New Economics Papers
on Neuroeconomics
Issue of 2010‒06‒04
three papers chosen by

  1. Dopamine and Risk Preferences in Different Domains By Dreber, Anna; Rand, David G.; Garcia, Justin R.; Wernerfelt, Nils; Lum, J. Koji; Zeckhauser, Richard
  2. Testosterone, Facial Symmetry and Cooperation in the Prisoners’ Dilemma By Santiago Sanchez-Pages; Enrique Turiegano
  3. On the Heritability of Choice, Judgment, and "Irrationality": Genetic Effects on Prudence and Constructive Predispositions By Simonson, Itamar; Sela, Aner

  1. By: Dreber, Anna (Harvard U); Rand, David G. (Harvard U); Garcia, Justin R. (Binghamton U, SUNY); Wernerfelt, Nils (Harvard U); Lum, J. Koji (Binghamton U, SUNY); Zeckhauser, Richard (Harvard U)
    Abstract: Individuals differ significantly in their willingness to take risks. Such differences may stem, at least in part, from individual biological (genetic) differences. We explore how risk-taking behavior varies with different versions of the dopamine receptor D4 gene (DRD4), which has been implicated in previous studies of risk taking. We investigate risk taking in three contexts: economic risk taking as proxied by a financial gamble, self-reported general risk taking, and self-reported behavior in risk-related activities. Our participants are serious tournament bridge players with substantial experience in risk taking. Presumably, this sample is much less varied in its environment than a random sample of the population, making genetic-related differences easier to detect. A prior study (Dreber et al. 2010) looked at risk taking by these individuals in their bridge decisions. We examine their risk decisions in other contexts. We find evidence that individuals with a 7-repeat allele (7R+) of the DRD4 genetic polymorphism take significantly more economic risk in an investment game than individuals without this allele (7R-). Interestingly, this positive relationship is driven by the men in our study, while the women show a negative but non-significant result. Even though the number of 7R+ women in our sample is low, our results may indicate a gender difference in how the 7R+ genotype affects behavior, a possibility that merits further study. Considering other risk measures, we find no difference between 7R+ and 7R- individuals in general risk taking or any of the risk-related activities. Overall, our results indicate that the dopamine system plays an important role in explaining individual differences in economic risk taking in men, but not necessarily in other activities involving risk.
    JEL: C91 C93 D81 D87 G00
    Date: 2010–04
  2. By: Santiago Sanchez-Pages; Enrique Turiegano
    Abstract: Recent research has analyzed how individual characteristics, like the exposure to different hormones and symmetry, affect decision-making and strategic behaviour. The present article investigates the effect of symmetry, of exposure to testosterone (T) in utero and during puberty and of current T on cooperation in a Prisoners’ Dilemma Game (PDG). T is a hormone with well known effect on males’ behaviour, and that promotes activities that seek to increase reproductive success. Fluctuating Asymmetry (FA) reflects the ability of the organism to maintain a stable development and it is usually employed as a variable reflecting genetic quality (low FA values are thought to signal higher genetic quality). Our results show that subjects with intermediate levels of second to fourth digit ratio (a proxy of exposure to T in utero) and with high FA cooperate more often in the PDG. We also observe that the latter effect is due to the fact that FA has an impact on subjects’ expectations about the behaviour of their counterpart in the game. These results reinforce the described link between markers related to genetic quality and cooperative behaviour. This possible linkage of individual condition and pro-social behaviour in humans clearly merits further attention.
    Keywords: Testosterone, Cooperation, Prisoners’ dilemma, Fluctuating asymmetry, Facial masculinity, 2D:4D.
    Date: 2009–11
  3. By: Simonson, Itamar (Stanford University); Sela, Aner (Stanford University)
    Abstract: Despite the very long history of research on heritable traits, we still know very little about genetic effects on judgment and choice, including consumer decision making. Building on recent advances in epigenetics, we hypothesize that people inherit a general prudence tendency, which affects their predisposition to choose options that vary on the prudence dimension. We use a classic twins study design whereby greater similarity between monozygotic twins than between dizygotic twins indicates a heritable trait. Unlike most prior studies that have focused on one or few characteristics, our study examines a broad range of judgment and choice phenomena simultaneously in order to gain insights into heritable tendencies (representing individual differences) and nonheritable tendencies. Consistent with our "prudence hypothesis," we find a significant heritable effect on (a) preferences for compromise (but not perceptually dominating) options, (b) choosing a sure gain over a gamble, (c) preferences for a feasible though dull assignment (in the near distance), (d) maximizing (versus satisficing), and (e) preferences for utilitarian (versus hedonic) options. Conversely, non-prudence problems (e.g., relating to discounting, highlighting, variety) as well as judgment heuristics (availability, representativeness, anchoring) do not appear to reflect heritable individual differences. We discuss the implications of our research with respect to the determinants of preferences, the interpretation of rationality and of BDT effects, the notion of constructive predispositions, and directions for future research regarding the role of genetics in decision making.
    Date: 2009–07

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