nep-neu New Economics Papers
on Neuroeconomics
Issue of 2017‒05‒21
three papers chosen by
Daniel Houser
George Mason University

  1. Cognitive ability and the effect of strategic uncertainty By Nobuyuki Hanaki; Nicolas Jacquemet; Stéphane Luchini; Adam Zylbersztejn
  2. Fluid intelligence and cognitive reflection in a strategic environment: evidence from dominance-solvable games By Nobuyuki Hanaki; Nicolas Jacquemet; Stéphane Luchini; Adam Zylbersztejn
  3. Modelling Heterogeneity in the Resilience to Major Socioeconomic Life Events By Fabrice Etilé; Paul Frijters; David W. Johson; Michael A. Shields

  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 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille); 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: Experiment,Strategic uncertainty,Bounded rationality,Robot
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:hal:pseose:halshs-01261036&r=neu
  2. 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 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille); Adam Zylbersztejn (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    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:pseose:hal-01359231&r=neu
  3. By: Fabrice Etilé (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, INRA - Institut National de la Recherche Agronomique, PSE - Paris School of Economics); Paul Frijters (CEPR - Center for Economic Policy Research - CEPR, LSE - London School of Economics and Political Science); David W. Johson (Monash University [Malaysia]); Michael A. Shields (Monash University [Malaysia])
    Abstract: Using a novel, dynamic finite mixture model applied to 12 years of nationally representative panel data, we explore individual heterogeneity in the total psychological response (our measure of resilience) to ten major adverse life events, including serious illness, redundancy and crime victimisation. Importantly, this model takes into account that individuals are not randomly selected into adverse events, that some events are anticipated in advance of their occurrence, and that the immediate psychological response and the speed of adaptation may differ across individuals. Additionally, we generate a ‘standardised event’ in order to document the distribution of general resilience in the population. We find considerable heterogeneity in the response to adverse events, with the total psychological loss of people with low resilience being several times larger than the average loss. We also find that resilience is strongly correlated with clinical measures of mental health, but only weakly correlated with cognitive and non-cognitive traits. Finally, we find that resilience in adulthood to some extent is predictable by childhood socioeconomic circumstances; the strongest predictor we identify is good childhood health.
    Keywords: Psychological Health, Resilience, Life Events, Childhood, Panel,Data, Mixture Model
    Date: 2017–03
    URL: http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01485989&r=neu

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