nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒02‒17
seven papers chosen by

  1. Sleep Restriction and Time‐of‐Day Impacts on Simple Social Interaction By Dickinson, David L.; McElroy, Todd
  2. Does Self-Control Depletion Affect Risk Attitudes? By Gerhardt, Holger; Schildberg-Hörisch, Hannah; Willrodt, Jana
  3. Attention and Endogenous Framing By Dertwinkel-Kalt, Markus; Wenzel, Tobias
  4. How does education improve cognitive skills? Instructional Time versus Timing of Instruction By Dahmann, Sarah
  5. The Impact of Education on Personality - Evidence from a German High School Reform By Anger, Silke; Dahmann, Sarah
  6. Television, Cognitive Ability, and High School Completion By Hernæs, Øystein; Markussen, Simen; Røed, Knut
  7. Something in the Air? Pollution, Allergens and Children's Cognitive Functioning By Marcotte, Dave E.

  1. By: Dickinson, David L. (Appalachian State University); McElroy, Todd (Florida Gulf Coast University)
    Abstract: Simple bargaining games are the foundation of more complex social interactions necessary for healthy relationships and well‐functioning societies. Neuroscience research has shown that high‐level deliberative thinking processes are necessary for social‐decision making - it seems cognitively less demanding to be greedy or to mistrust. In this paper, our focus is on how commonly‐experienced adverse sleep states, which are known to harm deliberative thinking, impact outcomes in the classic simple bargaining games (ultimatum, dictator, and trust games). Specifically, we experimentally manipulate sleep states of 184 young‐adult subjects who took part in a 3 week experimental protocol. Subjects were administered each game twice: once after a full week of sleep restriction and once after a full week of well‐rested sleep levels. Subjects were also randomly assigned to early morning (7:30 am) or later evening (10:00 pm) sessions to manipulate the optimality of the time‐of‐day of the decisions. We find a robust result of increased greed, reduced trust, and reduced trustworthiness following sleep restriction, after controlling for demographics and session indicators. We find no significant direct impact of circadian timing on decisions for these tasks. However, the mediating variable for these sleep manipulation effects is subjective sleepiness, and both sleep restriction and suboptimal circadian timing significantly increase self‐reported sleepiness. These results are consistent with the hypothesis that increased sleepiness reduces the relative input of deliberate thinking in social interactions.
    Keywords: sleep, time-of-day, ultimatum, dictator, trust, bargaining
    JEL: C7 C9
    Date: 2016–01
  2. By: Gerhardt, Holger (University of Bonn); Schildberg-Hörisch, Hannah (University of Bonn); Willrodt, Jana (University of Bonn)
    Abstract: A core prediction of recent "dual-self" models is that a person's risk attitudes depend on her current level of self-control. While these models have received a lot of attention, empirical studies tailored to testing their core prediction are lacking. Using two prominent models, we derive precise hypotheses for choices between risky monetary payoffs in a state of low self-control, compared to regular self-control; in particular, lower levels of self-control should induce stronger risk aversion for stakes within a particular range. We test the hypotheses in a lab experiment with a large number of subjects (N = 308), using a well-established self-control depletion task and measuring risk attitudes via finely graduated choice lists. While independent manipulation checks document the effectiveness of our depletion task, we do not find any evidence for increased risk aversion after self-control depletion. Our findings have important implications for the future modeling of decision making under risk.
    Keywords: risk attitudes, self-control, ego depletion, dual-self models, experiment
    JEL: D03 D81 C91
    Date: 2015–12
  3. By: Dertwinkel-Kalt, Markus; Wenzel, Tobias
    Abstract: This paper develops a theory of framing in an intertemporal context with risky choices. We provide a unifying account of existing theories of focusing by allowing a decision maker to choose her frame such that her attention is either drawn to salient events associated with an option or to the expected utilities an option yields in different time periods. Our key assumption is that a decision maker can choose her frame in a self-serving manner. We predict that the selected frame induces overoptimistic actions in the sense that subjects underrate risk but overrate chances and accordingly reveal overoptimistic actions. Hence, our theory can explain phenomena such as excessive harmful consumption (smoking, unhealthy diet) and risky investments (enterpreneurship, lotteries, gambling). We also apply our theory to static lotteries and find that classical phenomena of decision making under risk (such as the Common Ratio Allais paradox) can be rationalized by our model. We provide experimental evidence to support our claims.
    JEL: D03 D11 D90
    Date: 2015
  4. By: Dahmann, Sarah
    Abstract: This paper investigates two mechanisms through which education may affect cognitive skills in adolescence: the role of instructional quantity and the timing of instruction with respect to age. To identify causal effects, I exploit a school reform carried out at the state level in Germany as a quasi-natural experiment: between 2001 and 2007, academic-track high school (Gymnasium) was reduced by one year in most of Germany's federal states, leaving the overall curriculum unchanged. To investigate the impact of this educational change on students' cognitive abilities, I conduct two separate analyses: first, I exploit the variation in the curriculum taught to same-aged students at academic-track high school over time and across states to identify the effect of the increase in instructional time on students' crystallized and fluid intelligence scores. Using rich data on seventeen year-old adolescents from the German Socio-Economic Panel (SOEP) study, the estimates show that fluid intelligence remained unaffected, while crystallized intelligence improved for male students. Second, I compare students' competences in their final year of high school using data from the German National Educational Panel Study (NEPS). Preliminary results suggest that students affected by the reform catch up with their non-affected counterparts in terms of their competences by the time of graduation. However, they do not provide any evidence for the timing of instruction to matter in cognitive skill formation. Overall, secondary education therefore seems to impact students' cognitive skills in adolescence especially through instructional time and not so much through age-distinct timing of instruction.
    JEL: I21 I28 J24
    Date: 2015
  5. By: Anger, Silke; Dahmann, Sarah
    Abstract: Western labor markets face major challenges caused by demographic changes. They increasingly experience a shortage of skilled workers and face the problem of an increasing disparity between a reduced group of active workers contributing to the pension scheme and a rising share of an older population receiving pension benefits. Starting in 2001, Germany therefore introduced an educational reform enabling high school graduates earlier labor market entry. By shortening the length of upper secondary school leaving the overall curriculum unchanged, the reform did not only make German graduates more competitive on the international labor market and reduce costs in the German education system, but also increased the labor force by one birth cohort, relieving the shortage of skilled workers and disburdening the pension scheme. However, the reform may have led to unintended consequences on individuals' human capital. This paper investigates this reform's short-term effects on students' personality exploiting the variation in high school duration over time and across states as a quasi-natural experiment. Using rich data from the German Socio-Economic Panel (SOEP) study on adolescents' Big Five personality traits and on their locus of control, our estimates show that shortening high school caused students on average to be less emotionally stable. Moreover, the personality of male students and students from disrupted families changed more strongly following the reform: they became more agreeable and more extroverted, respectively. We conclude that the educational system plays a role in shaping adolescents' personality, which in turn impacts labor market success and further later life outcomes.
    JEL: I21 I28 J24
    Date: 2015
  6. By: Hernæs, Øystein (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: We exploit supply-driven heterogeneity in the expansion of cable television across Norwegian municipalities to identify developmental effects of commercial television exposure during childhood. We find that higher exposure to commercial television reduces cognitive ability and high school graduation rates for young men. The effects are largest for exposure during pre-school and elementary school age. We find no effect on high school completion for women, suggesting availability of non-educational media content as a factor in the widening educational gender gap. Based on time-use data, we show that a possible explanation is that television-watching crowds out reading more for boys than girls.
    Keywords: human capital, media, education gender gap
    JEL: J13 J16 J24 L82
    Date: 2016–01
  7. By: Marcotte, Dave E. (American University)
    Abstract: Poor air quality has been shown to harm the health and development of children. Research on these relationships has focused almost exclusively on the effects of human-made pollutants, and has not fully distinguished between contemporaneous and long-run effects. This paper contributes on both of these fronts. Merging data on plant pollen, human-made pollutants and ECLS-K data on academic skills, I study the relationship between poor air quality in the first years of life on school-readiness, and the effects of ambient air quality on achievement of young children. I find evidence that exposure in early childhood affects school readiness at the start of kindergarten, and that the effects of air quality on the growth of cognitive skills in math and reading continue into elementary school.
    Keywords: pollution, education, cognitive skills
    JEL: I1 I2 Q53
    Date: 2016–01

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