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on Neuroeconomics |
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Issue of 2022‒06‒20
seven papers chosen by |
| By: | Oriana Bandiera; Nidhi Parekh; Barbara Petrongolo; Michelle Rao |
| Abstract: | Gender differences in self-confidence could explain women's under representation in high-income occupations and glass-ceiling effects. We draw lessons from the economic literature via a survey of experts and a Bayesian hierarchical model that aggregates experimental findings over the last twenty years. The experts' survey indicates beliefs that men are overconfident and women under-confident. Yet, the literature reveals that both men and women are typically overconfident. Moreover, the model cannot reject the hypothesis that gender differences in self-confidence are equal to zero. In addition, the estimated pooling factor is low, implying that each study contains little information over a common phenomenon. The discordance can be reconciled if the experts overestimate the pooling factor or have priors that are biased and precise. |
| Keywords: | gender gaps, overconfidence, Bayesian hierarchical mode |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1820&r= |
| By: | Botha, Ferdi (University of Melbourne); Dahmann, Sarah C. (University of Melbourne) |
| Abstract: | We provide the first empirical evidence on the direct link between locus of control and self-control, and how they interact in explaining a range of health outcomes. Using rich Australian survey data, we find that, while the two traits are distinct constructs, a greater internal locus of control is associated with higher self-control. The association between locus of control and health is reduced once we control for self-control, suggesting that self-control mediates at least part of this relationship. Finally, an internal locus of control amplifies the beneficial effects of self-control particularly for physical health. |
| Keywords: | locus of control, self-control, health, health behavior |
| JEL: | D91 I12 I31 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15306&r= |
| By: | Ollikainen, Jani-Petteri (LABORE Labour Institute for Economic Research); Pekkarinen, Tuomas (VATT, Helsinki); Uusitalo, Roope (University of Jyväskylä); Virtanen, Hanna (ETLA - The Research Institute of the Finnish Economy) |
| Abstract: | We exploit admission cutoffs to secondary schools to study the effects of general academically oriented, versus vocational secondary schooling on cognitive and non-cognitive skills using a regression discontinuity design. We measure these skills using the Finnish Defence Forces Basic Skills Test that due to compulsory military service covers the vast majority of Finnish men and is a strong predictor of later labor market success. We find that large differences in average skills across students that differ in their schooling when entering military service are due to selection rather than causal effects of secondary schooling on either cognitive or non-cognitive skills. |
| Keywords: | non-cognitive skills, regression discontinuity, secondary schooling |
| JEL: | J24 I21 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15318&r= |
| By: | Masaki Aoyagi; Guillaume Frechette; Sevgi Yuksel |
| Abstract: | This paper uses a laboratory experiment to study beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoners' dilemma games. We find subjects' beliefs about the other player's action are accurate despite some systematic deviations corresponding to early pessimism in the indefinitely repeated game and late optimism in the finitely repeated game. The data reveals a close link between beliefs and actions that differs between the two games. In particular, the same history of play leads to different beliefs, and the same belief leads to different action choices in each game. Moreover, we find beliefs anticipate the evolution of behavior within a supergame, changing in response to the history of play (in both games) and the number of rounds played (in the finitely repeated game). We then use the subjects' beliefs over actions in each round to identify their beliefs over supergame strategies played by the other player. We find these beliefs correctly capture the different classes of strategies used in each game. Importantly, subjects using different strategies have different beliefs, and for the most part, strategies are subjectively rational given beliefs. The results also suggest subjects tend to overestimate the likelihood that others use the same strategy as them, while underestimating the likelihood that others use less cooperative strategies. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1119rr&r= |
| By: | Tverskoi, Denis; Guido, Andrea (Institute for Futures Studies); Andrighetto, Giulia; Sánchez, Angel; Gavrilets, Sergey |
| Abstract: | In social interactions, human decision-making, attitudes, and beliefs about others coevolve. Their dynamics are affected by cost-benefit considerations, cognitive processes (such as cognitive dissonance, social projecting, and logic constraints), and social influences by peers (via descriptive and injunctive social norms) and by authorities (e.g., educational, cultural, religious, political, administrative, individual or group, real or fictitious). Here we attempt to disentangle some of this complexity by using an integrative mathematical modeling and a 35-day online behavioral experiment. We utilize data from a Common Pool Resources experiment with or without messaging promoting a group-beneficial level of resource extraction. We first show that our model provides a better fit than a wide variety of alternative models. Then we directly estimate the weights of different factors in decision-making and beliefs dynamics. We show that material payoffs accounted only for about 20\% of decision-making. The remaining 80\% was due to different cognitive and social forces which we evaluated quantitatively. Without messaging, personal norms (and cognitive dissonance) have the largest weight in decision-making. Messaging greatly influences personal norms and normative expectations. Between-individual variation is present in all measured characteristics and notably impacts observed group behavior. At the same time, gender differences are not significant. We argue that one can hardly understand social behavior without understanding the dynamics of personal beliefs and beliefs about others and that cognitive, social, and material factors all play important roles in these processes. Our results have implications for understanding and predicting social processes triggered by certain shocks (e.g., social unrest, a pandemic, or a natural disaster) and for designing policy interventions aiming to change behavior (e.g. actions aimed at environment protection or climate change mitigation). |
| Date: | 2022–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:z5m9h&r= |
| By: | Gill, David (Purdue University); Prowse, Victoria L. (Purdue University) |
| Abstract: | Response times are a simple low-cost indicator of the process of reasoning in strategic games. In this paper, we leverage the dynamic nature of response-time data from repeated strategic interactions to measure the strategic complexity of a situation by how long people think on average when they face that situation (where we categorize situations according to the characteristics of play in the previous round). We find that strategic complexity varies significantly across situations, and we find considerable heterogeneity in how responsive subjects' thinking times are to complexity. We also study how variation in response times at the individual level across rounds affects strategic behavior and success: when a subject thinks for longer than she would normally do in a particular situation, she wins less frequently and earns less. The behavioral mechanism that drives the reduction in performance is a tendency to move away from Nash equilibrium behavior. Finally, cognitive ability and personality have no effect on average response times. |
| Keywords: | response time, decision time, deliberation time, thinking time, complexity, level-k, game theory, strategic game, repeated games, beauty contest, cognitive ability, personality |
| JEL: | C72 C91 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15275&r= |
| By: | Bhargav Bhat; Jonathan de Quidt; Johannes Haushofer; Vikram H. Patel; Gautam Rao; Frank Schilbach; Pierre-Luc P. Vautrey |
| Abstract: | We revisit two clinical trials that randomized depressed adults in India (n=775) to a brief course of psychotherapy or a control condition. Four to five years later, the treatment group was 11 percentage points less likely to be depressed than the control group. The more effective intervention averted 9 months of depression on average over five years and cost only $66 per recipient. Therapy changed people’s beliefs about themselves in three ways. First, it reduced their likelihood of seeing themselves as a failure or feeling bad about themselves. Second, when faced with a novel work opportunity, therapy reduced over-optimistic belief updating in response to feedback and thus reduced overconfidence. Third, it increased self-assessed levels of patience and altruism. Therapy did not increase levels of employment or consumption, possibly because of other constraints on employment in the largely female study sample. |
| JEL: | D03 D91 I15 O12 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30011&r= |