nep-neu New Economics Papers
on Neuroeconomics
Issue of 2023‒01‒16
two papers chosen by

  1. How Early Nutrition and Foundational Cognitive Skills Interconnect? Evidence from Two Developing Countries By Sanchez, Alan; Favara, Marta; Sheridan, Margaret; Behrman, Jere R.
  2. Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback By King-King Li

  1. By: Sanchez, Alan (Group for the Analysis of Development (GRADE)); Favara, Marta (University of Oxford); Sheridan, Margaret (University of North Carolina, Chapel Hill); Behrman, Jere R. (University of Pennsylvania)
    Abstract: While the long-term consequences of early stunting on educational attainment and on school achievement tests are well-known, there is scarce evidence about the specific mechanisms through which early stunting leads to poorer educational outcomes, especially in LMIC contexts. We use unique data collected in Ethiopia and Peru as part of the Young Lives to investigate the relationship between early undernutrition and four foundational cognitive skills, the first two of which measure executive functioning: working memory, inhibitory control, long-term memory, and implicit learning. We exploit the rich longitudinal data available to control for potential confounders at the household level and for time-invariant community characteristics and we use data for paired-siblings to obtain household fixed-effects estimates. We find that stunting is negatively related with the development of executive functions, predicting reductions in working memory and inhibitory control by 12.6% and 5.8% of a standard deviation.
    Keywords: foundational cognitive skills, early nutrition, executive functions, Ethiopia, Peru
    JEL: I15 I25 J24
    Date: 2022–12
  2. By: King-King Li (Shenzhen Audencia Business School, Shenzhen University)
    Abstract: We experimentally investigate the memory recall bias of overconfident (underconfident) individuals after receiving feedback on their overconfidence (underconfidence). Our study differs from the literature by identifying the recall pattern conditional on subjects' overconfidence/underconfidence. We obtain the following results. First, overconfident (underconfident) subjects exhibit overconfident (underconfident) recall despite receiving feedback on their overconfidence (underconfidence). Second, awareness of one's overconfidence or underconfidence does not eliminate memory recall bias. Third, the primacy effect is stronger than the recency effect. Overall, our results suggest that memory recall bias is mainly due to motivated beliefs of sophisticated decision makers rather than naïve decision-making.
    Keywords: memory recall bias, overconfidence, underconfidence, experiment
    Date: 2022–05–23

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