nep-neu New Economics Papers
on Neuroeconomics
Issue of 2019‒12‒23
five papers chosen by

  1. If You Could Read My Mind—An Experimental Beauty-Contest Game with Children By Hermes, Henning; Schunk, Daniel
  2. Till Death Do Us Part: Transactions between Losing One’s Spouse and the Big Five Personality Traits By Eva Asselmann; Jule Specht
  3. Do Productive Skills of Language Enhance Learners? Cognitive Ability? : An Experimental Study of Soft CLIL to Technology Majors By Chizuko Aiba; Junji Izumi
  4. Cognitive And Psychological Bias In Investment Decision-Making Behavior (Evidence From Indonesian Investor’s Behavior) By Ady, Sri Utami
  5. Cognitive Uncertainty By Benjamin Enke; Thomas Graeber

  1. By: Hermes, Henning (Dept. of Economics, Norwegian School of Economics and Business Administration); Schunk, Daniel (University of Mainz, Chair of Public and Behavioral Economics)
    Abstract: We develop a new design for the experimental beauty-contest game (BCG) that is suitable for children in school age and test it with 114 schoolchildren aged 9–11 years. In addition, we collect measures on cognitive skills and perspective-taking abilities to identify determinants of successful performance in the game. Results demonstrate that children can successfully understand and play a BCG. Choices start at a slightly higher level than those of adults but learning over time and depth of reasoning are largely comparable with the results of studies run with adults. Cognitive skills are predictive only of whether children choose weakly dominated strategies, whereas measures of perspective-taking abilities are strongly linked to successful performance in the BCG. These findings emphasize the importance of perspective-taking abilities for strategic interaction and economic decision-making. Our new design for the experimental BCG allows further study of the development of strategic interaction skills starting already in school age.
    Keywords: children; experimental beauty-contest game; guessing game; strategic interaction; decision-making; perspective-taking; theory of mind; empathy; noncognitive skills
    JEL: C72 C92
    Date: 2019–11–30
  2. By: Eva Asselmann; Jule Specht
    Abstract: Objective: Although losing one’s spouse is one of the worst experiences that can occur in life, it has not been resolved yet how this experience relates to personality development. Method: In the German Socio-Economic Panel study (SOEP), information on the death of a spouse was assessed yearly from 1985 to 2017 and personality was measured repeatedly in 2005, 2009, 2013, and 2017 with the BFI-S. We used multilevel analyses to simultaneously model whether personality differed between individuals who did or did not lose their spouse and whether personality changed prior to and after this experience. Results: Compared to controls without the event, individuals who lost their spouse at a later point of time were more conscientious (â=0.21) and more extraverted (â=0.17). They became gradually more extraverted in the three years prior to the event (â=0.25), but were less extraverted thereafter (â=-0.27). Moreover, they gradually increased in emotional stability in the three years after this experience (â=0.30). These changes were primarily driven by women and middle-aged individuals. Men whose spouse died were less open in the first year after the event (â=-0.47). Conclusions: Losing one’s spouse relates to changes in extraversion and emotional stability, especially in women and middle-aged adults.
    Keywords: Big Five; personality trait change; spousal bereavement; grief; widowhood
    Date: 2019
  3. By: Chizuko Aiba (Tokyo Denki University); Junji Izumi (Shibaura Institute of Technology)
    Abstract: STEM (Science, Technology, Engineering, and Mathematics) is one of the subject areas which are being taught in Japan by employing CLIL (Content and Language Integrated Learning). Within the framework of teaching methodology, output tasks are considered to be effective in helping learners' cognition with the target language. UBM (Usage-based model) supports this idea as learners can use the language more in the output tasks to explain and illustrate what they are paying attention to. In this study, the hypothesis is examined by teaching English in CLIL methodology to technology majors at a Japanese university. Throughout the semester, the output-focused group (N=54) is oriented to output tasks, while the input-focused group (N=24) is focused on reading material. Both groups are taught by the same English teacher in Soft CLIL. Their improvement of understanding of English involved with logical thinking can be measured by pre- and post-GJTs (Grammaticality Judgement Tests) which contain causal relationship with conjunctions. A t-test of the results shows that both groups shows significant differences between pre- and post-tests (input: t=1.7633, p=0.04181; output: t=1.9017, p=0.03491). However, no significant differences between the input group and output group are observed in both pre- and post-tests.
    Keywords: STEM, CLIL, UBM, GJT
    JEL: I20 I23
    Date: 2019–10
  4. By: Ady, Sri Utami
    Abstract: The purposes of this research were to understand and analyze the behavior of the psychological bias experienced by investors in making investment decisions. Psychological bias experienced by investors led to wrong decision making and fatal losses. This research used qualitative interpretive phenomenology method to understand the phenomenon of decision making based on the perspective of investors. The result showed that: (1) The phenomenon of cognitive bias and psychological bias behavior occur in nearly all informants, (2) The Psychologys bias could be divided by two tipe, namely: expected emotion bias behavior and immediate emotion bias behavior, (3) experience, knowledge of the capital markets and the management of good emotions determine the level of psychological stability and reduce bias behavior. that could be raising the return.
    Date: 2018–01–25
  5. By: Benjamin Enke; Thomas Graeber
    Abstract: This paper introduces a formal definition and an experimental measurement of the concept of cognitive uncertainty: people's subjective uncertainty about what the optimal action is. This concept allows us to bring together and partially explain a set of behavioral anomalies identified across four distinct domains of decision-making: choice under risk, choice under ambiguity, belief updating, and survey expectations about economic variables. In each of these domains, behavior in experiments and surveys tends to be insensitive to variation in probabilities, as in the classical probability weighting function. Building on existing models of noisy Bayesian cognition, we formally propose that cognitive uncertainty generates these patterns by inducing people to compress probabilities towards a mental default of 50:50. We document experimentally that the responses of individuals with higher cognitive uncertainty indeed exhibit stronger compression of probabilities in choice under risk and ambiguity, belief updating, and survey expectations. Our framework makes predictions that we test using exogenous manipulations of both cognitive uncertainty and the location of the mental default. The results provide causal evidence for the role of cognitive uncertainty in belief formation and choice, which we quantify through structural estimations.
    JEL: D01 D03
    Date: 2019–11

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