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on Cognitive and Behavioural Economics |
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Issue of 2021‒04‒05
nine papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Gerlinde Fellner-Röhling; Sabine Kröger; Erika Seki |
| Abstract: | We experimentally investigate the path dependence of voluntary contributions in a public good game with heterogeneous agents who vary in their ability to increase the public good. More specifically, we analyze whether contribution norms observed in a first phase of the experiment under a specific information regime carry over to a second phase with a more or a less transparent regime. We find evidence of path dependence that varies by the ability of agents. Efficient contribution norms establish under common knowledge about heterogeneity and transparency of contributors' ability, and they carry over to another game with less transparency. Other contribution norms that emerged under less transparency are also initially sticky, but they eventually evolve toward an efficient norm under a more transparent information regime. Thus, path dependence may impede but does not prevent efficient contribution norms to prevail in fully transparent settings. |
| Keywords: | Voluntary Contribution Mechanism,Heterogeneous MPCR,Information Transparency,Sticky Behavior,Behavioral Change,Social Norms, |
| JEL: | C92 D04 D63 D79 D89 D91 H41 H49 |
| Date: | 2021–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-13&r=all |
| By: | Radzvilavicius, Arunas (University of Sydney) |
| Abstract: | In public goods games, the benefit of collective action is shared among all participants, and this creates strong incentives to defect. Theoretical studies and economic experiments predict that without enforcement mechanisms, cooperation in public goods games should collapse. But human societies have repeatedly resolved collective action dilemmas through social norms and institutions. Humans condition their social behavior on the moral reputations of other individuals, and the reputations themselves reflect their past behavior. Here I show how Indirect Reciprocity mechanisms based on group reputations and group-level norms can evolve to promote collective action in public goods games. Individual reputations reflect moral judgments of social behavior within groups, according to the prevailing social norm. Only three norms previously studied as part of Indirect Reciprocity in pairwise games can sustain public goods investments, and their performance depends on how tolerant individuals are to occasional antisocial behavior within groups. When members of the society have predominantly tolerant moral views towards groups, only the norm that abstains from judgment in morally ambiguous interactions (known as ``Staying'') can sustain collective action. |
| Date: | 2021–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:neq9g&r=all |
| By: | Soldà, Alice; Ke, Changxia; von Hippel, William; Page, Lionel |
| Abstract: | Overconfidence is one of the most ubiquitous biases in the social sciences, but the evidence regarding its overall costs and benefits is mixed. To test the possibility that overconfidence might yield important relative benefits that offset its absolute costs, we conducted an experiment (N=298 university students) in which pairs of participants bargain over the unequal allocation of a prize that was earned via a joint effort. We manipulated confidence using a binary noisy signal to investigate the causal effect of negotiators’ beliefs about their relative contribution on the outcome of the negotiation. Our results provide evidence that high levels of confidence lead to relative benefits (how much one earns compared to one’s partner) but absolute costs (how much money one receives overall). These results suggest that overconfidence creates an inefficient equilibrium whereby overconfident negotiators benefit over their partners even as they bring about joint losses. |
| Keywords: | overconfidence; motivated beliefs; negotiation |
| Date: | 2021–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0700&r=all |
| By: | Arts, Sara; Ong, Qiyan; Qiu, Jianying |
| Abstract: | Information on decision confidence provides important insights into decision-making. In place of self-reported confidence statements in earlier studies, this study examines an incentivized approach to elicit quantitative decision confidence experimentally and theoretically. This approach allows the individual to choose randomization probabilities according to which she receives each option instead of committing to one option as in standard binary choices. We demonstrate theoretically that randomization probabilities reveal the individual's decision confidence level. In an experiment that elicited both randomization probabilities and confidence statements about standard binary choices from subjects, we find that randomization probabilities varied systematically with decision confidence and are a viable measure of decision confidence. Our study contributes to the discussion of convex preference by relating preference for randomization to an intuitive psychological concept of decision confidence. |
| Keywords: | decision confidence, randomization, incentivized approach |
| JEL: | B41 C91 D81 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106811&r=all |
| By: | Chowdhury, Subhasish; Mukherjee, Anwesha; Sheremeta, Roman |
| Abstract: | Individuals participating in a group conflict have different preferences, e.g., maximizing their own payoff, maximizing the group’s payoff, or defeating the rivals. When such preferences are present simultaneously, it is difficult to distinctly identify the impact of those preferences on conflict. In order to separate in-group and out-group preferences, we conduct an experiment in which human in-group or out-group players are removed while keeping the game strategically similar. Our design allows us to study (i) how effort in a group conflict vary due to in-group and out-group preferences, and (ii) how the impact of these preferences vary when the two groups have explicitly different social identities. The results of our experiment show that the presence of in-groups enhances concern about individual payoffs. A further presence of out-groups moderates the concern for individual payoffs through an additional concern for own group payoffs. The negative effect of the in-group preferences and the positive effect of the out-group preferences are weaker when group members have a common social identity. |
| Keywords: | Group conflict; Contest; Identity; Social preferences. |
| JEL: | C91 C92 D72 D74 |
| Date: | 2021–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105690&r=all |
| By: | Solda, Alice; Ke, Changxia; von Hippel, Bill; Page, Lionel |
| Abstract: | Overconfidence is one of the most ubiquitous biases in the social sciences, but the evidence regarding its overall costs and benefits is mixed. To test the possibility that overconfidence might yield important relative benefits that offset its absolute costs, we conducted an experiment (N=298 university students) in which pairs of participants bargain over the unequal allocation of a prize that was earned via a joint effort. We manipulated confidence using a binary noisy signal to investigate the causal effect of negotiators’ beliefs about their relative contribution on the outcome of the negotiation. Our results provide evidence that high levels of confidence lead to relative benefits (how much one earns compared to one’s partner) but absolute costs (how much money one receives overall). These results suggest that overconfidence creates an inefficient equilibrium whereby overconfident negotiators benefit over their partners even as they bring about joint losses. |
| Date: | 2021–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:9jw7a&r=all |
| By: | Atmaningrum, Siska; Kanto, Dwi Sunu; Kisman, Zainul; Institute of Research, Asian |
| Abstract: | Investment is an economic activity that can be a way for a person to expand or maintain his wealth. However, in investing, the public must be more careful in making decisions so that they are not trapped by fake investments. In investing, there are several factors that influence the decision to invest, namely Financial Knowledge, Income, Self-Control, Financial Behavior, and Financial Attitude towards Investment Decisions. This study aims to examine the influence of the variables of Financial Knowledge, Income, and Self-Control on Investing Decisions mediated by Financial Behavior and Financial Attitudes. This study uses Financial Knowledge, Income, and Self-Control as independent variables, then Investment Decisions as the dependent variable, then Financial Behavior, and Financial Attitudes as intervening variables. The results of this study indicate that financial knowledge has an effect on financial behavior. Financial Knowledge affects Financial Attitudes. Financial knowledge influences investment decisions. Income has an effect on Financial Behavior. Income has an effect on Financial Attitudes. Income does not affect the Investment Decision. Self-control affects financial behavior. Self-Control affects Financial Attitudes. Self-Control has no effect on Investment Decisions. Financial Behavior has no effect on Investment Decisions. Financial Attitudes do not affect the Investment Decision. |
| Date: | 2021–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:k4dzs&r=all |
| By: | Bejarano, Hernan; Gillet, Joris; Lara, Ismael Rodríguez |
| Abstract: | We study behavior in a trust game where first-movers initially have a higher endowment than second-movers but the occurrence of a positive random shock can eliminate this inequality by increasing the endowment of the second-mover before the decision of the first-mover. We find that second-movers return less (i.e., they are less trustworthy) when they have a lower endowment than first-movers, compared with the case in which first and second-movers have the same endowment. Second-movers who received the positive shock return more than those who did not; in fact, second-movers who received the positive shock return more than second-movers who had the same endowment as the first-mover from the outset. First-movers do not seem to anticipate this behavior from second-movers. They send less to second-movers who benefited from a shock. These findings suggest that in addition to the distribution of the endowments the source of this distribution plays an important role in determining the levels of trust and trustworthiness. This, in turn, implies that current models of inequality aversion should be extended to accommodate for reference points if random positive shocks are possible in the trust game. |
| Date: | 2021–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:wmejt&r=all |
| By: | Stolte, John Dr. |
| Abstract: | BACKGROUND. Experimental vignette research methods have been used to study a diverse range of theoretical and practical issues. Vignettes are designed to create hypothetical cultural/normative contexts for the study of variation in self-reported attitudes. A key problem in such research, however, is potential social desirability response bias. METHOD. A vignette experimental test of an hypothesis derived from a dual-process theory (the MODE framework initially developed by Fazio) linking explicit vs. implicit self-reported attitude measurement and social desirability response bias is reported here. RESULTS. The data show that measuring the social approval of a central vignette character explicitly results in greater social desirability responding than measuring such approval implicitly, supporting MODE theory. CONCLUSIONS. Vignette research methodologies provide a rich, flexible toolkit for studying many important social psychological topics, including issues of inequality and equity. However, researchers can and should design a measurement strategy that carefully manages inferences drawn in light of conditions likely to produce social desirability response bias. |
| Date: | 2021–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:u86aj&r=all |