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on Neuroeconomics |
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Issue of 2023‒05‒15
six papers chosen by |
| By: | Caliendo, Marco (University of Potsdam); Cobb-Clark, Deborah A. (University of Sydney); Silva Goncalves, Juliana (University of Sydney); Uhlendorff, Arne (CREST) |
| Abstract: | We conduct a laboratory experiment to study how locus of control operates through people's preferences and beliefs to influence their decisions. Using the principal-agent setting of the delegation game, we test four key channels that conceptually link locus of control to decision- making: (i) preference for agency; (ii) optimism and (iii) confidence regarding the return to effort; and (iv) illusion of control. Knowing the return and cost of stated effort, principals either retain or delegate the right to make an investment decision that generates payoffs for themselves and their agents. Extending the game to the context in which the return to stated effort is unknown allows us to explicitly study the relationship between locus of control and beliefs about the return to effort. We find that internal locus of control is linked to the preference for agency, an effect that is driven by women. We find no evidence that locus of control influences optimism and confidence about the return to stated effort, or that it operates through an illusion of control. |
| Keywords: | locus of control, preference for agency, decision-making, beliefs, optimism, confidence, illusion of control |
| JEL: | D83 D87 D91 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16061&r=neu |
| By: | Lia Q. Flores; Julian Jamison |
| Abstract: | Automatic thinking conditions decisions with intertemporal trade-offs which can matter greatly for life outcomes. Systematically choosing immediate gratification may result in different forms of antisocial behavior and also damage one’s economic circumstances. Based on a dataset of almost 1000 Liberian men over the course of one year, we evaluate the predictive power of three proxies of automatic thinking that have been used in different branches of the behavioral science literature: time preferences, executive function and self-control. We find that time preference is a robust predictor of both antisocial behavior and economic performance. Self-control only reliably predicts antisocial behavior, while executive function predicts neither significantly. |
| Date: | 2023–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:1005&r=neu |
| By: | Brenčič, Vera (University of Alberta); McGee, Andrew (University of Alberta) |
| Abstract: | We measure firms' demand for workers' personality traits expressed in job ads and find that firms primarily demand workers who are extroverted, conscientious, and open-to-experience. The personality demand measures are correlated with the soft skills required on the job and produce intuitively plausible rankings of occupations in terms of personality requirements. Consistent with firms needing more time to fill vacancies with more requirements, ads requiring extroversion and conscientiousness remain posted online longer. Using the personality demand measures and wage information in the ads, we show theoretically and empirically that firms seeking conscientious workers are less likely to offer incentive pay. |
| Keywords: | personality, job ads, method of pay |
| JEL: | D22 J23 J24 J33 M51 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16083&r=neu |
| By: | Guilhem Lecouteux (Université Côte d'Azur; GREDEG, CNRS, France) |
| Abstract: | A common narrative among some behavioural economists and policy makers is that experimental psychology highlights that individuals are more like Homer Simpson than the Mr Spock imagined by neoclassical economics, and that this justifies policies aiming to 'correct' individual behaviours. This narrative is central to nudging policies and suggests that a better understanding of individual cognition will lead to better policy prescriptions. I argue that this Homer economicus narrative is methodologically flawed, and that its emphasis on cognition advances a distorted view of public policies consisting in fixing malfunctioning individuals, while ignoring the possibly malfunctioning environment within which they evolve. |
| Keywords: | Homer Simpson and Mr Spock; homo economicus; rational choice; replication crisis; behaviourally informed policy |
| JEL: | A12 B41 C91 D04 D91 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-29&r=neu |
| By: | Kosinski, Michal (Stanford U) |
| Abstract: | Theory of mind (ToM), or the ability to impute unobservable mental states to others, is central to human social interactions, communication, empathy, self-consciousness, and morality. We tested several language models using 40 classic false-belief tasks widely used to test ToM in humans. The models published before 2020 showed virtually no ability to solve ToM tasks. Yet, the first version of GPT-3 (“davinci-001†), published in May 2020, solved about 40% of false-belief tasks—performance comparable with 3.5-year-old children. Its second version (“davinci-002†; January 2022) solved 70% of false-belief tasks, performance comparable with six-year-olds. Its most recent version, GPT-3.5 (“davinci-003†; November 2022), solved 90% of false-belief tasks, at the level of seven-year-olds. GPT-4 published in March 2023 solved nearly all the tasks (95%). These findings suggest that ToM-like ability (thus far considered to be uniquely human) may have spontaneously emerged as a byproduct of language models’ improving language skills. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:4086&r=neu |
| By: | Roberts, Ian David (Carnegie Mellon University); HajiHosseini, Azadeh; Hutcherson, Cendri |
| Abstract: | Although people often prefer to pursue pleasant affect, in many situations, unpleasant affect is more valuable. Yet little is known about how people flexibly value different affective valences across contexts. Do the same neural circuits that generate affect generate value? What differentiates people who more flexibly value affect? To investigate these questions, we developed a neurocomputational model of affect valuation, in which people convert subjective affect into context-sensitive decision value through a process of weighted evidence accumulation. We then tested model predictions by recording EEG and facial EMG during a novel affective choice paradigm in a sample of racially diverse, undergraduate participants (data collected in 2018-2019). Consistent with the model, we found that generation of affective responses occurs earlier than, and is neurally distinct from, valuation of that affect. Moreover, individual differences in flexibly valuing affect correlated only with later valuation processes, not earlier affect generation processes. Our results have important theoretical implications for emotion, emotion regulation, and decision making. |
| Date: | 2023–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:4cu98&r=neu |