|
on Neuroeconomics |
|
Issue of 2013‒04‒20
two papers chosen by |
| By: | Andersson, Ola (Research Institute of Industrial Economics (IFN)); Tyran, Jean-Robert (Department of Economics, University of Vienna); Wengström, Erik (Department of Economics, Lund University); Holm, Håkan J. (Department of Economics, Lund University) |
| Abstract: | Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making, rather than to risk preferences. |
| Keywords: | Risk preference; cognitive ability; experiment; noise |
| JEL: | C81 C91 D12 D81 |
| Date: | 2013–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_009&r=neu |
| By: | Bonnefon, Jean-François (CLLE); De Neys, Wim (Sorbonne, Universite Paris Descartes); Hopfensitz, Astrid (TSE) |
| Abstract: | Testosterone administration appears to make individuals less trusting, and this effect was interpreted as an adaptive adjustment of social suspicion, that improved the accuracy of trusting decisions. Here we consider another possibility, namely that testosterone increases the subjective cost of being duped, decreasing the propensity to trust without improving the accuracy of trusting decisions. In line with this hypothesis, we show that second-to-fourth digit ratio (2D:4D, a proxy for organising effects of testosterone in the foetus) correlates with the propensity to trust but not with the accuracy of trusting decisions. Trust game players (N=144) trusted less when they had lower 2D:4D (high prenatal testosterone), but their ability to detect the strategy of other players was constant (and better than chance) across all levels of digit ratio. Our results suggest that early prenatal organizing effects of testoterone in the foetus might impair rather than boost economic outcomes, by promoting indiscriminate social suspicion. |
| Keywords: | Trust – Digit Ratio – Testosterone – Strategy Detection – Betrayal Aversion |
| JEL: | C91 D03 D64 D87 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26982&r=neu |