New Economics Papers
on Neuroeconomics
Issue of 2010‒10‒30
five papers chosen by

  1. Gains and Losses: A Common Neural Network for Economic Behaviour By Valeria Faralla; Francesca Benuzzi; Fausta Lui; Patrizia Baraldi; Paolo Nichelli; Nicola Dimitri
  2. Neuroeconomics: Constructing Identity By Davis, John B
  3. Attention, Memory, and Evaluation of Schema Incongruent Brand Messages. An Empirical Study By Georgios Halkias; Flora Kokkinaki
  4. The Role of Impulses in Shaping Decisions By Judith Avrahami; Yaakov Kareev
  5. Other-regarding behaviour: Testing guilt- and reciprocity-based models By Tobias Regner; Nicole S. Harth

  1. By: Valeria Faralla; Francesca Benuzzi; Fausta Lui; Patrizia Baraldi; Paolo Nichelli; Nicola Dimitri
    Abstract: Event-related functional magnetic resonance imaging was used to investigate the neural mechanisms underlying intertemporal preference for symmetric gains and losses in certain conditions, by asking subjects to choose between two gains or two losses available at different points in time. Our data suggest that a common system is activated when an immediate reward/punishment is available, irrespectively of the impulsive /reflective behaviour performed by the individual.
    Keywords: intertemporal preferences; gains; losses; certainty; intertemporal preferences, gains, losses, certainty; sign effect; functional magnetic resonance imaging; decision-making .
    JEL: D87 D90 D91
    Date: 2010–09
  2. By: Davis, John B (Department of Economics Marquette University)
    Abstract: This paper asks whether neuroeconomics will make instrumental use of neuroscience to adjudicate existing disputes in economics or be more seriously informed by neuroscience in ways that might transform economics. The paper pursues the question by asking how neuroscience constructs an understanding of individuals as whole persons. The body of the paper is devoted to examining two approaches: Don Ross’s neurocellular approach to neuroeconomics and Joseph Dumit’s cultural anthropological science organization approach. The accounts are used to identify boundaries on single individual explanations. With that space Andy Clark’s external scaffolding view and Nathaniel Wilcox’s socially distributed cognition view are employed.
    Keywords: neuroeconomics, behavioral economics, neurocellular economics, collective brainset, external scaffolding, socially distributed cognition, Economics
    JEL: A12 B41
    Date: 2010–09
  3. By: Georgios Halkias; Flora Kokkinaki
    Abstract: A widely held conception in the marketing literature is to develop consistency and relevancy when communicating brand meaning to consumers. The underlying idea behind traditional theories of persuasive communication suggests that matching the message to consumers’ perceptions and experiences increases the effectiveness of communication. Based on the implications of schema theory in cognitive psychology, the present research challenges the above hypothesis and proposes that moderately incongruent brand messages may lead to more favorable results. An empirical study was conducted that investigated consumers’ cognitive and affective responses to advertising information that varied in terms of incongruity (i.e., congruent, moderately incongruent, and extremely incongruent) with their existing brand schemata. As predicted, the results supported a non-monotonic, inverted-U relationship across the degree of incongruity. Advertisements featuring moderately incongruent brand information resulted in more ad processing, better recall and recognition memory, as well as more favorable ad and brand attitude, compared to congruent and extremely incongruent advertisements. The practical implications and the theoretical relevance of these findings for future consumer research are discussed.
    Keywords: Schema incongruent brand messages.
    JEL: D90
    Date: 2010–09
  4. By: Judith Avrahami; Yaakov Kareev
    Abstract: This article explores the extent to which decision behavior is shaped by short-lived reactions to the outcome of the most recent decision. We inspected repeated decision-making behavior in two versions of each of two decision-making tasks, an individual task and a strategic one. By regressing behavior onto the outcomes of recent decisions, we found that the upcoming decision was well predicted by the most recent outcome alone, with the tendency to repeat a previous action being affected both by its actual outcome and by the outcomes of actions not taken. Because the goodness of predictions based on the most recent outcome did not diminish as participants gained experience with the task, we conclude that repeated decisions are continuously affected by impulsive reactions.
    Date: 2010–05
  5. By: Tobias Regner (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Nicole S. Harth (International Graduate College, Friedrich Schiller University, Jena)
    Abstract: Intentions-based models of social preferences use the framework of psychological games and incorporate higher order beliefs and actions into the utility function. We test the robustness of two types of intentions-based models (guilt aversion and reciprocity). In addition to incentivised elicitation of first- and second-order action beliefs, we assess participants' sensitivity to feel guilt, and their attitude towards acting reciprocal. The data confirm the predictions of intentions-based models. Both second-order beliefs and the weighting factor that depends on a participant's sensitivity to guilt/reciprocity are relevant for the decisions taken. Second-order beliefs appear to have an inverse U-shaped effect on the amount returned.
    Keywords: social preferences, other-regarding behaviour, experiments, trust game, guilt aversion, beliefs, psychological game theory, emotions
    JEL: C91 D84
    Date: 2010–10–20

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