nep-neu New Economics Papers
on Neuroeconomics
Issue of 2023‒11‒27
five papers chosen by
Daniel Houser, George Mason University

  1. Mindfulness Training, Cognitive Performance and Stress Reduction By Gary Charness; Yves Le Bihan; Marie Claire Villeval
  2. Heuristics Unveiled By Konstantinos Georgalos; Nathan Nabil
  3. Emotion Regulation Contagion By Pinus, Michael; Halperin, Eran; Cao, Yajun; Coman, Alin; Gross, James; Goldenberg, Amit
  4. Testing Models of Complexity Aversion By Konstantinos Georgalos; Nathan Nabil
  5. The role of self-confidence in teamwork: Experimental evidence By Bruhin, Adrian; Petros, Fidel; Santos-Pinto, Luís

  1. By: Gary Charness; Yves Le Bihan; Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Improving cognitive function and reducing stress may yield important benefits to individuals' health and to society. We conduct an experiment involving a three-month within-firm training program based on the principles of mindfulness and positive psychology at three large companies. We find an improvement in the difference-indifferences across the training and control groups in all five non-incentivized measures and in seven of the eight incentivized tasks but only the non-incentivized measures and one of the incentivized measures reached a standard level of significance (above 5%), showing strong evidence of its impact on both reducing perceived stress and increasing self-reported cognitive flexibility and mindfulness. At the aggregate level, we identify an average treatment effect on the treated for the non-incentivized measures and some effect for the incentivized measures. Remarkably, the treatment effects persisted three months after the training sessions ended. Overall, mindfulness training seems to provide benefits for psychological and cognitive health in adults.
    Keywords: Mindfulness, Attention, Cognition, Stress, Lab-in-the-Field Experiment
    Date: 2023–08–30
  2. By: Konstantinos Georgalos; Nathan Nabil
    Abstract: In an attempt to elucidate the classic violations of expected utility theory, the behavioural economics literature heavily relies on the influential work of Tversky and Kahneman (1992), specifically the Cumulative Prospect Theory (CPT) model and the Heuristics-and-Biases program. While both approaches have significantly contributed to our understanding of decision-making under uncertainty, empirical evidence remains inconclusive. In this study, we investigate the performance of each approach across a wide range of choice environments and increasing cognitive load, encompassing gains, losses, time pressure, and complexity. Utilising data from various studies and employing Bayesian inference, we assess the performance of CPT in comparison to an adaptive cognitive toolbox model of heuristics. For subjects classified as toolbox decision makers, we examine the content (i.e., which heuristics) and the size of the toolbox (i.e., how many heuristics). Our findings reveal that as the choice environment objectively increases in complexity, individuals transition from using sophisticated expectation-based utility models to relying on a set of simplification heuristics for decision-making. We quantify the relationship between toolbox usage and complexity, showing a significant and positive correlation between the two. Furthermore, our results indicate that as task complexity rises, individuals tend to employ smaller toolboxes with fewer heuristics for decision-making.
    Keywords: Complexity, Toolbox models, Heuristics, Risky choice, Bayesian modelling
    JEL: C91 D81 D91
    Date: 2023
  3. By: Pinus, Michael (Hebrew University of Jerusalem); Halperin, Eran; Cao, Yajun; Coman, Alin; Gross, James; Goldenberg, Amit (Harvard University)
    Abstract: In intergroup conflicts, emotion regulation interventions can decrease negative intergroup emotions and increase support for concessions. However, it is usually infeasible to provide emotion regulation interventions to everyone in a population of interest. This raises a “spill over” question about the relationship between the proportion of individuals who are treated with an emotion regulation intervention and its effectiveness at the whole-group level. To address this fundamental question, we had groups of six Israeli participants (N = 2, 659) share real-time responses to anger-inducing, conflict-related stimuli. Before interacting with each other, we treated different proportions of each group with an emotion regulation intervention called cognitive reappraisal. This intervention involved teaching selected participants to change the interpretation of events to reduce negative emotions. Results indicated an exponential relationship between the proportion of treated participants and group reduction in negative emotions. Furthermore, targeting between 25%-40% of participants resulted in group emotional change. Using language analysis, we validated contagion in semantic content between treated and non-treated participants. These findings shed light on the potential for emotion regulation contagion to reduce groups’ emotions, and more broadly, suggest the value of investigating the contagion of psychological interventions within groups.
    Date: 2023–10–24
  4. By: Konstantinos Georgalos; Nathan Nabil
    Abstract: In this paper we aim to investigate how the complexity of a decision-task may change an agents strategic behaviour as a result of increased cognitive fatigue. In this framework, complexity is defined as a function of the number of outcomes in a lottery. Using Bayesian inference techniques, we quantitatively specify and estimate adaptive toolbox models of cognition, which we rigorously test against popular expectation based models; modified to account for complexity aversion. We find that for the majority of the subjects, a toolbox model performs best both in-sample, and with regards to its predictive capacity out-of-sample, suggesting that individuals result to heuristics when the complexity of a task overwhelms their cognitive load.
    Keywords: Complexity aversion, Toolbox models, Heuristics, Risky choice, Bayesian modelling
    JEL: C91 D91 D81
    Date: 2023
  5. By: Bruhin, Adrian; Petros, Fidel; Santos-Pinto, Luís
    Abstract: Teamwork has become increasingly important in modern organizations and the labor market. Yet little is known about the role of self-confidence in teamwork. In this paper, we present evidence from a laboratory experiment using a team effort task. Effort and ability are complements and there are synergies between teammates' efforts. We exogenously manipulate subjects' self-confidence in their ability using easy and hard general knowledge quizzes. We find that overconfidence leads to more effort, less free riding, and higher team revenue. These findings suggest that organizations could improve team performance by hiring overconfident workers.
    Keywords: Teamwork, Self-Confidence, Effort, Free Riding
    JEL: C71 C92 D91 D83
    Date: 2023

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