|
on Cognitive and Behavioural Economics |
| By: | Matthias Sutter |
| Abstract: | Charness et al. (2007b) have shown that group membership has a strong effect on individual decisions in strategic games when group membership is salient through payoff commonality. In this comment I show that their findings also apply to non-strategic decisions, even when no outgroup exists, and I relate the effects of group membership on individual decisions to joint decision making in teams. I find in an investment experiment that individual decisions with salient group membership are largely the same as team decisions. This finding bridges the literature on team decision making and on group membership effects. |
| Keywords: | Individual Behavior, Group Membership, Team Decision Making, Experiment |
| JEL: | C91 C92 D71 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2008-23&r=cbe |
| By: | Francesco Feri; Bernd Irlenbusch; Matthias Sutter |
| Abstract: | The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision-making so far. In reality, however, teams often have to coordinate with other teams. We present an experiment with 825 participants, using six different coordination games, where either individuals or teams interact with each other. We find that teams coordinate much more efficiently than individuals. This finding adds one important cornerstone to the recent literature on the conditions for successful coordination. We explain the differences between individuals and teams using the experience weighted attraction learning model. |
| Keywords: | Coordination games, Individual decision-making, Team decision-making, Experience-weighted attraction learning, Experiment |
| JEL: | C71 C91 C92 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2008-22&r=cbe |
| By: | Björn Bartling; Urs Fischbacher |
| Abstract: | To fully understand the motives for delegating a decision right, it is important to study responsibility attributions for outcomes of delegated decisions. We conducted an experiment in which subjects were able to delegate the choice between a fair or unfair allocation, and used a punishment option to elicit responsibility attributions. Our results show that, first, responsibility attribution can be effectively shifted and, second, this constitutes a powerful motive for the delegation of a decision right. Furthermore, we propose a formal measure of responsibility and show that this measure outperforms measures based on outcome or intention in predicting punishment behavior. |
| Keywords: | delegation, decision rights, moral responsibility, blame shifting |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0032&r=cbe |
| By: | Tom Truyts |
| Abstract: | Social distinction or status is an important motivation of human behaviour. This paper provides a selective survey of recent advances in the economic analysis of the origins and consequences of social status. First, a selection of empirical research from a variety of scientific disciplines is discussed to underpin the further theoretical analysis. I then consider the origins and determinants of tastes for status, discuss the endogenous derivation of such a preferences for relative standing and assess the different formalisations these preferences. Subsequently, the consequences of preferences for status are studied for a variety of problems and settings. The last section discusses a number of implications of status concerns for normative economics and public policy. |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0821&r=cbe |
| By: | James Feigenbaum; Frank Caliendo; Emin Gahramanov |
| Abstract: | . . . |
| JEL: | C61 E21 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:368&r=cbe |
| By: | Benno Torgler; Bruno S. Frey; Markus Schaffner; Sascha L. Schmidt |
| Abstract: | The risk of external interventions crowding-out intrinsic motivation has long been established in economics. This paper introduces a new dimension by arguing that a crowding-out effect does become possible if individuals receive higher relative compensation. Using a unique, large data set that focuses on 26 seasons in basketball (NBA) we find empirical support for a relative crowding-out effect. Performance is reduced as a reaction to a relative income advantage. |
| Keywords: | Crowding-out; relative income; positional concerns; motivation |
| JEL: | D00 D60 L83 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-20&r=cbe |
| By: | Bruno S. Frey; David A. Savage; Benno Torgler |
| Abstract: | This paper explored the determinants of survival in a life and death situation created by an external and unpredictable shock. We are interested to see whether pro-social behaviour matters in such extreme situations. We therefore focus on the sinking of the RMS Titanic as a quasi-natural experiment do provide behavioural evidence which is rare in such a controlled and life threatening event. The empirical results support that social norm such as “women and children first” survive in such an environment. We also observe that women of reproductive age have a higher probability of surviving among women. On the other hand, we observe that crew members used their information advantage and their better access to resources (e.g. lifeboats) to generate a higher probability of surviving. The paper also finds that passenger class, fitness, group size, and cultural background matter. |
| Keywords: | Decision under Pressure; Altruism; Social Norms; Interdependent Preferences; Excess of Demand |
| JEL: | D63 D64 D71 D81 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-21&r=cbe |
| By: | Pipergias Analytis, Pantelis; Ramachandran , Rajesh; Rauh , Chris; Willis, Jack |
| Abstract: | The most common method of education remains that of the student teacher relationship in the classroom. Within this framework, although the student has the final choice on attendance, the educational institution can affect his relevant incentives. At the two extremes, full attendance can be mandatory for completion of the course, or attendance can be entirely optional. This article begins with a theoretical model showing that under the assumptions of rational individuals, no externalities, and “perfect evaluation methods”, optional attendance is optimal. The three central assumptions of the model are then relaxed to show that under certain conditions, assuming a high social value of education, institutional intervention can be justified economically. The approach is enriched with many practical examples, and the efficiency of numerous attendance rules is discussed. The article concludes with the deduction of policy recommendations for educational institutions |
| Keywords: | attendance laws; time allocation;educational production funtions; screening; mandatory attendance |
| JEL: | A20 I21 D82 |
| Date: | 2008–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10848&r=cbe |
| By: | Alessandro Innocenti |
| Abstract: | Before Kahneman and Tversky showed how behavioural economics could bring psychology and economics into a unified framework, in the 1950s a social psychologist, Sidney Siegel, entered the realm of economics and laid the foundation of experimental economics. This paper gives an assessment of Siegel’s overall contribution and claims that Siegel was not only a pioneer of experimental economics but also of behavioural economics. Had his view on the integration of psychology and economics been more promptly received, it might have triggered a different and more successfully path to the injection of greater realism in economics. When Siegel died, his approach to integrate psychology and economics lost its main advocate. Although his legacy was paramount in the work of the Nobel Prize Vernon Smith, Siegel endorsed a quite different approach to how make interdisciplinary research effective. |
| Keywords: | economics, psychology, behavioural economics, bargaining theory, utility theory. |
| JEL: | B20 B30 C70 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:usi:depfid:0808&r=cbe |
| By: | Eric Severin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, SAMOS - Statistique Appliquée et MOdélisation Stochastique - Université Panthéon-Sorbonne - Paris I, CIS - Lab of Computer and Information Science - Helsinki University of Technology) |
| Abstract: | This article deals with the usefulness of neuronal networks in the area of corporate finance. Firstly, we highlight the initial applications of neural networks. One can distinguish two main types: layer networks and self organizing maps. As Altman al. (1994) underlined, the use of layer networks has improved the reclassifying rate in models of bankruptcy forecasting. These first applications improved bankruptcy forecasting by showing a relationship between capital structure and corporate performance. The results highlighted in our second part, show the pertinence of the use of the algorithm of Kohonen applied to qualitative variables (KACM). More particularly, in line with Altman (1968, 1984), one can suggest the coexistence of negative and positive effects of financial structure on performance. This result allows us to question scoring models and to conclude as to a non-linear relationship. In a larger framework, the methodology of Kohonen has allowed a better perception of the factors able to explain the leasing financing (Cottrell et al., 1996). The objective is here to explain the factors of the choice between leasing and banking loans. By using different variables, we highlight the characteristics of firms which most often use leasing. The corporate financing policy could be explained by: the cost of the financing, advantages of leasing or by the minimization of agency costs in leasing, we highlight a relationship between resorting to leasing and credit rationing. |
| Keywords: | neural netwoks, SOM, corporate finance |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:ceswpp:hal-00325117_v1&r=cbe |
| By: | Francesco Feri; Miguel A. Meléndez-Jiménez; Giovanni Ponti; Fernando Vega Redondo |
| Abstract: | The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence, each of whom wins a fixed price if she manages to guess the total number of coins lying in everybody’s hands. Our evidence shows that, despite the remarkable frequency of equilibrium outcomes, deviations from optimal play are also significant. And when such deviations occur, we find that, for any given player position, the probability of a mistake is increasing in the probability of a mistake of her predecessors. This is what we call an error cascade, which we which we measure by way of two alternative models. |
| Keywords: | positional learning, error cascades |
| JEL: | C92 D8 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2008-21&r=cbe |
| By: | Alexander Sebald (Department of Economics, University of Copenhagen); Markus Walzl (Department of Economics, University of Maastricht) |
| Abstract: | We show that individuals’ desire to protect their self-esteem against ego-threatening feedback can mitigate moral hazard in environments with purely subjective performance evaluations. In line with evidence from social psychology we assume that agents’ react aggressively to evaluations by the principal which do not coincide with their own positive self-perceptions and thereby generate costs of conflict for the principal. We identify conditions for a positive welfare effect of increasing costs of conflict or increasing sensitivity to ego-threats, and a negative welfare effect of a more informative information technology. As a consequence, principals may choose imperfect information technologies in equilibrium even if the signal quality is costless. |
| Keywords: | contracts; Subjective evaluations; self-esteem; ego-threats |
| JEL: | D01 D02 D82 D86 J41 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:0819&r=cbe |
| By: | Astri Drange Hole |
| Abstract: | There are mainly two conjectures on why economists may behave differently than others in distributive situations: the selection hypothesis and the learning hypothesis. In this paper the “Are economists different?” question is addressed. Potential differences in three dimensions are studied: the weight people attach to fairness considerations, the prevalence of fairness ideals, and how people react to communication about fairness. A dictatorship game experiment with a production phase and a communication phase is run with first-year economics and engineering students. This experimental design is particularly suited for examining differences in all three dimensions. To the best of the author’s knowledge, no previous experimental study has been able to address this question as comprehensively as the current analysis. |
| Keywords: | experiment |
| JEL: | C91 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:usi:labsit:023&r=cbe |
| By: | Olivier Armantier; Amadou Boly |
| Abstract: | This paper makes an attempt at testing the external validity of corruption experiments by moving from the lab in a developed country, to where it matters the most, the field in a developing country. In our experiment a candidate proposes a bribe to a grader in order to obtain a better grade. We find the direction and the magnitude of most treatment effects to be statistically indistinguishable between the lab and the field. In particular, increasing the graders’.wage reduces in both environments the probability to accept the bribe. Finally, we identify several micro-determinants of corruption (age, religiousness, ability). <P>Le présent article essaie de tester la validité externe des expériences sur la corruption en quittant le laboratoire dans un pays développé pour le terrain dans un pays en développement, où la corruption importe encore plus. Dans notre expérience, un candidat offre un pot-de-vin à un correcteur afin d’obtenir une meilleure note. Nous trouvons que la direction et la magnitude de la plupart des effets de traitement sont statistiquement indistinctibles entre le laboratoire et le terrain. En particulier, augmenter la rémunération des correcteurs réduit la probabilité d’accepter le pot-de-vin aussi bien en laboratoire que sur le terrain. Enfin, nous identifions plusieurs micro-déterminants de la corruption (âge, religiosité, habilité). |
| Keywords: | corruption, experimental economics, field experiments., corruption, économie expérimentale, expérience sur le terrain. |
| JEL: | C91 C93 D73 I20 |
| Date: | 2008–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2008s-26&r=cbe |
| By: | Mitu, Narcis Eduard |
| Abstract: | Within the insurance process, the person who insures as well as the person who wishes to buy an insurance policy must control well enough the communication techniques. In deed, the insurance is grounded on communication. Various scientific researches showed that most people involved in a business are very careful to what they say and the way they say it. Along with the way we speak, in the insurance field as well as in other many fields we tried to emplasize the necessity of ackowledging and controlling the nonverbal communication techiniques. |
| Keywords: | nonverbal communication; insurance. |
| JEL: | D70 D83 G20 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10771&r=cbe |