nep-neu New Economics Papers
on Neuroeconomics
Issue of 2020‒04‒27
four papers chosen by

  1. Adaptive Rationality in Strategic Interaction: Do Emotions Regulate Thinking about Others? By Timo Ehrig; Monica Jaison Manjaly; Aditya Singh; Shyam Sunder
  2. Is Fish Brain Food or Brain Poison? Sea Surface Temperature, Methyl-mercury and Child Cognitive Development By Mark R. Rosenzweig; Rafael J. Santos Villagran
  3. Revisiting a Remedy against the Chain of Unkindness By Schnedler, Wendelin; Stephan, Nina Lucia
  4. The Long-Term Cognitive and Schooling Effects of Childhood Vaccinations in China By Oskorouchi, Hamid R.; Sousa-Poza, Alfonso; Bloom, David E.

  1. By: Timo Ehrig (Max Planck Institute for Mathematics in the Sciences, Leipzig); Monica Jaison Manjaly (Indian Institute of Technology, Gandhinagar); Aditya Singh (Indian Institute of Technology, Gandhinagar); Shyam Sunder (School of Management and Cowles Foundation, Yale University)
    Abstract: Forming beliefs or expectations about others’ behavior is fundamental to strategy, as it co-determines the outcomes of interactions in and across organizations. In the game theoretic conception of rationality, agents reason iteratively about each other to form expectations about behavior. According to prior scholarship, actual strategists fall short of this ideal, and attempts to understand the underlying cognitive processes of forming expectations about others are in their infancy. We propose that emotions help regulate iterative reasoning, that is, their tendency to not only reflect on what others think, but also on what others think about their thinking. Drawing on a controlled experiment, we ï¬ nd that a negative emotion (fear) deepens the tendency to engage in iterative reasoning, compared to a positive emotion (amusement). Moreover, neutral emotions yield even deeper levels of reasoning. We tentatively interpret these early ï¬ ndings and speculate about the broader link of emotions and expectations in the context of strategic management. Extending the view of emotional regulation as a capability, emotions may be building blocks of rational heuristics for strategic interaction and enable interactive decision-making when strategists have little experience with the environment.
    Date: 2020–04
  2. By: Mark R. Rosenzweig; Rafael J. Santos Villagran
    Abstract: We exploit variation in the composition of local fish catches around the time of birth using administrative and census data on adult cognitive test scores, schooling attainment, and occupation among coastal populations in Colombia to estimate the causal effects of early-life consumption of methylmercury (MeHg) and DHA, elements contained in fish, on cognitive development. Using an IV strategy based on an equilibrium model of fish supply that exploits time-series variation in oceanic SST anomalies on both coasts of Colombia from 1950 to 2014 as instruments, we find that net of cohort and municipality fixed effects increases in high-(low-)MeHg fish catches around a cohort’s birth negatively (positively) affect the cohort’s verbal and math test scores upon exiting high school and their likelihood of continuing their schooling, while increasing (decreasing) the likelihood the cohort is disproportionally represented in manual-labor occupations.
    JEL: J13 O15 Q22 Q53
    Date: 2020–04
  3. By: Schnedler, Wendelin (University of Paderborn); Stephan, Nina Lucia (University of Paderborn)
    Abstract: Previous experiments observe a chain of unkindness: unkindly treated people treat an innocent third party unkindly. As a remedy, it has been proposed that the unkindly treated person engages in emotional regulation by writing a letter to the unkind person. Indeed, subjects who received little money were willing to leave more to a third person when they were writing a letter rather than waiting. Here, we examine whether emotional regulation is indeed behind this observation. In line with emotional regulation, we find that letter writing also leads to more giving if the person is treated unkindly by being assigned to a frustrating rather than a pleasant job. Being able to write, however, does not affect self-reported happiness differently from having to wait. Even more strikingly, subjects assigned to pleasant jobs also give more when writing rather than waiting. This is not consistent with emotional regulation.
    Keywords: experimental economics, chain of unkindness, emotional closure, cooling down
    JEL: D91 C91 D03
    Date: 2020–04
  4. By: Oskorouchi, Hamid R. (University of Göttingen); Sousa-Poza, Alfonso (University of Hohenheim); Bloom, David E. (Harvard University)
    Abstract: By exploiting rich retrospective data on childhood immunization, socioeconomics, and health status in China (the China Health and Retirement Longitudinal Study), we assess the long-term effects of childhood vaccination on cognitive and educational outcomes in that country. To do so, we apply various techniques (e.g., propensity score and coarsened exact matching and correlated random effects) to different sets of conditioning variables and subsamples to estimate the average treatment on the treated effect of childhood vaccination. Our results confirm that vaccinations before the age of 15 have long-term positive and economically meaningful effects on nonhealth outcomes such as education and cognitive skills. These effects are relatively strong, with vaccinated individuals enjoying about one more year of schooling and performing substantially better later in life on several cognitive tests.
    Keywords: cognitive skills, vaccines, China, education
    JEL: I12 I18 I21
    Date: 2020–03

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