nep-neu New Economics Papers
on Neuroeconomics
Issue of 2021‒07‒12
eight papers chosen by

  1. The Roots of Cooperation By Basic, Zvonimir; Bindra, Parampreet C.; Glätzle-Rützler, Daniela; Romano, Angelo; Sutter, Matthias; Zoller, Claudia
  2. Unethical Decision Making and Sleep Restriction: Experimental Evidence By David L. Dickinson; David Masclet
  3. The Creativity Premium By Gill, David; Prowse, Victoria L.
  4. Of two minds: An experiment on how time scarcity shapes risk-taking behavior By Sergio Almeida; Mauro Rodrigues
  5. The strength of weak and strong ties in bridging geographic and cognitive distances By Abbasiharofteh, Milad; Kinne, Jan; Krüger, Miriam
  6. Social Metacognition: A Correlational Device for Strategic Interactions By Chiara Scarampi; Richard Fairchild; Luca Fumarco; Alberto Palermo; Neal Hinvest
  7. The impact of sleep restriction on interpersonal conflict resolution and the narcotic effect. By David L. Dickinson; David M. McEvoy; David Bruner
  8. Effect of congruent scent diffusion on individual creative fluidity: Mental imagery instruction and iconic stimulus as possible moderators By Laurent Busca; Julien Grobert; Cyrielle Vellera

  1. By: Basic, Zvonimir (University of Bonn); Bindra, Parampreet C. (University of Innsbruck); Glätzle-Rützler, Daniela (University of Innsbruck); Romano, Angelo (Leiden University); Sutter, Matthias (Max Planck Institute for Research on Collective Goods); Zoller, Claudia (Management Center Innsbruck)
    Abstract: Understanding the roots of human cooperation among strangers is of great importance for solving pressing social dilemmas and maintening public goods in human societies. We study the development of cooperation in 929 young children, aged 3 to 6. In a unified experimental framework, we examine which of three fundamental pillars of human cooperation – direct and indirect reciprocity as well as third-party punishment – emerges earliest as an effective means to increase cooperation in a repeated prisoner's dilemma game. We find that third-party punishment exhibits a strikingly positive effect on cooperation rates by doubling them in comparison to a control condition. It promotes cooperative behavior even before punishment of defectors is applied. Children also engage in reciprocating others, showing that reciprocity strategies are already prevalent at a very young age. However, direct and indirect reciprocity treatments do not increase overall cooperation rates, as young children fail to anticipate the benefits of reputation building. We also show that the cognitive skills of children and the socioeconomic background of parents play a vital role in the early development of human cooperation.
    Keywords: cooperation, reciprocity, third-party punishment, reputation, children, parents, cognitive abilities, socioeconomic status, prisoner's dilemma game, experiment
    JEL: C91 C93 D01 D91 H41
    Date: 2021–06
  2. By: David L. Dickinson; David Masclet
    Abstract: Recent examinations into the cognitive underpinnings of ethical decision making has focused on understanding whether honesty is more likely to result from deliberative or unconscious decision processes. We randomly assigned participants to a multi-night sleep manipulation, after which they completed 3 tasks of interest: imperfectly identifiable dishonesty (the Coin Flip task), identifiable dishonesty (the Matrix task), and anti-social allocation choices (the Money Burning game). We document the validity of the sleep protocol via significantly reduced nightly sleep levels (objectively measured using validated instrumentation) and significantly higher sleepiness ratings in the sleep-restricted (SR) group compared to the wellrested (WR) group. We report that money burning decisions are not statistically different between SR and WR participants. However, regarding honesty, we find significant and robust effects of SR on honesty. In total, given the connection between sleepiness and deliberation, these results add to the literature that has identified conditions under which deliberation impacts ethical choice. When dishonesty harms an abstract “other” person (e.g., the researcher’s budget), reduced deliberation more likely increases dishonesty compared to when harm is done to someone at closer social distance (e.g., another subject). Key Words: Ethical choice, dishonesty, antisocial behavior, sleep.
    JEL: C91 D91 D63
    Date: 2021
  3. By: Gill, David (Purdue University); Prowse, Victoria L. (Purdue University)
    Abstract: Success in life increasingly depends on key skills that allow people to thrive in education, the labor market, and their interactions with others. In this paper, we emphasize creativity as a key skill that is essential to open-ended problem solving and resistant to automation. We use rich longitudinal data to study the relationship between people's creativity measured in childhood and their individual attributes and life outcomes. We find that childhood creativity predicts labor market and educational success: more creative individuals earn more during the course of their careers, work in higher occupational categories, and reach higher levels of educational attainment. Our analysis of attributes further suggests that creative individuals have a package of practical skills that allows them to thrive in work environments where learning from experience is important. We combine insights from our findings with evidence from psychology to propose creativity-improving interventions that could lead to substantial economic benefits.
    Keywords: creativity, skills, life outcomes, children, longitudinal, labor market, wages, earnings, occupational category, educational attainment, practical skills, experience, cognitive ability, human capital
    JEL: D91 J24
    Date: 2021–05
  4. By: Sergio Almeida; Mauro Rodrigues
    Abstract: Several studies report that the brain evaluates prospects and executes decisions as the outcome of two mental processing types: one described as slow and reflective and the other as fast and intuitive. We investigate how these two mental processes affect risk-taking behavior by using time pressure to establish an intuitive response. We observe that time constraints do not change risk attitudes. Furthermore, it is only when subjects are given ample time to decide and instructed to reflect that they show the well-documented shift of risk preferences across the domain of losses and gains.
    Keywords: Risk-taking; time scarcity; dual-process cognition; fast-thinking; gain-loss framing
    JEL: D91 D90 C91 D81
    Date: 2021–07–01
  5. By: Abbasiharofteh, Milad; Kinne, Jan; Krüger, Miriam
    Abstract: The proximity framework has attracted considerable attention in a scholarly discourse on the driving forces of knowledge exchange tie formation. It has been discussed that too much proximity is negatively associated with the effectiveness of a knowledge exchange relation. However, little is known about the key factors that trigger the formation of the boundaryspanning knowledge ties. Going beyond the "dyadic" perspective on proximity dimensions, this paper argues that the key factor in bridging distances may reside at the "triadic" level. We build on the notion of "the strength of weak ties" and its recent development by investigating the innovative performance and relations of more than 600,000 German firms. We explored and extracted information from the textual and relational content of firms' websites by using machine learning techniques and hyperlink analysis. We thereby proxied the innovative performance of firms using a deep learning text analysis approach and showed that the triadic property of bridging dyadic relations is a reliable predictor of firms' innovativeness. Relations embedded in cliques (i.e., strong ties) that connect cognitively distant firms are more strongly associated with firms' innovation, whereas inter-regional relations connecting different parts of a network (i.e., weak ties) are positively associated with firms' innovative performance. Also, the results suggest that a combination of strong inter-community and weak inter-regional relations are more positively related with firms' innovativeness compared to the combination of other relation types.
    Keywords: weak and strong ties,proximity,knowledge exchange,innovation,web mining,natural language processing
    JEL: C81 D83 L14 O31
    Date: 2021
  6. By: Chiara Scarampi (University of Geneva); Richard Fairchild (University of Bath); Luca Fumarco (Tulane University); Alberto Palermo (Trier University); Neal Hinvest (University of Bath)
    Abstract: This study reports a laboratory experiment wherein we investigate the role of social metacognition– i.e., the ability to monitor and control one’s own and others’ mental states – in a chicken game. In the first part of the experiment, we try to implement a correlated equilibrium, a generalisation of the Nash equilibrium where players’ strategies are correlated by a third party/mechanism/choreographer. We find that social metacognition is a signif- icant predictor of subjects’ strategy choices. The experiment proceeds without third party recommendations. We find evidence that subjects with high social metacognition are more likely to play a correlated equilibrium; that is, social metacognition acts “as if” it is the correlating mechanism. We relate our findings to the individual social metacognitive ability as well as to the group composition.
    Keywords: Correlated Equilibrium, Social Metacognition, Experimental Economics
    JEL: C72 C92 D91
    Date: 2021–06
  7. By: David L. Dickinson; David M. McEvoy; David Bruner
    Abstract: Insufficient sleep is commonplace, and understanding how this affects interpersonal conflict holds implications for personal and workplace settings. We experimentally manipulated participant sleep state for a full week prior to administering a stylized bargaining task that models payoff uncertainty at impasse with a final-offer arbitration (FOA) procedure. FOA use in previous trials decreases the likelihood of voluntary settlements going forward—the narcotic effect. We also report a novel result that a significantly stronger narcotic effect is estimated for more sleepy bargaining pairs. One implication is that insufficient sleep predicts increased dependency on alternatives to voluntarily resolution of interpersonal conflict. Key Words: Bargaining, Sleep Restriction, Arbitration, Dispute/Conflict Resolution, Narcotic Effect
    JEL: J52 D74 D90 C92 D83
    Date: 2021
  8. By: Laurent Busca (UM - Université de Montpellier, MRM - Montpellier Research in Management - UM - Université de Montpellier - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM1 - Université Montpellier 1 - UPVD - Université de Perpignan Via Domitia - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVM - Université Paul-Valéry - Montpellier 3); Julien Grobert (TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées, TSM - Toulouse School of Management Research - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées); Cyrielle Vellera (TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées, TSM - Toulouse School of Management Research - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées)
    Keywords: sensory marketing,pictorial/iconic stimulus,mental imagery instruction,mental imagery,congruence,scent,olfactory stimulation,creative fluidity
    Date: 2021

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