nep-neu New Economics Papers
on Neuroeconomics
Issue of 2024‒03‒25
four papers chosen by

  1. The cognitive perspective in strategic choice By Midtgård, Kenneth; Selart, Marcus
  2. Genetic Risk for Alzheimer’s Disease and Related Dementias: Cognition, Economic Behavior, and Clinically Actionable Information By Yeongmi Jeong; Nicholas W. Papageorge; Meghan Skira; Kevin Thom
  3. Multidimensional Signaling with a Resource Constraint By Seungjin Han; Alex Sam
  4. Awareness of self-control By Mohammad Mehdi Mousavi; Mahdi Kohan Sefidi; Shirin Allahyarkhani

  1. By: Midtgård, Kenneth; Selart, Marcus
    Abstract: This paper examines to what degree organizations use strategies that focus on maximizing shareholder value (Theory E) or if they use strategies emphasizing the development of organizational capability (Theory O). Applying a cognitive perspective in strategic choice, our main goal was to investigate to what extent cognitive biases influenced strategic choices. A survey was developed that measured different aspects of the cognitive perspective in strategic choice. It was distributed to managers of several medium-sized organizations in Scandinavia (n = 119). The results indicated that managers used mixed strategies (Theory E and O) contrary to recommendations. Results also revealed that illusions of control together with beliefs about change processes skewed the application of strategies towards Theory E. Theoretical and practical implications of the results were finally discussed enlightening the cognitive perspective in strategic choice.
    Date: 2024–02–27
  2. By: Yeongmi Jeong; Nicholas W. Papageorge; Meghan Skira; Kevin Thom
    Abstract: Genetic factors play a major role in the development of Alzheimer’s disease and related dementias (ADRD). Observable genetic factors could impact household planning and medical care if they contain actionable information, meaning that they i) are associated with significant harms, ii) reflect risks for which individuals are not already prepared, and iii) are informative above and beyond current knowledge or expectations. We examine these properties for existing genetic measures related to ADRD in the Health and Retirement Study (HRS). We replicate existing relationships between genetic factors and cognitive health. We also show that higher genetic risk is associated with worse economic outcomes on several dimensions including work, income, and wealth. Surprisingly, individuals at higher risk are less likely to engage in planning activities that could mitigate the consequences of cognitive decline (e.g. assigning durable power of attorney). In predictive exercises, existing genetic indices provide clinically valuable and policy-relevant information on the development of severe adverse cognitive outcomes in the future.
    JEL: D14 G51 G52 I12 I14 J14 J22 J26
    Date: 2024–03
  3. By: Seungjin Han; Alex Sam
    Abstract: We study multidimensional signaling (cognitive/non-cognitive) as a sender's portfolio choice with a resource constraint. We establish the existence of a unique monotone D1 equilibrium where the cognitive (non-cognitive) signal increases (decreases) in sender type and the sum of the two increases in sender type. The equilibrium is characterized by two threshold sender types. The low threshold is one where a kink occurs in signaling. The constraint is binding only for sender types above it. The high threshold is the other one, above which all types spend all the resources in cognitive signal with pooling and discontinuity on the top.
    Date: 2024–02
  4. By: Mohammad Mehdi Mousavi; Mahdi Kohan Sefidi; Shirin Allahyarkhani
    Abstract: Economists modeled self-control problems in decisions of people with the time-inconsistence preferences model. They argued that the source of self-control problems could be uncertainty and temptation. This paper uses an experimental test offered to individuals instantaneous reward and future rewards to measure awareness of self-control problems in a tempting condition and also measure the effect of commitment and flexibility cost on their welfare. The quasi-hyperbolic discounting model with time discount factor and present bias at the same time was used for making a model for measuring awareness and choice reversal conditions. The test showed 66% awareness of self-control (partially naive behaviors) in individuals. The welfare implication for individuals increased with commitment and flexibility costs. The result can be useful in marketing and policy-making fields design precisely offers for customers and society.
    Date: 2024–02

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