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on Neuroeconomics |
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Issue of 2020‒01‒06
five papers chosen by |
| By: | Kopylov, Igor; Miller, Joshua Benjamin (The University of Melbourne) |
| Abstract: | Forgetting a piece of decision-relevant information is a salient source of uncertainty that should influence one's beliefs, confidence, and ambiguity attitudes. To investigate this, we run several experiments where people bet on propositions (facts) that they cannot recall with certainty. We use betting preferences to infer subjects' revealed beliefs and their revealed confidence in these beliefs. Forgetting is induced via interference tasks and time delays (up to one year). We observe a natural memory decay pattern where beliefs become less accurate and confidence is reduced as well. Moreover, we find a form of comparative ignorance where subjects are more ambiguity averse when they cannot recall the truth rather than never having learnt it. In a different vein, we identify an overconfidence pattern: on average, subjects overpay for bets on propositions that they believe in, but underpay for the opposite bets. We formulate a two-signal behavioral model of forgetting that generates all of these patterns. It suggests new testable hypotheses that are confirmed by our data. |
| Date: | 2018–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:wktcp&r=all |
| By: | Miller, Joshua Benjamin (The University of Melbourne); Sanjurjo, Adam |
| Abstract: | The hot hand fallacy has long been considered a massive and widespread cognitive illusion with important implications in economics and finance. We develop a novel empirical strategy to correct for several fundamental limitations in the canonical study and replications, conduct an improved field experiment to test for the hot hand in its original domain (basketball shooting), and gather all extant controlled shooting data. We find strong evidence of hot hand shooting in every dataset, including on the individual level. Also, in a novel study of beliefs, we find that expert observers can predict (out-of-sample) which shooters are hotter. |
| Date: | 2018–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:pj79r&r=all |
| By: | Assenza, Tiziana; Cardaci, Alberto; Delli Gatti, Domenico |
| Abstract: | By means of a laboratory experiment, we show that, contrary to standard consumer theory, financially equivalent balance sheet profiles may be perceived as non fungible in a controlled frictionless environment with no probabilistic attributes. A large majority of subjects indeed have a bias in the perception of wealth, such that balance sheet composition matters: for a given net worth with values of assets and debt that are financially certain and risk-free, a greater asset-debt ratio implies greater perceived wealth. The predominance of this bias is explained by low cognitive sophistication and great inattention. Moreover, biased subjects are less patient, less debt averse, more likely to increase spending out of unexpected gains and report greater propensities to consume. A standard optimal consumption choice model, enriched with a rational but inattentive agent a la Gabaix (2014, 2019), aligns our key experimental findings. |
| Keywords: | perceived wealth,cognitive sophistication,behavioral inattention,laboratory experiment,household debt,consumption |
| JEL: | C91 D91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imfswp:135&r=all |
| By: | David Masclet (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France); David L. Dickinson (Appalachian State University, Department of Economics, USA) |
| Abstract: | We present a framework that incorporates both moral motivations and fairness considerations into utility. The main idea is that individuals face a preference trade-off between their material individual interest and their desire to follow moral norms. In our model, we assume that moral motivation is conditional and may be influenced by others’ actions. Specifically, in our framework moral obligation is a combination of two main components: an autonomous component and a social influence component that captures the influence of others. Our framework is able to explain many stylized results in the literature and to improve theories of economic behavior. |
| Keywords: | Fairness; Ethical Decision Making; Moral Motivation; Behavioral Economics |
| JEL: | B3 D6 D9 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2019-10&r=all |
| By: | Maya Rossin-Slater; Molly Schnell; Hannes Schwandt; Sam Trejo; Lindsey Uniat |
| Abstract: | While over 240,000 American students experienced a school shooting in the last two decades, little is known about the impacts of these events on the mental health of surviving youth. Using large-scale prescription data from 2006 to 2015, we examine the effects of 44 school shootings on youth antidepressant use in a difference-in-difference framework. We find that local exposure to fatal school shootings increases youth antidepressant use by 21.4 percent in the following two years. These effects are smaller in areas with a higher density of mental health providers who focus on behavioral, rather than pharmacological, interventions. |
| JEL: | I18 I31 J13 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26563&r=all |