nep-neu New Economics Papers
on Neuroeconomics
Issue of 2019‒12‒16
four papers chosen by

  1. Neuroeconomics and modern neuroscience By Daniel Serra
  2. Cognitive Skills and Economic Preferences in the Fund Industry By Farago, Adam; Holmén, Martin; Holzmeister, Felix; Kirchler, Michael; Razen, Michael
  3. Child's Socio-Emotional Skills: Is There a Quantity-Quality Trade-off? By Simon Briole; Hélène Le Forner; Anthony Lepinteur
  4. Parental Inputs and Socio-Economic Gaps in Early Child Development By Macmillan, Lindsey; Tominey, Emma

  1. By: Daniel Serra (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - UM - Université de Montpellier - INRA - Institut National de la Recherche Agronomique)
    Abstract: The paper is an overview of the main significant advances in the knowledge of brain functioning by modern neuroscience that have contributed to the emergence of neuroeconomics and its rise over the past two decades. These advances are grouped over three non-independent topics referred to as the "emo-rational" brain, "social" brain, and "computational" brain. For each topic, it emphasizes findings considered as critical to the birth and development of neuroeconomics while highlighting some of prominent questions about which knowledge should be improved by future research. In parallel, it shows that the boundaries between neuroeconomics and several recent subfields of cognitive neuroscience, such as affective, social, and more generally, decision neuroscience, are rather porous. It suggests that a greater autonomy of neuroeconomics should perhaps come from the development of studies about more economic policy-oriented concerns. In order to make the paper accessible to a large audience the various neuroscientific notions used are defined and briefly explained. In the same way, for economists not specialized in experimental and behavioral economics, the definition of the main economic models referred to in the text is recalled.
    Keywords: neuroeconomics,neuroscience,behavioral economics,experimental economics
    Date: 2019
  2. By: Farago, Adam; Holmén, Martin; Holzmeister, Felix (University of Innsbruck); Kirchler, Michael; Razen, Michael
    Abstract: By running a battery of incentivized and non-incentivized experiments with fund managers from four countries in the European Union, we investigate the impact of fund managers' cognitive skills and economic preferences on the dynamics of the mutual funds they manage. First, we find that fund managers' risk tolerance positively correlates with fund risk when accounting for fund benchmark, fund category, and other controls. Second, we show that fund managers' ambiguity tolerance positively correlates with the funds' tracking error from the benchmark. Finally, we report that cognitive skills do not explain fund performance in terms of excess returns. However, we do find that fund managers with high cognitive reflection abilities generate these returns at lower risk.
    Date: 2019–07–23
  3. By: Simon Briole (PSE - Paris School of Economics, 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); Hélène Le Forner (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Anthony Lepinteur (University of Luxembourg [Luxembourg])
    Abstract: Though it is largely admitted that non-cognitive skills matter for adult outcomes, little is known about how the family environment affects their formation. In this paper, we use a cohort study of children born in 2000-2001 in the U.K. (Millennium Cohort Study) to estimate the effect of family size on socio-emotional skills, measured by the Strengths and Difficulties Questionnaire. To account for the endogeneity of fertility decisions, we use a well-known instrumental approach that exploits parents' preference for children's gender diversity. We show that an increase in family size negatively affects the socioemotional skills of the two first children in a persistent manner. However, we show that this negative effect is entirely driven by girls. We provide evidence that this gender effect is partly driven by an unequal response of parents' time investment in favor of boys and, to a lesser extent, to an unequal demand for household chores.
    Keywords: Non-cognitive skills,Family Size,Birth Order,Child development
    Date: 2019–10
  4. By: Macmillan, Lindsey (Institute of Education, University of London); Tominey, Emma (University of York)
    Abstract: By the time children start school, socio-economic gaps are evident in child skills. We document a causal effect of a reform to mothers' education on her child's skills and use mediation analysis to explore the role of parental inputs as mechanisms. The reform shifted mothers' education from no, to a low level of qualifications. Our results suggest that financial resources are an important channel, explaining up to 59% of the effect on child cognitive skills. On top of this, parental investments of health behaviours during pregnancy and monetary investments at home explain a further 14% of the test score gaps.
    Keywords: child development, test scores, socio-emotional skills, parental inputs, decomposition, ALSPAC
    JEL: I24 J13 D10
    Date: 2019–11

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