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on Cognitive and Behavioural Economics |
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Issue of 2017‒12‒18
eleven papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Sheheryar Banuri (University of East Anglia); Katarina Dankova (University of East Anglia); Philip Keefer (Inter-American Development Bank) |
| Abstract: | Performance feedback is a pervasive element of education, management, marketing, and the entire gaming industry. Prior research on feedback focuses on what information individuals receive, and how frequently. The gaming industry, though, is built upon the premise that how feedback is delivered matters and, in particular, that "context" – narrative and story – are key. However, even as organizations increasingly adopt gaming elements into their feedback systems, prior research offers little guidance about whether standard performance feedback, combined with gaming elements, yields greater effort. We report the results of experiments that identify the impact of feedback through gamification, through a novel experimental design that introduces narratives into the task. Compared to standard performance feedback, gamification significantly increases effort in a "real effort" task. However, consistent with past research showing that intrinsic and extrinsic incentives interact, gamification has a positive impact on effort when extrinsic incentives are low, but no impact when they are high. The introduction of narrative – storyline development – induces the greatest effort, even compared to Leaderboards, a gaming element that often features in performance feedback systems. |
| Keywords: | intrinsic motivation, extrinsic motivation, performance, feedback, gamification, effort |
| JEL: | J24 M12 C91 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:17-10&r=cbe |
| By: | Harald W. Lang |
| Abstract: | We provide experimental evidence that social comparisons affect individual risk taking. In particular, we focus on the case when individuals care about their income-rank. Our model predicts that compared to standard expected utility theory income-rank comparisons lead to less (more) risk taking in case of lotteries with more probability mass on the downside (upside) of the distribution. Evidence shows in line with our predictions that individuals take less risk when lotteries have more probability weight on the downside. However, we do not find an effect for lotteries with more upside probability mass. The effect of social comparisons on risk taking is strongest when the deciding subject and the reference subject are of the same gender. |
| Keywords: | Social comparisons, individual risk taking, status, portfolio choice, relative income concerns, experiment |
| JEL: | C91 D03 D81 G11 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2016-12&r=cbe |
| By: | Benjamin Ouvrard; Anne Stenger |
| Abstract: | We propose an experiment to test whether the reaction to a nudge implemented in a network depends on the network structure and on the sensitivity of individuals to the environment. After having elicited the sensitivity of subjects to environmental matters, the subjects played a public goods game in a network. The first ten periods served as a baseline. A nudge (announcement of the socially optimal level of investment) was then implemented both under complete information (the content of the nudge takes individuals’ position into account) and under incomplete information (the nudge cannot rely on individuals’ positions). Nudge implementation induces a higher coordination on the social optimum in the circle network for the most sensitive subjects. In the star network, the targeted nudge induces a decrease in the level of investments for the least sensitive subjects. Thus, nudge implementation should target specific individuals in specific network structures. |
| Keywords: | environmental sensitivity; inequity aversion; networks; nudge; public goods experiment. |
| JEL: | C72 C91 H41 Q50 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2017-36&r=cbe |
| By: | Da Silva, Sergio; De Faveri, Dinorá; Matsushita, Raul |
| Abstract: | We gather survey evidence for the influence of the HEXACO personality traits on the phenomenon of hyperbolic discounting. We also consider the demographics of age, sex, income and education, and evaluate how these interact with personality and hyperbolic discounting. Due to a sampling technique of “snowball,” we assembled a sample of well-educated and relatively wealthy adults from both sexes. Most respondents escaped hyperbolic discounting, and for those affected there was no “magnitude effect.” Those participants showing higher conscientiousness were less hyperbolic. Moreover, those more open to experience who were more extroverted at the same time were also less hyperbolic. We also detail how such personality traits influence hyperbolic discounting mediated by the demographics of age, sex, income and educational attainment. Thus, conscientiousness, openness to experience and extraversion are traits that contribute to rational decisions in intertemporal choice in our sample, in that participants with these personality traits are less hyperbolic. |
| Keywords: | intertemporal choice, hyperbolic discounting, impatience, personality, HEXACO, Big Five |
| JEL: | D90 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83171&r=cbe |
| By: | Peter Savelyev (The College of William & Mary); Kegon Teng Kok Tan (University of Rochester) |
| Abstract: | We use the high IQ Terman sample to estimate relationships between education, socioemotional skills, and health-related outcomes that include health behaviors, lifestyles, and health measures across the lifecycle. By both focusing on a high IQ sample and controlling for IQ in regression models, we mitigate ability bias due to cognitive skill. In addition, we control for detailed personality measures to account for socioemotional skills. We model skills using factor analysis to address measurement error and adopt a powerful stepdown procedure to account for multiple hypothesis testing. We find that among high IQ subjects, education is linked to better health-related outcomes, in contrast to previous evidence. Conscientiousness, Openness, Extraversion, and Neuroticism are linked to various health-related outcomes across the lifecycle. Furthermore, we find that accounting for a comprehensive set of skills, measurement error, and multiple hypothesis testing not only provides greater confidence in several established relationships but also generates novel results. |
| Keywords: | college education, Big Five, health behavior, lifestyle |
| JEL: | I12 J24 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-086&r=cbe |
| By: | Daniel Kardefelt Winther; UNICEF Office of Research - Innocenti |
| Abstract: | Based on an evidence-focused literature review, the first part of this paper examines existing knowledge on how the time children spend using digital technology impacts their well-being across three dimensions; mental/psychological, social and physical. The evidence reviewed here is largely inconclusive with respect to impact on children’s physical activity, but indicates that digital technology seems to be beneficial for children’s social relationships. In terms of impact on children’s mental well-being, the most robust studies suggest that the relationship is U-shaped, where no use and excessive use can have a small negative impact on mental well-being, while moderate use can have a small positive impact. In the second part of the paper, the hypothetical idea of addiction to technology is introduced and scrutinized. This is followed by an overview of the hypothetical idea that digital technology might re-wire or hijack children’s brains; an assumption that is challenged by recent neuroscience evidence. In conclusion, considerable methodological limitations exist across the spectrum of research on the impact of digital technology on child well-being, including the majority of the studies on time use reviewed here, and those studies concerned with clinical or brain impacts. This prompts reconsideration of how research in this area is conducted. Finally, recommendations for strengthening research practices are offered. |
| Keywords: | information technology; mental health; social behaviour; |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ucf:indipa:indipa925&r=cbe |
| By: | Iain Embrey |
| Abstract: | Canonical economic agents act so as to maximise a single, representative, utility function. However there is accumulating evidence that heterogeneity in thought-processes may be an important determinant of individual behaviour. This paper investigates the implications of a vector-valued generalisation of the Expected Utility paradigm, which permits agents either to deliberate as per Homo-economics, or to act impulsively. That generalised decision theory is applied to explain irrational educational investment decisions, persistent social inequalities, the crowding-out effect, the pervasive influence of non-cognitive ability on socio-economic outcomes, and the dynamic relationships between non-cognitive ability, cognitive ability, and behavioural biases. These results suggest that the generalised decision theory warrants further investigation. |
| Keywords: | Decision Theory, Dual-Self, Behavioural Anomalies, Human Capital, Social Exclusion, Unemployment |
| JEL: | D01 D81 D91 I24 I31 J24 J64 B41 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:209919485&r=cbe |
| By: | Jana Cahlikova; Lubomir Cingl; Ian Levely |
| Abstract: | Since many key career events, such as exams and interviews, involve competition and stress, gender differences in response to these factors could help to explain the labor-market gender gaps. In a laboratory experiment, we manipulate psychosocial stress using the Trier Social Stress Test, and conï¬ rm that this is effective by measuring salivary cortisol. Subjects perform a realeffort task under both tournament and piece-rate incentives and we elicit willingness to compete. We ï¬ nd that women under heightened stress do worse than women in the control group when compensated with tournament incentives, while there is no treatment difference for performance under piece-rate incentives. For males, stress does not affect output under competition. We also ï¬ nd that stress decreases willingness to compete overall, and for women, this is related to performance. These results help to explain previous ï¬ ndings on gender differences in performance under competition both in and out of the lab. |
| Keywords: | competitiveness, performance in tournaments, psychosocial stress, gender gap |
| JEL: | C91 D03 J16 J33 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2017-01&r=cbe |
| By: | Nicolas Vallois (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Dorian Jullien (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - UCA - Université Côte d'Azur) |
| Abstract: | We propose a historical perspective on replication in experimental economics focused on public good games. Our intended contribution is twofold: in terms of method and in terms of object. Methodologically, we blend traditional qualitative history of economics with a less traditional quantitative approach using basic econometric tools to detect unnoticed historical patterns of replication. In terms of our object, we highlight a type of replication that we call " baseline replication " , which is not present in explicit methodological discussions, yet central in the specificity of experimental economics regarding replication in economics. |
| Keywords: | Experimental Economics, Replication, History of Economic Thought,Methodology, Public Good Experiments |
| Date: | 2017–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01651080&r=cbe |
| By: | Szabolcs Deák (University of Surrey); Paul Levine (University of Surrey); Joseph Pearlman (City University); Bo Yang (Swansea University) |
| Abstract: | We construct, estimate and explore the monetary policy consequences of a New Keynesian (NK) behavioural model with bounded-rationality and heterogeneous agents. We radically depart from most existing models of this genre in our treatment of bounded rationality and learning. Instead of the usual Euler learning approach, we assume that agents are internally rational (IR) given their beliefs of aggregate states and prices. The model is inhabited by fully rational (RE) and IR agents where the latter use simple heuristic rules to forecast aggregate variables exogenous to their micro-environment. We nd that IR results in an NK model with more persistence and a smaller policy space for rule parameters that induce stability and determinacy. In the most general form of the model, agents learn from their forecasting errors by observing and comparing them with those under RE making the composition of the two types endogenous. In a Bayesian estimation with xed proportions of RE and IR agents and a general heuristic forecasting rule we nd that a pure IR model ts the data better than the pure RE case. However, the latter with imperfect rather than the standard perfect information assumption outperforms IR (easily) and RE-IR composites (slightly), but second moment comparisons suggest that the RE-IR composite can match data better. Our ndings suggest that Kalman- ltering learning with RE can match bounded-rationality in matching persistence seen in the data. |
| JEL: | E12 E32 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:0817&r=cbe |
| By: | Florian Lindner |
| Abstract: | Psychological pressure affects performance. This is especially true for individuals completing precision tasks in decisive situations, such as assessment tests, job talks, or sports competitions. In this paper, I shed light on detrimental effects of pressure on performance, a phenomenon known as "choking under pressure". I analyze a unique setting in which the effect of pressure on performance is naturally observable: Biathlon World Cup competitions. As the last shot in the final bout of shootings is regularly decisive for the victory, pressure is highest on the leader of the competition not to miss this last shot. Using event data from 11 seasons of Biathlon World Cup, I find strong evidence for "choking under pressure", implying that especially leaders are more likely to fail decisive shots. Furthermore, taking more time for the last shootings bout leads to a decrease in performance. Finally, I show suggestive evidence for a momentum effect – after missing a shot during the last shooting bout, the probability of missing the last shot decreases. |
| Keywords: | Choking under pressure, psychological pressure, biathlon |
| JEL: | L83 M51 M54 L83 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2017-24&r=cbe |