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on Cognitive and Behavioural Economics |
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Issue of 2017‒09‒10
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Drichoutis, Andreas C.; Nayga, Rodolfo |
| Abstract: | Economic analysis assumes that consumer behavior can be rationalized by a utility function. Previous research has shown that some decision-making quality can be captured by permanent cognitive ability but has not examined how a temporary load in subjects' working memory can affect economic rationality. In a controlled laboratory experiment, we exogenously vary cognitive load by asking subjects to memorize a number while they undertake an induced budget allocation task (Choi et al., 2007a,b). Using a number of manipulation checks, we verify that cognitive load has adverse affects on subjects' performance in reasoning tasks. However, we find no effect in any of the goodness-of-fit measures that measure consistency of subjects' choices with the Generalized Axiom of Revealed Preferences (GARP), despite having a sample size large enough to detect even small differences between treatments with 80% power. Our finding suggests that researchers need not worry about economic rationality breaking down when subjects are placed under temporary working memory load. |
| Keywords: | Cognitive load, rationality, revealed preferences, working memory, response times, laboratory experiment |
| JEL: | C91 D03 D11 D12 G11 |
| Date: | 2017–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81111&r=cbe |
| By: | Doll, Monika; Seebauer, Michael; Tonn, Maren |
| Abstract: | We implement waiting time as a currency in an ultimatum game in an experimental laboratory study. Subjects had to split 60 minutes of waiting time. We analyze bargaining behavior in varying situations connected to waiting time as well as gain and loss framing. Different situations that follow waiting time have no influence on bargaining behavior. Regarding gain and loss framing, we do not find differences in proposers' behavior. Responders show less willingness to wait when the bargaining outcome is framed as a loss compared to being framed as a gain of time. Displaying less willingness to wait, responders show a higher propensity to risk a rejection of the proposers' offers. |
| Keywords: | Ultimatum Game,Waiting Time,Experimental Currency,Leaving the Laboratory,Framing |
| JEL: | C91 C70 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:152017&r=cbe |
| By: | March, Christoph; Sahm, Marco |
| Abstract: | We investigate how individual risk preferences affect the likelihood of selecting the more able contestant within a two-player Tullock contest. Our theoretical model yields two main predictions: First, an increase in the risk aversion of a player worsens her odds unless she already has a sufficiently large advantage. Second, if the prize money is sufficiently large, a less able but less risk averse contestant can achieve an equal or even higher probability of winning than a more able but more risk averse opponent. In a laboratory experiment we confirm both, the non-monotonic impact and the compensating effect of risk aversion on winning probabilities. Our results suggest a novel explanation for the gender gap and the optimality of limited monetary incentives in selection contests. |
| Keywords: | Selection Contest,Risk Aversion,Competitive Balance,Gender Gap |
| JEL: | C72 D72 J31 K41 M51 M52 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bamber:127&r=cbe |
| By: | Haoran He (School of Economics and Business Administration - Beijing Normal University); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team decision-making. However, teams are no more selfish than individuals who decide in isolation. Individuals express strategically more inequality aversion in their initial proposals in team decision-making because they anticipate the selfishness of other members. Members with median social preferences drive team decisions. Finally, we show that social image has little influence because guilt and envy are almost similar in anonymous and non-anonymous interactions. |
| Keywords: | social image,experiment,Team,inequity aversion,preference aggregation |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00996545&r=cbe |
| By: | Alice Solda (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Marie Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The existing literature on ostracism in social dilemma games has focused on the impact of the threat of exclusion on cooperation within groups but so far, little attention has been paid to the behavior of the excluded members after their reintegration. This paper studies the effect of exclusion by peers followed by reintegration on cooperation once excluded individuals are readmitted in their group. Using a negatively framed public good game, we manipulate the length of exclusion and whether this length is imposed ex-ogenously or results from a vote. We show that people are willing to exclude the least cooperators although it is not an equilibrium strategy. Exclusion has a positive impact on cooperation and compliance to the group norm of withdrawal after reintegration when exclusion is followed by a quick rather than a slow reintegration and that the length of exclusion is chosen by the group. In this environment, a quicker reintegration also limits retaliation. Post-exclusion cooperation and forgiveness de end not only on the length of exclusion but also on the perceived intentions of others when they punish. Abstract The existing literature on ostracism in social dilemma games has focused on the impact of the threat of exclusion on cooperation within groups but so far, little attention has been paid to the behavior of the excluded members after their reintegration. This paper studies the effect of exclusion by peers followed by reintegration on cooperation once excluded individuals are readmitted in their group. Using a negatively framed public good game, we manipulate the length of exclusion and whether this length is imposed ex-ogenously or results from a vote. We show that people are willing to exclude the least cooperators although it is not an equilibrium strategy. Exclusion has a positive impact on cooperation and compliance to the group norm of withdrawal after reintegration when exclusion is followed by a quick rather than a slow reintegration and that the length of exclusion is chosen by the group. In this environment, a quicker reintegration also limits retaliation. Post-exclusion cooperation and forgiveness depend not only on the length of exclusion but also on the perceived intentions of others when they punish. |
| Keywords: | Ostracism, exclusion, reintegration, social dilemma, cooperation, experiment |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01579216&r=cbe |
| By: | Mario Le Glatin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Decision theory has been long applied to project management for risk and uncertainty reduction. Among the foundations, the manager is considered following axioms describing his rationality the most prominent ones being transitivity and independence. The order in preferences is not supposed be reversed yet unknowns events of nature, seen as exogenous, may perturb our understanding of the given situation and may require designing new decisions going against decision theories, hence increasing uncertainty. In this paper we show that in an innovation project management, traditional decision making is not able to grasp expansion and generativity phenomena as a manager senses the unknown and endogenises it. To highlight this phenomenon we use Bayesian Nets with Wald's foundations to sense the reordering preferences in an industrial case and the benefits of designing one's playground and being intransitive. The purpose to contribute to the idea theories studying generative processes (design theory) by opposition to optimisation (decision theory) can help extend the underlying logics of innovation management and untangle the tipping point, the necessity to explore/exploit. |
| Keywords: | Décision Bayésienne,Design Decisions,Théorie de la conception |
| Date: | 2017–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01529620&r=cbe |
| By: | Bott, Kristina Maria (Dept. of Economics, Norwegian School of Economics and Business Administration); Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | We report from a large-scale randomized field experiment conducted on a unique sample of more than 15 000 taxpayers in Norway, who were likely to have misreported their foreign income. We find that the inclusion of a moral appeal or a sentence that increases the perceived probability of detection in a letter from the tax authorities almost doubled the average self-reported foreign income. The moral letter mainly works on the intensive margin, while the detection letter mainly works on the extensive margin. We also show that the detection letter has large long-term effects on tax compliance. |
| Keywords: | Taxation; tax evasion; field Experiment. |
| JEL: | C93 D63 H26 |
| Date: | 2017–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2017_010&r=cbe |
| By: | Emma Riley |
| Abstract: | This paper presents experimental evidence on the impact of a role model on secondary school student exam performance in Uganda. Students preparing to take their national exams (classes S4 and S6) were individually randomised to see either an aspirational movie featuring a potential role model, Queen of Katwe, or to see a placebo movie. I find that treatment with the aspirational movie leads to a 0.11 standard deviation increase in maths performance for S4 students, with the effect coming from students being 11 percentage points less likely to fail the exam. This effect is being driven by the lowest ability and students at lower ranked schools. For S6 students, their total score on their exams increase by 0.13 standard deviations. This study highlights the power of a role model as a cost-effective way to improve secondary school students' educational attainment, particularly of the worst performing students. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2017-13&r=cbe |