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on Cognitive and Behavioural Economics |
| By: | Lunn, Pete |
| Keywords: | Policy |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:ec8&r=cbe |
| By: | Trautmann, Stefan T. (Tilburg University); van de Kuilen, Gijs (Tilburg University); Zeckhauser, Richard J. (Harvard University) |
| Abstract: | We test whether and how membership in the upper class affects ethical behavior in a large representative population sample. Using objective measures of socioeconomic status to define class, we find no evidence of a general tendency for upper class to be less ethical, although we do replicate previous findings that higher status leads to less condemnation of infidelity. We also find evidence that higher class status leads to more self-focus and disengagement, as previously shown in laboratory studies with convenience samples. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-019&r=cbe |
| By: | Dominik Erharter |
| Abstract: | We study credence goods markets where an expert not only cares for her own monetary payoff, but also for the monetary payoff of her customer. We show how an expert with heterogeneous distributional preferences responds to monetary incentives in the absence of institutions, under liability and/or verifiability and identify optimal contracts for an expert with distributional preferences in each of these settings. |
| Keywords: | other-regarding preferences, credence good, institution, contract theory, industrial organization |
| JEL: | D63 D64 L13 L15 C72 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2012-11&r=cbe |
| By: | Daniel Müller; Benno Torgler; Eric M. Uslaner |
| Abstract: | Algan and Cahuc in "Inherited Trust and Growth" (AER, 2010) argue that "inherited trust" is a key factor in explaining growth rates across countries. They derive a measure of inherited trust by linking respondents’ "home countries" in the United States General Social Survey (1972-2004) and the 2000 wave of the World Values Survey. Algan and Cahuc then estimate trust levels for people born before 1910 (inherited trust in 1935) and afterwards (inherited trust in 2000). They show a strong link between economic growth rates and inherited trust. We do not challenge this result, but we do argue that: (1) the 2000 World Values Survey has many anomalous results; (2) the estimates for inherited trust in 1935 are mostly based upon tiny samples for most ethnic heritage groups in the General Social Survey; and (3) Algan and Cahuc’s findings are based upon two-tailed rather than one-tailed tests. We reestimate their model using the more reliable waves of the World Values Survey and find much weaker relationships between inherited trust in 1935 and trust in the home country. We also suggest caution in the overall measure of inherited trust in 1935. |
| Keywords: | inherited trust; generalized trust; US immigrants |
| JEL: | N31 N32 Z12 Z13 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2012-04&r=cbe |
| By: | Thierry Madiès (Department of Economics - University of Fribourg - University of Fribourg); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Malgorzata Wasmer (Department of Economics - University of Fribourg - University of Fribourg) |
| Abstract: | We study the attitudes of junior and senior employees towards strategic uncertainty and competition, by means of a market entry game inspired by Camerer and Lovallo (1999). Seniors exhibit higher entry rates compared to juniors, especially when earnings depend on relative performance. This difference persists after controlling for attitudes towards non-strategic uncertainty and for beliefs on others' competitiveness and ability. Social image matters, as evidenced by the fact that seniors enter more when they predict others enter more and when they are matched with a majority of juniors. This contradicts the stereotype of risk averse and less competitive older employees. |
| Keywords: | Aging; risk; ambiguity; competitiveness; self-image; confidence; experiment |
| Date: | 2012–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00702579&r=cbe |
| By: | Irina Cojuharenco; Gert Cornelissen; Natalia Karelaia |
| Abstract: | We suggest that cultivating an individual's connectedness to others promotes socially responsible behavior both directly and indirectly – through increased perceived ability to make a difference. Individuals whose interdependent self is more prominent feel they have more of an impact on larger scale societal outcomes and, therefore, engage more in socially responsible behaviors than do individuals whose independent self is more prominent. We test these hypotheses in two experiments in which participants make financial contributions or exert an effort for a social cause. In a survey, we find that perceived effectiveness mediates the effect of self-construal on socially responsible consumption. |
| Keywords: | self-construal, interdependent self, independent self, socially responsible behavior, perceived effectiveness |
| JEL: | C91 D64 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1292&r=cbe |
| By: | Kenju Kamei; Louis Putterman |
| Abstract: | The expectation that non-cooperators will be punished can help to sustain cooperation, but there are competing claims about whether opportunities to engage in higher-order punishment (punishing punishment or failure to punish) help or undermine cooperation in social dilemmas. In a set of experimental treatments, we find that availability of higher-order punishment increases cooperation and efficiency when subjects have full information on the pattern of punishing, including its past history, and opportunities to punish are unrestricted. Availability of higher-order punishment reduces cooperation and efficiency if it is restricted to counter-punishing alone, if past history is unavailable, and if there is a dedicated counter-punishment stage. |
| Keywords: | collective action, social dilemma, voluntary contribution, public goods, punishment, counter-punishment, higher-order punishment. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2012-3&r=cbe |
| By: | Leonardo Becchetti (Università di Roma "Tor Vergata"); Stefano Castriota (Università di Roma "Tor Vergata"); Pierluigi Conzo (Università di Napoli and CSEF) |
| Abstract: | Natural disasters have been shown to produce effects on social capital, risk and time preferences of victims. We run experiments on altruistic preferences on a sample of Sri Lankan microfinance borrowers affected/unaffected by the tsunami shock in 2004 at a 7-year distance from the event (a distance longer than in most empirical studies). We find that people who suffered at least a damage from the event behave in dictator games less altruistically as senders (and expect less as receivers) than those who do not report any damage. Interestingly, among damaged, those who suffered also house damages or injuries send (expect) more than those reporting only losses to the economic activity. Since the former are shown to receive significantly more help than the latter we interpret this last finding as a form of indirect reciprocity. |
| Keywords: | tsunami, disaster recovery, social preferences, altruism, development aid |
| JEL: | C90 D03 O12 |
| Date: | 2012–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:316&r=cbe |
| By: | Antoni Bosch-Domènech; Joaquim Silvestre |
| Abstract: | Various experimental procedures aimed at measuring individual risk aversion involve a list of pairs of alternative prospects. We first study the widely used method by Holt and Laury (2002), for which we find that the removal of some items from the lists yields a systematic decrease in risk aversion. This bias is quite distinct from other confounds that have been previously observed in the use of the Holt and Laury method. It may be related to empirical phenomena and theoretical developments where better prospects increase risk aversion. Nevertheless, we have also found that the more recent elicitation method due to Abdellaoui et al. (2011), also based on lists, does not display any statistically significant bias when the corresponding items of the list are removed. Our results suggest that methods other than the popular Holt and Laury one may be preferable for the measurement of risk aversion. |
| Keywords: | Risk preferences, measurement of risk, experiments |
| JEL: | C91 D03 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:634&r=cbe |
| By: | Douadia Bougherara; Xavier Gassmann; Laurent Piet |
| Abstract: | We designed an artefactual field experiment involving real payments to elicit French farmers’ risk preferences. We test for two descriptions of farmers’ behaviour: expected utility and cumulative prospect theory and for preference stability across context (price risk and yield risk). We use multiple price lists where farmers make series of choices between two lotteries with varying probabilities and outcomes in the gain and loss domains. We estimate parameters describing farmers’ risk preferences derived from structural models. We find farmers are slightly risk averse in the expected utility framework. In the cumulative prospect theory frame, we find farmers display either loss aversion or probability weighting, tending to overweight small probabilities and to underweight high probabilities. We also estimate the reference point and find it not significantly different from zero. Cumulative prospect theory is a better description of farmers’ risk attitudes. We find risk preferences vary across context. |
| Keywords: | risk attitudes, field experiment, farmer |
| JEL: | C93 D81 Q10 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201106&r=cbe |
| By: | Kesternich, Martin; Lange, Andreas; Sturm, Bodo |
| Abstract: | We investigate how burden sharing rules may impact the voluntary provision of a public good which generates heterogeneous benefits to agents. We compare different rule-based contribution schemes that are based on the principle of the smallest common denominator: all agents can suggest a minimum provision level of the public good that is allocated across agents according to some predetermined rule. We find that rule-based contribution schemes significantly increase payoff levels relative to the VCM. Important differences exist between the rules. Contrary to theory predictions, the equal-payoff rule Pareto-dominates all other rules. This also holds relative to a scheme where different types of players separately can determine their minimum contribution levels. Our results lend insights into the efficient institutional design for voluntary private provision of public goods, and how burden sharing rules interact with efficiency when agents are heterogeneous. -- |
| Keywords: | public goods,institutions,minimum contribution rules,cooperation,heterogeneity |
| JEL: | C72 C92 H41 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12033&r=cbe |
| By: | Aldo Rustichini (Department of Economics, University of Minnesota - University of Minnesota); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon) |
| Abstract: | We show with a laboratory experiment that individuals adjust their moral principles to the situation and to their actions, just as much as they adjust their actions to their principles. We first elicit the individuals' principles regarding the fairness and unfairness of allocations in three different scenarios (a Dictator game, an Ultimatum game, and a Trust game). One week later, the same individuals are invited to play those same games with monetary compensation. Finally in the same session we elicit again their principles regarding the fairness and unfairness of allocations in the same three scenarios. Our results show that individuals adjust abstract norms to fit the game, their role and the choices they made. First, norms that appear abstract and universal take into account the bargaining power of the two sides. The strong side bends the norm in its favor and the weak side agrees : Stated fairness is a compromise with power. Second, in most situations, individuals adjust the range of fair shares after playing the game for real money compared with their initial statement. Third, the discrepancy between hypothetical and real behavior is larger in games where real choices have no strategic consequence (Dictator game and second mover in Trust game) than in those where they do (Ultimatum game). Finally the adjustment of principles to actions is mainly the fact of individuals who behave more selfishly and who have a stronger bargaining power. The moral hypocrisy displayed (measured by the discrepancy between statements and actions chosen followed by an adjustment of principles to actions) appears produced by the attempt, not necessarily conscious, to strike a balance between self-image and immediate convenience. |
| Keywords: | Moral hypocrisy; fairness; social preferences; power; self-deception |
| Date: | 2012–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00702578&r=cbe |
| By: | Bosch-Domenech, Antoni (Pompeu Fabra University); Silvestre, Joaquim (University of CA, Davis) |
| Abstract: | Various experimental procedures aimed at measuring individual risk aversion involve a list of pairs of alternative prospects. We first study the widely used method by Holt and Laury (2002), for which we find that the removal of some items from the lists yields a systematic decrease in risk aversion. This bias is quite distinct from other confounds that have been previously observed in the use of the Holt and Laury method. It may be related to empirical phenomena and theoretical developments where better prospects increase risk aversion. Nevertheless, we have also found that the more recent elicitation method due to Abdellaoui et al. (2011), also based on lists, does not display any statistically significant bias when the corresponding items of the list are removed. Our results suggest that methods other than the popular Holt and Laury one may be preferable for the measurement of risk aversion. |
| JEL: | C91 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ucdeco:2012-10&r=cbe |