nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒10‒02
five papers chosen by
  1. Cognitive ability and the effect of strategic uncertainty By Nobuyuki Hanaki; Nicolas Jacquemet; Stéphane Luchini; Adam Zylbersztejn
  2. CEO Personality and Firm Policies By Gow, Ian D.; Kaplan, Steven N.; Larcker, David F.; Zakolyukina, Anastasia A.
  3. Fluid intelligence and cognitive reflection in a strategic environment: evidence from dominance-solvable games By Nobuyuki Hanaki; Nicolas Jacquemet; Stéphane Luchini; Adam Zylbersztejn
  4. Patience and time consistency in collective decisions By Laurent Denant-Boemont; Enrico Diecidue; Olivier L'Haridon
  5. Dual Decision Processes: Retrieving Preferences when some Choices are Intuitive By Francesco Cerigioni
  1. By: Nobuyuki Hanaki (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Nicolas Jacquemet (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stéphane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales - Université Paul Cézanne - Aix-Marseille 3 - Université de la Méditerranée - Aix-Marseille 2 - CNRS - Centre National de la Recherche Scientifique); Adam Zylbersztejn (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)
    Abstract: How is one's cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple 2 × 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive ability are more sensitive to strategic uncertainty than those with lower cognitive ability.
    Keywords: Strategic uncertainty,Bounded rationality,Robot,Experiment
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:hal:journl:halshs-01261036&r=neu
  2. By: Gow, Ian D. (Harvard University); Kaplan, Steven N. (University of Chicago); Larcker, David F. (Stanford University); Zakolyukina, Anastasia A. (University of Chicago)
    Abstract: Based on two samples of high quality personality data for chief executive officers (CEOs), we use linguistic features extracted from conferences calls and statistical learning techniques to develop a measure of CEO personality in terms of the Big Five traits: agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience. These personality measures have strong out-of-sample predictive performance and are stable over time. Our measures of the Big Five personality traits are associated with financing choices, investment choices and firm operating performance.
    Date: 2016–07
    URL: http://d.repec.org/n?u=RePEc:ecl:stabus:3444&r=neu
  3. By: Nobuyuki Hanaki (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Nicolas Jacquemet (PSE - Paris School of Economics); Stéphane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales - Université Paul Cézanne - Aix-Marseille 3 - Université de la Méditerranée - Aix-Marseille 2 - CNRS - Centre National de la Recherche Scientifique); Adam Zylbersztejn (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon)
    Abstract: Dominance solvability is one of the most straightforward solution concepts in game theory. It is based on two principles: dominance (according to which players always use their dominant strategy) and iterated dominance (according to which players always act as if others apply the principle of dominance). However, existing experimental evidence questions the empirical accuracy of dominance solvability. In this study, we study the relationships between the key facets of dominance solvability and two cognitive skills, cognitive reection and uid intelligence. We provide evidence that the behaviors in accordance with dominance and one-step iterated dominance are both predicted by one's uid intelligence rather than cognitive reection. Individual cognitive skills, however, only explain a small fraction of the observed failure of dominance solvability. The accuracy of theoretical predictions on strategic decision making thus not only depends on individual cognitive characteristics, but also, perhaps more importantly, on the decision making environment itself.
    Keywords: Raven's test,experiment,Dominance solvability,cognitive skills,CRT
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-01359231&r=neu
  4. By: Laurent Denant-Boemont (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique); Enrico Diecidue (INSEAD - INSEAD); Olivier L'Haridon (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We present experimental evidence regarding individual and group decisions over time. Static and longitudinal methods are combined to test four conditions on time preferences: impatience, stationarity, age independence, and dynamic consistency. Decision making in groups should favor coordination via communication about voting intentions. We find that individuals are neither patient nor consistent, that groups are both patient and highly consistent, and that information exchange between participants helps groups converge to stable decisions. Finally we provide additional evidence showing that our results are driven by the specific role of groups and not by either repeated choices or individual preferences when choosing for other subjects.
    Keywords: Time Preferences,Dynamic Consistency,present-bias,Group Decisions
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:hal:journl:halshs-01306949&r=neu
  5. By: Francesco Cerigioni
    Abstract: Evidence from cognitive sciences shows that some choices are conscious and reflect individual preferences while others tend to be intuitive, driven by analogies with past experiences. Under these circumstances, usual economic modeling might not be valid because not all choices are the consequence of individual tastes. We here propose a behavioral model that can be used in standard economic analysis that formalizes how conscious and intuitive choices arise by presenting a decision maker composed by two systems. One system compares past decision problems with the one the decision maker faces, and it replicates past behavior when the problems are similar enough (Intuitive choices). Otherwise, a second system is activated and preferences are maximized (Conscious choices). We then present a novel method capable of finding conscious choices just from observed behavior and finally, we provide a choice theoretical foundation of the model and discuss its importance as a general framework to study behavioral inertia.
    Keywords: Dual Processes, Fast and Slow Thinking, Similarity, Revealed Preferences, memory, Intuition
    JEL: D01 D03 D60
    Date: 2016–09
    URL: http://d.repec.org/n?u=RePEc:bge:wpaper:924&r=neu
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