nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒04‒16
three papers chosen by
Daniel Houser
George Mason University

  1. Clever Enough to Tell the Truth By Ruffle, Bradley; Tobol, Yossi
  2. Overconfidence, Incentives and Digit Ratio By Neyse, Levent; Bosworth, Steven; Ring, Patrick; Schmidt, Ulrich
  3. Cognitive Skills, Non-Cognitive Skills, and Family Background: Evidence from Sibling Correlations By Silke Anger; Daniel D. Schnitzlein

  1. By: Ruffle, Bradley (Wilfrid Laurier University); Tobol, Yossi (Jerusalem College of Technology (JTC))
    Abstract: We conduct a field experiment on 427 Israeli soldiers who each rolled a six-sided die in private and reported the outcome. For every point reported, the soldier received an additional half-hour early release from the army base on Thursday afternoon. We find that the higher a soldier's military entrance score, the more honest he is on average. We replicate this finding on a sample of 156 civilians paid in cash for their die reports. Furthermore, the civilian experiments reveal that two measures of cognitive ability predict honesty, whereas general self-report honesty questions and a consistency check among them are of no value. We provide a rationale for the relationship between cognitive ability and honesty and discuss its generalizability.
    Keywords: honesty, cognitive ability, soldiers, high non-monetary stakes
    JEL: C93 M51
    Date: 2016–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9860&r=neu
  2. By: Neyse, Levent; Bosworth, Steven; Ring, Patrick; Schmidt, Ulrich
    Abstract: This paper contributes to a better understanding of the biological underpinnings of overconfidence by analyzing performance predictions in the Cognitive Reflection Test with and without monetary incentives. In line with the existing literature we find that the participants are too optimistic about their performance on average; incentives lead to higher performance; and males score higher than females on this particular task. The novelty of this paper is an analysis of the relation between participants’ performance prediction accuracy and their second to fourth digit ratio. It has been reported that the digit ratio is a negatively correlated bio-marker of prenatal testosterone exposure. In the unincentivized treatment, we find that males with low digit ratios, on average, are significantly more overconfident about their performance. In the incentivized treatment, however, we observe that males with low digit ratios, on average, are less overconfident about their performance. These effects are not observed in females. We discuss how these findings fit into the literature on testosterone and decision making and how they might help to explain seemingly opposing evidence.
    Keywords: Behavioural genetics,Personality,Sexual dimorphism
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:ifwkie:130145&r=neu
  3. By: Silke Anger; Daniel D. Schnitzlein
    Abstract: This paper estimates sibling correlations in cognitive and non-cognitive skills to evaluate the importance of family background for skill formation. Based on a large representative German dataset including IQ test scores and measures of non-cognitive skills, a restricted maximum likelihood model indicates a strong relationship between family background and skill formation. Sibling correlations in non-cognitive skills range from 0.22 to 0.46; therefore, at least one-fifth of the variance in these skills results from shared sibling-related factors. Sibling correlations in cognitive skills are higher than 0.50; therefore, more than half of the inequality in cognition can be explained by shared family background. Comparing these findings with those in the intergenerational skill transmission literature suggests that intergenerational correlations capture only part of the influence of family on children’s cognitive and non-cognitive skills, as confirmed by decomposition analyses and in line with previous findings on educational and income mobility.
    Keywords: Sibling correlations, family background, non-cognitive skills, cognitive skills, intergenerational mobility
    JEL: J24 J62
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp834&r=neu

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