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on Neuroeconomics |
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Issue of 2009‒07‒28
three papers chosen by |
| By: | Green, Kesten C.; Armstrong, J. Scott |
| Abstract: | Better forecasts of decisions in conflict situations, such as occur in business, politics, and war, can help protagonists achieve better outcomes. It is common advice to “stand in the other person’s shoes” when involved in a conflict, a procedure we refer to as “role thinking.” We tested this advice in order to assess the extent to which it can improve accuracy. Improvement in accuracy is important because prior research found that unaided judgment produced forecasts that were little better than guessing. We obtained 101 role-thinking forecasts from 27 Naval postgraduate students (experts) and 107 role-thinking forecasts from 103 second-year organizational behavior students (novices) of the decisions that would be made in nine diverse conflicts. The accuracy of the forecasts from the novices was 33% and of those from the experts 31%. The accuracy of the role-thinking forecasts was little different from chance, which was 28%. In contrast, when we asked groups of participants to each act as if they were in the shoes one of the protagonists, accuracy was 60%. |
| Keywords: | combining; group decision-making; simulated interaction; unaided judgment |
| JEL: | D81 C53 D7 Q34 F51 M51 |
| Date: | 2009–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16422&r=neu |
| By: | Jennifer M. Mellor (Department of Economics, College of William and Mary); Beth A. Freeborn (Department of Economics, College of William and Mary) |
| Abstract: | Previous studies have shown that adolescent religious participation is negatively associated with risky health behaviors like cigarette smoking, alcohol consumption, and illicit drug use. One explanation for these findings is that religion directly reduces risky behaviors because churches provide youths with moral guidance or with strong social networks that reinforce social norms. An alternative explanation is that both religious participation and risky health behaviors are driven by some common unobserved individual trait. We use data from the National Longitudinal Study of Adolescent Health and implement an instrumental variables approach to identify the effect of religious participation on smoking, binge drinking and marijuana use. Following Gruber (2005), we use a county-level measure of religious market density as an instrument. Religious market density has a strong positive association on adolescent religious participation, but not on secular measures of social capital. Upon accounting for unobserved heterogeneity, we find that religious participation continues to have a negative effect on illicit drug use. |
| Keywords: | Substance Abuse, Religion, Tobacco, Youth |
| JEL: | I1 Z12 |
| Date: | 2009–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:86&r=neu |
| By: | Musau, Andrew |
| Abstract: | One area that is often overlooked by economists and social scientists is discounting. Most economic models of intertemporal choice make use of Samuelson's (1937) DU model which leads to an exponential discount function. Divergences from what economic modelling predicts and empirical findings are on the most part attributed to factors other than the discount function employed. We review the literature on the DU model and identify its behavioral anomalies. We look into suggested quasi-hyperbolic and hyperbolic models that in part account for these anomalies. We analyze an infinite IPD game and demonstrate that under quasi-hyperbolic discounting, cooperation emerges as an SPE at a higher level of the discount factor. We further demonstrate that the unemployment equilibrium in the Shapiro & Stiglitz (1984) Shirking model is not static under both hyperbolic and quasi-hyperbolic discounting. |
| Keywords: | intertemporal; exponential; quasi-hyperbolic; hyperbolic. |
| JEL: | A10 |
| Date: | 2009–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16416&r=neu |