nep-neu New Economics Papers
on Neuroeconomics
Issue of 2022‒07‒18
seven papers chosen by
Daniel Houser
George Mason University

  1. Cognitive Uncertainty and Overconfidence By Andrea Amelio
  2. The Big Five Personality Traits and Earnings: A Meta-Analysis By Giammarco Alderotti; Chiara Rapallini; Silvio Traverso
  3. Cognitive Endurance as Human Capital By Christina L. Brown; Supreet Kaur; Geeta Kingdon; Heather Schofield
  4. Assortativity in cognition By Ennio Bilancini; Leonardo Boncinelli; Eugenio Vicario
  5. Effect of Air Pollution on Cognitive Performance in India By Damini Singh; Indrani Gupta; Sagnik Dey
  6. The Effect of Intellectual, Emotional, and Spiritual Intelligence on the Ethical Behavior of Accounting Students By Yuniar, Rachma Etika Dwi; Sayidah, Nur
  7. Mindsponge: from surviving to thriving By Khuc, Quy Van

  1. By: Andrea Amelio (University of Bonn)
    Abstract: Overconfidence is one of the most ubiquitous cognitive bias. There is copious evidence of overconfidence being relevant in a diverse set of economic domains. In this paper, we relate the recent concept of cognitive uncertainty with overconfidence. Cognitive uncertainty represents a decision maker's uncertainty about her action optimality. We present a simple model of overconfidence based on the concept of cognitive uncertainty. The model relates the concepts theoretically and generates testable predictions. We propose an experimental paradigm to cleanly identify such theoretical relationships. In particular, we focus on overplacement and we find that, as predicted, cognitive uncertainty is inversely related to overplacement. Exogenously manipulating cognitive uncertainty through compound choices, we are able to show a causal relationship with overplacement. Evidence on these relationships allows to link overplacement with other behavioral anomalies explained through cognitive uncertainty.
    Keywords: Cognitive Uncertainty, Overconfidence, Overplacement, Cognitive Noise, Experiments
    JEL: D91 C91 D83
    Date: 2022–06
  2. By: Giammarco Alderotti; Chiara Rapallini; Silvio Traverso
    Abstract: The past two decades have witnessed an increasing interest in the relationship between personality and labor market outcomes, as well as the emergence of the Five-Factor Model as the reference framework for the study of personality. In this paper, we provide the first meta-analytical review of the empirical literature on the association between personal earnings and the Big Five personality traits. The analysis combines the results of 62 peer-reviewed articles published between 2001-2020, from which we retrieved 896 partial effect sizes. Overall, the primary literature provides robust support for a positive association between personal earnings and the traits of Openness, Conscientiousness, and Extraversion, while simultaneously revealing a negative and significant association between earnings and the traits of Agreeableness and Neuroticism. We find no evidence of a substantial publication bias. Meta-regression estimates suggest that Openness and Conscientiousness are positively associated with earnings even when primary researchers control for individual cognitive abilities and educational attainments. Similarly, the studies that include labor market control variables exhibit weaker associations between earnings and Extraversion and Agreeableness. The results of the primary studies seem unaffected by the time at which the Big Five are measured, as well as by the scale and number of inventory items. Meta-regression estimates suggest that the results of the primary literature are not stable across cultures and gender, and that the ranking and academic field of the journal matter.
    Keywords: Big Five personality traits, earnings, meta-analysis.
    JEL: J24 D91
    Date: 2022
  3. By: Christina L. Brown; Supreet Kaur; Geeta Kingdon; Heather Schofield
    Abstract: Schooling may build human capital not only by teaching academic skills, but by expanding the capacity for cognition itself. We focus specifically on cognitive endurance: the ability to sustain effortful mental activity over a continuous stretch of time. As motivation, we document that globally and in the US, the poor exhibit cognitive fatigue more quickly than the rich across field settings; they also attend schools that offer fewer opportunities to practice thinking for continuous stretches. Using a field experiment with 1,600 Indian primary school students, we randomly increase the amount of time students spend in sustained cognitive activity during the school day—using either math problems (mimicking good schooling) or non-academic games (providing a pure test of our mechanism). Each approach markedly improves cognitive endurance: students show 22% less decline in performance over time when engaged in intellectual activities—listening comprehension, academic problems, or IQ tests. They also exhibit increased attentiveness in the classroom and score higher on psychological measures of sustained attention. Moreover, each treatment improves students’ school performance by 0.09 standard deviations. This indicates that the experience of effortful thinking itself—even when devoid of any subject content—increases the ability to accumulate traditional human capital. Finally, we complement these results with quasi-experimental variation indicating that an additional year of schooling improves cognitive endurance, but only in higher-quality schools. Our findings suggest that schooling disparities may further disadvantage poor children by hampering the development of a core mental capacity.
    JEL: D90 I24 I25 O12
    Date: 2022–06
  4. By: Ennio Bilancini; Leonardo Boncinelli; Eugenio Vicario
    Abstract: In pairwise interactions assortativity in cognition means that pairs where both decision-makers use the same cognitive process are more likely to occur than what happens under random matching. In this paper we study both the mechanisms determining assortativity in cognition and its effects. In particular, we analyze an applied model where assortativity in cognition helps explain the emergence of cooperation and the degree of prosociality of intuition and deliberation, which are the typical cognitive processes postulated by the dual process theory in psychology. Our findings rely on agent-based simulations, but analytical results are also obtained in a special case. We conclude with examples showing that assortativity in cognition can have different implications in terms of its societal desirability.
    Keywords: Assortativity, cognition, deliberation, intuition, cooperation
    JEL: C73 D91 C63
    Date: 2022
  5. By: Damini Singh; Indrani Gupta (Institute of Economic Growth, Delhi University, Delhi); Sagnik Dey
    Abstract: This paper provides a causal estimate of the contemporaneous impact of outdoor air pollution on cognitive and academic performance of children aged 8-11 years in India by combining satellite PM2.5 data with the two rounds of Indian Human Development Survey. Our identification strategy relies on the use of thermal inversions as an instrument that generates exogenous variation in the pollution levels. Results show that exposure to average PM2.5 concentrations in the past 12 months prior to the month of test taken by the children has a significant detrimental impact on their cognitive ability in India. Specifically, a 1 µg/m3 increase in average PM2.5 concentrations in the past 12 months decreases the math performance by 10-16 percentage points and the reading performance by 7-9 percentage points. We also find that there is a significant fall in the combined agestandardised cognitive score. The results imply that the cost of air pollution in India is much higher than estimated, and a narrow focus on health-related outcomes understate the magnitude of negative impact of pollution, as mental acuity is essential for higher productivity of children.
    Keywords: Air pollution, Cognitive performance, Educational outcomes, Thermal inversions, India.
    JEL: O12 O13 I15 I24 I25 Q53 Q56
    Date: 2022–05–01
  6. By: Yuniar, Rachma Etika Dwi; Sayidah, Nur
    Abstract: This research aims to analyze and prove the factors that influence the Ethical Behavior of Accounting Students, namely Intellectual Intelligence, Emotional Intelligence, and Spiritual Intelligence. We collect data using a questionnaire with the purposive sampling method. The population in this study were accounting students from three universities, including Dr. University. Soetomo, Bhayangkara University, Narotama University. The data analysis used in this study is a multiple linear regression model. The results show that: (1) Intellectual Intelligence has a significant positive effect on the Ethical Behavior of Accounting Students; (2) Emotional Intelligence has significant a positive effect on the Ethical Behavior of Accounting Students; (3) Spiritual Intelligence has a significant adverse effect on the Ethical Behavior of Accounting Students.
    Date: 2022–05–19
  7. By: Khuc, Quy Van
    Abstract: Mindsponge, nature, mechanism, happy life, survival skills
    Date: 2022–04–15

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