|
on Cognitive and Behavioural Economics |
|
Issue of 2020‒08‒24
seven papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Andrea Hackethal; Michael Kirchler; Christine Laudenbach; Michael Razen; Annika Weber |
| Abstract: | Incentivized experiments in which individuals receive monetary rewards according to the outcomes of their decisions are regarded as the gold standard for preference elicitation in experimental economics. These task-related real payments are considered necessary to reveal subjects' "true preferences". Using a systematic, large-sample approach with three subject pools of private investors, professional investors, and students, we test the effect of task-related monetary incentives on risk preferences elicited in four standard experimental tasks. We find no systematic differences in behavior between subjects in the incentivized and non-incentivized regimes. We discuss implications for academic research and for applications in the field. |
| Keywords: | Risk Preferences, Incentives, Experimental Economics, Risk Aversion |
| JEL: | C91 D01 D81 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2020-29&r=all |
| By: | Chowdhury, Shyamal; Sutter, Matthias; Zimmermann, Klaus F. |
| Abstract: | Economic preferences are important for lifetime outcomes such as educational achievements, health status, or labor market success. We present a holistic view of how economic preferences are related within families. In an experiment with 544 families (and 1,999 individuals) from rural Bangladesh we find a large degree of intergenerational persistence of economic preferences. Both mothers’ and fathers’ risk, time and social preferences are significantly (and largely to the same degree) positively correlated with their children’s economic preferences, even when controlling for personality traits and socio-economic background data. We discuss possible transmission channels for these relationships within families and find indications that there is more than pure genetics at work. Moving beyond an individual level analysis, we are the first to classify a whole family into one of two clusters, with either relatively patient, risk-tolerant and pro-social members or relatively impatient, risk averse and spiteful members. Socio-economic background variables correlate with the cluster to which a family belongs to. |
| Keywords: | Economic preferences within families,intergenerational transmission of preferences,time preferences,risk preferences,social preferences,family clusters,socio-economic status,Bangladesh,experiment |
| JEL: | C90 D1 D90 D81 D64 J13 J24 J62 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:592&r=all |
| By: | Tomáš Jagelka (ECONtribute Cluster of Excellence, IZA, Institute for Applied Microeconomics at the University of Bonn, and CEHD at the University of Chicago.) |
| Abstract: | This paper proposes a method for empirically mapping psychological personality traits to economic preferences. Careful modelling of random components of decision making is crucial to establishing the long supposed but empirically elusive link between economic and psychological systems for understanding differences in individuals’ behavior. I use factor analysis to extract information on individuals’ cognitive ability and personality and embed it within a Random Preference Model to estimate distributions of risk and time preferences, of their individual-level stability, and of people’s propensity to make mistakes. I explain up to 50% of the variation in both average risk and time preferences and in individuals’ capacity to make consistent rational choices using four factors related to cognitive ability and three of the Big Five personality traits. True differences in desired outcomes are related to differences in personality whereas actual mistakes in decisions are related to cognitive skill. |
| Keywords: | economic preferences, personality traits, decision error, measurement error, stochastic discrete choice |
| JEL: | D91 D80 D01 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:014&r=all |
| By: | Shusaku Sasaki (Corresponding author; Faculty of Economics, Tohoku Gakuin University); Hirofumi Kurokawa (School of Economics and Management, University of Hyogo); Fumio Ohtake (Graduate School of Economics, Osaka University) |
| Abstract: | To control and slow down the spread of COVID-19, policymakers and practitioners are employing messages with elements and wording based on nudges to encourage people fs voluntary behaviors of contact avoidance and infection prevention. However, although existing studies have found that nudge-based messages strengthen their intention to take the behaviors, it is not known whether the messages really promote their actual performance. In the end of April 2020, we conducted a survey experiment on a nationwide sample of Japan through the internet, where we randomly provided to them one of five different nudge-based messages and a message without nudges, and subsequently ascertained their intention to take the contact avoidance and infection prevention behaviors. In the beginning of the following month, May, we further conducted a follow-up survey to determine their actual behavioral changes. The empirical analysis with 5,225 respondents found that only the gAltruistic Message h emphasizing that their behavioral adherence would protect the lives of people close to them reinforced their intentions and also could promote some actual behaviors. However, the similar behavioral changes were not observed for the messages which contained an altruistic element but emphasized it in a loss-frame, or described it as protecting both of their own and others f lives. The message emphasizing only their own benefit were found to have the adverse effect of impeding their intention and behavior. Further analysis revealed that even the gain-framed gAltruistic Message h with the promotional consequences had side effects of deteriorating the quality of sleep and diet and life satisfaction. When employing nudge-based messages as a countermeasure for COVID-19, the policymakers and practitioners need to carefully scrutinize the elements and wording of the messages while considering their potential adverse effects and side effects. |
| Keywords: | Infectious diseases, nudge, behavioral economics, altruism, physical distance |
| JEL: | C93 D01 D91 I12 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:2011&r=all |
| By: | Sacha Bourgeois-Gironde (Laboratory of modern economics - UP2 - Université Panthéon-Assas); Alda Mari (IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Philosophie - ENS Paris - ENS Paris - École normale supérieure - Paris); David Nicolas (IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Philosophie - ENS Paris - ENS Paris - École normale supérieure - Paris); David Blunier |
| Abstract: | This paper explores the impact of language on behaviour studying the impact of mood in a probabilistic choice context. Building on the idea of "aversion to ambiguity" according to which subjects prefer situations in which probabilities are known over those in which they are not known, we have systematically tested the association of sentence mood with choice situations. We found that with indicative the aversion to ambiguity is confirmed, whereas with the subjunctive, it is not. This indicates that grammatical features can influence the way in which subjects apprehend choices in probabilistic contexts. Goal While modern economic theories have soundly established a connection between economic behavior and psychology, there is a new and growing interest in the connection between language and behavior. This paper studies one aspect of this connection by addressing choices in probabilistic contexts. Specifically, we study how the verbalization of mental states accompanying choices in probabilistic contexts can modify what psychology based economic theories have labelled as the "standard" behavior. We show here that certain grammaticalized features of natural language can impact the expectations solely based on psychological considerations. |
| Keywords: | subjunctive,mood,decision theory,language,ambiguity,risk |
| Date: | 2019–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02869834&r=all |
| By: | Cristina Bicchieri (University of Pennsylvania, Center for Social Norms and Behavioral Dynamics); Eugen Dimant (University of Pennsylvania, Center for Social Norms and Behavioral Dynamics; CESifo, Munich; IZA, Bonn); Simon Gächter (University of Nottingham); Daniele Nosenzo (University of Nottingham, Luxembourg Institute of Socio-Economic Research (LISER)) |
| Abstract: | We study how an individual's compliance with social norms is influenced by other actors' norm compliance. In a repeated non-strategic Take-or-Give donation experiment we show that giving is considered socially appropriate while taking is sociallyinappropriate.Observing norm violations erodesanindividual'sownnormcompliance.Weshowthatthe erosion of norm compliance is led by a change in norm-related beliefs.This change has a major effect on individuals who initially obey the norm,driving them to non-compliance, whereas initially non-compliant individuals do not change their taking behavior.Erosion is halted when individuals have even minimal social proximity to those they observe: individuals now also pay attention to norm followers. |
| Keywords: | Norm Compliance, Social Norms, Social Proximity |
| JEL: | C92 D64 D9 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:009&r=all |
| By: | Bose, Neha (University of Warwick); Hills, Thomas (University of Warwick); Sgroi, Daniel (University of Warwick) |
| Abstract: | Though many in the general public are concerned about climate change, most are unaware that agriculture and food production accounts for about one quarter of aggregate green house emissions and therefore, diet change is one of the most effective ways that individuals can reduce their climate impact. To investigate how best to communicate this, we present the results of a pre-registered randomised control trial, involving 1220 subjects, exploring six different information interventions. Our findings indicate that the most influential interventions are based on scientific knowledge and efficacy salience. These effects are mediated by prior beliefs and individual characteristics. Providing information on the health impact of a plant-based diet was most effective for individuals with pre-existing health concerns. The greatest resistance to this information was associated with motivated reasoning around meat consumption: the more meat a participant consumed the less they reported knowing about the relationship between diet and climate before the study, the more resistant they were to new information demonstrating that relationship, the lower their efficacy beliefs around climate change, and the more likely they were to take moral offence at being informed. Our results suggest that while many people are open to dietary change and are responsive to scientific evidence, the largest potential for impact between diet and climate may be in overcoming pre-existing biases associated with sacred values around meat consumption. |
| Keywords: | self efficacy, decit model of science communication, nudge, interventions, environment, agriculture, vegan, vegetarian, diet, climate change, motivated reasoning, cognitive dissonance, strategic ignorance, social norms |
| JEL: | Q54 D91 I12 C90 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13426&r=all |