Taking task. Randomized treatment assignments administered either a High or Low Cognitive Load manipulation prior to decision making by prompting participants to consider a more or less expensive unexpected financial expense. While food insecurity did not impact cognitive control and risky choices as hypothesized, it may indirectly affect outcomes via anxiety. And, exploratory analysis of response times data suggest food insecurity may promote some increased risk taking due to less deliberative decision processing. The role of anxiety and its effect on choice process among the food-insecure likely merits further investigation. fatigue. Key Words: food insecurity, cognitive load, anxiety, risky-choice |
| JEL: | D00 D91 I30 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:apl:wpaper:26-08 |
| By: | David L. Dickinson |
| Abstract: | We examine time-of-day (TOD) effects on moral choice by comparing afternoon (DAY: 3pm- 5pm) and nighttime (NIGHT: 3am-5am) decisions across three incentivized tasks. While the NIGHT treatment successfully induced sleepiness, we report no evidence that circadian suboptimality shifts decisions towards oneÕs default ethical tendencies. Rather, the NIGHT treatment increased dishonesty in a victimless Die-Roll task but not when dishonesty harms another participant (modified Coin-Flip task) or in consequential moral dilemmas affecting only othersÕ outcomes (Payoff-Trolley task). Exploratory evidence from response times suggests immorality results from deliberative processes. Overall, these results indicate that moral choice exhibits task-dependent stability during circadian fatigue. Key Words: behavioral economics, honesty, Trolley problem, moral choice, sleep |
| JEL: | C90 D01 D91 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:apl:wpaper:26-07 |
| By: | Andrea Albertazzi; Paolo Pin; Marco Stimolo; Alessandro Stringhi |
| Abstract: | Decision-makers usually receive information through narratives that combine diagnostic evidence with nondiagnostic details. In a laboratory experiment, we study how such nondiagnostic clues affect belief updating. Participants repeatedly report beliefs in a Bayesian inference task within a narrative context. Reduced-form estimates and subject-level classifications show that nondiagnostic narrative clues systematically induce belief revision toward maximal uncertainty, weakening previously accumulated diagnostic evidence. This effect is weaker in an equivalent abstract context and disappears in an identical narrative task when nondiagnostic clues are replaced by no-information messages. We assess the economic significance of such return to uncertainty by showing that it delays belief convergence, thereby increasing the amount of information agents require before making a decision. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.04753 |
| By: | Mikhail Freer; Daniel Friedman; Christian Ghiglino; Elke Weidenholzer |
| Abstract: | Existing literature offers persuasive evidence that individuals care about how their consumption compares to that of peers, and proposes a large variety of explanatory models. The present paper proposes a common framework for many of those models, and compares their ability to predict behavior in a laboratory experiment. We find evidence of Keeping up with the Joneses motivations but also find that conspicuous consumption is enhanced by Veblen motivations arising from peers' ability to observe one's own choice. Among the seven quasi-linear preference models we compare, our data are best explained by a model that contrasts envy and pride (upward vs downward comparisons) using a value function borrowed from Prospect Theory. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.07353 |
| By: | Sapkota, Sushil; Gitungwa, Henriette; Gustafson, Christopher; Rose, Devin |
| Abstract: | Pulses provide well-documented health and environmental benefits, yet remain underconsumed. In fact, pulses are a critical element in the movement to shift diets towards plant-based foods to improve human and environmental health: they are both a protein food and a vegetable food. While surveys and choice experiments show significant percentages of consumers interested in pulse-containing foods, sales data do not reflect these claims. A potential explanation is that simple research environments eliminate cognitive or search costs for attributes that constitute a small percentage of products. Recent work on rational inattention theory predicts that these costs will lead decision-makers to limit the set of items/information they consider. In the food retail environments, attention is likely to be driven by individual priorities (e.g., taste, health, price sensitivity, etc.). To examine these mechanisms, we conducted an online experiment with 831 U.S. adults in which participants selected foods in large product sets (50 items/category) across six product categories under two pulse-prevalence conditions (10% vs. 20% of products). Immediately after completing the food choices, participants completed an ecological momentary assessment-style question capturing what they were actively thinking about while making food choices. They then rated how important taste, food prices, healthiness, and environmental impact are when making food choices. Mixed-effects logit and mediation analyses indicate that both environmental and health importance ratings are positively associated with pulse product selection. Environmental importance also exhibits a statistically significant indirect effect through active consideration of environment during choice, while the indirect pathway through active consideration of health is not statistically significant. Increasing pulse prevalence more than doubles the odds of choosing pulses without affecting self-reported consideration. Overall, the findings suggest that policies highlighting environmental attributes while increasing the availability of pulse-based products may be particularly effective in encouraging sustainable food choices, as they target both attention to sustainability information and the accessibility of sustainable options. |
| Keywords: | Institutional and Behavioral Economics |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404428 |