nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒04‒25
four papers chosen by
Daniel Houser
George Mason University

  1. Cognitive Diversity, Binary Decisions, and Epistemic Democracy By John A Weymark
  2. The Effect of Sample Size and Cognitive Strategy on Probability Estimation Bias By Hanan Shteingart; Yonatan Loewenstein
  3. Strong intrinsic motivation By Dessi, Roberta; Ristichini, Aldo
  4. The effects of social media on cognitive development in undergraduate economics students By Ling Ting and Naiefa Rashied

  1. By: John A Weymark (Vanderbilt University)
    Abstract: In Democratic Reason, Hélène Landemore has built a case for the epistemic virtues of inclusive deliberative democracy based on the cognitive diversity of the group engaged in making collective decisions. She supports her thesis by appealing to the Diversity Trumps Ability Theorem of Lu Hong and Scott Page. In practice, deliberative assemblies often restrict attention to situations with only two options. In this paper, it is shown that it is not possible to satisfy the assumptions of the Diversity Trumps Ability Theorem when decisions are binary. The relevance of this theorem for democratic decision-making in non-binary situations is also considered.
    Keywords: epistemic democracy, Diversity Trumps Ability Theorem
    JEL: D7 Y8
    Date: 2014–08–13
  2. By: Hanan Shteingart; Yonatan Loewenstein
    Abstract: Probability estimation is an essential cognitive function in perception, motor control, and decision making. Many studies have shown that when making decisions in a stochastic operant conditioning task, people and animals behave as if they underestimatethe probability of rare events. It is commonly assumed that this behavior is a natural consequence of estimating a probability from a small sample, also known as sampling bias. The objective of this paper is to challenge this common lore. We show that in fact, probabilities estimated from a small sample can lead to behaviors that will be interpreted as underestimatingor as overestimating the probability of rare events, depending on the cognitive strategy used. Moreover, this sampling bias hypothesis makes an implausible prediction that minute differences in the values of the sample size or the underlying probability will determine whether rare events will be underweighted or overweighed. We discuss the implications of this sensitivity for the design and interpretation of experiments. Finally, we propose an alternative sequential learning model with a resetting of initial conditions for probability estimation and show that this model predicts the experimentally-observed robust underweighting of rare events.
    Keywords: Probability Estimation, Underweighting of Rare Events, Decision Making, Reinforcement Learning
    Date: 2015–02
  3. By: Dessi, Roberta; Ristichini, Aldo
    Abstract: A large literature in psychology, and more recently in economics, has argued that monetary rewards can reduce intrinsic motivation. We investigate whether the negative impact persists when intrinsic motivation is strong, and test this hypothesis experimentally focusing on the motivation to undertake interesting and challenging tasks, informative about individual ability. We find that this type of task can generate strong intrinsic motivation, that is impervious to the effect of monetary incentives, particularly when the individual is "racing against himself". In our experiments, monetary incentives have no significant impact on performance. In a second experiment using the same kind of task but a setting designed to weaken intrinsic motivation, monetary incentives do have a significant, positive, effect on performance. This result confirms that our experimental setup may, with appropriate conditions, replicate the known crowding out effects.
    Date: 2015–04
  4. By: Ling Ting and Naiefa Rashied
    Abstract: The study attempts to evaluate the effectiveness of social media on cognitive development among undergraduate economics students at a South African university. The study collects data on student postings to discussion topics posted on Facebook and Twitter. The use of 3 well-known rubrics for evaluating cognitive development: Garrison, Anderson, and Archer (2001), revised Bloom’s taxonomy (Anderson et al. 2001), and Greenlaw and Deloach (2003), are used. Results indicate that student posts fall mainly into lower levels of thinking suggesting that social media may not be effective in cultivating critical thinking. Moreover, these results shed light on the voluntary versus mandatory nature of participation, the time length for student responses, and “big think†style questions in a developing country context (i.e. poor internet).
    Keywords: Social media, teaching and learning, critical thinking
    JEL: A20 A22
    Date: 2015

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