|
on Neuroeconomics |
|
Issue of 2017‒09‒24
five papers chosen by |
| By: | David Gill; Victoria Prowse |
| Abstract: | Response times are a simple low-cost indicator of the process of reasoning in strategic games. In this paper, we leverage the dynamic nature of response-time data from repeated strategic interactions to measure the strategic complexity of a situation by how long people think on average when they face that situation (where we categorize situations according to the characteristics of play in the previous round). We find that strategic complexity varies significantly across situations, and we find considerable heterogeneity in how responsive subjects’ thinking times are to complexity. We also study how variation in response times at the individual level across rounds a?ects strategic behavior and success. We find that ‘overthinking’ is detrimental to performance: when a subject thinks for longer than she would normally do in a particular situation, she wins less frequently and earns less. The behavioral mechanism that drives the reduction in performance is a tendency to move away from Nash equilibrium behavior. Overthinking is detrimental even though subjects who think for longer on average tend to be more successful. Finally, cognitive ability and personality have no e?ect on average response times. |
| Keywords: | Response time; decision time; thinking time; strategic complexity; game theory; strategic games; repeated games; beauty contest; cognitive ability; personality |
| JEL: | C72 C91 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1296&r=neu |
| By: | Shirokova, G.; Laskovaia, A.; Osiyevskyy, O. |
| Abstract: | Strategic management and entrepreneurship literature traditionally pay substantive attention to rational decision-making processes with clear formalized plans and analytical procedures. Despite all the advantageous of planning-based logic, some scholars prefer alternative approaches to making decisions. In entrepreneurship field, the effectuation theory rose to prominence, emphasizing analogical rather than analytical reasoning. While prior effectuation research focused primarily on studying personal characteristics of entrepreneurs, this paper is intended to reach a new level in examining macro-level factors that may influence the efficiency of entrepreneurial cognitive processes. Particularly, we investigate how formal in-stitutions shape the relationship between venture cognitive logic of 4413 student entrepreneurs and performance of their ventures. We demonstrate that this relationship is to a large extent shaped by the characteristics of the country-level institutional environment (particularly, level of financial market development and generalized index of the ease of doing business). |
| Keywords: | effectuation, causation, institutions, GUESSS, ease of doing business, financial market development index, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:6447&r=neu |
| By: | Sergio Beraldo (Università di Napoli Federico II and CSEF) |
| Abstract: | I offer an impossibility result on nudging grounded in the theory of intentional action. I prove that if individuals are not open to money-pump manipulation and nudges are motivationally irrelevant, any induced choice is unintentional and just reflects the preferences of the choice architect. Autonomy is therefore violated, and nudging proves to be inconsistent with liberal principles at a fundamental level. |
| Keywords: | Nudging, Manipulation, Autonomy |
| JEL: | D03 D6 |
| Date: | 2017–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:485&r=neu |
| By: | Brocas, Isabelle; Carrillo, Juan D; Kodaverdian, Niree |
| Abstract: | We conduct a laboratory experiment to investigate the evolution of altruism and strategic giving from childhood to adulthood. 334 school-age children and adolescents (from K to 12th grade) and 48 college students participated in a one-shot dictator game and a repeated alternating version of the same dictator game. Each dictator game featured the choice between a fair split (4; 4) and a selfish split (6; 1) between oneself and an anonymous partner. We find that altruism (fair split in the one-shot game) increases with age in children and drops after adolescence, and cannot alone account for the development of cooperation in the repeated game. Older subjects reciprocate more and also better anticipate the potential gains of initiating a cooperative play. Overall, children younger than 7 years of age are neither altruistic nor strategic while college students strategically cooperate despite a relatively low level of altruism. Participants in the intermediate age range gradually learn to anticipate the long term benefits of cooperation and to adapt their behavior to that of their partner. A turning point after which cooperation can be sustained occurs at about 11-12 years of age. |
| Keywords: | altruism; developmental decision-making; repeated games; strategic giving |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12288&r=neu |
| By: | Gerhardt, Holger; Schildberg-Hörisch, Hannah; Willrodt, Jana |
| Abstract: | A core prediction of recent “dual-self” models is that risk attitudes depend on self-control. While these models have received a lot of attention, empirical evidence regarding their predictions is lacking. We derive hypotheses from three prominent models for choices between risky monetary payoffs under regular and reduced self-control. We test the hypotheses in a lab experiment, using a well-established ego depletion task to reduce self-control, and measuring risk attitudes via finely graduated choice lists. Manipulation checks document the effectiveness of the depletion task. We find no systematic evidence in favor of the theoretical predictions. In particular, depletion does not increase risk aversion. |
| Keywords: | Risk attitudes, Self-control, Ego depletion, Dual-self models, Experiment |
| JEL: | C91 D03 D81 |
| Date: | 2017–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81490&r=neu |