nep-exp New Economics Papers
on Experimental Economics
Issue of 2008‒08‒21
three papers chosen by
Daniel Houser
George Mason University

  1. Risk Aversion and Physical Prowess: Prediction, Choice and Bias By Sheryl Ball; Catherine C. Eckel; Maria Heracleous
  2. An Investigation of Incongruency and Distraction Hypotheses: The Context of Dubbed TV Commercials By ; Sinha Piyush Kumar
  3. Event-related Potentials reveal differential Brain Regions implicated in Discounting in Two Tasks By Liam Delaney; Kevin Denny; Wen Zhang; Caroline Rawdon; Richard AP Roche

  1. By: Sheryl Ball; Catherine C. Eckel; Maria Heracleous
    Abstract: This paper reports on experiments where individuals are asked to make risky decisions for themselves as well as predicting the risky decisions of others. Prior research has generally shown that people expect women to be more risk averse than men and that they, in fact are - a result we also find. We ask whether this is a pure gender effect or whether there is more to this result. In particular, both evolutionary and economic theories suggest that physically stronger decision makers should make riskier decisions, suggesting physical prowess as an underlying cause of gender differences. These experiments explore whether risk aversion is associated with a number of measures of real and perceived physical prowess. We find that forecasters consistently predict the types of risky decision produced by both gender and physical prowess, but often at magnitudes that significantly exaggerate than actual differences. Sources of bias are also examined, showing that specific characteristics of the target and predictor lead to over-estimation or under-estimation of risk preferences.
    Keywords: Risk Aversion, Physical Risk, Experiment, Gender, Stereotyping
    Date: 2008
  2. By: ; Sinha Piyush Kumar
    Abstract: When one looks at the Television commercials scene in India, one easily sees three distinct patterns of communication. One is the nation-wide campaigns that are language neutral, meaning, they are purely music based. The other kind is a pure regional communications, with regional content starting from the language to the props used. The third variety is more like the ‘transition-ads’ that are between a pure nation-wide and a pure regional communication. These are basically nation-wide commercials dubbed in the regional languages, while not changing any part of the visual: thus they are ‘national’ with their visuals and regional with their sound track. The current study seeks to understand the effectiveness of such dubbed advertisements. Here incongruency and distraction hypotheses are investigated through two experiments. A social message against the use of cell-phones is used with students as target audience. The results of the first experiment while indicates distraction effects, the ANOVA tests have a very low power. The second experiment apart from repeating the first experiment with a little larger sample also looks at amount of counterarguments in the treatment conditions. The results of the second study do not validate any of the hypotheses. However the recall results are intriguing. Divided attention and incongruency are found to be two competing theories in explaining the recall effects of dubbed advertisements.
    Date: 2008–08–15
  3. By: Liam Delaney (University College of Dublin); Kevin Denny (University College of Dublin); Wen Zhang (University College of Dublin); Caroline Rawdon (National University of Ireland); Richard AP Roche (National University of Ireland)
    Abstract: The way people make decisions about future benefits – termed discounting - has important implications for both financial planning and health behaviour. Several theories assume that, when delaying gratification, the lower weight given to future benefits (the discount rate) declines exponentially. However there is considerable evidence that it declines hyperbolically with the rate of discount being proportionate to the delay distance. There is relatively little evidence as to whether neural areas mediating time- dependent discounting processes differ according to the nature of the task. The present study investigates the potential neurological mechanisms underpinning domain-specific discounting processes. We present high-density event-related potentials (ERPs) data from a task in which participants were asked to make decisions about financial rewards or their health over short and long time-horizons. Participants (n=17) made a button-press response to their preference for an immediate or delayed gain (in the case of finance) or loss (in the case of health), with the discrepancy in the size of benefits/losses varying between alternatives. Waveform components elicited during the task were similar for both domains and included posterior N1, frontal P2 and posterior P3 components. We provide source dipole evidence that differential brain activation does occur across domains with results suggesting the possible involvement of the right cingulate gyrus and left claustrum for the health domain and the left medial and right superior frontal gyri for the finance domain. However, little evidence for differential activation across time horizons is found.
    Keywords: Decision Making, Domain-Specific Discounting, Event-Related Potentials
    Date: 2008–04–21

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