nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒02‒11
four papers chosen by
Daniel Houser
George Mason University

  1. On the relationship between personal experience, affect and risk perception: the case of climate change By Sander van der Linden
  2. DO SELF-THEORIES EXPLAIN OVERCONFIDENCE AND FINANCIAL RISK TAKING? A field experiment. By Bertrand Koebel; André Schmitt; Sandrine Spaeter
  3. Understanding Heterogeneity in the Effects of Birth Weight on Adult Cognition and Wages By C. Justin Cook; Jason M. Fletcher
  4. Cost-utility of cognitive behavioral therapy versus U.S. Food and Drug Administration recommended drugs and usual care in the treatment of patients with fibromyalgia: an economic evaluation alongside a 6-month randomized controlled trial By Juan V. Luciano; Francesco D’Amico; Marta Cerdà-Lafont; María T. Peñarrubia-María; Martin Knapp; Antonio I. Cuesta-Vargas; Antoni Serrano-Blanco; Javier García-Campayo

  1. By: Sander van der Linden
    Abstract: Examining the conceptual relationship between personal experience, affect, and risk perception is crucial in improving our understanding of how emotional and cognitive process mechanisms shape public perceptions of climate change. This study is the first to investigate the interrelated nature of these variables by contrasting three prominent social-psychological theories. In the first model, affect is viewed as a fast and associative information processing heuristic that guides perceptions of risk. In the second model, affect is seen as flowing from cognitive appraisals (i.e., affect is thought of as a post-cognitive process). Lastly, a third, dual-process model is advanced that integrates aspects from both theoretical perspectives. Four structural equation models were tested on a national sample (N = 808) of British respondents. Results initially provide support for the “cognitive” model, where personal experience with extreme weather is best conceptualized as a predictor of climate change risk perception and, in turn, risk perception a predictor of affect. Yet, closer examination strongly indicates that at the same time, risk perception and affect reciprocally influence each other in a stable feedback system. It is therefore concluded that both theoretical claims are valid and that a dual-process perspective provides a superior fit to the data. Implications for theory and risk communication are discussed.
    JEL: G32
    Date: 2014–08
  2. By: Bertrand Koebel; André Schmitt; Sandrine Spaeter
    Abstract: How people develop beliefs about themselves (self-theories) plays an important role on motivation and achievement as shown by Carol Dweck’s life-long research. In this paper, we conduct a field experiment to investigate whether self-theories impact overconfidence and risk taking. Self-theories deal with how an individual perceives some of her attributes such as intelligence, personality or moral character. In this paper, we are interested by how people perceive their mindset (fixed or growth). All decisions taken by young Vietnamese executives were incentivized to identify their degree of overconfidence and risk taking. As in previous studies, we find that subjects exhibit significant overconfidence. We also find that fixed mindset subjects are less over-confident than growth mindset persons, the latter earning the highest incomes in our experiment. Finally, we find correlation between risk taking and overconfidence. However, contrary to the existing results in the literature on behavioral finance, in our experiment, the higher the degree of overconfidence, the lower the investment in risky lotteries. Gender does not seem to have any impact on neither overconfidence nor risk-taking behavior.
    Keywords: overconfidence, experiment; self-theories, mindset, risk-taking.
    JEL: C93 D81
    Date: 2015
  3. By: C. Justin Cook; Jason M. Fletcher
    Abstract: A large economics literature has shown long term impacts of birth weight on adult outcomes, including IQ and earnings that are often robust to sibling or twin fixed effects. We examine potential mechanisms underlying these effects by incorporating findings from the genetics and neuroscience literatures. We use a sample of siblings combined with an “orchids and dandelions hypothesis”, where the IQ of genetic dandelions is not affected by in utero nutrition variation but genetic orchids thrive under advantageous conditions and wilt in poor conditions. Indeed, using variation in three candidate genes related to neuroplasticity (APOE, BDNF, and COMT), we find substantial heterogeneity in the associations between birth weight and adult outcomes, where part of the population (i.e., “dandelions”) is not affected by birth weight variation. Our results help uncover why birth weight affects adult outcomes.
    JEL: I1 J1 J24
    Date: 2015–01
  4. By: Juan V. Luciano; Francesco D’Amico; Marta Cerdà-Lafont; María T. Peñarrubia-María; Martin Knapp; Antonio I. Cuesta-Vargas; Antoni Serrano-Blanco; Javier García-Campayo
    Abstract: Introduction:- Cognitive behavioral therapy (CBT) and U.S. Food and Drug Administration (FDA)-recommended pharmacologic treatments (RPTs; pregabalin, duloxetine, and milnacipran) are effective treatment options for fibromyalgia (FM) syndrome and are currently recommended by clinical guidelines. We compared the cost-utility from the healthcare and societal perspectives of CBT versus RPT (combination of pregabalin + duloxetine) and usual care (TAU) groups in the treatment of FM. Methods:- The economic evaluation was conducted alongside a 6-month, multicenter, randomized, blinded, parallel group, controlled trial. In total, 168 FM patients from 41 general practices in Zaragoza (Spain) were randomized to CBT (n = 57), RPT (n = 56), or TAU (n = 55). The main outcome measures were Quality-Adjusted Life Years (QALYs, assessed by using the EuroQoL-5D questionnaire) and improvements in health-related quality of life (HRQoL, assessed by using EuroQoL-5D visual analogue scale, EQ-VAS). The costs of healthcare use were estimated from patient self-reports (Client Service Receipt Inventory). Cost-utility was assessed by using the net-benefit approach and cost-effectiveness acceptability curves (CEACs). Results:- On average, the total costs per patient in the CBT group (1,847€) were significantly lower than those in patients receiving RPT (3,664€) or TAU (3,124€). Patients receiving CBT reported a higher quality of life (QALYs and EQ-VAS scores); the differences between groups were significant only for EQ-VAS. From a complete case-analysis approach (base case), the point estimates of the cost-effectiveness ratios resulted in dominance for the CBT group in all of the comparisons performed, by using both QALYs and EQ-VAS as outcomes. These findings were confirmed by bootstrap analyses, net-benefit curves, and CEACs. Two additional sensitivity analyses (intention-to-treat analysis and per-protocol analysis) indicated that the results were robust. The comparison of RPT with TAU yielded no clear preference for either treatment when using QALYs, although RPT was determined to be more cost-effective than TAU when evaluating EQ-VAS. Conclusions:- Because of lower costs, CBT is the most cost-effective treatment for adult FM patients. Implementation in routine medical care would require policymakers to develop more-widespread public access to trained and experienced therapists in group-based forms of CBT. Trial registration:- Current Controlled Trials ISRCTN10804772. Registered 29 September 2008.
    JEL: N0
    Date: 2014–10

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