nep-neu New Economics Papers
on Neuroeconomics
Issue of 2023‒12‒04
seven papers chosen by
Daniel Houser, George Mason University

  1. How Cognitive Skills Affect Strategic Behavior: Cognitive Ability, Fluid Intelligence and Judgment By Gill, David; Knepper, Zachary; Prowse, Victoria; Zhou, Junya
  2. Trends in cognitive impairment among older adults in the USA and Europe, 1996-2018 By Mikko Myrskylä; Jo M. Hale; Daniel C. Schneider; Neil K. Mehta
  3. Transferring Control of Finances: Timing Poses a Risk By John Ameriks; Andrew Caplin; Minjoon Lee; Matthew D. Shapiro; Christopher Tonetti
  4. Behavioral Science Interventions Could Increase SNAP Comprehension and Awareness Among Military Families By Colleen Heflin; Hannah Patnaik; Leonard M. Lopoo; Siobhan O'Keefe
  5. Self-Control and Demand for Preventive Health: Evidence from Hypertension in India By Bai, Liang; Handel, Benjamin; Miguel, Edward; Rao, Gautam
  6. Demand for Personality Traits, Tasks, and Sorting By Brenčič, Vera; McGee, Andrew
  7. “Time is of the essence”: relationship between hospital staff perceptions of time, safety attitudes and staff wellbeing By Louise A Ellis; Yvonne Tran; Chiara Pomare; Janet C Long; Kate Churruca; Zeyad Mahmoud; Winston Liauw; Jeffrey Braithwaite

  1. By: Gill, David (Department of Economics, Purdue University); Knepper, Zachary (Department of Economics, Purdue University); Prowse, Victoria (Department of Economics, Purdue University); Zhou, Junya (Department of Economics, Purdue University)
    Abstract: We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game. Using the level-k model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However, individuals with better judgment choose the Nash equilibrium action less frequently, and we uncover a novel dynamic mechanism that sheds light on this pattern. Taken together, our results indicate that fluid (i.e., analytical) intelligence is a primary driver of strategic level-k thinking, while facets of judgment that are distinct from fluid intelligence drive the lower inclination of high judgment individuals to choose the equilibrium action.
    Keywords: cognitive ability; judgment; fluid intelligence; matrix reasoning; beauty contest; strategic sophistication; level-k; experiment; game theory JEL Classification: C92; C72; D91
    Date: 2023
  2. By: Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany); Jo M. Hale (Max Planck Institute for Demographic Research, Rostock, Germany); Daniel C. Schneider (Max Planck Institute for Demographic Research, Rostock, Germany); Neil K. Mehta
    Abstract: Background Single-country studies document varying time trends in cognitive impairment. Comparative analyses across several countries are limited. Methods We use data for a total of 13 countries from three large representative surveys (USA: HRS; England: ELSA; 11 European countries: SHARE), across years 1996-2018, and ages 50 and above. Cognitive function is based on the modified Telephone Interview for Cognitive Status. We use linear regression to study trends in average test scores and logistic regression for cognitive impairment. We analyze trend heterogeneity by gender, age, and education and explore mechanisms by adjusting for migration background, education, health and health behaviors, and partnership status. Results The age-adjusted 10-year change in average score is 0.23 standard deviations (SD) (95% confidence interval (CI) 0.21, 0.24) for SHARE countries; 0.08 (95% CI 0.05, 0.10) in England; and -0.02 (95% CI -0.03, -0.01) in the USA The 10-year change in odds ratio for cognitive impairment is 0.63 (95% CI 0.61, 0.66) for SHARE; 0.93 (95% CI 0.85, 1.02) in England; and 1.05 (95% CI 1.02, 1.09) in the USA. The trends are largely similar across gender, education, and age subgroups. Regional differences in trends remain after adjustment for potential mechanisms. Conclusions Time trends in cognitive function and impairment vary across countries. European countries have experienced improvement over the last twenty years, whereas the USA time trend is worsening or stagnating both in mean scores and in indicators for impairment. Uncovering the causes for this “American exceptionalism” should be both a research and public health priority. Keywords: Cognitive impairment, dementia, trends, comparative analysis
    JEL: J1 Z0
    Date: 2023
  3. By: John Ameriks; Andrew Caplin; Minjoon Lee; Matthew D. Shapiro; Christopher Tonetti
    Abstract: As older Americans approach the end of their lives, many have to make major financial decisions, including estate planning and long-term care arrangements. Unfortunately, with age comes the risk of cognitive decline, which may affect the quality of such decisions as well as making people easier targets for financial scams. One way to help individuals protect their finances against mistakes is to involve a third party (an “agent†), commonly a family member, to take over financial decisions. But several conditions need to be met to make it work. First, the agent must be capable of making good decisions on behalf of the individual and be trustworthy. Second, the agent must be available when needed. Lastly, the transfer of control must be made at the right time, in particular before the aging individual makes irreversible mistakes. This brief, which summarizes a recent study of the authors published by the American Economic Association, assesses the perceptions of individuals ages 55+ about the roles and limits of an agent in addressing cognitive decline, based on a sample of retail investors at the Vanguard Group. The discussion proceeds as follows. The first section provides background on the prevalence of cognitive decline and related financial mistakes; and it describes the survey and the sample. The remaining sections summarize the results of the survey. The second section reports that most respondents are confident that they have a suitable agent in mind. The third section explains, though, that respondents anticipate a significant chance that they might transfer control too late, primarily due to a failure to quickly detect their own cognitive decline. The fourth section summarizes the consequences of delay – respondents think it could substantially damage their finances and well-being. The last section concludes that any measure that can help the timely detection of cognitive decline could protect against serious financial mistakes, thereby improving late-life financial security.
    Date: 2023–06
  4. By: Colleen Heflin (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Hannah Patnaik (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Leonard M. Lopoo (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Siobhan O'Keefe
    Abstract: Food insecurity is more common among military families than the general population, and the transition from active service to civilian life is a time of heightened risk. The Supplemental Nutritional Assistance Program (SNAP) is designed to support food security among low-income families. Many eligible military and veteran families do not enroll in SNAP due to a lack of information, stigma, and administrative barriers. This brief highlights findings from a survey experiment conducted in 2022 and 2023 to assess how small changes to SNAP informational flyers, such as simplifying information provided about SNAP, highlighting that other veterans use SNAP, and emphasizing how much monetary support veterans may be foregoing, to improve SNAP uptake among military families transitioning to civilian life. Results of the study show that making these small changes to informational flyers increased veterans’ awareness and comprehension of SNAP, while also reducing the cognitive load placed on veterans and their families.
    Keywords: Food insecurity, SNAP, veterans
    Date: 2023–11
  5. By: Bai, Liang; Handel, Benjamin; Miguel, Edward; Rao, Gautam
    Abstract: Self-control problems constitute a potential explanation for the underinvestment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. Despite achieving high take-up of such contracts in some treatment arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment but fail to follow through on the doctor visit, losing money without experiencing health benefits. We develop and structurally estimate a prespecified model of consumer behavior under present bias with varying levels of naiveté. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment but overly optimistic about whether a given level of commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about their role in health care.
    Keywords: Economics, Applied Economics, Prevention, Clinical Research, Good Health and Well Being, Econometrics, Banking, finance and investment, Applied economics
    Date: 2021–12–02
  6. By: Brenčič, Vera (University of Alberta); McGee, Andrew (University of Alberta)
    Abstract: In job ads, employers express demand for personality traits when seeking workers to perform tasks that can be completed with different behaviors (e.g., communication, problem-solving) but not when seeking workers to perform tasks involving narrowly prescribed sets of behaviors such as routine and mathematics tasks. For many tasks, employers appear to demand narrower personality traits than those measured at the Big Five factor level. The job ads also exhibit substantial heterogeneity within occupations in the tasks mentioned. Workers may thus sort based on personality-derived comparative advantages in tasks into jobs rather than occupations. In the National Longitudinal Survey of Youth 1997, we confirm that personality sorting based on tasks occurs at both the occupation and job levels. In this sample, however, there is little evidence of task-specific wage returns to personality traits, which would influence the supply of traits to jobs with particular tasks. This may explain why personality sorting based on tasks in the sample is very limited in spite of the correlations between tasks and employers' demands for traits.
    Keywords: personality, tasks, sorting, job ads, employer demand
    JEL: D22 J23 J24 J33 M51
    Date: 2023–11
  7. By: Louise A Ellis (Macquarie University [Sydney]); Yvonne Tran (Macquarie University [Sydney]); Chiara Pomare (Macquarie University [Sydney]); Janet C Long (Macquarie University [Sydney]); Kate Churruca (Macquarie University [Sydney]); Zeyad Mahmoud (IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes, Macquarie University [Sydney]); Winston Liauw (Macquarie University [Sydney]); Jeffrey Braithwaite
    Abstract: Background Hospitals are perceived as fast-paced and complex environments in which a missed or incorrect diagnosis or misread chart has the potential to lead to patient harm. However, to date, limited attention has been paid to studying how hospital sociotemporal norms may be associated with staff wellbeing or patient safety. The aim of this study was to use novel network analysis, in conjunction with well-established statistical methods, to investigate and untangle the complex interplay of relationships between hospital staff perceived sociotemporal structures, staff safety attitudes and work-related well-being. Method Cross-sectional survey data of hospital staff ( n = 314) was collected from four major hospitals in Australia. The survey included subscales from the Organizational Temporality Scale (OTS), two previously established scales of safety attitudes (teamwork climate and safety climate) and measures of staff-related wellbeing (job satisfaction, emotional exhaustion, depersonalisation). Results Using confirmatory factor analysis, we first tested a 19-item version of the OTS for use in future studies of hospital temporality (the OTS-H). Novel psychological network analysis techniques were then employed, which identified that "pace" (the tempo or rate of hospital activity) occupies the central position in understanding the complex relationship between temporality, safety attitudes and staff wellbeing. Using a path analysis approach, serial mediation further identified that pace has an indirect relationship with safety attitudes through wellbeing factors, that is, pace impacts on staff wellbeing, which in turn affects hospital safety attitudes. Conclusions The findings of this study are important in revealing that staff wellbeing and safety attitudes can be significantly improved by placing more focus on temporal norms, and in particular hospital pace. There are implications for increasing levels of trust and providing staff with opportunities to exercise greater levels of control over their work.
    Keywords: Temporality, Time, Job satisfaction, Burnout, Hospital
    Date: 2021–12

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