New Economics Papers
on Neuroeconomics
Issue of 2014‒03‒01
four papers chosen by

  1. Food for Thought? Breastfeeding and Child Development By Emla Fitzsimons; Marcos Vera-Hernández
  2. Moving Ahead by Thinking Backwards: Cognitive Skills, Personality, and Economic Preferences in Collegiate Success By Burks, Stephen V.; Lewis, Connor; Kivi, Paul; Wiener, Amanda; Anderson, Jon E.; Götte, Lorenz; DeYoung, Colin G.; Rustichini, Aldo
  3. Self-Confidence, Overconfidence and Prenatal Testosterone Exposure: Evidence from the Lab By Patricio S. Dalton; Sayantan Ghosal
  4. The Determinants of Decision Time By Anna Conte; John D. Hey; Ivan Soraperra

  1. By: Emla Fitzsimons (Department of Quantitative Social Science, Institute of Education, University of London); Marcos Vera-Hernández (University College London)
    Abstract: We show that children who are born at the weekend or just before are less likely to be breastfed, owing to poorer breastfeeding support services at weekends. We use this variation to estimate the effect of breastfeeding on children’s development for a sample of uncomplicated births from low educated mothers. We find that breastfeeding has large effects on children’s cognitive development, but not on non-cognitive development or health. Regarding mechanisms, we estimate how breastfeeding affects parental investments in the child and the quality of the mother-child relationship.
    Keywords: Breastfeeding; timing of birth; hospital support; instrumental variables; optimal instruments; cognitive and non-cognitive development; health.
    JEL: I14 I18 J13
    Date: 2014–02–17
  2. By: Burks, Stephen V. (University of Minnesota, Morris); Lewis, Connor (University of Minnesota, Morris); Kivi, Paul (University of Minnesota, Morris); Wiener, Amanda (University of Minnesota, Morris); Anderson, Jon E. (University of Minnesota, Morris); Götte, Lorenz (University of Lausanne); DeYoung, Colin G. (University of Minnesota); Rustichini, Aldo (University of Minnesota)
    Abstract: We collected personality (Big Five) and demographic characteristics, and ran incentivized experiments measuring cognitive skills (non-verbal IQ, numeracy, backward induction/ planning), and economic (time, risk) preferences, with 100 students at a small public undergraduate liberal arts college in the Midwestern US as part of a larger study that collected the same measures from 1,065 trainee truckers. Using standardized (z-score) versions of our variables we analyze their relative power to predict (1) timely graduation (four years or less), (2) graduation in six years or less, and (3) final GPA. The proactive aspect of Conscientious (but not the inhibitive one) has a large and robust positive effect on all three outcomes, and Agreeableness has a robust negative effect on both graduation outcomes, but not on GPA. Economic time preferences predict graduation in four years, and GPA. Cognitive skill measures predict as expected if entered individually in a multivariate model, but when all variables compete it is only our backward induction measure ("Hit15") that weakly predicts graduation in four years, and strongly predicts graduation in six years. Trainee truckers work in a different vocational setting and their results are appropriately different, but there is a common element: Hit15 also predicts their job success (completing a one year employment contract that makes training free). We interpret Hit15 as capturing a specific part of the cognitive skills required for self-management in non-routine settings – thinking backward from future goals to make the best current choice – that is not well measured by existing instruments, and suggest this deserves further scientific and institutional scrutiny.
    Keywords: graduation, Big Five, cognitive skill, backward induction, economic preferences, GPA
    JEL: D03 I21 C99
    Date: 2014–02
  3. By: Patricio S. Dalton; Sayantan Ghosal
    Abstract: This paper examines whether the degree of confidence and overconfidence in one’s ability is determined biologically. In particular, we study whether foetal testosterone exposure correlates with an incentive-compatible measure of confidence within an experimental setting. We find that men (rather than women) who were exposed to high testosterone levels in their mother’s womb are less likely to overestimate their actual performance, which in turn helps them to gain higher monetary rewards. Men exposed to low prenatal testosterone levels, instead, set unrealistically high expectations which results in self-defeating behavior. These results from the lab are able to recon- cile hitherto disconnected evidence from the field, by providing a link between traders’ overconfidence bias, long-term financial returns and prenatal testosterone exposure.
    Keywords: 2D:4D, testosterone, neuroeconomics, expectations, overconfidence, self- confidence, goals.
    JEL: C91 D03 D87
    Date: 2014–02
  4. By: Anna Conte (Strategic Interaction Group, Max Planck Institute of Economics, Jena, and Department of Economics and Quantitative methods, WBS, University of Westminster); John D. Hey (Department of Economics and Related Studies, University of York); Ivan Soraperra (Dipartimento di Scienze Economiche, University of Verona,)
    Abstract: This paper estimates the determinants of decision time for different types of decision maker in the context of an experimental investigation of multiple prior models of behaviour under ambiguity. Four models are considered: Expected Utility, Smooth, Rank Dependent Expected Utility and Alpha model. The results of a mixture model which assigns subjects to types enable us to distinguish the factors influencing the decision time of each of these four types. We find that the different types are influenced by different factors. In general, the Rank Dependent type takes more time, followed by the Smooth, the Expected Utility and finally the Alpha type, whose decision time is always the lowest. Our results reflect the relative complexity of the preference functionals used by the different types. Consequently, the importance of looking at the process of pairwise choices rather than simply at the choice made is raised to the attention of theorists and analysts.
    Keywords: decision time, choice under uncertainty, censored regression
    JEL: C23 C24 C91 D81
    Date: 2014–02–19

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