nep-neu New Economics Papers
on Neuroeconomics
Issue of 2017‒02‒12
ten papers chosen by

  1. No Gender Difference in Willingness to Compete When Competing against Self By Coren L. Apicella; Elif E. Demiral; Johanna Mollerstrom
  2. Emotion at Stake – The role of stake size and emotions in a power-to-take game experiment in China with a comparison to Europe By Hennig-Schmidt, Heike; Bosman, Ronald; van Winden, Frans
  3. The anatomy of distributional preferences with group identity By Daniel Muller
  4. In Your Eyes Only? Discrepancies and Agreement Between Self- and Other-Reports of Personality From Age 14 to 29 By Julia Rohrer; Boris Egloff; Michal Kosinski; David Stillwell; Stefan Schmukle
  5. Job Loss and Changes in Personality - Evidence from Plant Closures By Anger, Silke; Camehl, Georg; Peter , Frauke H.
  6. Decision structure of risky choice By Lamb Wubin; Naixin Ren
  7. Mindreading and Endogenous Beliefs in Games By Lauren Larrouy; Guilhem Lecouteux
  8. Sentiment, Risk Aversion, and Time Preference By Giovanni Barone-Adesi; Loriano Mancini; Hersh Shefrin
  9. When does it matter how you ask? Cross-subject heterogeneity in framing effects in a charitable donation experiment By David Fielding; Stephen Knowles; Kirsten Robertson
  10. Testing the Consistency of Preferences in Discrete Choice Experiments: An Eye Tracking Study By Segovia, Michelle S.; Palma, Marco A.; Chavez, Daniel E.

  1. By: Coren L. Apicella; Elif E. Demiral; Johanna Mollerstrom
    Abstract: We report on two experiments investigating whether there is a gender difference in thewillingness to compete against oneself (self-competition), similar to what is found whencompeting against others (other-competition). In one laboratory and one online marketexperiment, involving a total of 1,200 participants, we replicate the gender-gap inwillingness to other-compete but find no evidence of a gender difference in the willingnessto self-compete. We explore the roles of risk and confidence and suggest that these factorscan account for the different findings. Finally, we document that self-competition does noworse than other-competition in terms of performance boosting.
    Keywords: gender, competition, discrimination, experiment
    JEL: C90 C91 J16 J71
    Date: 2017
  2. By: Hennig-Schmidt, Heike; Bosman, Ronald; van Winden, Frans
    Abstract: This paper experimentally investigates how monetary incentives and emotions influence behaviour in a two-player power-to-take game. In this game, one player can claim any part of the other's endowment (take rate), and the second player can respond by destroying his or her own endowment. We focus on how stake size (endowment) and emotions influence responses in China. Our main findings are the following. First, average (median) take and destruction rates are not influenced by a large or small stake size. Second, emotions related to anger and joy mediate the impact of the take rate on destruction. Third, monetary incentives matter for the reaction function of the responder regarding the take rate: when stakes are low there is more destruction for low and intermediate take rates (smaller than 80%), while, when stakes are high, there is more destruction for high take rates (larger than 80%). This result is explained in terms of the amount of behavioural control that the responder has over his or her actions via emotion regulation. Finally, comparing our data with existing data for countries in Europe, it turns out that average (median) take and destruction rates are similar, while a similar set of emotions mediates destruction in both regions.
    JEL: C91 O53 O52
    Date: 2016
  3. By: Daniel Muller
    Abstract: This paper dissects distributional preferences with group identity in a modified dictator game. I estimate individual-level utility functions with two parameters that govern the trade- offs between equity and efficiency and giving to self and to other. Subjects put on average less weight on income of the out-group, but overall only a minority behaves completely selfishly. Giving to the out-group also renders subjects more accepting of inequality. However, the experiment also uncovers a large heterogeneity of preferences. It seems that those who are social become slightly less social in the presence of the out-group. The number of selfish individuals is instead hardly affected. Moreover, choices in both treatments overwhelmingly stem from well-behaved, yet systematically different underlying social preference functionals. Hence this experiment suggests that the rational choice approach, which is predominantly used in the literature, is a useful tool to understand the effect of group identity on social preferences. Interestingly, I also find that the weight on self, but not the individual equity-efficiency trade-off, predicts political left-right self-assessment as more conservative voters are more selfish. I also document gender differences: females put less weight on self, are more inequality averse and react more strongly to the treatment.
    Keywords: Social identity, GARP, distributional preferences
    JEL: D30 D63 H50
    Date: 2017–01
  4. By: Julia Rohrer (University of Leipzig); Boris Egloff (Johannes Gutenberg University Mainz); Michal Kosinski (Stanford University); David Stillwell (University of Cambridge); Stefan Schmukle (University of Leipzig)
    Abstract: Do others perceive the personality changes that take place between the ages of 14 and 29 in a similar fashion as the aging person him- or herself? This cross-sectional study analyzed age trajectories in self- versus other-reported Big Five personality traits and in self-other agreement in a sample of more than 10,000 individuals from the myPersonality Project. Results for self-reported personality showed maturation effects (increases in extraversion, conscientiousness, openness to experience, and emotional stability), and this pattern was generally also reflected in other-reports, albeit with discrepancies regarding timing and magnitude. Age differences found for extraversion were similar between the self- and other reports, but the increase found in self-reported conscientiousness was delayed in other reports, and the curvilinear increase found in self-reported openness was slightly steeper in other-reports. Only emotional stability showed a distinct mismatch with an increase in self reports, but no significant age effect in other-reports. Both the self- and other-reports of agreeableness showed no significant age trends. The trait correlations between the self- and other-reports increased with age for emotional stability, openness, agreeableness, and conscientiousness; by contrast, agreement regarding extraversion remained stable. The profile correlations confirmed increases in self-other agreement with age. We suggest that these gains in agreement are a further manifestation of maturation. Taken together, our analyses generally show commonalities but also some divergences in age-associated mean level changes between self- and other-reports of the Big Five, as well as an age trend towards increasing self-other agreement.
    Keywords: personality maturation, other-reports, self-other agreement, Big Five, personality cross-ratings
    Date: 2017
  5. By: Anger, Silke; Camehl, Georg; Peter , Frauke H.
    Abstract: Personality traits and other non-cognitive skills have long been considered to be quite stable over adulthood. Economic studies on non-cognitive skills as determinants of educational and labor market outcomes therefore assumed their stability over time to rule out reverse causality. However, recent evidence from psychology suggests that the stability assumption may not always hold. Our paper aims at identifying causal effects of job loss on changes in personality and thereby at complementing recent studies in economics and psychology on the stability of personality traits. We use data from the German Socio-Economic Panel Study (SOEP) for the years 2004 to 2014 which include measures of the Big 5 personality inventory with two repeated measurements as well as detailed employment information. We focus on plant closures and dismissals, which have been widely used as an exogenous event in the literature. Our results based on linear regression models and on a novel econometric method to account for selectivity suggest that job loss leads to a drop in emotional stability. The other dimensions of the Big 5 personality inventory remain (nearly) unchanged. Moreover, the drop in emotional stability is more pronounced for individuals who do not find re-employment. Individuals who face changes in their non-cognitive skills following a job loss may find it more difficult to re-enter employment, which may explain duration dependence of unemployment.
    JEL: I12 J24 J65
    Date: 2016
  6. By: Lamb Wubin; Naixin Ren
    Abstract: As we know, there is a controversy about the decision making under risk between economists and psychologists. We discuss to build a unified theory of risky choice, which would explain both of compensatory and non-compensatory theories. Obviously, decision strategy is not stuck in a rut, but based on the things, in the real life, and experiment materials, in the laboratory. We believe that human has a decision structure, which has constant and variable, interval, concepts of probability and value. Namely, according to cognition ability, we argue that people could not build a continuous and accurate subjective probability world, but several intervals of probability perception. More precisely, decision making is an order reduction process, which is simplifying the decision structure. However, we are not really sure which reduction path will occur during decision making process. It is why preference reversal always happens when making decisions. The most efficient way to reduce the order of decision structure is mathematical expectation. We also argue that the deliberation time at least has four parts, which are consist of substitution time,{\tau}''(G) d{\tau} time, {\tau}'(G) d{\tau} time and calculation time. Decision structure can simply explain the phenomenon of paradoxes and anomalies. JEL Codes: C10, D03, D81.
    Date: 2017–01
  7. By: Lauren Larrouy (Université Côte d'Azur; GREDEG CNRS); Guilhem Lecouteux (Université Côte d'Azur; GREDEG CNRS)
    Abstract: We argue that a Bayesian explanation of strategic choices in games requires introducing a psychological theory of belief formation. We highlight that beliefs in epistemic game theory are derived from the actual choice of the players, and cannot therefore explain why Bayesian rational players should play the strategy they actually chose. We introduce the players’ capacity of mindreading in a game theoretical framework with the simulation theory, and characterise the beliefs that Bayes rational players could endogenously form in games. We show in particular that those beliefs need not be ratifiable, and therefore that rational players can form action-dependent beliefs.
    Keywords: prior beliefs, mindreading, simulation, action-dependent beliefs, choice under uncertainty
    JEL: B41 C72 D81
    Date: 2017–01
  8. By: Giovanni Barone-Adesi (University of Lugano, Ecole Polytechnique Fédérale de Lausanne, and Swiss Finance Institute); Loriano Mancini (Ecole Polytechnique Fédérale de Lausanne and Swiss Finance Institute); Hersh Shefrin (Santa Clara University)
    Abstract: We estimate aggregate preferences, beliefs, and sentiment from option prices and historical returns. Our market-based estimates correlate well with independent survey-based estimates, and yet provide a number of novel insights. Our analysis points out two significant issues related to overconfidence. First, the Baker--Wurgler index strongly reflects excessive optimism but not overconfidence. Second, optimism and overconfidence comove over time and generate a perceived negative risk-return relationship, while objectively the relationship is positive. The appendices for this paper are available at the following URL:
    Keywords: Sentiment, Pricing Kernel, Optimism, Overconfidence, Option Data
    JEL: G02 G12
  9. By: David Fielding (Department of Economics, University of Otago, New Zealand); Stephen Knowles (Department of Economics, University of Otago, New Zealand); Kirsten Robertson (Department of Marketing, University of Otago, New Zealand)
    Abstract: In this paper we present results from an experiment that draws on insights from economics on different possible incentives for generosity and insights from social psychology on different possible personality types. Firstly, we test whether the effect of an appeal to a pure altruism motive versus an appeal to a self-interest motive varies across subjects. We find that there is substantial variation, and this variation is strongly correlated with a subject’s level of materialism. Secondly, we test whether spoken appeals and written appeals have different effects. We find no evidence for such a difference. These results have important implications for the fundraising strategies of charities and for experimental design.
    Keywords: Altruism, Self-Interest, Dictator Game, Materialism
    JEL: D64 M31 C91
    Date: 2017–01
  10. By: Segovia, Michelle S.; Palma, Marco A.; Chavez, Daniel E.
    Keywords: Choice Experiments, Eye-Tracking, Consistency, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, C91, C18,
    Date: 2017

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