nep-neu New Economics Papers
on Neuroeconomics
Issue of 2021‒05‒03
three papers chosen by

  1. Infant Health, Cognitive Performance and Earnings : Evidence from Inception of the Welfare State in Sweden By Bhalotra, Sonia; Martin Karlsson; Therese Nilsson; Schwarz, Nina
  2. On the Causes and Consequences of Deviations from Rational Behavior By Strittmatter, Anthony; Sunde, Uwe; Zegners, Dainis
  3. Inducing Cooperation with Emotion – Who Is Affected? By Gärtner, Manja; Tinghög, Gustav; Västfjäll, Daniel

  1. By: Bhalotra, Sonia (University of Essex & University of Warwick); Martin Karlsson (CINCH, University of Duisburg-Essen); Therese Nilsson (Lund University, Research Institute of Industrial Economics (IFN)); Schwarz, Nina (University of Duisburg-Essen)
    Abstract: We identify earnings impacts of exposure to an infant health intervention in Sweden, using individual linked administrative data to trace potential mechanisms. Leveraging quasi-random variation in eligibility, we estimate that exposure was associated with higher test scores in primary school for boys and girls. However only girls were more likely to score in the top quintile. Subsequent gains, in secondary schooling, employment, and earnings, are restricted to girls. We show that the differential gains for women accrued from both skills and opportunities, expansion of the welfare state having created unprecedented employment opportunities for women.
    Keywords: Infant health ; early life interventions ; cognitive skills ; education ; earnings ; occupational choice ; programme evaluation ; Sweden ; gender JEL Classification: I15 ; I18 ; H41
    Date: 2021
  2. By: Strittmatter, Anthony (University of St. Gallen); Sunde, Uwe (LMU Munich); Zegners, Dainis (Erasmus University Rotterdam)
    Abstract: This paper presents novel evidence for the prevalence of deviations from rational behavior in human decision making – and for the corresponding causes and consequences. The analysis is based on move-by-move data from chess tournaments and an identification strategy that compares behavior of professional chess players to a rational behavioral benchmark that is constructed using modern chess engines. The evidence documents the existence of several distinct dimensions in which human players deviate from a rational benchmark. In particular, the results show deviations related to loss aversion, time pressure, fatigue, and cognitive limitations. The results also demonstrate that deviations do not necessarily lead to worse performance. Consistent with an important influence of intuition and experience, faster decisions are associated with more frequent deviations from the rational benchmark, yet they are also associated with better performance.
    Keywords: Rational strategies; artificial intelligence; behavioral bias;
    JEL: D01 D9 C7 C8
    Date: 2020–05–29
  3. By: Gärtner, Manja (DIW Berlin); Tinghög, Gustav (Linköping University); Västfjäll, Daniel (Linköping University)
    Abstract: We study the effects of dual processing differences that arise from the state level (through experimental manipulation of the decision mode), the trait level (using individual difference measures of the decision mode), and their interaction on cooperative behavior. In a survey experiment with a representative sample of the Swedish population (N = 1,828), we elicited the individuals’ primary decision mode and experimentally varied whether individuals could rely on their preferred mode or were induced to rely either on emotion or reason. Cooperation was measured across a series of commonly used and incentivized games (prisoner’s dilemma game, public goods game, trust game, dictator game). At the state level, our results show that average cooperation rates increased when emotions were induced rather than reason. At the trait level, our results show that individual decision modes and cooperation rates were not correlated when subjects could rely on their primary mode, but traits interacted with our processing manipulation: Experimentally inducing emotions increased cooperation among individuals who otherwise rely primarily on reason, but not among individuals who already rely primarily on emotion. These findings suggest that individuals integrate their traits with emotion-based states by substituting their trait rather than enhancing it. Thus, who is affected by emotions in their decision to cooperate crucially depends on state-trait interactions at the point of decision.
    Keywords: cooperation; intuition; emotion; reason; experiment;
    JEL: C71 C91 D91
    Date: 2020–04–06

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