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on Neuroeconomics |
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Issue of 2012‒01‒03
four papers chosen by |
| By: | Ulrich Witt; Martin Binder |
| Abstract: | Although decision makers are often reported to have difficulties in making comparisons between multi-dimensional decision outcomes, economic theory assumes a uni-dimensional utility measure. This paper reviews evidence from behavioral and brain sciences to assess whether, and for what reasons, this assumption may be warranted. It is claimed that the decision makers' difficulties can be explained once the motivational aspects of utility ("wanting") are disentangled from the experiential ones ("liking") and the features of the different psychological processes involved are recognized. |
| Keywords: | utility, neuroeconomics, index number problem, wanting, liking, affective, forecasting |
| JEL: | D87 B41 B12 |
| Date: | 2011–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2011-20&r=neu |
| By: | Dessí, Roberta; Zhao, Xiaojian |
| Abstract: | Evidence from psychology suggests that overconfidence is more important in North America than in Japan. The pattern is reversed for shame, an emotion that appears to play a more important role among Japanese than North Americans. We develop a model that endogenizes these differences, building on a tradeoff between the benefits of encouraging self-improvement and the benefits of promoting initiative and new investments. Overconfidence and high sensitivity to shame emerge as substitute mechanisms to induce efficient decisions. We identify the key equilibrium costs as well as benefits of reliance on each mechanism, and the implications for welfare. |
| Keywords: | cultural transmission; overconfidence; shame |
| JEL: | D82 D83 Z13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8722&r=neu |
| By: | Cobb-Clark, Deborah; Schurer, Stefanie |
| Abstract: | We use a large, nationally-representative sample of working-age adults to demonstrate that personality (as measured by the Big Five) is stable over a four-year period. Average personality changes are small and do not vary substantially across age groups. Intra-individual personality change is generally unrelated to experiencing adverse life events and is unlikely to be economically meaningful. Like other non-cognitive traits, personality can be modeled as a stable input into many economic decisions. |
| Keywords: | non-cognitive skills, Big-Five personality traits, stability, wages, |
| Date: | 2011–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwecf:1834&r=neu |
| By: | Outes, Ingo (Oxford University); Porter, Catherine (Oxford University); Sanchez, Alan (Central Bank of Peru; Oxford University); Escobal, Javier (Grupo de Análisis para el Desarrollo) |
| Abstract: | An extensive literature documents linkages between early nutritional deficiencies and reduced cognitive ability, educational attainment and, ultimately, lower labor market performance. Few of these studies, however, have shown these correlations to be genuinely causal. We reexamine the nutrition and cognition link, applying instrumental variable methods to a sibling-difference specification for a sample of Peruvian pre-school children. We use household shocks and food price changes as instruments. As such our analysis also quantifies the nutritional and cognitive costs of the 2006-08 global food price crisis. We find that there are significant and negative cognitive effects of early childhood nutritional disinvestments: a decrease in Height-for-Age z-score leads to a reduction in the Peabody Picture Vocabulary Test score of 17-21 percent. The accumulated deficits are sizeable considering that these children are only 3-6 years old and are yet to enroll in formal schooling, with deficits likely to widen in later years. |
| Keywords: | Health, Nutrition, Cognitive Development, Children, Peru |
| JEL: | I12 I20 J13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:rbp:wpaper:2011-017&r=neu |