|
on Neuroeconomics |
|
Issue of 2014‒02‒02
seven papers chosen by |
| By: | Anger, Silke; Schnitzlein, Daniel D. |
| Abstract: | This paper estimates sibling correlations in cognitive skills and non-cognitive skills to evaluate the importance of family background for skill formation. The study is based on a large representative German dataset, which includes IQ test scores and measures of personality (locus of control, reciprocity, Big Five) for brothers and sisters. Using a Restricted Maximum Likelihood (REML) model we find substantial influences of family background on the skills of both brothers and sisters. Sibling correlations of personality traits range from 0.24 to 0.59, indicating that even for the lowest estimate, one fourth of the variance can be attributed to factors shared by siblings. With one exception, all calculated sibling correlations in cognitive skills are higher than 0.50, indicating that more than half of the inequality can be explained by family characteristics. Comparing these findings to the results in the intergenerational skill transmission literature suggests that intergenerational correlations are only able to capture parts of the influence of the family on children s cognitive and non-cognitive skills. This result is in line with findings in the literature on educational and income mobility. -- |
| JEL: | J24 J62 I00 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc13:80052&r=neu |
| By: | Salamanca N.; Fouarge D.; Montizaan R.M.; Grip A. de (GSBE) |
| Abstract: | Using representative household panel data, we show that the investment behavior of households is related to the economic locus of control of household heads. A households internal locus of control in economic issues is positively related to its decision to hold risky assets as well as its share of risky investments. We find evidence that these relations are due to a lower perception of the risk of investing in risky assets Those who have an internal economic locus of control perceive less variance in risky assets, which makes these assets more attractive. The relation between investmentin risky assets and locus of control cannot be explained by risk and time preferences or by personality traits such as optimism and the Big Five traits. Furthermore, the relation is independent of household socioeconomic background in terms of wealth or knowledge-- it holds for sophisticated and unsophisticated households alike. |
| Keywords: | Personal Finance; Household Behavior and Family Economics: Other; Portfolio Choice; Investment Decisions; |
| JEL: | G11 D14 D19 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2013052&r=neu |
| By: | Friehe, Tim (University of Bonn); Schildberg-Hörisch, Hannah (University of Bonn) |
| Abstract: | We explore the individual and joint explanatory power of concepts from economics, psychology, and criminology for criminal behavior. More precisely, we consider risk and time preferences, personality traits from psychology (Big Five and locus of control), and a self-control scale from criminology. We find that economic preferences, personality traits, and self-control complement each other in predicting criminal behavior. The most significant predictors stem from all three disciplines: risk aversion, conscientiousness, and high self-control make criminal behavior less likely. Our results illustrate that integrating concepts from various disciplines enhances our understanding of individual behavior. |
| Keywords: | crime, risk preferences, time preferences, personality traits, self-control, experiment |
| JEL: | K42 D03 D81 D90 C21 C91 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7894&r=neu |
| By: | Cicognani, Simona; Mittone, Luigi |
| Abstract: | This paper extends choice theory by allowing for the interaction between cognitive costs and social norms. The authors experimentally investigate the role of imitation and temporal decisional patterns when participants face a task which is costly in cognitive terms. They identify two main reasons for imitative behavior. First, individuals belonging to a community might want to conform to others to obey to social norms. Second, individuals might be boundedly rational and consider imitation as a decisional device when comparing alternatives is cognitively demanding. In order to empirically disentangle the two effects, the authors present a laboratory experiment in which they model the choice of different alternatives through high or low cognitive costs and feedback information given to subjects. Their results do not provide strong evidence for imitative behavior. They find instead a temporal pattern in the distribution of choices, both in the high-cost and low-cost conditions. -- |
| Keywords: | social norms,cognitive costs,laboratory experiments |
| JEL: | C92 D81 Z13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20142&r=neu |
| By: | Humburg M. (ROA) |
| Abstract: | Field of study choice has far-reaching implications for individuals enrolling in university. Field of study choice is strongly linked to the subject matter graduates will specialize in, the kind of work environment they will be working in, and the returns to their skills they can expect once they enter the workforce. This paper uses unique Dutch data which demonstrates that personality measured at age 14 can be linked to field of study choice at around age 19. It can be shown that the Big Five personality traits affect field of study choice. Moreover, while personality matters less than cognitive skills, such as math ability and verbal ability, for educational attainment, the influence of personality on field of study choice is comparable to that of cognitive skills. Sorting across fields of study on the basis of personality traits is in some respects similar for women and men, although substantial differences exist. |
| Keywords: | Analysis of Education; Human Capital; Skills; Occupational Choice; Labor Productivity; |
| JEL: | I21 J24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2014001&r=neu |
| By: | Enke, Benjamin; Zimmermann, Florian |
| Abstract: | A frequent feature of information structures is that they generate signals which are not mutually independent, but rather rely on a common set of underlying information. Using a simple experimental design, we show that in such contexts many people neglect correlations in the updating process, leading to systematically "overshooting" beliefs. This finding lends direct support to recent models of boundedly rational learning in social networks. In an experimental market setting, correlation neglect not only drives overoptimism and overpessimism at the individual level, but also affects aggregate outcomes in a systematic manner. In particular, the excessive confidence swings produced by correlated information structures translate into predictable price bubbles and crashes. Finally, we show the robustness of correlation neglect in a naturally occurring informational environment, in which subjects predict GDP growth on the basis of real news reports. -- |
| JEL: | D84 D03 D40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc13:79900&r=neu |
| By: | Alos Ferrer, Carlos |
| Abstract: | Dual-process theories view decisions as the result of the interaction of two qualitatively different types of processes, automatic/impulsive and controlled/deliberative. This paper considers a model of self-control where each decision can be taken by either an automatic process or a deliberative one. In line with recent evidence from psychology, effortful self-control (willpower) is modeled as a limited resource, i.e. exercising self-control for an initial decision limits the amount of self-control available for persevering later. Automatic decisions follow a reinforcement-based process, while controlled ones are utility-maximizing. A "personal evolution" approach shows that agents might fall into self-control traps: for instance, although exercising full self-control might be efficient, decision makers might be caught in a "personal optimum" where no self-control is exercised. Reciprocally, agents might also fall prey to excessive self-control, where they waste willpower in initial decisions only to give in to temptation later. -- |
| JEL: | D03 D83 C72 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc13:80019&r=neu |