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on Neuroeconomics |
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Issue of 2022‒09‒12
five papers chosen by |
| By: | Benjamin Enke; Thomas Graeber; Ryan Oprea |
| Abstract: | The influence of behavioral biases on aggregate outcomes like prices and allocations depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. We conduct a series of betting market, auction and committee experiments using 15 classic cognitive bias tasks. We document that some cognitive errors are strongly reduced through self-selection, while others are not affected at all. A large part of this variation is explained by the quality of people's meta-cognition. In some cognitive tasks, confidence and performance are strongly positively correlated, while for others this link is absent or even negative. |
| JEL: | D01 D03 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30262&r= |
| By: | Esteban García-Miralles; Miriam Gensowski |
| Abstract: | Child skills are shaped by parental investments. Health shocks to parents can affect these investments and their children’s skills. This paper estimates causal effects of severe parental health shocks on child socio-emotional skills. Drawing on a large-scale survey linked to hospital records, we find that socio-emotional skills of 11-16 year-olds are robust to these shocks, except for small reductions in Conscientiousness. We estimate short-run effects with child-fixed effects and dynamics around shocks with event studies. In the long-run, we find some evidence of build-up of effects that may be rationalized with shocks having a delayed impact on children’s skills. |
| Keywords: | Big Five personality traits, development of personality traits, parental health shocks, socio-emotional skills, non-cognitive skills, skill formation |
| JEL: | J24 I10 I21 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9880&r= |
| By: | Gill, David (Purdue University); Prowse, Victoria (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 Classification: D91 ; J24 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:618&r= |
| By: | Lambrecht, Marco (Hanken School of Economics); Proto, Eugenio (University of Glasgow); Rustichini, Aldo (University of Minnesota); Sofianos, Andis (Heidelberg University) |
| Abstract: | We investigate in a laboratory setting whether revealing information on the intelligence of both players affects behavior in repeated games. We study the Prisoners' Dilemma (PD) and Battle of Sexes (BoS) as they cover a large set of the interesting scenarios generated by repeated games of two actions two players symmetric stage games. Furthermore, in order to understand how cognitive skills disclosure interacts with different potential payoff allocations, we consider two versions of the BoS, with high and low payoff inequality. In PD, disclosure markedly hampers cooperation, as higher intelligence players trust their partners less when made aware that they play against someone of lower ability than themselves. Similarly, in BoS with low payoff inequality, disclosure disrupts coordination, as higher intelligence players try to force their most preferred outcome. However, in the BoS with high payoff inequality, this pattern of behavior changes substantially. Disclosure does not significantly affect coordination, while coordination is more often on outcomes that favor the less intelligent player. This result may indicate an intention to achieve a fairer division, or that the intelligent player anticipates that the other player will not concede. |
| Keywords: | repeated prisoners dilemma, cooperation, intelligence, IQ |
| JEL: | C73 C91 C92 D83 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15438&r= |
| By: | Thomas Buser (University of Amsterdam); Roel van Veldhuizen (Lund University); Yang Zhong (University of Amsterdam) |
| Abstract: | Many professional and educational settings require individuals to be willing and able to perform under time pressure. We use a lab experiment to elicit preferences for working under time pressure in an incentivized way by eliciting the minimum additional payment participants require to complete a cognitive task under various levels of time pressure versus completing it without pressure. We make three main contributions. First, we document that participants are averse to working under time pressure on aggregate. Second, we show that there is substantial heterogeneity in the degree of time pressure aversion across individuals and that these individual preferences can be partially captured by simple survey questions. Third, we include these questions in a survey of bachelor students and show that time pressure preferences correlate with future career plans. Our results indicate that individual differences in time pressure aversion could be an influential factor in determining labor market outcomes. |
| JEL: | J24 D9 C91 |
| Date: | 2022–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20220054&r= |