nep-neu New Economics Papers
on Neuroeconomics
Issue of 2024‒02‒05
five papers chosen by

  1. The Impact of Working Memory Training on Children's Cognitive and Noncognitive Skills By Eva M. Berger; Ernst Fehr; Henning Hermes; Daniel Schunk; Kirsten Winkel
  2. The roots of cooperation By Zvonimir BaÅ¡ić; Parampreet C. Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
  3. Consumption and account balances in crises: Have we neglected cognitive load? By Assenza, Tiziana; Cardaci, Alberto; Chaliasos, Michael
  4. Whoever You Want Me to Be: Personality and Incentives By McGee, Andrew; McGee, Peter
  5. Employers’ Demand for Personality Traits and Provision of Incentives By Brencic, Vera; McGee, Andrew

  1. By: Eva M. Berger (Federal Ministry of Labour and Social Affairs); Ernst Fehr (University of Zurich); Henning Hermes (ifo Institute Munich); Daniel Schunk (Johannes Gutenberg University); Kirsten Winkel (University of Koblenz)
    Abstract: Working memory capacity is a key component of executive functioning and is thought to play an important role for a wide range of cognitive and noncognitive skills such as fluid intelligence, math, reading, the inhibition of pre-potent impulses or more general self-regulation abilities. Because these abilities substantially affect individuals’ life trajectories in terms of health, education, and earnings, the question of whether working memory (WM) training can improve them is of considerable importance. However, whether WM training leads to spillover effects on these other skills is contested. Here, we examine the causal impact of WM training embedded in regular school teaching by a randomized educational intervention involving a sample of 6–7 years old first graders. We find substantial immediate and lasting gains in working memory capacity. In addition, we document positive spillover effects on geometry, Raven’s fluid IQ measure, and the ability to inhibit pre-potent impulses. Moreover, these spillover effects emerge over time and only become fully visible after 12–13 months. Finally, we document that three years after the intervention the children who received training have a roughly 16 percentage points higher probability of entering the academic track in secondary school.
    Date: 2024–01–11
  2. By: Zvonimir BaÅ¡ić (Adam Smith Business School, University of Glasgow, UK); Parampreet C. Bindra (University of Innsbruck); Daniela Glätzle-Rützler (University of Innsbruck, Austria); Angelo Romano (Leiden University, Netherlands); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, Germany, University of Innsbruck, Austria, IZA Bonn, Germany, and CESifo Munich); Claudia Zoller (Management Center Innsbruck)
    Abstract: We study the developmental roots of cooperation in 929 young children, aged 3 to 6. In a unified experimental framework, we examine pre-registered hypotheses about which of three fundamental pillars of human cooperation – direct reciprocity, indirect reciprocity, and third-party punishment – emerges earliest and is more effective as a means to increase cooperation in a repeated prisoner’s dilemma game. We find that already children aged 3 act in a conditionally cooperative way. Yet, direct and indirect reciprocity do not increase overall cooperation rates beyond a control condition. Compared to the latter, punishment more than doubles cooperation rates, making it the most effective mechanism to promote cooperation. We also find that children’s cognitive skills and parents’ socioeconomic background influence cooperation. We complement our experimental findings with a meta-analysis of studies on cooperation among adults and older children, confirming that punishment outperforms direct and indirect reciprocity.
    Keywords: Cooperation, reciprocity, third-party punishment, children, parents, prisoner’s dilemma game, experiment, meta-analysis
    JEL: C91 C93 D01 D91 H41
    Date: 2024–02
  3. By: Assenza, Tiziana; Cardaci, Alberto; Chaliasos, Michael
    Abstract: The complexities of geopolitical events, financial and fiscal crises, and the ebb and flow of personal life circumstances can weigh heavily on individuals' minds as they make critical economic decisions. To investigate the impact of cognitive load on such decisions, we conducted an incentivized online experiment involving a representative sample of 2, 000 French households.. The results revealed that exposure to a taxing and persistent cognitive load significantly reduced consumption, particularly for individuals under the threat of furlough, while simultaneously increasing their account balances, particularly for those not facing such employment uncertainty. These effects were not driven by supply constraints or a worsening of credit constraints. Instead, cognitive load primarily affected the optimality of the chosen policy rules and impaired the ability of the standard economic model to accurately predict consumption patterns, although this effect was less pronounced among college-educated subjects.
    Keywords: consumption, saving, borrowing, cognitive load, online experiments, RCT, crises, furlough
    JEL: G5 C9 D15 D91
    Date: 2023
  4. By: McGee, Andrew (University of Alberta, Department of Economics); McGee, Peter (University of Arkansas)
    Abstract: What can employers learn from personality tests when applicants have incentives to misrepresent themselves? Using a within-subject, laboratory experiment, we compare personality measures with and without incentives for misrepresentation. Incentivized personality measures are weakly to moderately correlated with non-incentivized measures in all treatments. When test-takers are given a job ad indicating that an extrovert (introvert) is desired, extroversion measures are positively (negatively) correlated with IQ. Among other characteristics, only locus of control appears related to faking on personality measures. Our findings highlight the identification challenges in measuring personality and the potential for correlations between incentivized personality measures and other traits.
    Keywords: personality; measurement; hiring; screening; experiments
    JEL: C91 D82 M50
    Date: 2023–12–29
  5. By: Brencic, Vera (University of Alberta, Department of Economics); McGee, Andrew (University of Alberta, Department of Economics)
    Abstract: We measure firms’ demands for personality traits from job ads and assess how these demands relate to the incentives firms offer. The demand measures produce intuitive rankings of occupations in terms of personality requirements and, at the occupation-level, are positively correlated with the traits of workers in those occupations for all traits except emotional stability. Employers primarily demand workers who are extroverted, conscientious, and open-to-experience. Firms seeking conscientious workers are less likely to offer incentive pay and promotion opportunities, which suggests that personality demands interact with the optimal design of pay if conscientious workers require fewer incentives to elicit effort.
    Keywords: personality; job ads; incentive pay; promotions; recruitment
    JEL: D22 J23 J24 J33 M51
    Date: 2023–12–29

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