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on Neuroeconomics |
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Issue of 2012‒06‒05
three papers chosen by |
| By: | de Magistris, Tiziana; Gracia, Azucena; Nayga, Rodolfo M., Jr. |
| Abstract: | We test whether the use of an honesty priming task from the social psychology literature can help mitigate hypothetical bias in stated preference choice experiments (CE). Using a between-sample design, we conducted experiments with five treatments: (1) hypothetical CE without cognitive task, (2) hypothetical CE with cheap talk script, (3) hypothetical CE with neutral priming task, (4) hypothetical CE with honesty priming task, and (5) non-hypothetical CE. Results generally suggest that marginal willingness to pay estimates from treatment 4 where subjects are given honesty priming task before the choice experiment are not statistically different from marginal valuations from treatment 5 where subjects are in a non-hypothetical choice experiment. Values from both these treatments are significantly lower than those from other three hypothetical treatments (treatments 1-3). Using hold out tasks, our results also suggest that one could get higher percentage of correct predictions of participants’ choices in treatments 4 and 5 than in treatments 1-3 and that there is no significant difference in percentage of correct predictions between treatments 4 and 5. |
| Keywords: | hypothetical bias, cheap talk, priming, Willingness-to-pay, Marketing, Research Methods/ Statistical Methods, C23, D12, Q18, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:123639&r=neu |
| By: | LAAJAJ, RACHID |
| Abstract: | This paper analyzes the impact of economic prospects on one’s time preference. Research in psychol- ogy has shown how individuals modify their preferences in order to reduce their cognitive dissonance, which is the uncomfortable tension felt when simultaneously holding conflicting thoughts. It occurs among the poor when simultaneously caring about their future welfare while having gloomy economic prospects. Hence closing their eyes on the future can reduce their psychological distress at the cost of worsening their future economic wellbeing. This paper offers a new theoretical approach that decom- poses time discounting and analyzes the endogenous determination of one’s time horizon. The model predicts that, below a certain wealth, the time horizon of an individual is decreasing in poverty, result- ing in a behavioral poverty trap. The prediction is tested using data from a randomized experiment in Mozambique, which confirms that the beneficiaries of an agro-input subsidy and a matched savings intervention increased their planning horizon as a result of their improved economic prospects. |
| Keywords: | Endogenous time preference, cognitive dissonance, time horizon, Community/Rural/Urban Development, Consumer/Household Economics, Institutional and Behavioral Economics, D91, O12, Q12, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:123933&r=neu |
| By: | Thunström, Linda; Nordström, Jonas; Shogren, Jason F.; Ehmke, Mariah |
| Abstract: | This paper analyzes if people use ignorance as an excuse to pursue immediate gratification, at the expense of future wellbeing, a behavior we label ‘strategic self-ignorance’. In a theoretical model we show that present-biased individuals benefit from choosing ignorance of the potentially negative impact of present consumption, and that ignorance leads to over consumption of harmful goods. In an experiment we empirically test for strategic self-ignorance. The experiment entails prepared meals, for which subjects may be familiar with the taste (immediate utility) but are uninformed of the calorie content (potential harm to future health). Subjects are offered costless information on the calorie content of the meal alternatives. A majority of subjects (58 percent) choose to remain ignorant of the calorie content, and ignorance leads to a significantly higher intake of calories. Our results imply that people are strategically self-ignorant and that such behavior may help explain over consumption of harmful goods. |
| Keywords: | strategic ignorance, harmful consumption, experiment, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:123949&r=neu |