nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒04‒04
four papers chosen by
Daniel Houser
George Mason University

  1. Intelligence and defense spending: a cross-country evidence By Salahodjaev, Raufhon
  2. Leisure and Learning - Activities and Their Effects on Child Skill Development By Peter Funk; Thorsten Kemper
  3. The Logic of Love By Aviv Keren
  4. Creativity Under Fire: The Effects of Competition on Creative Production By Daniel P. Gross

  1. By: Salahodjaev, Raufhon
    Abstract: This paper investigates the association between intelligence and military expenditure, across 159 nations during the 1990-2013 period. The econometric results we provide are surprising. On one hand, we fail to confirm that intelligence has monotonic effect on military spending. However, the results also suggest a novel type of intelligence-military spending nexus. In particular, the regression estimates show that there is inverted U-shaped relationship between IQ and military expenditure. From a policy perspective these findings suggest that cognitive development that increases military expenditures is sustainable so long as defense sector has positive spillovers on economic and social well-being.
    Keywords: military, expenditure, intelligence, cross-country, IQ
    JEL: F52
    Date: 2016–03–01
  2. By: Peter Funk; Thorsten Kemper
    Abstract: This paper studies how variations in leisure time allocation help explain the variations in school children's cognitive skills. We use representative data on the time use of American children from the Child Development Supplement (CDS) to the Panel Study of Income Dynamics (PSID). Our findings suggest that 1) including time use data significantly contributes to explaining the variation in math and reading test scores; 2) in a relative ranking of the effect of raising the time spent on a given activity on the math test score music is placed at the top, followed by learning, reading, sports, watching television, attending school and sleep (in descending order). For the reading test score music ranks first again and reading second, before learning, school, television, sports and sleep; 3) when comparing the effect of child activities with that of parental investments on test scores in the PSID data, it turns out that activities have no less explanatory power than investments, proxied by an established investment measure, with higher explanatory power for the production of math skills.
    Keywords: Child development, leisure time activities
    JEL: D13 I21 J13 J24
    Date: 2016–02–08
  3. By: Aviv Keren
    Abstract: This philosophical work lays the groundwork for a game-theoretic account of (romantic) love, substantiating the folk-psychological conception of love as 'a unification of souls'. It does so by setting up an appropriate universal framework of cognitive agency, that accommodates such unifications and motivates them. This framework applies the gene’s eye view of evolution to the evolution of cognition, integrating it with a distributed, dynamic theory of selfhood – and the game-theoretic principles of agent-unification that govern these dynamics. The application of this framework to particular biological settings produces love as a theoretical evolutionary prediction (unveiling its rationality). Through this, the connection of the strategic normativity to love's real-life behavioral and phenomenological expressions is systematically explored.
    Date: 2016–03
  4. By: Daniel P. Gross (Harvard Business School, Strategy Unit)
    Abstract: Though fundamental to innovation and essential to many industries and occupations, the creative act has received limited attention as an economic behavior and has historically proven difficult to study. This paper studies the incentive effects of competition on individuals' creative production. Using a sample of commercial logo design competitions, and a novel, content-based measure of originality, I find that competition has an inverted-U effect on creativity: some competition is necessary to induce agents to produce radically novel, untested ideas over incrementally tweaking their earlier work, but heavy competition drives them to stop investing altogether. The results are consistent with economic theory and reconcile conflicting evidence from an extensive literature on the effects of competition on innovation, with implications for R&D policy, competition policy, and organizations in creative or research industries.
    Keywords: Creativity; Incentives; Tournaments; Competition; Radical vs. incremental innovation
    JEL: D81 D82 D83 L4 M52 M55 O31 O32
    Date: 2016–03

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