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on Cognitive and Behavioural Economics |
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Issue of 2025–09–22
six papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Thomas Graeber; Shakked Noy; Christopher Roth; Thomas W. Graeber |
| Abstract: | Information often shapes behavior regardless of its quality: unreliable claims wield influence, while reliable ones are neglected. We propose that this occurs in part because word-of-mouth transmission tends to preserve claims while dropping information about their reliability. We conduct controlled online experiments where participants listen to economic forecasts and pass them on through voice messages. Other participants listen either to original or transmitted audio recordings and report incentivized beliefs. Across various transmitter incentive schemes, a claim’s reliability is lost in transmission much more than the claim itself. Reliable and unreliable information, once filtered through transmission, impact listener beliefs similarly. Mechanism experiments show that reliability is lost not because it is perceived as less relevant or harder to transmit, but because it is less likely to come to mind during transmission. A simple associative-memory framework suggests that reliability information may be less likely to come to mind either because it is less likely to be cued by transmission requests or because attempts to retrieve it face greater interference. Evidence from our experiments, a large corpus of everyday conversations, and economic TV news supports both of these mechanisms. |
| Keywords: | information transmission, word-of-mouth, reliability, memory, TV news |
| JEL: | D83 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12109 |
| By: | Peter Katuscak; Tomas Miklanek |
| Abstract: | Fischbacher, Gachter and Fehr (2001) let subjects condition their contributions in a linear public goods game on the average contribution of their groupmates using the strategy method. About half of their subjects exhibit “conditional cooperation†(CC) in that they contribute more the more the groupmates are assumed to contribute. This finding has been extensively replicated. However, recent studies have found large fractions of conditional cooperators (CCs) even in placebo settings in which we would not expect to see any CC, suggesting that the measure of CC is upwardly-biased. We investigate whether mitigating subject confusion and experimenter demand can eliminate or at least reduce the bias. We introduce several design features to mitigate confusion. To mitigate experimenter demand, we provide participants with “exit options†that allow them to avoid conditioning their contributions on those of their groupmates. We evaluate the extent of the bias by the proportion of subjects classified as CCs in a mirror placebo setting involving a meaningless conditioning variable. When we mitigate confusion but not experimenter demand, more than a quarter of subjects end up classified as CCs in the placebo mirror. When we also mitigate experimenter demand, this proportion drops to a level indistinguishable from random behavior. In a standard setting, mitigating experimenter demand reduces the proportion of CCs by almost 40 percent. We therefore conclude that CC should be measured in the presence of the exit options in order to mitigate experimenter demand. |
| Keywords: | conditional cooperation, experimental methodology |
| JEL: | H41 C91 D64 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:cer:papers:wp798 |
| By: | Yeganloo, A.; Moran, C.; Jafri, J. |
| Abstract: | We present comprehensive experimental evidence that expanding the number of charitable options enhances both donation outcomes and donor experience, suggesting choice deprivation rather than choice overload. In a pre-registered online experiment with over 2, 248 participants donating real money to UK charities (average donation of £1.59 out of £2.50), we find that increasing the number of available charities raises total donations robustly by approximately £0.04. Furthermore, allowing participants to donate to multiple charities, rather than restricting them to one, boosts donations by £0.23 on average, without increasing regret or diminishing satisfaction. Other mediators, difficulty, deliberation, and familiarity, do not explain the impact of treatments on giving behaviour. Our design rules out alternative explanations, including self-interest, ease of donation, or perceived importance of giving, and highlights that more choices encourage thoughtful engagement with the donation decision. The results are highly relevant to the design of consumer-facing interventions in pro-environmental domains, importantly for energy and climate policy. In areas such as carbon offsetting and climate-focused giving, individuals are required to make voluntary contributions or adopt sustainable products. Our evidence suggests that providing diverse and flexible choices can increase contributions in these domains. |
| Keywords: | Charitable Giving, Donation, Public Goods, Choice Overload, Choice Deprivation, Satisfaction, Regret |
| JEL: | C91 D64 D91 H00 |
| Date: | 2025–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2554 |
| By: | Stefania Bortolotti; Felix Kölle; Ivan Soraperra; Matthias Sutter |
| Abstract: | Inequality often arises from strategic interactions among individuals. This is so because risky investments can not only be resolved by chance (natural risk), but also by others’ actions (social risk). We study how these different sources of inequality shape fairness judgments and the level of redistribution in a controlled experiment with a total of 2, 152 participants. We find significantly less inequality acceptance, and thus much more redistribution, under social risk. In addition to the well-known types of Libertarians, Egalitarians and Choice Egalitarians, we identify a novel, hitherto unnoticed, fairness type — Insurers — who always compensate unlucky risk-takers and are especially prevalent when one is let down by others rather than simply unlucky by chance. This suggests that impartial spectators view betrayal as more deserving of support than bad luck. Our findings show that fairness ideals depend jointly on risk-taking and the way in which risk is resolved, either by nature or another human actor, thus highlighting the important role of strategic interaction for fairness types and redistribution. |
| Keywords: | inequality, fairness views, social risk, redistribution, experiment |
| JEL: | C91 D63 D90 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12128 |
| By: | Nickolas Gagnon; Kristof Bosmans; Arno Riedl |
| Abstract: | We conduct an online experiment to study how the unfairness of chances leading to wage inequality affects labor supply decisions. We find that, at a given wage, disadvantageous wage inequality reduces labor supply, but whether this inequality stems from fair or unfair chances does not matter. That is, a procedure with fair chances does not compensate for wage inequality. Our results stand in stark contrast to prior empirical evidence showing that individuals care about fair chances when making equity judgments. |
| Keywords: | D63, D90, J22, J31, M52 |
| JEL: | D63 D90 J22 J31 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12102 |
| By: | Shuige Liu; Gabriel Ziegler |
| Abstract: | Interactive decision-making relies on strategic reasoning. Two prominent frameworks are (1) models of bounded reasoning, exemplified by level-$k$ models, which keep reasoning implicit, and (2) epistemic game theory, which makes reasoning explicit. We connect these approaches by "lifting" static complete-information games into incomplete-information settings where payoff types reflect players' reasoning depths as in level-$k$ models. We introduce downward rationalizability, defined via minimal belief restrictions capturing the basic idea common to level-$k$ models, to provide robust yet well-founded predictions in games where bounded reasoning matters. We then refine these belief restrictions to analyze the foundations of two seminal models of bounded reasoning: the classic level-$k$ model and the cognitive hierarchy model. Our findings shed light on the distinction between hard cognitive bounds on reasoning and beliefs about co-players' types. Furthermore, they offer insights into robustness issues relevant for market design. Thus, our approach unifies key level-$k$ models building on clear foundations of strategic reasoning stemming from epistemic game theory. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.19737 |