|
on Neuroeconomics |
|
Issue of 2022‒01‒31
four papers chosen by |
| By: | Benjamin Enke; Thomas W. Graeber |
| Abstract: | This paper studies the relevance of cognitive uncertainty – subjective uncertainty over one’s utility-maximizing action – for understanding and predicting intertemporal choice. The main idea is that when people are cognitively noisy, such as when a decision is complex, they implicitly treat different time delays to some degree alike. By experimentally measuring and manipulating cognitive uncertainty, we document three economic implications of this idea. First, cognitive uncertainty explains various core empirical regularities, such as why people often appear very impatient, why per-period impatience is smaller over long than over short horizons, why discounting is often hyperbolic even when the present is not involved, and why choices frequently violate transitivity. Second, impatience is context-dependent: discounting is substantially more hyperbolic when the decision environment is more complex. Third, cognitive uncertainty matters for choice architecture: people who are nervous about making mistakes are twice as likely to follow expert advice to be more patient. |
| Keywords: | cognitive uncertainty, intertemporal choice, complexity |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9472&r= |
| By: | Cary D. Frydman; Salvatore Nunnari |
| Abstract: | We propose and experimentally test a theory of strategic behavior in which players are cognitively imprecise and perceive a fundamental parameter with noise. We focus on 2 x 2 coordination games, which generate multiple equilibria when perception is precise. When adding a small amount of cognitive imprecision to the model, we obtain a unique equilibrium where players use a simple cutoff strategy. The model further predicts that behavior is context-dependent: players implement the unique equilibrium strategy with noise, and the noise decreases in fundamental volatility. Our experimental data strongly support this novel prediction and reject several alterna-tive game-theoretic models that do not predict context-dependence. We also find that subjects are aware of other players’ imprecision, which is key to generating strategic uncertainty. Our framework has important implications for the literature on global games and, more broadly, illuminates the role of perception in generating both random and context-dependent behavior in games. |
| Keywords: | perception, efficient coding, coordination, global games |
| JEL: | C72 C92 D91 E71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9483&r= |
| By: | Ylenia Brilli (Department of Economics, University Of Venice CÃ Foscari) |
| Abstract: | This paper analyzes the effects of maternal time allocation between work, child care, and leisure and non-parental child care on a child's cognitive development. By using data for the US from the Panel Study of Income Dynamics, we estimate a model that takes into account the heterogeneity in a mother’s child-care productivity induced by her level of education and the various impacts of non-parental child care given by the different child care types available in the market. The results show that mothers with at least some college education are more effective than their less-educated counterparts in boosting their children's cognitive skills through their child-care time. Moreover, formal child care is found to be more productive than informal child care, especially during a child's first years of life. The simulation of policies aimed at increasing mothers’ labor supply or at regulating the non-parental child care market shows that the effects on the children's cognitive outcomes are greater for the children of less educated mothers, but may be negative for the children of the highly educated, who benefit less from replacing their mother’s time with the alternative care provider's time. |
| Keywords: | Mother employment, mother time allocation, non-parental child care, child development, structural estimation |
| JEL: | D13 J13 J22 C15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2021:30&r= |
| By: | Melissa K. Zochowski; Giselle E. Kolenic; Kara Zivin; Anca Tilea; Lindsay K. Admon; Stephanie V. Hall; Agatha Advincula; Vanessa K. Dalton |
| Abstract: | Reducing the rate of cesarean sections among women considered at low risk for delivery by that method is a goal of Healthy People 2030. |
| Keywords: | Maternal health, Women's health, Mental health, Health conditions, Depression, Systematic reviews, Organization of care, Morbidity, Children's health |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:3b3fef1b7dd549caaa52f00b612fd7fd&r= |