nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒07‒18
three papers chosen by
Daniel Houser
George Mason University

  1. Follow your heart or your head? A longitudinal study of the facilitating role of calling and ability in the pursuit of a challenging career By Shoshana Dobrow Riza; Daniel Heller
  2. More effort with less pay: On information avoidance, belief design and performance By Huck, Steffen; Szech, Nora; Wenner, Lukas M.
  3. On the Origins of Risk-Taking By Black, Sandra E.; Devereux, Paul J.; Lundborg, Petter; Majlesi, Kaveh

  1. By: Shoshana Dobrow Riza; Daniel Heller
    Abstract: While making early career decisions in which pursuing what one loves and earning a secure living are at odds with one another, when and why will the intrinsic considerations prevail over the extrinsic considerations? We posit that a key factor in resolving this dilemma in favor of the intrinsic side of the career is the sense of calling, a consuming, meaningful passion people experience toward the domain. We test the connection between early callings (in adolescence) and later career pursuit (in adulthood) and the mediating role of perceived and actual abilities (in young adulthood) in a career context in which the intrinsic and extrinsic sides of a career can clash: the path to become a professional musician. In an 11-year 5-wave longitudinal study of 450 amateur high school musicians progressing from adolescence to adulthood, we found that regardless of their actual musical ability, people with stronger early callings were likely to perceive their abilities more favorably, which led them to pursue music professionally. Our findings thus indicate an intriguing pattern in which the experience of stronger early callings led to greater perceived ability that was not reflected in greater actual ability. Perceived ability, rather than objective ability as assessed by awards won in music competitions, led to subsequent career pursuit. We discuss implications for theory and research on the nature and consequences of calling, as well as for career decision making, both in general and in challenging career contexts in particular.
    JEL: J50
    Date: 2015–05
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:59408&r=neu
  2. By: Huck, Steffen; Szech, Nora; Wenner, Lukas M.
    Abstract: In a tedious real effort task, agents can choose to receive information about their piece rate that is either low or ten times higher. One third of subjects deliberately decide to forego this instrumental information, revealing a preference for information avoidance. Strikingly, agents who face uncertainty about their wage outperform all others, including those who know that their wage is high. This also holds for enforced uncertainty. We demonstrate that all our findings can be captured by a model of optimally distorted expectations following Brunnermeier and Parker (2005).
    Keywords: Optimal Expectations,Belief Design,Performance,,Real Effort Task
    JEL: D83 D84 J31 M52
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2015304&r=neu
  3. By: Black, Sandra E. (University of Texas at Austin); Devereux, Paul J. (University College Dublin); Lundborg, Petter (Lund University); Majlesi, Kaveh (Lund University)
    Abstract: Risk-taking behavior is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use data on stock market participation of Swedish adoptees and relate this to the investment behavior of both their biological and adoptive parents. We find that stock market participation of parents increases that of children by about 34% and that both pre-birth and post-birth factors are important. However, once we condition on having positive financial wealth, we find that nurture has a much stronger influence on risk-taking by children, and the evidence of a relationship between stock-holding of biological parents and their adoptive children becomes very weak. We find similar results when we study the share of financial wealth that is invested in stocks. This suggests that a substantial proportion of risk-attitudes and behavior is environmentally determined.
    Keywords: intergenerational mobility, nature versus nurture, portfolio allocation
    JEL: G11 J01
    Date: 2015–07
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9178&r=neu

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