New Economics Papers
on Neuroeconomics
Issue of 2012‒04‒03
three papers chosen by

  1. Brain-Based Guided Experience Approach to Teaching Entrepreneurship Students the Practice of Innovation By Ronald Jean Degen
  2. What can the Big Five Personality Factors contribute to explain Small-Scale Economic Behavior? By Julia Muller; Christiane Schwieren
  3. Income Comparisons and Non-Cognitive Skills By Budría, Santiago; Ferrer-i-Carbonell, Ada

  1. By: Ronald Jean Degen (International School of Management Paris)
    Abstract: This paper presents a new approach to coaching entrepreneurship students to practice innovation and to identify adequate high-impact business opportunities. The coaching approach is based on the methodology for guided experience learning that was developed by Caine, Caine, McClintic, and Klimek (2009) in 12 Brain/Mind Learning Principles in Action, and on the innovation framework that was introduced by Verganti (2009) in Design-Driven Innovation. The cognitive perspective of creativity explained by Weisberg (2006) in his book Creativity is used to show how the practice of innovation can be learned. The model used for the creative process is based on Wallas? (1926) The Art of Thought, and on recent neurological findings on the deliberate and spontaneous pathways to creativity, that were described by Carson (2010) in Your Creative Brain. For the validation of radical innovations, the effectual process, described by Sarasvathy (2008) in Effectuation, is used.
    Keywords: brain-based guided experience, teaching entrepreneurship, practice of innovation, innovation framework, cognitive perspective of creativity, creativity process
    JEL: M0 M1
    Date: 2012–03–26
  2. By: Julia Muller (Erasmus University Rotterdam); Christiane Schwieren (University of Heidelberg)
    Abstract: Growing interest in using personality variables in economic research leads to the question whether personality as measured by psychology is useful to predict economic behavior. Is it reasonable to expect values on personality scales to be predictive of behavior in economic games? It is undoubted that personality can influence large-scale economic outcomes. Whether personality variables can also be used to understand micro-behavior in economic games is however less clear. We discuss reasons in favor and against this assumption and test in our own experiment, whether and which personality factors are useful in predicting behavior in the trust or investment game. We can also use the trust game to understand how personality measures fare relatively in predicting behavior when situational constraints vary in strength. This approach can help economists to better understand what to expect from the inclusion of personality variables in their models and experiments, and where further research might be useful and needed.
    Keywords: Personality; Big Five; Five Factor Model; Incentives; Experiment; Trust Game
    JEL: C72 C91 D03
    Date: 2012–03–26
  3. By: Budría, Santiago (University of Madeira); Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC))
    Abstract: People gain utility from occupying a higher ranked position in the income distribution of the reference group. This paper investigates whether these gains depend on an individual's set of non-cognitive skills. Using the 2000-2008 waves of the German Socioeconomic Panel dataset (SOEP), a subjective question on Life Satisfaction, and three different sets of non-cognitive skills indicators, we find significant and robust differences across skills groups. People who are more neurotic, extravert and have low external locus of control and low negative reciprocity are more sensitive to their individual position in the economic ladder. By contrast, the Life Satisfaction reaction to changes in economic status is significantly lower among individuals who score high (low) in negative (positive) reciprocity, and are at the bottom of the distribution of neuroticism, extraversion. The heterogeneity on the importance of income comparisons needs to be taken into account when, for example, introducing them into economic models, predicting individuals' behaviour, or making welfare judgments.
    Keywords: life satisfaction, income comparisons, personality traits
    JEL: D62 I31
    Date: 2012–03

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