|
on Cognitive and Behavioural Economics |
|
Issue of 2014‒05‒04
sixteen papers chosen by Marco Novarese Universita' del Piemonte Orientale Amedeo Avogadro |
| By: | Angerer, Silvia; Glätzle-Rützler, Daniela; Lergetporer, Philipp Jürgen Huber; Sutter, Matthias |
| Abstract: | We study with a sample of 1,070 primary school children, aged seven to eleven years, how altruism in a donation experiment is related to children’s risk attitudes and intertemporal choices. Examining such a relationship is motivated by theories of reciprocal altruism that provide a cornerstone to understand human social behavior. We find that higher risk tolerance and patience in intertemporal choice increase, in general, the level of donations, albeit the effects are non-linear. We confirm earlier results that altruism increases with age during childhood and that girls are more altruistic than boys. Having older brothers makes subjects less altruistic. |
| Keywords: | Altruism, donations, risk attitudes, intertemporal choices, experiment, children |
| JEL: | C91 D03 D63 D64 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2014/04&r=cbe |
| By: | Alison L. Booth; Lina Cardona-Sosa; Patrick Nolen |
| Abstract: | Single-sex classes within coeducational environments are likely to modify students' risktaking attitudes in economically important ways. To test this, we designed a controlled experiment using first year college students who made choices over real-stakes lotteries at two distinct dates. Students were randomly assigned to weekly classes of three types: all female, all male, and coeducational. They were not allowed to change group subsequently. We found that women are less likely to make risky choices than men at both dates. However, after eight weeks in a single-sex class environment, women were significantly more likely to choose the lottery than their counterparts in coeducational groups. These results are robust to the inclusion of controls for IQ and for personality type, as well as to a number of sensitivity tests. Our findings suggest that observed gender differences in behaviour under uncertainty found in previous studies might partly reflect social learning rather than inherent gender traits. |
| Keywords: | Gender, risk preferences, single-sex groups, cognitive ability |
| JEL: | C9 C91 C92 J16 D01 D80 J16 J24 |
| Date: | 2013–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:010988&r=cbe |
| By: | Li Hao (Sam M. Walton College of Business, University of Arkansas, Fayetteville); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Lei Mao (Groupe d’Analyse et de Théorie Economique, UniversiteÌ de Lyon); Marie Claire Villeval (Groupe d’Analyse et de Théorie Economique, UniversiteÌ de Lyon) |
| Abstract: | Using a field experiment in China, we study whether migration status is correlated with attitudes toward risk, ambiguity, and competitiveness. Our subjects include migrants and non-migrants. We find that, migrants exhibit no differences from non-migrants in risk and ambiguity preferences elicited using pairs of lotteries; however, migrants are significantly more likely to enter competition in the presence of strategic uncertainty when they expect competitive entries from others. Our results suggest that migration may be driven more by a stronger belief in one’s ability to succeed in an uncertain and competitive environment than by risk attitudes under state uncertainty. Length: 46 |
| Keywords: | migration, risk preferences, strategic uncertainty, ambiguity, field experiment |
| JEL: | C93 D03 D63 J61 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1047&r=cbe |
| By: | Julien Gagnon |
| Abstract: | The first aim of this paper is to revisit the puzzle of cooperation in large-scale societies.It proposes a game theoretic model showing how endogenous emotion-based punishment can sustain ull cooperation when interactions are not repeated, provided that players' endogenous trust is high enough. The model the signalling theory of religion. Finally, the model enables clear and tractable predictions about the levels of religious affiliation and participation within a society. Evidence of the model's implications is discussed. |
| Keywords: | Cooperation; Emotions; Psychological Game Theory; Punishment; Religion; Trust. |
| JEL: | D02 D03 D71 D81 Z12 |
| Date: | 2014–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1406&r=cbe |
| By: | Al-Ubaydli, Omar; Jones, Garett; Weel, Jaap |
| Abstract: | Many studies have looked at how individual player traits influence individual choice in the repeated prisoner’s dilemma, but few studies have looked at how the average traits of pairs of players influence the average choices of pairs. We consider cognitive ability, patience, risk tolerance, and the Big Five personality measures as predictors of individual and average group choices in a ten-round repeated prisoner’s dilemma. We find that a pair’s average cognitive ability measured by the Raven’s IQ test predicts average cooperation rates robustly and average earnings more modestly. Higher individual cognitive ability also predicts a greater probability of sustaining cooperation in the second round, suggesting that positive reciprocity is more likely among players with higher Raven’s scores. Openness is the only control variable that predicts first-round cooperative behavior. |
| Keywords: | cooperation; IQ; personality; discount rate; patience; risk-aversion; prisoner's dilemma |
| JEL: | D02 D23 O12 O43 |
| Date: | 2014–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55383&r=cbe |
| By: | Clark, Andrew E. (Paris School of Economics); D'Ambrosio, Conchita (University of Luxembourg) |
| Abstract: | We review the survey and experimental findings in the literature on attitudes to income inequality. We interpret the latter as any disparity in incomes between individuals. We classify these findings into two broad types of individual attitudes towards the income distribution in a society: the normative and the comparative view. The first can be thought of as the individual's disinterested evaluation of income inequality; on the contrary, the second view reflects self-interest, as individual's inequality attitudes depend not only on how much income they receive but also on how much they receive compared to others. We conclude with a number of extensions, outstanding issues and suggestions for future research. |
| Keywords: | attitudes, distribution, experiments, income inequality, life satisfaction, reference groups |
| JEL: | C91 D31 D63 I31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8136&r=cbe |
| By: | Jonathan E. Alevy; Michael K. Price |
| Abstract: | There is substantial evidence that the decisions of experienced and inexperienced agents differ in ways that impact both individual earnings and aggregate market outcomes. Typically, such evidence is gathered by studying experience as it accumulates within subjects. We examine a new question; whether behaviors associated with experience can be transferred directly to new market participants. Specifically, we study the intergenerational transmission of information, including direct advice, in experimental asset markets. Empirical results suggest that advice is a good substitute for experience; prices in sessions with advised traders shift towards fundamentals. Further, convergence towards fundamentals holds in mixed-markets where only a subset of traders are advised. Such data patterns are consistent with recent neurological evidence on fictive learning. |
| Keywords: | asset markets; laboratory experiments; advice, fictive learning |
| JEL: | C92 G12 D83 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:exc:wpaper:2014-03&r=cbe |
| By: | Gary Charness; Francesco Feri; Miguel A. Meléndez-Jiménez; Matthias Sutter |
| Abstract: | In this paper, we describe a series of laboratory experiments that implement specific examples of a more general network structure and we examine equilibrium selection. Specifically, actions are either strategic substitutes or strategic complements, and participants have either complete or incomplete information about the structure of a random network. Since economic environments typically have a considerable degree of complementarity or substitutability, this framework applies to a wide variety of settings. The degree of equilibrium play is striking, in particular with incomplete information. Behavior closely resembles the theoretical equilibrium whenever this is unique; when there are multiple equilibria, general features of networks, such as connectivity, clustering, and the degree of the players, help to predict informed behavior in the lab. People appear to be strongly attracted to maximizing aggregate payoffs (social efficiency), but there are forces that moderate this attraction: 1) people seem content with (in the aggregate) capturing only the lion’s share of the efficient profits in exchange for reduced exposure to loss, and 2) uncertainty about the network structure makes it considerably more difficult to coordinate on a demanding, but efficient, equilibrium that is typically implemented with complete information. |
| Keywords: | Random networks, Incomplete information, Connectivity, Clustering, Strategic substitutes, Strategic complements, Experiment |
| JEL: | C71 C91 D03 D85 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2014-14&r=cbe |
| By: | Anaïs Carlin (University of Nice Sophia Antipolis, France; GREDEG CNRS) |
| Abstract: | In this paper we formalize learning as a determinant of individual choice. We model economic agent as an individual who makes her choice according to a specific set of experiences, which evolves over time as the agent learns from both her personal history and her social environment. We link preferences to choices through the notion of hierarchy of wants. We present an axiomatic characterization, inspired by Georgescu-Roegen (1950, 1954), of the individual choice mechanism in a social environment. Following these axioms, we show that an agent may change her choice from one period to another and remain nonetheless rational. The learning mechanism allows for the modication of individual preference ordering over time as well as it implies irreversibility, in the sense that economic changes leave a mark in the decision making process. |
| Keywords: | Preference formation, preference change, learning, path dependency |
| JEL: | D01 D11 D83 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-13&r=cbe |
| By: | Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Karimi, Arizo (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nilsson, Peter (Institute for International Economic Studies (IIES), Stockholm University) |
| Abstract: | This paper studies gender differences in the extent to which social preferences affect workers' shirking decisions. Using exogenous variation in work absence induced by a randomized field experiment that increased treated workers' absence, we find that also non-treated workers increased their absence as a response. Furthermore, we find that male workers react more strongly to decreased monitoring, but no significant gender difference in the extent to which workers are influenced by peers. However, our results suggest significant heterogeneity in the degree of influence that male and female workers exert on each other: conditional on the potential exposure to same-sex co-workers, men are only affected by their male peers, and women are only affected by their female peers. |
| Keywords: | Peer effects; employer-employee data; work absence; randomized field experiment |
| JEL: | C23 C93 J24 |
| Date: | 2014–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2014_009&r=cbe |
| By: | Rong Rong (Department of Economics, Weber State University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University) |
| Abstract: | Communication between departments within a firm may include deception. Theory suggests that telling lies in these environments may be strategically optimal if there exists a small difference in monetary incentives (Crawford and Sobel, 1982; Galeotti et al, 2012). We design a laboratory experiment to investigate whether agents with different monetary incentives in a network environment behave according to theoretical predictions. We found that players’ choices are consistent with the theory. That is, most communication within an incentive group is truthful and deception often occurs between subjects from different groups. These results have important implications for intra-organizational conflict management, demonstrating that in order to minimize deceptive communication between departments the firm may need to reduce incentive differences between these groups. Length: 19 |
| Keywords: | social networks, deception, strategic information transmission, experiments |
| JEL: | D85 D02 C92 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1046&r=cbe |
| By: | Chen, Josie I |
| Abstract: | Governments sometimes promote rules backed by sanctions too weak to make obedience privately optimal. Factors that may help make such rules effective include the presence of informal sanctions by peers, and implementation through voting. I study the impact of non-deterrent formal sanctions on voluntary contributions to a public good in a laboratory experiment. The effect is studied both in the presence and absence of informal sanctions, under fully exogenous implementation and after both implemented and randomly overridden voting. I find that informal sanctions strengthen the effect of formal ones in most conditions. However, voted implementation has no clear effect on non-deterrent formal sanction in my data, which suggests a reason for caution when studying exogenous implementation by a random vote override procedure. |
| Keywords: | experiment, voluntary contribution, public goods, formal sanctions, informal sanctions, voting, democracy effect |
| JEL: | C72 C91 C92 D72 H41 |
| Date: | 2014–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55364&r=cbe |
| By: | Azmat, Ghazala (Queen Mary, University of London); Petrongolo, Barbara (Queen Mary, University of London) |
| Abstract: | We discuss the contribution of the experimental literature to the understanding of both traditional and previously unexplored dimensions of gender differences and discuss their bearings on labor market outcomes. Experiments have offered new findings on gender discrimination, and while they have identified a bias against hiring women in some labor market segments, the discrimination detected in field experiments is less pervasive than that implied by the regression approach. Experiments have also offered new insights into gender differences in preferences: women appear to gain less from negotiation, have lower preferences than men for risk and competition, and may be more sensitive to social cues. These gender differences in preferences also have implications in group settings, whereby the gender composition of a group affects team decisions and performance. Most of the evidence on gender traits comes from the lab, and key open questions remain as to the source of gender preferences – nature versus nurture, or their interaction – and their role, if any, in the workplace. |
| Keywords: | gender, field experiments, lab experiments, discrimination, gender preferences |
| JEL: | J16 J24 J71 C91 C92 C93 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8135&r=cbe |
| By: | Al-Ubaydli, Omar; Yeomans, Mike |
| Abstract: | According to the identifiability effect, people will donate more to a single beneficiary rather than to many beneficiaries, holding constant what the donations are actually used for. We test the identifiability effect for two novel subject pools (the suppliers and beneficiaries of volunteer labor). We also test a refinement of the identifiability effect where we vary whether or not the single beneficiary is personally known to the solicitees. While the behavior of volunteers is consistent with the identifiability effect, we find that the identifiability effect is reversed for beneficiaries of volunteer labor. Moreover, we find that making the single beneficiary personally known to the solicitees lowers donations by a statistically insignificant amount, suggesting that it does not enhance donations. |
| Keywords: | solicitation; donation; field experiment |
| JEL: | D64 L31 |
| Date: | 2014–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55382&r=cbe |
| By: | Turner, Robert (Department of Economics, Colgate University) |
| Abstract: | This is the draft of a chapter from a forthcoming book related to the conference Sensing Change: Mapping the Climatic Imaginary through Art, Science and History, held at the Chemical Heritage Foundation November 7-9, 2013. The artwork shown in the exhibit Sensing Change is part of a thriving environmental art movement. There is a long history of art influencing environmental attitudes and to some extent behavior. Historically such art has used what photography critic Vicki Goldberg calls the “pastoral eulogy†approach but there is also a more critical approach that emphasizes the environmental damage and risk associated with human behavior. Ecological artist Ruth Wallen says, “Ecological art work can help engender an intuitive appreciation of the environment, address core values, advocate political action, and broaden intellectual understanding.†But there is little evidence about whether people change their behavior in response to this sort of art. This chapter uses a contingent choice survey (a kind of choice experiment) to investigate whether exposure to such artwork influences environmental behavior, in particular the purchase of carbon offsets. (Purchasing offsets provides funding for activities that reduce net greenhouse gas emissions.) Contingent choice surveys are often used to analyze respondents’ environmental behavior and/or the underlying preferences for environmental goods and resources driving that behavior. In these surveys, respondents choose among a selection of hypothetical or real scenarios comprised of varying levels of different variables. Based on the choices they make, the relative importance of the different variables can be estimated. In the survey upon which this chapter is based, respondents chose from alternative carbon offset purchase options, including the option to buy no offsets. The central questions are as follows: what would make respondents more or less likely to choose to buy no offsets, and did respondents who saw artwork as part of the survey differ systematically from those who didn’t? Subsets of respondents in a choice experiment investigating willingness to buy carbon offsets were shown artistic images related to climate change. One subset was shown photographs from The Canary Project (Susannah Sayler and Edward Morris); another subset was shown images from the Wind Map: Poetry in Motion project (Fernanda Viégas and Martin Wattenberg); a control group was not shown any artistic images. The survey responses were analyzed to explore whether the artistic images affected respondents' willingness to buy carbon offsets. Another issue investigated was whether the images affect the ways in which the willingness to buy carbon offsets is influenced by other factors. These other factors include the types of mitigation efforts being funded by offsets and also personal characteristics of the respondents such as age, income, and adherence to social norms. The results of the split-sample contingent choice survey indicate that respondents who were shown photographs by the Canary Project that illustrate the impacts of climate change were more likely to purchase carbon offsets than were respondents in a control group. This is even though the respondents viewed the images only briefly: typically for less than a minute. Not all artistic images had this effect, though: respondents who saw animated images from the Wind Map Project that illustrate wind speeds and patterns for extreme weather events were actually less willing to buy offsets than the control group. Results indicate that preferences about buying carbon offsets are very heterogeneous, but in all cases the pattern remains that respondents in the treatment group that saw the Canary Project photos are more likely to buy offsets and respondents in the treatment group that saw the Wind Map Project images are less likely to buy offsets. The heterogeneity was driven largely by variables related to social norms and expectations. But the differences across treatment groups were not driven by differences in individual characteristics. The chapter continues with some thoughts about why the responses to the Canary Project and Wind Map Project art differed. The chapter concludes with some ideas for future survey-based research exploring the impact of art on environmental attitudes and behavior. |
| Keywords: | artistic images, carbon offsets, contingent choice, choice experiments |
| JEL: | Z11 Q54 |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cgt:wpaper:2014-03&r=cbe |
| By: | Thunström, Linda (Department of Economics and Finance, University of Wyoming); Nordström, Jonas (Department of Economics, Lund University) |
| Abstract: | This paper quantitatively analyzes the importance of taste versus health in food demand, as well as the effect on consumers’ experienced taste of the non-intrinsic value of healthy labels. Our analysis is based on taste experiments and Vickrey second price auctions on potato chips and bread. Our findings imply a large positive effect on demand for potato chips from higher taste scores: when consumers’ experienced taste from potato chips improves by one unit, the average willingness-to-pay (WTP) for a 150 gram bag of chips increases by 25 euro cents. The estimated effect from taste on bread demand is smaller, but may be sizeable for subgroups of consumers. Our evidence suggests that demand for chips and bread is unaffected by nutrition – the effect of the healthy label on WTP is not statistically significant. Finally, we find that consumers’ experienced taste of a food is unaffected by the food carrying a healthy label. |
| Keywords: | willingness-to-pay for food; revealed preferences; taste; non-intrinsic value; healthy label |
| JEL: | D12 D83 Q18 |
| Date: | 2014–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2014_013&r=cbe |