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on Cognitive and Behavioural Economics |
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Issue of 2019‒05‒20
fourteen papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Kevin Grubiak (University of East Anglia) |
| Abstract: | This paper reports an experiment designed to investigate the role of image concerns in promise keeping. The task employed allows to shed light on the relevance of both social -image and self -image concerns. Whereas in the former case, behavior is expected to depend on how others perceive a given action, in the latter case what matters is how actions reflect on a decision-maker’s self -perception. We observe strong evidence of social-image concerns in treatments which feature ex-ante opportunities for promise exchange. Ruling out alternative explanations, our results are consistent with subjects exhibiting an aversion to being perceived as a promise breaker by others. Surprisingly, subjects seem not to anticipate social-image concerns to be present in others. Our test of self-image concerns yields a null result: there is no evidence suggesting that subjects in our experiment engaged in self-deception to evade their promise-induced commitments. This resilience can be interpreted as corroborating evidence of the strength of promises. Our results shed light on the conditions under which promises can be expected to facilitate successful relationships based on trust. |
| Keywords: | Trust; Communication; Promises; Image Concerns; Beliefs |
| JEL: | C91 D03 D82 D83 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:19-02&r=all |
| By: | Chen, Daniel; Hopfensitz, Astrid; van Leeuwen, Boris (Tilburg University, Center For Economic Research); van de Ven, J. (Tilburg University, Center For Economic Research) |
| Abstract: | The emotion that someone expresses has consequences for how that person is treated. We study whether people display emotions strategically. In two laboratory experiments, participants play task delegation games in which managers assign a task to one of two workers. When assigning the task, managers see pictures of the workers and we vary whether getting the task is desirable or not. We find that workers strategically adapt their emotional expressions to the incentives they face, and that it indeed pays off to do so. Yet, workers do not exploit the full potential of the strategic display of emotions. |
| Keywords: | emotions; expressions; communication; experiment; incentives |
| JEL: | D91 C91 D83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:ab45cbcc-1ea1-4762-b5c9-ecd16a6f33af&r=all |
| By: | Morten Hedegaard; Rudolf Kerschbamer; Mueller Daniel; Jean-Robert Tyran |
| Abstract: | We use a large and heterogeneous sample of the Danish population to investigate the importance of distributional preferences for behavior in a public good game and a trust game. We find robust evidence for the significant explanatory power of distributional preferences. In fact, compared to twenty-one covariates, distributional preferences turn out to be the single most important predictor of behavior. Specifically, subjects who reveal benevolence in the domain of advantageous inequality contribute more to the public good and are more likely to pick the trustworthy action in the trust game than other subjects. Since the experiments were spread out more than one year, our results suggest that there is a component of distributional preferences that is stable across games and over time. |
| Keywords: | Distributional preferences, social preferences, Equality-Equivalence Test, representa- tive online experiment, trust game, public goods game, dictator game. |
| JEL: | C72 C91 D64 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2019-09&r=all |
| By: | Louis Lévy-Garboua (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal , PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Muniza Askari (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Marco Gazel (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne) |
| Abstract: | We design a double-or-quits game to compare the speed of learning one's specific ability with the speed of rising confidence as the task gets increasingly difficult. We find that people on average learn to be overconfident faster than they learn their true ability and we present an intuitive-Bayesian model of confidence which integrates confidence biases and learning. Uncertainty about one's true ability to perform a task in isolation can be responsible for large and stable confidence biases, namely limited discrimination, the hard–easy effect, the Dunning–Kruger effect, conservative learning from experience and the overprecision phenomenon (without underprecision) if subjects act as Bayesian learners who rely only on sequentially perceived performance cues and contrarian illusory signals induced by doubt. Moreover, these biases are likely to persist since the Bayesian aggregation of past information consolidates the accumulation of errors and the perception of contrarian illusory signals generates conservatism and under-reaction to events. Taken together, these two features may explain why intuitive Bayesians make systematically wrong predictions of their own performance. |
| Keywords: | Confidence biases , Intuitive-Bayesian , Learning , Double or quits , experimental game , Doubt , Contrarian illusory signals |
| Date: | 2017–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01558394&r=all |
| By: | Bellemare, Charles; Sebald, A.; Suetens, Sigrid (Tilburg University, Center For Economic Research) |
| Abstract: | We investigate whether the concept of guilt aversion in economics is related to the psychological characterization of the same phenomenon. For trust games and dictator games we report correlations between the guilt sensitivity measured within a framework of psychological games most common in economics and the guilt sensitivity measured using a questionnaire common in psychology (TOSCA-3). We find that the two measures correlate well and significantly in the two settings. |
| Keywords: | guilt sensitivity; psychological game theory; TOSCA; laboratory experiment; guilt aversion |
| JEL: | A13 C91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:5dca2a21-519f-4f5a-834d-b39b71b11298&r=all |
| By: | Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Mollerstrom, Johanna; Reme, Bjørn-Atle; Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | The meritocratic fairness ideal implies that inequalities in earnings are regarded as fair only when they reflect differences in performance. Consequently, implementation of the meritocratic fairness ideal requires complete information about individual performances, but in practice, such information is often not available. We study redistributive behavior in the common, but previously understudied, situation where there is uncertainty about whether inequality is reflecting performance or luck. We show theoretically that meritocrats in such situations can become very egalitarian in their behavior, and that the degree to which this happens depends on how they trade off the probability of making mistakes and the size of mistakes that they risk making when redistributing under uncertainty. Our laboratory experiments show, in line with our model, that uncertainty about the source of inequality provides a strong egalitarian pull on the behavior of meritocrats. In addition, the external validity of our framework, and the results from the laboratory, are supported in two general population surveys conducted in the United States and Norway. |
| Keywords: | inequality; fairness; redistribution; responsibility; performance; luck; experiment; survey. |
| JEL: | C91 D63 D81 H23 |
| Date: | 2019–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2019_009&r=all |
| By: | Lisa Bruttel (University of Potsdam); Lisa Juri Nithammer (University of Potsdam); Florian Stolley (University of Potsdam) |
| Abstract: | This paper studies the effect of the commonly used phrase “thanks in advance” on compliance with a small request. In a controlled laboratory experiment we ask participants to give a detailed answer to an open question. The treatment variable is whether or not they see the phrase “thanks in advance.” Our participants react to the treatment by exerting less effort in answering the request even though they perceive the phrase as polite. |
| Keywords: | labor compliance behavior, gratitude, reciprocity, experiment |
| JEL: | C91 D64 D91 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:pot:cepadp:07&r=all |
| By: | Mueller Daniel; Sander Renes |
| Abstract: | We elicit distributional fairness ideals of impartial spectators using an incentivized elici- tation in a large and heterogeneous sample of the German population. We document several empirical facts: i) egalitarianism is the predominant ideal; ii) females are more egalitarian than men; iii) men are relatively more efficiency minded; iv) left-leaning voters are more likely to be egalitarians whereas right-leaning voters are more likely to be efficiency minded; and v) young and highly-educated participants hold different fairness ideals than the rest of the population. Moreover, we show that the fairness ideals predict preferences for redistribution and interven- tion by the government, as well as actual charitable giving, even after controlling for a range of covariates. Hence, our paper contributes to our understanding of the underpinnings of voting behavior and ideological preferences, as well the literature that links lab and field behavior. |
| Keywords: | Distributional fairness, impartial spectator, representative sample, po- litical attitudes, voting behavior, lab to field |
| JEL: | C90 D31 D63 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2019-08&r=all |
| By: | Fortuna Casoria (Univ Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France); Alice Ciccone (Institute of Transport Economics, Oslo, Norvège) |
| Abstract: | We investigate whether upfront investments increase cooperation in settings with no enforcement mechanism, where cooperation is not easily sustained voluntarily. Such investments are a cost that individuals incur before deciding whether to cooperate and increase cooperation payoff. We find that cooperation rarely emerges in treatments without investments, while both endogenous and exogenous investments boost overall cooperation levels. For low endogenous investments, cooperation is lower than when the same investments are exogenous. For high investments, cooperation is not significantly different between endogenous and exogenous conditions. This supports low investments being interpreted as a signal of unwillingness to cooperate, triggering non-cooperative choices. |
| Keywords: | KeyCooperation, Upfront investments, Prisoners' dilemma, Experiment |
| JEL: | C7 C72 C73 C9 C91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1918&r=all |
| By: | Lisa Bruttel (University of Potsdam); Florian Stolley (University of Potsdam); Verena Utikal (University of Erlangen-Nuremberg) |
| Abstract: | This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game, in which the recipient can send a free-form text message to the dictator before the latter decides. We find that putting effort into the message, writing in a humorous way and mentioning reasons why the money is needed pays off. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the dictator’s power and responsibility. |
| Keywords: | dictator game, communication, inequality, text analysis, experiment |
| JEL: | C91 D63 D64 D83 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:pot:cepadp:02&r=all |
| By: | Florian Lindner (Max Planck Institute for Research on Collective Goods); Michael Kirchler (University of Innsbruck); Stephanie Rosenkranz (Utrecht University School of Economics); Utz Weitzel (Radboud University) |
| Abstract: | A pervasive feature in the finance industry is relative performance, which can include extrinsic (money), intrinsic (self-image), and reputational (status) motives. In this paper, we model a portfolio decision with two assets and investigate how reputational motives (i.e., the public announcement of the winners or losers) influence risk-taking in investment decisions vis-a-vis intrinsic motives. We test our hypotheses experimentally with 864 students and 330 financial professionals. We find that reputational motives play a minor role among financial professionals, as the risk-taking of underperformers is already increased due to intrinsic motives. Student behavior, however, is mainly driven by reputational motives with risk-taking levels that come close to those of professionals when winners or losers are announced publicly. This indicates that professionals show higher levels of intrinsic (self-image) incentives to outperform others compared to non-professionals (students), but a similar behavior can be sparked among the latter by adding reputational incentives. |
| Keywords: | experimental finance, behavioral economics, investment game, rank incentives, social status, reputational motives |
| JEL: | G02 G11 D03 C93 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2019_07&r=all |
| By: | Christophe Charlier (Université Côte d'Azur, France; GREDEG CNRS); Gilles Guerassimoff (MINES ParisTech; PSL Research University; Center for Applied Mathematics); Ankinée Kirakozian (Université Polytechnique Hauts-de-France; IDP; GREDEG CNRS); Sandrine Selosse (MINES ParisTech; PSL Research University; Center for Applied Mathematics) |
| Abstract: | Controlling energy consumption is a serious environmental issue due to global warming and pollution. Public policies are developed in this context. One such policy is the nudge, a form of policy aimed at changing individual behaviors without using financial incentives nor orders, for example by providing information to individuals so as to conduct behaviors in the direction desired by the policymaker. Interestingly "private nudges" can be imagined for companies. Many economists and psychologists have studied the impact of nudges on households' pro-environmental behaviors. Yet, studies focusing on nudging employees' energy use are rare. The objective of our paper is precisely to explore this issue from an empirical point of view with the help of a field experiment. Using a difference-in-difference methodology, the effects of three nudges on employees' energy conservation are tested. The first nudge, "moral appeal", stresses the responsible use of energy regarding environmental stakes. The second one, "social comparison", informs employees on the energy consumption of other firms participating in the experiment. Finally, the third nudge, "stickers", alerts employees about good energy conservation practices. The field experiment was conducted at 47 French companies's sites. Our results stress the complementarity of these nudges. When implemented alone, the three nudges have no significant effects on energy consumption. However, when the moral appeal and social comparison nudges are combined with the stickers one, they become effective. |
| Keywords: | Energy demand management, Private nudges, Peer pressure, Field experiment |
| JEL: | C93 D04 D91 Q41 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2019-18&r=all |
| By: | van der Swaluw, K. (Tilburg University, School of Economics and Management); Lambooij, M.S.; Mathijssen, J.J.P. (Tilburg University, School of Economics and Management); Prast, H.M. (Tilburg University, School of Economics and Management); Zeelenberg, M. (Tilburg University, School of Economics and Management); Polder, J.J. (Tilburg University, School of Economics and Management) |
| Abstract: | Many people aim to change their lifestyle, but have trouble acting on their intentions. Behavioral economic incentives and related emotions can support commitment to personal health goals, but the related emotions remain unexplored. In a regret lottery, winners who do not attain their health goals do not get their prize but receive feedback on what their forgone earnings would have been. This counterfactual feedback should provoke anticipated regret and increase commitment to health goals. We explored which emotions were actually expected upon missing out on a prize due to unsuccessful weight loss and which incentive-characteristics influence their likelihood and intensity. Participants reported their expected emotional response after missing out on a prize in one of 12 randomly presented incentive-scenarios, which varied in incentive type, incentive size and deadline distance. Participants primarily reported feeling disappointment, followed by regret. Regret was expected most when losing a lottery prize (vs. a fixed incentive) and intensified with prize size. Multiple features of the participant and the lottery incentive increase the occurrence and intensity of regret. As such, our findings can be helpful in designing behavioral economic incentives that leverage emotions to support health behavior change. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:fc3c1f00-c8a5-4d77-a12b-b1a46ac9bd30&r=all |
| By: | Lima de Miranda, Katharina |
| Abstract: | Mindfulness could influence economic and health related behaviour by bringing about increased and unbiased attention to the present moment, for example to a decision making process. This study explores the relationship between mindfulness and economic preferences, and consequently well-being, of adolescents. Comprehensive data of 525 German secondary school students were elicited and show no evidence for a strong linear or non-linear correlation between mindfulness and economic preferences. However, both mindfulness and preferences have explanatory power for adolescents' field behaviour and thus contribute to explaining variation in behaviour that may translate into serious health and economic consequences. In this regard, my findings indicate that the two concepts play rather complementary than substitutable roles, which implies that an integration of economic preferences and personality traits such as mindfulness may improve the analysis of potential sources of variation in life outcomes. As mindfulness reflects on a healthier lifestyle (less smoking and smaller BMI) and higher life satisfaction, the findings furthermore point into the direction that the development of mindfulness skills might help students to grow social-emotional capacities and increase physical and psychological well-being. |
| Keywords: | time preference,risk preferences,mindfulness,personality,experiments with adolescents,subjective well-being |
| JEL: | C93 D81 D90 I12 I20 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2127&r=all |