nep-neu New Economics Papers
on Neuroeconomics
Issue of 2022‒11‒21
three papers chosen by

  1. Cognitive Skills among Adults: An Impeding Factor for Gender Convergence? By Battisti, Michele; Kinne, Lavinia; Fedorets, Alexandra
  2. Late-career unemployment and cognitive abilities By Freise, Diana; Schmitz, Hendrik; Westphal, Matthias
  3. Zero-Ending Prices, Cognitive Convenience, and Price Rigidity By Daniel Levy; Avichai Snir

  1. By: Battisti, Michele; Kinne, Lavinia; Fedorets, Alexandra
    JEL: I24 J16 J24
    Date: 2022
  2. By: Freise, Diana; Schmitz, Hendrik; Westphal, Matthias
    Abstract: We study the effect of unemployment on cognitive abilities among individuals aged between 50 and 65 in Europe. To this end, we exploit plant closures and use flexible event-study estimations together with an experimentally elicited measure of fluid intelligence, namely word recall. We find that, within a time period of around eight years after the event of unemployment, cognitive abilities only deteriorate marginally - the effects are insignificant both in statistical and economic terms. We do, however, find significant effects of late-career unemployment on the likelihood to leave the labor force, and short-term effects on mental health problems such as depression and sleep problems.
    Keywords: Cognitive abilities,mental health,unemployment,event studies,plant closures
    JEL: J14 J24 C21 I1
    Date: 2022
  3. By: Daniel Levy (Bar-Ilan University); Avichai Snir
    Abstract: We assess the role of cognitive convenience in the popularity and rigidity of 0-ending prices in convenience settings. Studies show that 0-ending prices are common at convenience stores because of the transaction convenience that 0-ending prices offer. Using a large store-level retail CPI data, we find that 0-ending prices are popular and rigid at convenience stores even when they offer little transaction convenience. We corroborate these findings with two large retail scanner price datasets from Dominick’s and Nielsen. In the Dominick’s data, we find that there are more 0-endings in the prices of the items in the front-end candies category than in any other category, even though these prices have no effect on the convenience of the consumers’ check-out transaction. In addition, in both Dominick’s and Nielsen’s datasets, we find that 0-ending prices have a positive effect on demand. Ruling out consumer antagonism and retailers’ use of heuristics in pricing, we conclude that 0-ending prices are popular and rigid, and that they increase demand at convenience settings, not only for their transaction convenience, but also for the cognitive convenience they offer.
    Keywords: Cognitive Convenience, Transaction Convenience, Price Rigidity, Price Stickiness, Sticky Prices, Rigid Prices, 0-Ending Prices, Round Prices, Convenient Prices, 9-Ending Prices, Just Below Prices, Psychological Prices, Price Points
    JEL: E31 L16 D90 E70 M30
    Date: 2022–10

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