nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒03‒17
six papers chosen by

  1. DO SELF-THEORIES ON INTELLIGENCE EXPLAIN OVERCONFIDENCE AND RISK TAKING? A Field Experiment. By Bertrand Koebel; André Schmitt; Sandrine Spaeter
  2. Circadian Rhythms, Sleep and Cognitive Skills: Evidence from an Unsleeping Giant By Giuntella, Osea; Han, Wei; Mazzonna, Fabrizio
  3. Eliciting Risk Preferences: Firefighting in the Field By Dasgupta, Utteeyo; Mani, Subha; Sharma, Smriti; Singhal, Saurabh
  4. Temporary and permanent migrant selection: Theory and evidence of ability-search cost dynamics By Chen, Joyce J.; Kosec, Katrina; Mueller, Valerie
  5. Cognitive and Non-Cognitive Costs of Daycare 0–2 for Girls By Fort, Margherita; Ichino, Andrea; Zanella, Giulio
  6. The gender gap in mathematics achievements: evidence from Italian data. By Contini, Dalit; Di Tommaso, Maria Laura; Mendolia, Silvia

  1. By: Bertrand Koebel; André Schmitt; Sandrine Spaeter
    Abstract: Self-theories deal with how an individual perceives some of her attributes such as intelligence. People endorse basically one of two theories: growth mindset people think that intelligence can be developed (incremental theory) whereas fixed mindset people believe that intelligence is a fixed trait (entity theory). These theories play an important role on motivation and achievement as shown by Carol Dweck’s life-long research. They also impact self-assessment accuracy since fixed mindsets are much more imprecise in estimating their own ability. In behavioral economics, overconfidence is shown to play an important role in individual’s preferences and choices. In this paper, we conducted a field experiment to investigate whether self-theories impact overconfidence. Early career Vietnamese executives pursuing an MBA were incentivized. Our sample of managers and professionals controls for a wide range of corporate and demographic variables. The main result of our paper is that self-theories impact overconfidence when taking into account income. As in previous studies, we also find that subjects exhibit significant absolute overconfidence. Gender does not have any impact on overconfidence. We also tested the relationships between self-theories and risk taking.
    Keywords: self-theories; overconfidence; experiment; mindset; risk-taking.
    JEL: C93 D81
    Date: 2016
  2. By: Giuntella, Osea (University of Oxford); Han, Wei (University of Oxford); Mazzonna, Fabrizio (USI Università della Svizzera Italiana)
    Abstract: This paper analyzes the effects of sleep duration on cognitive skills and depression symptoms of older workers in China. Cognitive skills and mental health have been associated with sleep duration and are known to be strongly related to economic behavior and performance. However, causal evidence is lacking and little is known about sleep deprivation in developing countries. We exploit the relationship between circadian rhythms and bedtime to identify the effects of sleep using sunset time as an instrument. Using the Chinese Health and Retirement Longitudinal Study, we show that a later sunset time reduces significantly sleep duration and that sleep duration increases cognitive skills and eases depression symptoms of workers aged over 45 years. The results are driven by employed individuals living in urban areas, who are more likely to be constrained by rigid working schedules. On the contrary, we find no evidence of significant effects on self-employed and farmers.
    Keywords: sleep deprivation, cognitive skills, risky behaviors
    JEL: I12
    Date: 2016–02
  3. By: Dasgupta, Utteeyo; Mani, Subha; Sharma, Smriti; Singhal, Saurabh
    Abstract: Field constraints often necessitate choosing an elicitation task that is intuitive, easy to explain, and simple to implement. Given that subject behavior often differs dramatically across tasks when eliciting risk preferences, caution needs to be exercised in choosing one risk elicitation task over another in the face of field constraints. We compare behavior in the simple most investment game (Gneezy and Potters 1997) and the ordered lottery choice game (Eckel and Grossman 2002) to evaluate whether the simpler task allows us to elicit attitudes consistent with those elicited from the ordered lottery task. Using a sample of over 2000 Indian undergraduate students, we find risk attitudes to be fairly stable across the two tasks. Our results further indicate that the consistency of risk attitudes across the tasks depends on gender of the subject, quantitative skills, father’s education level, and dispositional factors such as locus of control and Big Five personality traits.
    Keywords: Risk preferences, Experiment Design, Elicitation Methods, Personality Traits, India
    JEL: C81 C91 D81
    Date: 2016–02
  4. By: Chen, Joyce J.; Kosec, Katrina; Mueller, Valerie
    Abstract: The migrant selection literature concentrates primarily on spatial patterns. We integrate two workhorses of the labor literature, the Roy and search models, to illustrate the implications of migration duration for patterns of selection. Theory and empirics show that temporary migrants are intermediately selected on education, with weaker selection on cognitive ability. Longer migration episodes lead to stronger positive selection on both education and ability because the associated jobs involve finer employee-employer matching and offer greater returns to experience. Networks are more valuable for permanent migration, where search costs are higher. Labor market frictions explain observed complex network-skill interactions. When considering migrant selection, the economics literature has largely focused on patterns by area of origin. However, the duration of migration episodes–temporary versus permanent–is another important determinant of selection. We integrate two workhorses of the labor literature, the Roy model and a search model, to illustrate the implications of migration duration for patterns of self-selection. We provide theoretical and empirical evidence showing that, because short-term migration episodes have less scope for skill-based matching and greater need for screening, temporary migrants are more likely to display intermediate selection on education, with weaker selection on underlying cognitive ability. Longer term migration episodes, in contrast, allow for finer employee-employer matching and greater returns to experience, leading to stronger positive selection on both education and cognitive ability among permanent migrants. Networks are also found to be more valuable for permanent migration, where search costs tend to be higher. However, we also provide evidence of complex network-skill interactions, driven primarily by labor market frictions.
    Keywords: migration, labor markets, income, search costs, networks,
    Date: 2015
  5. By: Fort, Margherita (University of Bologna); Ichino, Andrea (European University Institute); Zanella, Giulio (University of Bologna)
    Abstract: Exploiting admission thresholds in a Regression Discontinuity Design, we study the causal effects of daycare at age 0–2 on cognitive and non-cognitive outcomes at age 8–14. One additional month in daycare reduces IQ by 0.5% (4.5% of a standard deviation). Effects for conscientiousness are small and imprecisely estimated. Psychologists suggest that children in daycare experience fewer one-to-one interactions with adults, which should be particularly relevant for girls who are more capable than boys of exploiting cognitive stimuli at an early age. In line with this interpretation, losses for girls are larger and more significant, especially in affluent families.
    Keywords: daycare, childcare, child development, cognitive skills, non-cognitive skills
    JEL: J13 I20 I28 H75
    Date: 2016–02
  6. By: Contini, Dalit; Di Tommaso, Maria Laura; Mendolia, Silvia (University of Turin)
    Abstract: This paper describes the Italian gender gap in math utilizing the National Test “Invalsi” for the year 2013, in which all Italian children in school year 2, 5, 6, 8 and 10 are tested. The magnitude of the gender gap is measured using OLS and a school fixed effect model. We find that the female dummy is negative for all years, even after controlling for a socio-economic indicator, parental education, maternal professional status, geographical areas, number of siblings, kindergarten attendance, math self-beliefs (only year 5 and 6), belief about the importance of math and the type of high school (only year 10). In order to check if the gap is increasing with the age of the child, lacking longitudinal data, we use a pseudo panel technique and find that the gap is increasing from age 7 to age 15 with a slight decrease at age 11. Finally, we study the distribution of the gap across test scores, using quantile regressions, and find that the gap is higher for top performing children. This result is confirmed using a metric-free technique.
    Date: 2016–02

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