nep-neu New Economics Papers
on Neuroeconomics
Issue of 2018‒12‒17
five papers chosen by

  1. Cognitive skills and the development of strategic sophistication By David Gill; Eduardo Fe
  3. The Effect of Monetary Incentives on Cognitive Effort, Emotions and Test-Solving Performance By Juan F. Castro; Gustavo Yamada; Hans Contreras; Freddy Linares; Herwig Watson
  4. Correlation Investigation: The Cognitive Reflection Test and the Math National Evaluation scores By Anca Tamas
  5. The Work-Family Balance: Making Men and Women Happy By Francesca Luppi; Letizia Mencarini; Sarah Grace See

  1. By: David Gill; Eduardo Fe
    Abstract: In this paper, we investigate how observable cognitive skills influence the development of strategic sophistication. To answer this question, we study experimentally how psychometric measures of theory-of-mind and cognitive ability (or‘fluid intelligence')work together with age to determine the strategic ability and level-k behavior of children in a variety of incentivized strategic interactions. We find that better theory-of-mind and cognitive ability predict strategic sophistication in competitive games. Furthermore, age and cognitive ability act in tandem as complements, while age and theory-of-mind operate independently. Older children respond to information about the cognitive ability of their opponent, which provides support for the emergence of a sophisticated strategic theory-of-mind. Finally, theory-of-mind and age strongly predict whether children respond to intentions in a gift-exchange game, while cognitive ability has no influence, suggesting that different psychometric measures of cognitive skill correspond to different cognitive processes in strategic situations that involve the understanding of intentions.
    Keywords: Cognitive skills; theory-of-mind; cognitive ability; fluid intelligence; strategic sophistication; age; children; experiment; level-k; bounded rationality; non-equilibrium thinking; intentions; gift-exchange game; competitive game; strategic game; strategic interaction.
    JEL: C91 D91 J24
    Date: 2018–11
  2. By: Deepak Gupta (University School of Management Studies, Guru Gobind Singh Indraprastha University)
    Abstract: People, everday are inumdated with making decisions whether they are big or small. Cognitive psychology plays a major role in how people make their choices. Cognitive bias is known to have an effect on decision making. These biases are based on memory which create a systematic deviation in thinking and processing information. This paper aims to identify the effect of select cognitive biases i.e., Overconfidence bias, Endowment bias, Ambiguity Aversion bias and Recency bias on General Decision Making of a person as well as Financial Decision Making. The study also explores the differences and similarities in cognitive biases working during general decision making and financial decision making. For this, a self-administered questionnaire was used to collect data from 416 people and analysis and conclusions were drawn based on it.
    Keywords: Over confidence bias, Endowment bias, Ambiguity Aversion bias, Recency bias, Decision making, Financial Decision Making
    JEL: M00
    Date: 2018–10
  3. By: Juan F. Castro (Universidad del Pacífico); Gustavo Yamada (Universidad del Pacífico); Hans Contreras (Universidad Nacional Mayor de San Marcos); Freddy Linares (Neurometrics); Herwig Watson (Neurometrics)
    Abstract: The relation between monetary incentives, cognitive effort and task performance has been extensively studied. There is, however, scant experimental evidence about the concurrent effect of incentives on cognitive effort and emotions, and its implications for task performance. It is well documented that high-stakes tests correlate with students’ anxiety and performance, but the available evidence is not causal. In this paper we estimate the effect of providing a monetary prize on the cognitive effort, emotions and efficacy exhibited by a group of university students when solving a set of four mathematics and logical reasoning questions. The prize was conditional on answering all questions correctly and was randomly assigned within a group of 126 participants. We find that the incentive produced more cognitive effort but this did not translate into increased test-solving efficacy. We provide evidence suggesting that the absence of increased efficacy despite the greater input of cognitive effort can be linked to the participants’ emotional response to the prize.
    Keywords: Cognitive effort, emotions, monetary incentives, eye-tracking, facial expressions
    JEL: D91 C91
    Date: 2018–12
  4. By: Anca Tamas (Center of International Business and Economics; The Bucharest University of Economic Studies)
    Abstract: Purpose - the aim of the paper is to assess the relationship between the Cognitive Reflection Test (CRT) scores and the Math National Evaluation scores.Design/methodology/approach - statistical analyze and econometric methods, using SPSS, the Pearson correlation; critical assessment of literature review; quantitative methods.Findings - there is a significant, strong and positive correlation between the Math National Evaluation scores and the Cognitive Reflection Test scores, in both versions, the original CRT and the 10 items LCRT (Long Cognitive Reflection Test). Practical implications ? optional courses focused on logical reasoning could have a positive impact on Math National Evaluation scores.Originality/value ? to the author?s knowledge, this is the first analysis of the relationship between CRT scores and Math scores at secondary school level.Limitations - the participants were only from the Eastern part of Romania.
    Keywords: Cognitive Reflection Test, Math National Evaluation scores
    JEL: C02 I21
    Date: 2018–10
  5. By: Francesca Luppi; Letizia Mencarini; Sarah Grace See
    Abstract: The paper analyses how individuals’ subjective well-being, measured both in terms of life satisfaction and mental health, is affected by the work-family balance. We measure the work-family balance so as to encompass individuals’ roles as a partner, parent and employee. We, also, consider life satisfaction in partnership, family, and work as result of satisfaction with the innate psychological needs of competence, autonomy, and relatedness. Analyses are conducted on sub-samples of parents and working parents from the German Family Panel. Findings show that, even though satisfaction in the three roles is important for both men and women, differences between the sexes persist, and that these are rooted in traditional gender roles. In particular, women’s perception of being a “good mother” and men’s perception of being a “good worker” are crucial for subjective emotional and cognitive well-being.
    Keywords: Subjective Well-Being; work-family balance; basic psychological needs; Self Determination Theory
    Date: 2017–02

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