nep-neu New Economics Papers
on Neuroeconomics
Issue of 2020‒12‒14
four papers chosen by

  1. Cognitive Skills, Strategic Sophistication, and Life Outcomes By Fe, Eduardo; Gill, David; Prowse, Victoria L.
  2. The adaptive value of probability distortion and risk-seeking in macaques' decision-making By Aurélien Nioche; Nicolas P. Rougier; Marc Deffains; Sacha Bourgeois-Gironde; Sébastien Ballesta; Thomas Boraud
  3. Emotions in Online Content Diffusion By Yifan Yu; Shan Huang; Yuchen Liu; Yong Tan
  4. Employers’ Skills Requirements in the Austrian Labour Market: On the Relative Importance of ICT, Cognitive and Non-cognitive Skills over the Past 15 Years By Sandra M. Leitner; Oliver Reiter

  1. By: Fe, Eduardo (University of Strathclyde); Gill, David (Purdue University); Prowse, Victoria L. (Purdue University)
    Abstract: We investigate how childhood cognitive skills affect strategic sophistication and adult outcomes. In particular, we emphasize the importance of childhood theory-of-mind as a cognitive skill. We collected experimental data from more than seven hundred children in a variety of strategic interactions. First, we find that theory-of-mind ability and cognitive ability both predict level-k behavior. Second, older children respond to information about the cognitive ability of their opponent, which provides support for the emergence of a sophisticated strategic theory-of-mind. Third, theory-of-mind and age strongly predict whether children respond to intentions in a gift-exchange game, while cognitive ability has no influence, suggesting that different measures of cognitive skill correspond to different cognitive processes in strategic situations that involve understanding intentions. Using the ALSPAC birth-cohort study, we find that childhood theory-of-mind and cognitive ability are both associated with enhanced adult social skills, higher educational participation, better educational attainment, and lower fertility in young adulthood. Finally, we provide evidence that school spending improves theory-of-mind in childhood.
    Keywords: cognitive skills, theory-of-mind, cognitive ability, fluid intelligence, children, experiment, strategic sophistication, level-k, bounded rationality, non-equilibrium thinking, intentions, gift-exchange game, competitive game, strategic game, ALSPAC, social skills, adult outcomes, life outcomes, education, fertility, labor market, wages, employment, school spending, childhood intervention
    JEL: C91 D91 J24
    Date: 2020–11
  2. By: Aurélien Nioche (Department of Communications and Networking [Aalto] - Aalto University); Nicolas P. Rougier (Mnemosyne - Mnemonic Synergy - LaBRI - Laboratoire Bordelais de Recherche en Informatique - CNRS - Centre National de la Recherche Scientifique - École Nationale Supérieure d'Électronique, Informatique et Radiocommunications de Bordeaux (ENSEIRB) - Université Sciences et Technologies - Bordeaux 1 - Université Bordeaux Segalen - Bordeaux 2 - Inria Bordeaux - Sud-Ouest - Inria - Institut National de Recherche en Informatique et en Automatique - IMN - Institut des Maladies Neurodégénératives [Bordeaux] - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Marc Deffains (IMN - Institut des Maladies Neurodégénératives [Bordeaux] - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Sacha Bourgeois-Gironde (LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - UP2 - Université Panthéon-Assas - Sorbonne Université, IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - 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 - PSL - Université Paris sciences et lettres); Sébastien Ballesta (UNISTRA - Université de Strasbourg); Thomas Boraud (IMN - Institut des Maladies Neurodégénératives [Bordeaux] - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In humans, the attitude toward risk is not neutral and is dissimilar between bets involving gains and bets involving losses. The existence and prevalence of these decision features in non-human primates are unclear. In addition, only a few studies have tried to simulate the evolution of agents based on their attitude toward risk. Therefore, we still ignore to which extent Prospect theory's claims are evolutionary rooted. To shed light on this issue, we collected data in 9 macaques that performed bets involving gains or losses. We confirmed that their overall behaviour is coherent with Prospect theory's claims. In parallel, we used a genetic algorithm to simulate the evolution of a population of agents across several generations. We showed that the algorithm selects progressively agents that exhibit risk-seeking and an inverted S-shape distorted perception of probability. We compared these two results and found that monkeys' attitude toward risk when facing losses only is congruent with the simulation. This result is consistent with the idea that gambling in the loss domain is analogous to deciding in a context of life-threatening challenges where a certain level of risk-seeking behaviours and probability distortions may be adaptive.
    Keywords: Genetic algorithm,Cognitive biases,Monkey,Autonomous Cognitive Testing,Experimental economics
    Date: 2021–01–21
  3. By: Yifan Yu; Shan Huang; Yuchen Liu; Yong Tan
    Abstract: Social media-transmitted online information, particularly content that is emotionally charged, shapes our thoughts and actions. In this study, we incorporate social network theories and analyses to investigate how emotions shape online content diffusion, using a computational approach. We rigorously quantify and characterize the structural properties of diffusion cascades, in which more than six million unique individuals transmitted 387,486 articles in a massive-scale online social network, WeChat. We detected the degree of eight discrete emotions (i.e., surprise, joy, anticipation, love, anxiety, sadness, anger, and disgust) embedded in these articles, using a newly generated domain-specific and up-to-date emotion lexicon. We found that articles with a higher degree of anxiety and love reached a larger number of individuals and diffused more deeply, broadly, and virally, whereas sadness had the opposite effect. Age and network degree of the individuals who transmitted an article and, in particular, the social ties between senders and receivers, significantly mediated how emotions affect article diffusion. These findings offer valuable insight into how emotions facilitate or hinder information spread through social networks and how people receive and transmit online content that induces various emotions.
    Date: 2020–11
  4. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses job advertisements to identify the particular skills, abilities and characteristics that are in demand on the Austrian labour market. It takes a novel approach and uses information extracted from over 1.5 million job advertisements over the past 15 years from Austria’s largest online job portal,, to shed light on employers’ skills needs and the relative importance of, and demand for, different skill types over time. It develops a taxonomy which classifies observable skills into information and communications technology (ICT) skills (which are of increasing importance as a result of the ongoing digital revolution), cognitive skills, cognitively based skills and non-cognitive (soft) skills; but it also takes into account other factors that frequently appear in job advertisements, such as previous work experience, physical appearance, and the willingness to travel, work overtime, weekends or shifts, among others. It shows that Austrian employers are quite demanding cognitive skills, previous work experience and ICT skills were the three most frequent requirements, appearing in (almost) every second job advertisement in 2019. Over the years, these categories have also become increasingly important to employers. Among cognitively based skills, language skills were the most important, also appearing in every second job advertisement. The ability to work as part of a team, communication skills, independence, flexibility and accuracy were the top five non-cognitive (soft) skills demanded by employers.
    Keywords: Job advertisements, online job portal, skills requirements, ICT skills, cognitive skills, non-cognitive skills
    JEL: J23 J24 J63
    Date: 2020–12

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