nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒10‒17
three papers chosen by

  1. Stress and Coping - An Economic Approach By Klaus Wälde
  2. Role of Personality Style on Bargaining Outcomes By Bryan C. McCannon; John B. Stevens
  3. More effort with less pay: On information avoidance, belief design and performance By Huck, Steffen; Szech, Nora; Wenner, Lukas M.

  1. By: Klaus Wälde (Johannes Gutenberg University Mainz)
    Abstract: Stress is ubiquitous in society. In our model, stressors translate into subjective stress via an appraisal process. Stress reduces instantaneous utility of an individual directly and via a cognitive load argument. Coping can be functional and under the control of the individual or more automatic with dysfunctional features. We predict the occurrence and frequency of uncontrolled coping emotional outbursts as a function of an individuals personality and environment. Outbursts cannot always be avoided. Delaying emotional outbursts articially can lead to even more outbursts. Looking at the e/ect of psychotherapy shows that expecting little and being emotional can help maximizing well-being.
    Keywords: Stress, coping, personality, controlled vs. automatic reaction, emotional outbursts, optimal stopping problem
    JEL: D03 D91 I12
  2. By: Bryan C. McCannon (West Virginia University, Department of Economics); John B. Stevens (Saint Bonaventure University)
    Abstract: Purpose: The motivation for the research is to identify whether personality traits can help explain the outcomes that arise in bargaining outcomes. Design: Experiments with subjects playing the alternating-offers bargaining game are considered. Both full information and asymmetric information treatments are considered. Subjects also complete standardized Myers-Briggs Type Indicator assessments. Findings: Personality type measurements are shown to help explain the opening offers, rejections, and resulting wealth in the negotiations. It is shown that interactions between the personality dimensions are important and that the interaction between personality and information play a key role in bargaining outcomes. Research limitations/implications – The research utilizes laboratory experiments to generate data. This expands our understanding of individual level behaviour, but suffers from the limitation of not replicating realistic bargaining situations. Practical Implications: The work should serve as a guide to organizations to identify traits of effective negotiators. Social Implications: Bargaining is a central economic activity. Being able to identify the root of differences in outcomes from negotiations should be able to inform institutional design issues. Originality/Value: Little work has been done connecting the rich literature in social psychology and management on personality to economic outcomes. The research on bargaining neglects to incorporate individual-level traits into the process. This research begins to bridge this gap and informs both bargaining theory as well as emphasizes the importance of personality in application.
    Keywords: personality, bargaining, bargaining outcomes
    Date: 2015–05
  3. By: Huck, Steffen; Szech, Nora; Wenner, Lukas M.
    Abstract: In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice - and perform stunningly well. Agents who are uninformed regarding their piece rate tend to outperform all others, even those who know that their piece rate is high. This also holds for enforced instead of self-selected information avoidance. All our findings can be captured by a model of optimally distorted expectations following Brunnermeier and Parker (2005).
    Keywords: Optimal Expectations,Belief Desing,Performance,Real Effort Task,Coarse Incentive Structures,Workplace Incentives
    JEL: D83 D84 J31 M52
    Date: 2015

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