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on Cognitive and Behavioural Economics |
| By: | Murayama, Kota; Nirei, Makoto; Shimizu, Hiroshi |
| Abstract: | This study investigates the impact of management style on research performance in science. If a managerial role is played by a leading scientist in the research team, that is considered management-research integration. If not, we consider that management and research are separated. We found that separating the managerial and research role has a positive effect on the number of papers published for that research project. In contrast, management-research integration is positively associated with the quality of the paper through allowing researchers to pursue serendipitous findings. These results show the trade-off between research efficiency and quality in science via who plays the managerial role and the leading research role. |
| Keywords: | science, serendipity, productivity, research management |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:13-13&r=cbe |
| By: | Lunn, Pete |
| Abstract: | This paper challenges the increasingly common view that the findings of behavioural economics constitute a fourth type of market failure. The market failure framework elevates the standard competitive market model to the status of an ideal. It provides us with tools to identify departures from the ideal model and to deduce a direction policy might take to restore it. Many behavioural phenomena also imply departures from the ideal model. Yet rather than allowing us to deduce a good direction for policy, the findings question the legitimacy and usefulness of this deductive theoretical framework for policy analysis. Two policy problems are highlighted here: the validity of inferring that consumers' choices after an intervention improve outcomes relative to their previous choices, and the potential for distributional consequences when policy alters consumers' choices. The paper concludes that, given these problems, conceiving of the relevant behavioural phenomena as an additional form of market failure is potentially to misunderstand their implications for consumer and competition policy. |
| Keywords: | Market Failure/Decision-making biases/Behavioural economics/Regulation |
| JEL: | D03 D18 L96 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp455&r=cbe |
| By: | Takehito Masuda; Yoshitaka Okano; Tatsuyoshi Saijo |
| Abstract: | We propose the minimum approval mechanism (MAM) for a standard linear public good environment with two players. Players simultaneously and privately choose their contributions to the public good in the first stage. In the second stage, they simultaneously decide whether to approve the otherfs choice. Both contribute what they choose in the first stage if both players approve; otherwise, both contribute the minimum of the two choices in the first stage. The MAM implements the Pareto-efficient allocation in backward elimination of weakly dominated strategies (BEWDS) and is unique under plausible conditions. Contributions in the MAM experiment overall averaged 94.9%. The data support BEWDS rather than subgame perfect Nash equilibria. Quantifying subjectsf responses to the questionnaire showed that the majority of subjects in the MAM found a heuristic or an algorithm named diagonalization and supported the notions of minimax regret and iterated best response, all of which mimic BEWDS outcomes. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0874&r=cbe |
| By: | Sebastian J. Goerg (Department of Economics, Florida State University); John Lightle (Department of Economics, Florida State University); Dmitry Ryvkin (Department of Economics, Florida State University) |
| Abstract: | We study experimentally two-stage self-financing raffles, a novel class of charity fund-raising mechanisms in which participants can buy tickets in two stages. The proceeds of the first stage are used as the seed money for the second stage. The mechanisms differ by what happens to the tickets purchased in the first stage. In the complete draw down two-stage raffle, the first stage tickets are eliminated from the active pool of tickets, while in the no draw down raffle they remain in the active pool. We find that both two-stage raffles initially perform better than the standard one-stage 50-50 raffle. Over time, the aggregate contribution level in the complete draw down raffle declines and approaches that of the one-stage raffle, while in the no draw down raffle contributions are stable and remain higher than in the other two mechanisms. In both two-stage raffles we observe a positive correlation between the proceeds of the first stage and the number of tickets bought in the second stage. Our results show promise for multi-stage self-financing fund-raising mechanisms, although not necessarily driven by equilibrium motives. |
| Keywords: | two-stage raffle, charity, experiment |
| JEL: | C72 C92 D64 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2013_05_01&r=cbe |
| By: | Mattos, Fabio; Poirier, Jamie |
| Abstract: | This study examines formation and adaptation of reference prices by Manitoban grain producers. Research shows that preferences are reference‐dependent and marketing decisions are affected by reference prices. Results suggest that Manitoban producers’ reference prices are formed primarily by an average of recent prices and the highest price to‐date in the marketing window. Reference prices are found to adapt in the same direction as market prices, with adaptation to increasing prices being larger than adaptation to decreasing prices. When deciding to sell grain, producers are more likely to sell when they expect prices to decrease over the next month and when their reference price adjusts downwards towards the current price. |
| Keywords: | grain marketing, reference prices, Agribusiness, Crop Production/Industries, Institutional and Behavioral Economics, Risk and Uncertainty, C93, D03, D81, Q13, |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:spaawp:148591&r=cbe |
| By: | Roberto Dell’Anno (University of Salerno); Jorge Martinez-Vazquez (International Center for Public Policy. Andrew Young School of Policy Studies, Georgia State University) |
| Abstract: | In this paper we argue that renter’s illusion may not be a form of asymmetric information neither irrationality but rather a way to include in our economic analysis evidence that while homo oeconomicus aims to do a good job of making choices, he frequently is not able to do that. Taxpayers do not know the “objective” world but take decisions according to mental and often biased representations of “their” world. We develop a simple model where misperception plays a fundamental role in the behavior of renters and allows overcoming the dichotomy between rational and irrational renter's behavior. In the paper we also pursue the two complementary aims of introducing “cognitive limitation” into the theory of local public finance and of filling a gap in this literature regarding the lack of micro-foundations for the renter’s illusion hypothesis. |
| Keywords: | Renter effect; Renter’s illusion; Fiscal illusion; Behavioral local public finance. |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1303&r=cbe |
| By: | Giuseppe Attanasi; Pierpaolo Battigalli; Elena Manzoni |
| Abstract: | In the theory of psychological games it is assumed that players' preferences on material consequences depend on endogenous beliefs. Most of the applications of this theoretical framework assume that the psychological utility functions representing such preferences are common knowledge. But this is often unrealistic. In particular, it cannot be true in experimental games where players are subjects drawn at random from a population. Therefore an incomplete-information methodology is called for. We take a first step in this direction, focusing on models of guilt aversion in the Trust Game. We consider two alternative modeling assumptions: (i) guilt aversion depends on the role played in the game, because only the "trustee" can feel guilt for letting the co-player down, (ii) guilt aversion is independent of the role played in the game. We show how the set of Bayesian equilibria changes as the upper bound on guilt sensitivity varies, and we compare this with the complete-information case. Our analysis illustrates the incomplete-information approach to psychological games and can help organize experimental results in the Trust Game. JEL classification: C72, C91, D03. Keywords: Psychological games, Trust Game, guilt, incomplete information. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:480&r=cbe |