nep-neu New Economics Papers
on Neuroeconomics
Issue of 2024‒06‒17
five papers chosen by

  1. Students’ Grit and Their Post-Compulsory Educational Choices and Trajectories: Evidence from Switzerland By Janine Albiez; Maurizio Strazzeri; Stefan C. Wolter
  2. Overconfidence Due to a Self-reliance Dilemma By Gergely Hajdu; Nikola Frollová
  3. Children's Residential Proximity, Spousal Presence and Dementia Risk By Lin, Zhuoer; Yin, Xuecheng; Levy, Becca R.; Yuan, Yue; Chen, Xi
  4. Level-$k$ Reasoning, Cognitive Hierarchy, and Rationalizability By Shuige Liu
  5. Nonlinear Relationship between the Number of Children and Late-life Cognition By BAI Yuting; MARUYAMA Shiko; WANG Si

  1. By: Janine Albiez; Maurizio Strazzeri; Stefan C. Wolter
    Abstract: We examine the association between the personality trait grit and post-compulsory educational choices and trajectories using a large survey linked to administrative student register data. Exploiting cross sectional variation in students’ self-reported grit in the last year of compulsory school, we find that an increase in students’ grit is associated with a higher likelihood to start a vocational education instead of a general education. This association is robust to the inclusion of cognitive skill measures and a comprehensive set of other students’ background characteristics. Moreover, using novel data on skill requirements of around 240 vocational training occupations, we find that grittier vocational education students sort into math-intensive training occupations. Similarly, students in general education with more grit select themselves more often into the math-intensive track. Finally, we do not find evidence that students with a higher grit have lower dropout rates in post-compulsory education.
    Keywords: non-cognitive skills, personality traits, grit, educational choices
    JEL: D01 I20
    Date: 2024
  2. By: Gergely Hajdu (Department of Economics, Vienna University of Economics and Business); Nikola Frollová (Department of Management, Prague University of Economics and Business)
    Abstract: Choosing between payment based on one’s own performance or others’ is inherent in most delegation decisions. We propose and test that such self-reliance dilemma could result in motivated reasoning about own and others’ performances. Participants in an experiment face this dilemma and learn about it either before or after reporting their beliefs. We find that learning about the dilemma decreases participants’ beliefs about their counterpart’s performance advantage (CPA) by an average of 17%. Furthermore, it causes an average overestimation of one’s own performance and increases the fraction of participants who falsely believe they outperformed their counterpart. Organizations should, therefore, carefully manage delegation decisions and implement measures to curb overconfidence.
    Keywords: overconfidence, self-reliance, motivated reasoning
    JEL: D90 C91 D83
    Date: 2024–04
  3. By: Lin, Zhuoer (Yale University); Yin, Xuecheng (Oklahoma State University); Levy, Becca R. (Yale University); Yuan, Yue (Lehigh University); Chen, Xi (Yale University)
    Abstract: Cognitive impairment poses considerable challenges among older adults, with the protective role of family support becoming increasingly crucial. This study examines the role of children's residential proximity and spousal presence with dementia risk in cognitively impaired older adults. We analyzed 14, 600 individuals aged 50 and older with cognitive impairment from the Health and Retirement Study (1995-2018). Family support was categorized by spousal presence and children's residential proximity. Modifiable risk factors, including smoking, depressive symptoms, and social isolation, were assessed. Mixed-effects models were estimated. A significant proportion of older adults with cognitive impairment lacked access to family support, with either no spouse (46.9%) or all children living over 10 miles away (25.3%). Those with less available family support, characterized by distant-residing children and the absence of a spouse, had a significantly higher percentage of smoking, depressive symptoms, and social isolation. Moreover, we revealed a consistent gradient in the percentage of the risk factors by the degree of family support. Relative to older adults with a spouse and co-resident children, those without a spouse and with all children residing further than 10 miles displayed the highest percentage of the risk factors. These findings were robust to various sensitivity analyses.
    Keywords: dementia, depression, social isolation, smoking, long-term care, family support, residential proximity
    JEL: I12 J14 I18 I11
    Date: 2024–05
  4. By: Shuige Liu
    Abstract: We use a uniform framework to cognitive hierarchy (CH) solution concepts a decision-theoretical foundation by the epistemic game theoretical solution concept $\Delta$-rationalizability (Battigalli and Siniscalchi, 2003). We formulate level-$k$ strategic sophistication as an information type, and, by putting intuitive conditions on the the belief of players with a strategic sophistication, we define a restriction $\Delta^\kappa$, from which the levels of reasoning is endogenously determined. We show that in static games, Camerer, Ho, and Chong's (2004) CH solution generically coincides with the behavioral consequence of rationality, common belief in rationality, and transparency of $\Delta^\kappa$; based on this, we connect CH with Bayesian equilibrium. By adapting $\Delta^\kappa$ into dynamic games, we show that Lin and Palfrey's (2024) DCH solution generically coincides with the behavioral consequence of rationality, common strong belief in rationality, and transparency of (dynamic) $\Delta^\kappa$. The same structure could analyze many variations of CH in the literature.
    Date: 2024–04
  5. By: BAI Yuting; MARUYAMA Shiko; WANG Si
    Abstract: Late-life cognition is a growing concern as populations age. This study investigates how the number of children affects late-life cognition in rural China by exploiting the exogenous variation in the rollout timing of Family Planning Policies. Theoretical analysis suggests a nonlinear effect along the fertility dimension. Using data from the China Health and Retirement Longitudinal Study, we find nonlinear causal effects of fertility. Having one more child when the mother has 4+ children leads to adverse effects on a range of late-life cognition measures, while positive effects exist for episodic memory and mental intactness at low parities, implying hump-shaped effect heterogeneity. Underlying this hump-shaped causal relationship is increased interaction with children but a greater risk of chronic conditions.
    Date: 2024–05

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