nep-neu New Economics Papers
on Neuroeconomics
Issue of 2020‒08‒24
five papers chosen by
Daniel Houser
George Mason University

  1. Effects of Peers and Rank on Cognition, Preferences, and Personality By Dasgupta, Utteeyo; Mani, Subha; Sharma, Smriti; Singhal, Saurabh
  2. Are Economists’ Preferences Psychologists’ Personality Traits? A Structural Approach By Tomáš Jagelka
  3. The Shared Non-cognitive Roots of Health and Socioeconomic Status: Evidence from the US By Alessandro Bucciol; Chiara Coriele; Luca Zarri
  4. Grammatical mood and ambiguity aversion By Sacha Bourgeois-Gironde; Alda Mari; David Nicolas; David Blunier
  5. The Socioeconomic Gradient of Cognitive Test Scores: Evidence from Two Cohorts of Irish Children By David (David Patrick) Madden

  1. By: Dasgupta, Utteeyo; Mani, Subha; Sharma, Smriti; Singhal, Saurabh
    Abstract: We exploit the variation in admission cutoffs across colleges at a leading Indian university to estimate the causal effects of enrolling in a selective college on cognitive attainment, economic preferences, and Big Five personality traits. Using a regression discontinuity design, we find that enrolling in a selective college improves university exam scores of the marginally admitted females, and makes them less overconfident and less risk averse, while males in selective colleges experience a decline in extraversion and conscientiousness. We find differences in peer quality and rank concerns to be driving our findings.
    Keywords: College Quality,Peer Effects,Rank Concerns,Regression Discontinuity,India
    JEL: I23 C9 C14 J24 O15
    Date: 2020
  2. By: Tomáš Jagelka (ECONtribute Cluster of Excellence, IZA, Institute for Applied Microeconomics at the University of Bonn, and CEHD at the University of Chicago.)
    Abstract: This paper proposes a method for empirically mapping psychological personality traits to economic preferences. Careful modelling of random components of decision making is crucial to establishing the long supposed but empirically elusive link between economic and psychological systems for understanding differences in individuals’ behavior. I use factor analysis to extract information on individuals’ cognitive ability and personality and embed it within a Random Preference Model to estimate distributions of risk and time preferences, of their individual-level stability, and of people’s propensity to make mistakes. I explain up to 50% of the variation in both average risk and time preferences and in individuals’ capacity to make consistent rational choices using four factors related to cognitive ability and three of the Big Five personality traits. True differences in desired outcomes are related to differences in personality whereas actual mistakes in decisions are related to cognitive skill.
    Keywords: economic preferences, personality traits, decision error, measurement error, stochastic discrete choice
    JEL: D91 D80 D01
    Date: 2020–07
  3. By: Alessandro Bucciol (Department of Economics (University of Verona)); Chiara Coriele (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona))
    Abstract: A voluminous literature established a strong relationship between subjective health and socioeconomic status measures. We test the idea that self-reported health and subjective socioeconomic status have “shared non-cognitive roots”, i.e., that the same personality traits significantly affect both status variables, even after controlling for the complex relationships involving objective and subjective measures across the two domains. To this aim, we estimate a bivariate model based on longitudinal large-scale data (30,675 observations) from six waves (2006-2016) of the US Health and Retirement Study. Our findings strongly support our conjecture, as all the “Big Five” traits are significantly related to self-reported health and subjective socioeconomic status with the same sign, even after controlling for both objective measures and once the other subjective measure is considered. These results point to a novel, direct channel through which non-cognitive factors similarly influence self-evaluations across distinct, though strongly intertwined, domains.
    Keywords: Self-reported Health Status, Subjective Socioeconomic Status, Non-Cognitive Factors, Bivariate Model
    JEL: D91 I14 I31
    Date: 2020–07
  4. By: Sacha Bourgeois-Gironde (Laboratory of modern economics - UP2 - Université Panthéon-Assas); Alda Mari (IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Philosophie - ENS Paris - ENS Paris - École normale supérieure - Paris); David Nicolas (IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Philosophie - ENS Paris - ENS Paris - École normale supérieure - Paris); David Blunier
    Abstract: This paper explores the impact of language on behaviour studying the impact of mood in a probabilistic choice context. Building on the idea of "aversion to ambiguity" according to which subjects prefer situations in which probabilities are known over those in which they are not known, we have systematically tested the association of sentence mood with choice situations. We found that with indicative the aversion to ambiguity is confirmed, whereas with the subjunctive, it is not. This indicates that grammatical features can influence the way in which subjects apprehend choices in probabilistic contexts. Goal While modern economic theories have soundly established a connection between economic behavior and psychology, there is a new and growing interest in the connection between language and behavior. This paper studies one aspect of this connection by addressing choices in probabilistic contexts. Specifically, we study how the verbalization of mental states accompanying choices in probabilistic contexts can modify what psychology based economic theories have labelled as the "standard" behavior. We show here that certain grammaticalized features of natural language can impact the expectations solely based on psychological considerations.
    Keywords: subjunctive,mood,decision theory,language,ambiguity,risk
    Date: 2019–09–25
  5. By: David (David Patrick) Madden
    Abstract: There is a well-established socioeconomic gradient in cognitive test scores for children. This gradient emerges at very early ages and there is also some evidence that it can widen as children age. We investigate this phenomenon with two longitudinal cohorts of Irish children who take such tests at ages ranging from 9 months to 17 years, using maternal education and equivalised income as our measure of socioeconomic resources. The gradient is observed from about 3 years and there is some tentative evidence that it widens as children get older. We have evidence on a wide range of tests and there is some evidence that the gradient is slightly stronger for tests involving crystalised as opposed to fluid intelligence. Exploiting the longitudinal nature of the data, we also investigate mobility across the distribution of test scores and there is some evidence that such mobility is less among poorer children raising the disturbing possibility that such children could become trapped in low achievement.
    Keywords: Socioeconomics gradient; Cognitive test score; Achievement gap
    JEL: I24 I30
    Date: 2020–06

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