nep-neu New Economics Papers
on Neuroeconomics
Issue of 2010‒07‒03
four papers chosen by
Daniel Houser
George Mason University

  1. Unraveling Fairness in Simple Games? The Role of Empathy and Theory of Mind By Florian Artinger; Fillipos Exadaktylos; Lauri Sääksvuori; Hannes Koppel
  2. Can subjective expectations data be used in choice models? Evidence on cognitive biases By Basit Zafar
  3. Research methodology in the congnitive style field: a review study in the area of business and management, 1988-2007 By Cools, E.; Armstrong, S. J.; Sadler-Smith, E.
  4. Environmental Decision Making and Behaviours: How to People Choose how to Travel to Work? By Arnold, S

  1. By: Florian Artinger (Max Planck Institute for Human Development, Berlin); Fillipos Exadaktylos (University of Granada); Lauri Sääksvuori (Max Planck Institute of Economics, Jena); Hannes Koppel (Max Planck Institute of Economics, Jena)
    Abstract: Economists have been theorizing that other-regarding preferences influence decision making. Yet, what are the corresponding psychological mechanisms that inform these preferences in laboratory games? Empathy and Theory of Mind (ToM) are dispositions considered to be essential in social interaction. We investigate the connection between an individual's preference type and her disposition to engage in empathy and ToM in neutrally framed Dictator and Ultimatum Game. For that purpose, cognitive and emotional psychometric scales are applied to infer the dispositions of each subject. We find that a disposition for empathy does not influence the behavior in the games. ToM positively correlates with offers in the Dictator Game. Integral to ToM are beliefs about others. Both, other-regarding and selfish types, show a strong correlation between what they belief others do and their own action. These results indicate that expectations about the prevalent social norm might be central in informing behavior in one-shot games.
    Keywords: Altruism, Inequality, Empathy, Theory of Mind, Behavioral Economics
    JEL: C91 C72 D01 D64
    Date: 2010–06–23
  2. By: Basit Zafar
    Abstract: A pervasive concern with the use of subjective data in choice models is that the data are biased and endogenous. This paper examines the extent to which cognitive biases plague subjective data, specifically addressing 1) whether cognitive dissonance affects the reporting of beliefs, and 2) whether individuals exert sufficient mental effort when probed about their subjective beliefs. For this purpose, I collect a unique panel data set of Northwestern University undergraduates that contains their subjective expectations about outcomes specific to different majors in their choice set. I do not find evidence of cognitive biases systematically affecting the reporting of beliefs: By analyzing patterns of belief updating, I can rule out cognitive dissonance being a serious concern in the current setting. Moreover, there seems to be no systematic (nonclassical) measurement error in the reporting of beliefs. In the reported beliefs for the various majors, I find no systematic patterns in mental recall of previous responses or in the extent of rounding. Comparison of subjective beliefs with objective measures suggests that students have well-formed expectations. Overall, the results paint a favorable picture for the use of subjective expectations data in choice models.
    Keywords: Bayesian statistical decision theory ; Human behavior ; Social choice ; Universities and colleges
    Date: 2010
  3. By: Cools, E.; Armstrong, S. J.; Sadler-Smith, E. (Vlerick Leuven Gent Management School)
    Abstract: This study provides insights into the methodological practices of the field of cognitive styles research over the past two decades and aims to shed light on possible gaps and avenues for future research. Based on a carefully designed selection process, 102 style-related articles within the field of business and management were included in our methodological review study, representing 175 different empirical studies. These studies were content-analysed using a coding scheme that contained the following dimensions: theoretical framework, research design, measurement, and data analytic approach. Our results indicated that research on cognitive styles predominantly takes place in North America (mainly US) and Europe (mainly UK), looking at the affiliations of the first authors and the nationality of the samples. International collaborative studies are scarce. Unsurprisingly, a wide diversity of cognitive style models and measures is used in these studies, although three theories (i.e., Cognitive Style Index, Kirton Adaption-Innovation Inventory, and Myers-Briggs Type Indicator) represent about 60 per cent of the applied frameworks. In terms of research methods, the field of cognitive styles research mainly uses quantitative, cross-sectional, and single-source designs and heavily relies on self-reports, sample surveys, and student samples. While these findings might indicate a potential vulnerability in terms of internal and external validity, we also found a rather strong emphasis on construct validity, exemplified in the fairly high attention for reliability, exploratory and confirmatory factor analyses. Consequently, we encourage cognitive style researchers to work on three particular issues to further enhance the rigour and relevance of the field: (1) triangulation by striving towards more diverse research designs and implementing more diverse ways of data collection; (2) collaboration by increasing both scholar-practitioner cooperation and the number of international collaborative studies; and (3) contextualisation by embodying the context as well as a time dimension in style research, by conducting more multi-sample and longitudinal studies, and by striving towards more purposeful sampling. Although we are convinced of the value of this first systematic methodological review study of the cognitive style field, future similar studies are necessary, extending the scope of the current study to other research domains, a broader time period, and unpublished research, to strengthen and cross-validate our findings.
    Keywords: Cognitive styles, methodological review, rigour versus relevance
    Date: 2010–06–23
  4. By: Arnold, S
    Abstract: The daily commute is an important element of transport and travel behaviour in the UK, and as such is relevant to discussions about the environment and sustainability, as well as social well-being. Economic research on the matter focuses on cost and structural factors, with preferences being given, whilst the psychological literature looks at how preferences are formed from attitudes and values, but tends to underplay the role of structural variables. This paper develops a simple structure of how attitudes, values and behaviours are linked, and tests them with multinomial and ordered regressions using data from Defra’s 2007 Survey of Attitudes and Behaviours in Relation to the Environment. The results found that attitudes towards cars and driving were a significant factor in transport choices, but environmental beliefs were only mildly significant, and only for some travel choices. Structural variables, here proxied by distance to work, were influential in most travel choices, as was age. Stated environmental behaviours however, were almost entirely insignificant. The results were robust, and suggest that policies aimed at structural or attitudinal change would be more effective than policies aimed at changing people’s environmental values.
    Date: 2010–06

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