|
on Neuroeconomics |
| By: | Lavy, Victor (University of Warwick, Hebrew University, and NBER); Rachkovski, Genia (Tel Aviv University); Yoresh, Omry (London School of Economics) |
| Abstract: | Literature has shown that air pollution can have short- and long-term adverse effects on physiological and cognitive performance. In this study, we estimate the effect of increased pollution levels on the likelihood of accidents in construction sites, a significant factor related to productivity losses in the labor market. Using data from all construction sites and pollution monitoring stations in Israel, we find a strong and significant causal effect of nitrogen dioxide (NO2), one of the primary air pollutants, on construction site accidents. We find that a 10-ppb increase in NO2 levels increases the likelihood of an accident by as much as 25 percent. Importantly, our findings suggest that these effects are non-linear. While moderate pollution levels, according to EPA standards, compared to clean air levels, increase the likelihood of accidents by 138 percent, unhealthy levels increase it by 377 percent. We present a mechanism where the effect of pollution is exacerbated in conditions with high cogitive strain or reduced awareness. Finally, we perform a cost-benefit analysis, supported by a nonparametric estimation calculating the implied number of accidents due to NO2 exposure, and examining a potential welfare-improving policy to subsidize the closure of construction sites on highly polluted days. |
| Keywords: | Workplace Accidents ; Labor Productivity ; Air Pollution, Government Policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1575 |
| By: | Yimin Du; Guolin Tang |
| Abstract: | We develop a theoretical framework for understanding how cognitive load affects information processing in financial markets and test it using exogenous variation in disclosure complexity. Our model distinguishes between attention allocation and cognitive processing capacity, showing that complex information creates differential effects across investor types. Using a comprehensive dataset of corporate disclosures and a novel identification strategy based on regulatory changes, we find that cognitive load significantly impairs price discovery, with effects concentrated among less sophisticated investors. A one-standard-deviation increase in cognitive complexity reduces information incorporation speed by 18\% and increases mispricing duration by 23\%. We provide evidence for three theoretical mechanisms: selective attention, processing errors, and strategic complexity. Our findings suggest that cognitive constraints create systematic inefficiencies in financial markets, with important implications for disclosure regulation and market design. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.07037 |
| By: | Laura Gómez Ruiz (Universidad Pablo de Olavide); Natalia Jiménez-Jiménez (Universidad Pablo de Olavide); Maria Jesús Sánchez-Expósito (Universidad Pablo de Olavide) |
| Abstract: | This study investigates how the design of ex-ante information (given before decisions are taken) affects the cooperative decisions made by team members, depending on their inclination to cooperate. Also analyzed is the effect of this information on cognitive conflict (when an agent internally experiences contrary demands or opposing forces). Moreover, the relationship between cognitive conflict and cooperation is explored. We design an experiment in which participants play 15 rounds, in pairs, of three social dilemmas. The ex-ante information is manipulated in three different ways: displaying only private and individual earnings (the “I” frame); displaying the joint profits (the “We” frame); and displaying both types of information (the “I&We” frame). Mouse movements are tracked using a specific software. Individual inclinations to cooperate are measured using the Honesty-Humility (HH) dimension of the HEXACO personality model. The agents are classified as HH_highs (high tendency to cooperate) and HH_lows (low tendency to cooperate). We measure the cooperation level as the percentage of cooperative decisions and the cognitive conflict level based on the curvature of mouse movements. Ex-ante information design is not found to affect cooperation levels in the case of HH_highs but does affect cognitive conflict levels. The opposite is observed for HH_lows. The main result is therefore that the cooperation of non-cooperative agents can be increased through framing (“I&We” being the best framing). No effect on cognitive conflict is found for HH_lows. Finally, a relationship between cognitive conflict and cooperative decisions for HH_highs is only observed in the case of the “I&We” frame. |
| Keywords: | cognitive conflict; ex-ante information design; cooperation; HEXACO; mouse tracking. |
| JEL: | C72 C92 D83 D91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:25.06 |
| By: | Biagi Federico (European Commission - JRC); Sala Jacopo |
| Abstract: | This report investigates the evolving occupational outcomes among young cohorts in Europe from 1995 to 2020. Using data from the European Labour Force Survey (EU-LFS), we evaluate how the likelihood of being employed in a cognitive occupation and receiving a temporary job has changed over time for young workers with different levels of education. Results reveal diverging fortunes. On the one hand, the probability of obtaining cognitive jobs has remained steady for tertiary-educated workers, but it has declined significantly for young workers who have only attained upper secondary education, especially in Southern and Northern Europe. On the other hand, the likelihood of receiving a temporary contract has increased substantially for more recent cohorts of young workers in all European areas, particularly for those with only upper secondary education. These findings call for a reflection on the future of jobs that have a large cognitive component (and for which higher education is generally a necessary requirement), especially in light of the recent development of artificial intelligence. On the other hand, the increased use of temporary contracts among young workers, especially in some EU areas, raises concerns on the long-term sustainability of the socio-economic (and demographic) situation of the EU, considering that educational and parenting choices tend to be concentrated in the earlier stages of the life-cycle. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc140850 |
| By: | Ying Cui (School of Economics, Capital University of Economics and Business, China; China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Hong Liu (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China); Liqiu Zhao (School of Labor and Human Resources, Renmin University of China, China) |
| Abstract: | This paper investigates the causal impact of mother's schooling on various outcomes of adoles- cent development by exploiting the temporal and geographical variations in the enforcement of compulsory schooling laws in China. Using data from China Family Panel Studies, we find that mother's education increases adolescents' school enrollment, math test scores, college aspiration, and internal locus of control related to education. Mother's education also improves adolescent mental health status and reduces the incidence of underweight. We also find considerable gender heterogeneity in the effects of mother's education. The results further indicate that mother's education leads to an increase in family resources for children and an improvement in maternal mental health and parenting, which we interpret as potential mechanisms behind our findings. |
| Keywords: | Mother's education, School reforms, Child development, China |
| JEL: | I21 I24 J13 J24 O15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:783 |
| By: | Shuige Liu; Gabriel Ziegler |
| Abstract: | Interactive decision-making relies on strategic reasoning. Two prominent frameworks are (1) models of bounded reasoning, exemplified by level-$k$ models, which keep reasoning implicit, and (2) epistemic game theory, which makes reasoning explicit. We connect these approaches by "lifting" static complete-information games into incomplete-information settings where payoff types reflect players' reasoning depths as in level-$k$ models. We introduce downward rationalizability, defined via minimal belief restrictions capturing the basic idea common to level-$k$ models, to provide robust yet well-founded predictions in games where bounded reasoning matters. We then refine these belief restrictions to analyze the foundations of two seminal models of bounded reasoning: the classic level-$k$ model and the cognitive hierarchy model. Our findings shed light on the distinction between hard cognitive bounds on reasoning and beliefs about co-players' types. Furthermore, they offer insights into robustness issues relevant for market design. Thus, our approach unifies key level-$k$ models building on clear foundations of strategic reasoning stemming from epistemic game theory. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.19737 |