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on Neuroeconomics |
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Issue of 2019‒07‒29
four papers chosen by |
| By: | Gill, David (Purdue University); Prowse, Victoria (Purdue University) |
| 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 whenthey 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 affects 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 effect 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 Classification: C72; C91. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:431&r=all |
| By: | Cobb-Clark, Deborah A.; Dahmann, Sarah Christina; Kamhöfer, Daniel A.; Schildberg-Hörisch, Hannah |
| Abstract: | This paper studies self-control in a nationally representative sample. Using the wellestablished Tangney scale to measure trait self-control, we find that people's age as well as the political and economic institutions they are exposed to have an economically meaningful impact on their level of self-control. A higher degree of self-control is, in turn, associated with better health, educational and labor market outcomes as well as greater financial and overall well-being. Parents' self-control is linked to reduced behavioral problems among their children. Importantly, we demonstrate that self-control is a key behavioral economic construct which adds significant explanatory power beyond other more commonly studied personality traits and economic preference parameters. Our results suggest that self-control is potentially a good target for intervention policies. |
| Keywords: | self-control,Tangney scale,personality traits,intergenerational transmission |
| JEL: | D91 J24 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:319&r=all |
| By: | Amador, Luis; Brañas-Garza, Pablo; Espín, Antonio M.; Garcia, Teresa; Hernández, Ana |
| Abstract: | There is an intense debate whether decision making under uncertainty is partially driven by cognitive abilities. The critical issue is whether choices arising from subjects with lower cognitive abilities are more likely driven by errors or lack of understanding than pure preferences for risk. The latter implies that the often argued link between risk preferences and cognitive abilities might be a spurious correlation. This experiment reports evidence from a sample of 556 participants who made choices in risk-related tasks about winning and losing money and completed three cognitive tasks, all with real monetary incentives: number-additions under time pressure (including incentive-compatible expected number of correct additions), the Cognitive Refection Test (to measure analytical/reflective thinking) and the Remote Associates Test (for convergent thinking). Results are unambiguous: none of our cognition measures plays any systematic role on risky decision making. Our data indeed suggest that cognitive abilities are negatively associated with noisy, inconsistent choices, which might have led to spurious correlations with risk preferences in previous studies. |
| Keywords: | decision making under uncertainty, cognitive abilities, online experiment |
| JEL: | C91 D81 |
| Date: | 2019–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95178&r=all |
| By: | Fochmann, Martin; Hechtner, Frank; Kirchler, Erich; Mohr, Peter |
| Abstract: | Emotions have a strong impact on our everyday life, including our mental health, sleep pattern, overall well-being, and judgment and decision making. Our paper is the first study to show that incidental emotions, i.e., emotions not related to the actual choice problem, influence the compliance behavior of individuals. In particular, we provide evidence that individuals have a lower willingness to comply with social norms after being primed with positive incidental emotions compared with aversive emotions. This result is replicated in a second study. As an extension to our first study, we add a neutral condition as a control. Willingness to comply in this condition ranges between the other two conditions. Importantly, this finding indicates that the valence of an emotion but not its arousal drives the influence on compliance behavior. Furthermore, we show that priming with incidental emotions is only effective if individuals are - at least to some extent - emotionally sensitive. |
| Keywords: | compliance behavior,emotions,cheating,tax evasion,norms,experimental economics |
| JEL: | C91 D91 H26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:237&r=all |