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on Cognitive and Behavioural Economics |
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Issue of 2026–09–28
four papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Ali Moghaddasi Kelishomi (Loughborough University); Daniel Sgroi (University of Warwick); Andis Sofianos (Durham University) |
| Abstract: | How does rationality shape cooperation in strategic settings? We study this question in a laboratory experiment that links individual rationality, measured by consistency with the generalized axiom of revealed preference, to behaviour in an indefinitely repeated Prisoner’s Dilemma. Participants are grouped by pre-measured rationality before interacting repeatedly. We find that higher rationality substantially increases cooperation and payoffs. This effect operates through a novel mechanism: more rational individuals make fewer implementation errors when executing their intended strategies, thereby sustaining cooperative outcomes. By contrast, higher cognitive ability also promotes cooperation and higher payoffs, but through a distinct channel—reducing strategic errors in responding optimally to others’ actions. Our results provide the first experimental evidence linking rationality to cooperation via decision-making errors, and clarify the distinct roles of rationality and intelligence in shaping strategic behaviour. Together, the findings offer a unified account of how cognitive constraints affect cooperation in repeated games |
| Keywords: | Repeated Prisoners Dilemma, Cooperation, Rationality, Intelligence, Learning, Strategy Errors JEL codes: C73, C91, C92, D83 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1630 |
| By: | Gerrit Bauch; Arthur Dolgopolov; Manuel Foerster |
| Abstract: | We investigate the strategic communication of narratives under model uncertainty. The sender has private information about the true data-generating process of publicly observable data. The receiver is uncertain about how to interpret the data, but aware of the sender's incentives to strategically provide interpretations (``narratives''). We theoretically show that the size of the conflict of interest between the sender and the receiver is a crucial determinant of equilibrium communication. In particular, the stronger the sender's bias, (i) the more senders exaggerate their information and (ii) the more receivers correct the sender's action recommendations. In a laboratory experiment, we find evidence in line with both predictions, suggesting that people in complex and uncertain environments take a narrator's strategic incentives into account. Additional analyses reveal that narrative likelihood does not drive receiver behavior and that narratives are, on average, slightly persuasive only when bias is low. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.10074 |
| By: | Marcus Giamattei (Frankfurt School of Finance and Management); Pierfrancesco Alaimo di Loro (LUMSA University, Rome, Italy; HURfuture Research Center); Matteo Rizzolli (GEPLI Department, LUMSA University, Rome, Italy; HURfuture Research Center); Stefan Voigt (Hamburg University) |
| Abstract: | We test the replicability of ten stylized facts about voluntary contributions to public goods using a large crowd-sourced dataset of classroom experiments on the classEx platform. Our sample comprises 81, 391 contribution decisions by 10, 891 players across 377 sessions in 16 countries (2019-2025). Five facts replicate: initial contributions above Nash (37.6% of endowment), non-zero final-round contributions (38.7%), conditional cooperation as the modal behavioral type, imperfect matching, and cross-country heterogeneity. One is partially confirmed (a modest end-game effect) and one is weakly supported (a positive MPCR effect, sensitive to country fixed effects). Three do not replicate. Contributions follow a hump-shaped trajectory - rising through round 5, plateauing, then gently declining - rather than the canonical decline. Only 34.4% of players free-ride in the final round (vs. the laboratory benchmark of over 70%), while a substantial minority (22.1%) sustain full cooperation. Societal indicators do not predict country-level cooperation, partly because cross-country variation explains only 0.8% of individual contribution variance - an order of magnitude less than organization-level heterogeneity (6.8%). Taken together, the canonical behavioral building blocks of the public goods game reproduce in the classroom, whereas several of its dynamic and cross-country regularities - most notably the absence of the canonical decline - do not. (Includes Online Appendix with experimental interface and additional figures.) |
| Keywords: | Public goods game; Cooperation; Replication; Classroom experiments; ClassEx; Conditional cooperation |
| JEL: | C91 C92 D70 H41 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:lsa:wphurf:wphurf05 |
| By: | Ted O'Donoghue; Charles Sprenger; Po Hyun Sung; Ben Wincelberg |
| Abstract: | Past research highlights failures of "procedural invariance" when measuring economic preferences using choices versus valuations. We reassess these failures by examining theoretical connections between choices and valuations when preferences are stable but measurements are noisy and individuals are heterogeneous. Even under strong assumptions governing noise and heterogeneity, stability does not generally imply identical measurements. We develop new tests of stable preferences in conjunction with various ancillary assumptions about heterogeneity and noise. We implement these tests using existing data to understand if, in the domain of risk preferences, choices and valuations truly differ and to provide quantitative assessments of any deviations. Limiting to the types of data used in the prior literature, we rarely reject the null of stable preferences. With richer data linking individual choices and valuations and structural assumptions, we find evidence of instability which differs qualitatively from the received wisdom that choices implicate greater risk aversion than valuations. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.12291 |