nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒01‒18
five papers chosen by

  1. The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences By Adrian Bruhin; Ernst Fehr; Daniel Schunk
  2. Correlates of Narrow Bracketing By Alexander K. Koch; Julia Nafziger
  4. Higher Intelligence Groups Have Higher Cooperation Rates in the Repeated Prisoner's Dilemma By Proto, Eugenio; Rustichini, Aldo; Sofianos, Andis
  5. Psychology of Trust: A Three Component Analytical Framework to Explain the Impact of Formal Institutions on Social Trust Formation By Tamilina, Larysa; Tamilina, Natalya

  1. By: Adrian Bruhin (University of Lausanne); Ernst Fehr (University of Zurich); Daniel Schunk (Johannes Gutenberg University of Mainz)
    Abstract: There is vast heterogeneity in the human willingness to weigh others’ interests in decision making. This heterogeneity concerns the motivational intricacies as well as the strength of other-regarding behaviors, and raises the question how one can parsimoniously model and characterize heterogeneity across several dimensions of social preferences while still being able to predict behavior over time and across situations. We tackle this task with an experiment and a structural model of preferences that allows us to simultaneously estimate outcome-based and reciprocity-based social preferences. We find that non-selfish preferences are the rule rather than the exception. Neither at the level of the representative agent nor when we allow for several preference types do purely selfish types emerge. Instead, three temporally stable and qualitatively different other-regarding types emerge endogenously, i.e., without pre-specifying assumptions about the characteristics of types. When ahead, all three types value others’ payoffs significantly more than when behind. The first type, which we denote as strongly altruistic type, is characterized by a relatively large weight on others’ payoffs – even when behind – and moderate levels of reciprocity. The second type, denoted as moderately altruistic type, also puts positive weight on others’ payoff, yet at a considerable lower level, and displays no positive reciprocity while the third type is behindness averse, i.e., puts a large negative weight on others’ payoffs when behind and behaves selfishly otherwise. We also find that there is an unambiguous and temporally stable assignment of individuals to types. Moreover, the three-type model substantially improves the (out-of-sample) predictions of individuals’ behavior across additional games while the information contained in subject-specific parameter estimates leads to no or only minor additional predictive power. This suggests that a parsimonious model with three types captures the bulk of the predictive power contained in the preference estimates.
    Keywords: Social Preferences, Heterogeneity, Stability, Finite Mixture Models
    JEL: C49 C91 D03
    Date: 2016–01–04
  2. By: Alexander K. Koch (Department of Economics and Business Economics, Aarhus University, Denmark); Julia Nafziger (Department of Economics and Business Economics, Aarhus University, Denmark)
    Abstract: We examine whether different phenomena of narrow bracketing can be traced back to some common characteristic and whether and how different phenomena are related. We find that making dominated lottery choices or ignoring the endowment when making risky choices are related phenomena and are both associated with low levels of cognitive reflection. In contrast, the phenomena of setting narrow goals or narrow mental budgets seem not to reflect choice errors due to low cognitive reflection, but are tools to overcome self-control problems. Buying small scale insurance is associated with having narrow mental budgets - suggesting that people buy such insurance to insure themselves against the consequences of their own self-control strategy.
    Keywords: Narrow bracketing, mental accounting, risky choices, cognitive skills, selfcontrol
    JEL: D03 C91 D81 D91
    Date: 2016–04–01
  3. By: Mamta Sharma; Akankasha Sharma
    Abstract: Sleep, a vital ingredient in life, is an active and complex rhythmic state that may get disturbed by a variety of reasons. Daytime sleepiness, sleep deprivation, and irregular sleep schedules are highly prevalent among college students, as 50% report daytime sleepiness and 70% attain insufficient sleep. The study aims to evaluate the efficacy of music therapy in improving disturbed sleep patterns and low self-worth of university students. It was hypothesized that Post-intervention sleep quality scores in experimental group would be significantly better than pre-intervention scores; and Music therapy would enhance self-worth of university students. Participants in the experimental group would show improved self-worth relative to the participants in the control group. A pre-post experimental-control assessment design was adopted. The Pittsburgh Sleep Quality Index (Buysse DJ et al 1989) and Contingencies of Self Worth (Crocker & Luhtanen, 2002) were administered to identify university students having faulty sleep patterns and low self-worth. Music therapy was given for consecutive three weeks for half an hour daily. After intervention, sleep quality index and contingencies of self-worth were re-administered to see the efficacy of music therapy. Results revealed that music therapy made a significant improvement in students’ sleep patterns as significant difference was observed between both experimental and control groups on Subjective sleep quality (t=1.21*), Sleep latency (t=2.63*), Sleep duration (t=2.24*), Habitual sleep efficiency (t=4.64**), Sleep disturbances (t=10.46**), and Daytime dysfunction (t=3.97*). The effect of intervention was also found to be significant for self-worth domains for subjects of experimental group on physical appearance (t=2.42*), Outdoing others in competition (t=1.39*), Academic competence (t=2.16*), Being a virtuous or moral person (t=2.09*), and God’s love (t=1.64*) as the difference between experimental and control group came out to be statistically significant. Key words: sleep patterns, self worth, music, music therapy
    Date: 2015–12
  4. By: Proto, Eugenio (Department of Economics, University of Warwick); Rustichini, Aldo (Department of Economics, University of Minnesota); Sofianos, Andis (Department of Economics, University of Warwick)
    Abstract: Intelligence affects the social outcomes of groups. A systematic study of the link is provided in an experiment where two groups of subjects with different levels of intelligence, but otherwise similar, play a repeated prisoner's dilemma. Initial cooperation rates are similar, but increase in the groups with higher intelligence to reach almost full cooperation, while they decline in the groups with lower intelligence. Cooperation of higher intelligence subjects is payo sensitive and not automatic: in a treatment with lower continuation probability there is no difference between different intelligence groups.
    Keywords: Repeated Prisoner's Dilemma ; Cooperation ; Intelligence
    JEL: C73 C91 C92
    Date: 2015
  5. By: Tamilina, Larysa; Tamilina, Natalya
    Abstract: Drawing on a social-cognitive theory of psychology, this study introduces a new conceptual framework to explain trust building by individuals and the role that formal rules and laws may play in this process. Trust is viewed as composed of cultural, communal, and contextual components, with the latter encompassing formal institutions. We demonstrate that the contextual component measured through three institutional indexes is the strongest predictor of social trust that may not only condition the importance of cultural and communal components for the process of trust formation, but also trigger changes in them. We also furnish evidence that this impact may vary across formal institutional types and suggest that the autonomy dimension of the institutional framework is particularly important for social trust building.
    Keywords: interpersonal trust, trust formation, formal institutions, social-cognitive psychology
    JEL: K40 Z13
    Date: 2015–02–10

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.