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on Evolutionary Economics |
| By: | Nguyen, Quang (Nanyang Technological University, Singapore); Villeval, Marie Claire (CNRS, GATE); Xu, Hui (CNRS, GATE) |
| Abstract: | We study the influence of risk and time preferences on trust and trustworthiness by conducting a field experiment in Vietnamese villages and by estimating the parameters of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences. We find that while probability sensitivity or risk aversion do not affect trust, loss aversion influences trust indirectly by lowering the expectations of return. Also, more risk averse and less present biased participants are found to be trustworthier. The experience of receiving remittances influences behavior and a longer exposure to a collectivist economy tend to reduce trust and trustworthiness. |
| Keywords: | trust, trustworthiness, risk preferences, time preferences, Cumulative Prospect Theory, Vietnam, field experiment |
| JEL: | C91 C93 D81 D90 O10 O53 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6851&r=evo |
| By: | Sacha Bourgeois-Gironde (IJN - Institut Jean-Nicod - CNRS : UMR8129 - Ecole Normale Supérieure de Paris - ENS Paris - Ecole des Hautes Etudes en Sciences Sociales (EHESS), LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442); Anne Corcos François Pannequin (LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442) |
| Abstract: | In this article, we focus on two types of "aversion" which we deem essential aspects of the notion of trust: betrayal aversion (social) and ambiguity aversion (a special case of aversion to uncertainty). Based on trust-games studies in experimental economics and neuroeconomics, our main goal is to assess the conceptual, behavioral and neurobiological connections between betrayal and ambiguity aversions. From a social and individual psychological point of view the bottom line of our trusting behavior could be our general aversion to ambiguous signals. We approach social trust in the terms of a phenomenon based on uncertainty aversion.Specifically, a reduction of the perceived uncertainty of a social interaction tends to build up a trusting climate conducive to trade by decreasing betrayal aversion.We hypothesize that betrayal aversion and ambiguity aversion bear such a negative correlation. Focusing on this potential negative correlation our approach clearly differs from more positive accounts of trust centred on altruism. |
| Keywords: | trust game - betrayal aversion - ambiguity aversion - neuroeconomics |
| Date: | 2012–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:ijn_00734564&r=evo |
| By: | D Nosenzo (School of Economics, the University of Nottingham); Jon Anderson (Division of Science and Mathematics, University of Minnesota); Stephen V Burks (Division of Social Science, University of Minnesota); Jeffrey Carpenter (Department of Economics, Middlebury College); Lorenz Gotte (Faculty of Business and Economics, University of Lausanne); Karsten Maurer (Department of Statistics, Iowa State University); Ruth Potter (Division of Social Science, University of Minnesota); Kim Rocha (Division of Social Science, University of Minnesota); Aldo Rustichini (Department of Economics, University of Minnesota) |
| Abstract: | We measure the other-regarding behavior in samples from three related populations in the upper Midwest of the United States: college students, non-student adults from the community surrounding the college, and adult trainee truckers in a residential training program. The use of typical experimental economics recruitment procedures made the first two groups substantially self-selected. Because the context reduced the opportunity cost of participating dramatically, 91% of the adult trainees solicited participated, leaving little scope for self-selection in this sample. We find no differences in the elicited other-regarding preferences between the selfselected adults and the adult trainees, suggesting that selection is unlikely to bias inferences about the prevalence of other-regarding preferences among non-student adult subjects. Our data also reject the more specific hypothesis that approval-seeking subjects are the ones most likely to select into experiments. Finally, we observe a large difference between self-selected college students and self-selected adults: the students appear considerably less pro-social. |
| Keywords: | methodology; selection bias; laboratory experiment; field experiment; other regarding behavior, social preferences, prisoner's dilemma, truckload, trucker. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2012-14&r=evo |
| By: | Bernd Irlenbusch (University of Cologne); Janna Ter Meer (University of Cologne) |
| Abstract: | Our study takes an individual perspective on receiver credulity in a public good setting with deceptive messages. In a laboratory experiment, subjects play a public good game with punishment in which feedback on actual contributions is obscured. Instead, subjects can communicate what they have contributed through a post-hoc announcement mechanism. Using subject’s social value orientation, we show that those highest on the measure are too optimistic towards announcements of their fellow group members. This, in turn, influences payoff-relevant decisions: those high on social value orientation contribute more to the public good and punish their fellow group members less. |
| Keywords: | public goods, punishment, lying, receiver credulity |
| JEL: | C92 D03 H41 D02 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:cgr:cgsser:03-11&r=evo |
| By: | Kocher, Martin G.; Poulsen, Odile; Zizzo, Daniel J. |
| Abstract: | We assess the extent of preferences for employment in a collective wage bargaining situation with heterogeneous workers. We vary the size of the union and introduce a treatment mechanism transforming the voting game into an individual allocation task. Our results show that highly productive workers do not take employment of low productive workers into account when making wage proposals, regardless of whether insiders determine the wage or all workers. The level of pro-social preferences is small in the voting game, while it increases as the game is transformed into an individual allocation task. We interpret this as an accountability effect. |
| Keywords: | social preferences; wage bargaining; accountability; collective decision making |
| JEL: | C91 C92 D71 J51 J52 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:14039&r=evo |
| By: | Slonim, Robert (University of Sydney); Wang, Carmen (University of Sydney); Garbarino, Ellen (University of Sydney); Merrett, Danielle (University of Sydney) |
| Abstract: | Assuming individuals rationally decide whether to participate or not to participate in lab experiments, we hypothesize several non-representative biases in the characteristics of lab participants. We test the hypotheses by first collecting survey and experimental data on a typical recruitment population and then inviting them to participate in a lab experiment. The results indicate that lab participants are not representative of the target population on almost all the hypothesized characteristics, including having lower income, working fewer hours, volunteering more often, and exhibiting behaviors correlated with interest in experiments and economics. We discuss the implications and various methods for addressing non-representative biases. |
| Keywords: | participation bias, laboratory experiments |
| JEL: | C9 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6865&r=evo |
| By: | Joaquin Gomez-Minambres (Economic Science Institute, Chapman University); Eric Schniter (Economic Science Institute, Chapman University) |
| Abstract: | We study a dynamic model of self-control where the history of one's decisions (understood as emotions) has influence on subsequent decision making. We propose that effort and regret are emotions produced by previous decisions to either resist or yield to temptation, respectively. When recalled, these emotions affect an individual's preferences, in turn affecting self-control decision at a particular point in time. Our model provides a unified explanation for several empirical regularities puzzling economists and cognitive scientists. We explain non-stationary consumption paths characterized by compensatory indulgence and restraint cycles, why the amplitude of consumption cycles increases with foresight and decreases with emotional memory, and, finally, we show how unavoidable options that might show up on one's menu influence choices, consequent emotions, consumption paths, and preferences for commitment. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:12-20&r=evo |
| By: | Sturgis, Patrick; Patulny, Roger; Allum, Nick; Buscha, Franz |
| Abstract: | Social, or generalized, trust refers to beliefs that people hold about how other people in society will in general act towards them. Can people in general be trusted? Or must one be careful in dealing with people? Research on the antecedents of social trust has typically relied on cross-sectional regression estimators to evaluate putative causes. Our contention is that much of this research over-estimates the importance of many of these causes because of the failure to account for unmeasured confounding influences. In this paper we use longitudinal data assess the causal status of a particularly prominent mooted cause of trust: the degree to which individuals are socially integrated via formal membership of civic organisations and through friendship networks. We fit a range of regression estimators to repeated measures data from the UK for the period 1998 to 2008. Our results show little support for the widely held view that social trust results from integration within social networks, of either a formal or an informal nature. |
| Date: | 2012–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2012-19&r=evo |
| By: | Sacha Bourgeois-Gironde (IJN - Institut Jean-Nicod - CNRS : UMR8129 - Ecole Normale Supérieure de Paris - ENS Paris - Ecole des Hautes Etudes en Sciences Sociales (EHESS), LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442) |
| Abstract: | The aim of this paper is to assess the relevance of methodological transfers from behavioral ecology to experimental economics with respect to the elicitation of intertemporal preferences. More precisely our discussion will stem from the analysis of Stephens and Anderson's (2001) seminal article. In their study with blue jays they document that foraging behavior typically implements short-sighted choice rules which are beneficial in the long run. Such long-term profitability of short-sighted behavior cannot be evidenced when using a self-control paradigm (one which contrasts in a binary way sooner smaller and later larger payoffs) but becomes apparent when ecological patch-paradigms (replicating economic situations in which the main trade-off consists in staying on a food patch or leaving for another patch) are implemented. We transfer this methodology in view of contrasting foraging strategies and self-control in human intertemporal choices. |
| Keywords: | behavioral ecology, intertemporal choice, myopia, patch-paradigms, self-control |
| Date: | 2012–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:ijn_00734565&r=evo |
| By: | Sacha Bourgeois-Gironde (IJN - Institut Jean-Nicod - CNRS : UMR8129 - Ecole Normale Supérieure de Paris - ENS Paris - Ecole des Hautes Etudes en Sciences Sociales (EHESS), LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442); Anne Corcos (LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442); François Pannequin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan) |
| Abstract: | According to an early approach, the decision to trust in the one-shot anonymous trust game is intuitively tantamount to a risky decision: the willingness to bet on the reciprocation of my investment. In a seminal study, Eckel and Wilson (2004) explored the correlation between risk attitudes (as elicited through a Holt and Laury mechanism) and the behavior of investors in the trust game. They found no correlation: trust decision cannot be viewed as a risky decision. However, since the probabilities of possible returns are unknown, we argue that trust behavior may correlate more specifically with ambiguity aversion rather than with risk aversion. We therefore modified Eckel and Wilson's experimental procedure in order to investigate the question as to whether trust is an ambiguous decision. We extended Holt and Laury switching-point elicitation mechanism between risky lotteries to ambiguous lotteries as Chrakravarty and Roy (2009) did. We then ran an experimental session including a standard one shot anonymous trust game (OSG). We found significant negative correlations between aversion to ambiguity and behavior in OSG. This result is a plea in favor of a decision-theoretical analogy between choices in ambiguous lotteries and trust-games. |
| Keywords: | trust, risk aversion, ambiguity |
| Date: | 2012–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:ijn_00734563&r=evo |
| By: | Liebenehm, Sabine; Waibel, Hermann |
| Abstract: | This study investigates risk and time preferences of small-holder cattle farmers in West Africa. We apply a discounted utility model and jointly estimate a prospect theory-based utility function and a quasi-hyperbolic discounting function using a maximum likelihood method. Results show that West African farmers are less loss-averse and are more patient than suggested by comparable studies in Asian developing countries. The main factors influencing farmers' risk and time preferences are cattle herd size and net revenue from sales of cattle products. |
| Keywords: | experiments, prospect theory, risk preference, time preference, West Africa |
| JEL: | D81 C61 C93 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-501&r=evo |
| By: | Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Pham-Khanh, Nam (Department of Economics, School of Business, Economics and Law, Göteborg University); Villegas-Palacio, Clara (Dept of Geosciences and Environment,) |
| Abstract: | Understanding the motivations behind people’s voluntary contributions to public goods is crucial for the broader issues of economic and social development. By using the experimental design of Fischbacher et al. (2001), we investigate the distribution of contribution types in two developing countries with very high collectivism rating – Colombia and Vietnam – and compare our findings with those previously found in developed countries. We also investigate the effect of introducing disclosure of contribution on the distribution of contribution types and on the contribution itself. Overall, our experiments show that the distribution of contribution types remains unaffected by the disclosure of contributions and, on average, is similar both in the two countries and when compared with previous findings with the exception of proportion of free-riders.<p> |
| Keywords: | Conditional cooperation; Disclosure; Experiment; Public Goods. |
| JEL: | C72 C92 H41 |
| Date: | 2012–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0541&r=evo |
| By: | Anna Aizer; Laura Stroud; Stephen Buka |
| Abstract: | We study how maternal stress affects offspring outcomes. We find that in-utero exposure to elevated levels of the stress hormone cortisol negatively affects offspring cognition, health and educational attainment. These findings are based on comparisons between siblings which limits variation to short-lived shocks and controls for unobserved differences between mothers that could bias estimates. Our results are consistent with recent experimental results in the neurobiological literature linking exogenous exposure to stress hormones in-utero with declines in offspring cognitive, behavioral and motor development. Moreover, we find that not only are mothers with low levels of human capital characterized by higher and more variable cortisol levels, but that the negative impact of elevated cortisol is greater for them. These results suggest that prenatal stress may play a role in the intergenerational persistence of poverty. |
| JEL: | I12 I14 I24 J24 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18422&r=evo |
| By: | Schade, Christian; Snir, Avichai |
| Abstract: | Business-owners often postpone disinvestment decisions even when future profits are not expected to compensate for current losses. We use an experiment to study one possible behavioral motivation. Studies in psychology suggest that making decisions is stressful and, consequently, many people prefer to buck-pass their decisions to someone else or to postpone them to future periods. Other people, however, are vigilant subjects that are able to make efficient decisions. In our experiment, we measure subjects’ buck-passing, vigilance and risk-aversion traits and study their performance in games in which they have to make investment and disinvestment decisions. We find that the number of rounds most subjects play is greater than the number expected by real-option theory but that vigilant and risk-averse subjects tend to make decisions that are more efficient than all other subjects, that vigilant but not risk-averse subjects tend to shirk making the investment decisions and that buck-passing and not risk-averse subjects tend to postpone their disinvestment decisions even when they make losses that would have induced most other subjects to disinvest. Unternehmer sind dafür bekannt, Desinvestitionsentscheidungen zu verschieben, auch wenn die Erwartung über zukünftige Gewinne nicht ausreicht, um die derzeitigen Verluste zu kompensieren. Wir führen eine experimentelle Studie durch, um einen möglichen Treiber dieses Verhaltens besser zu verstehen. Psychologische Studien zeigen, dass das Treffen von Entscheidungen mit Stress verbunden sein kann, und dass viele Menschen daher eine Neigung haben, entweder andere ihre Entscheidungen treffen zu lassen oder diese auf zukünftige Perioden zu verschieben. Andere Personen sind dagegen wachsam und dazu in der Lage, effizient zu entscheiden. In unserem Experiment messen wir die Tendenz von Personen, ihre Entscheidungen zu verschieben bzw. wachsam zu sein sowie deren Risikobereitschaft und beobachten, wie gut diese in Spielen abschneiden, in denen sie Investitions- und Desinvestitionsentscheidungen treffen müssen. Unsere Ergebnisse zeigen, dass die meisten Personen mehr Runden spielen, als dies auf Basis der Realoptionstheorie erklärt werden kann, dass aber zugleich wachsame und risikoaverse Personen Entscheidungen treffen, die näher an eine effiziente Entscheidung herankommen als die anderer Personen. Wir zeigen weiterhin, dass wachsame, aber nicht risikoaverse Personen dazu neigen, die Investitionsentscheidung gar nicht erst zu treffen (d.h., die Teilnahme an dem Spiel zu vermeiden), und dass verschiebende und nicht risikoaverse Personen dazu neigen, ihre Desinvestitionsentscheidungen auch dann spät zu treffen, wenn sie Verluste machen, bei denen andere längst mit dem Spiel aufgehört hätten. |
| Keywords: | buck-passing, conflict theory of decision making, disinvestment decisions, economic experiment, optimal stopping, player types, risk aversion, vigilance, Buck-passing (Entscheidungsverschiebungsneigung), Konflikttheorie der Entscheidung, Desinvestitionsentscheidungen, ökonomisches Experiment, optimal stopping, Spielertypen, Risikoneigung, Vigilance (Wachsamkeit), Agribusiness, Agricultural and Food Policy, Farm Management, Labor and Human Capital, Risk and Uncertainty, D03, D81, L26, |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:huscpw:134426&r=evo |
| By: | Bin Xu; Zhijian Wang |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000577&r=evo |
| By: | Knutsson, Mikael (Dept of Psychology, University of Gothenburg); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Wollbrant, Conny (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | We use a natural field experiment to investigate the hypothesis that generosity is partly involuntary, by examining whether individuals tend to avoid opportunities to act generously. In Sweden, new recycling machines for bottles and cans with an option of donating the returned deposit to charity were gradually introduced in one of the largest store chains. We find a substantial decline in recycling the month these new machines were introduced and a further decline in the following months. These results indicate that individuals avoid opportunities to act generously and corroborate findings from both lab and field studies supporting the claim that generous behavior is partly involuntary |
| Keywords: | Generosity; Donations; Natural field experiment; Avoidance behavior |
| JEL: | C93 D01 D03 D64 |
| Date: | 2012–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0542&r=evo |