|
on Cognitive and Behavioural Economics |
|
Issue of 2021‒06‒28
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Archsmith, James (University of Maryland); Heyes, Anthony (University of Ottawa); Neidell, Matthew (Columbia University); Sampat, Bhaven (Columbia University) |
| Abstract: | Recent theoretical and empirical work characterizes attention as a limited resource that decision-makers strategically allocate. There has been less research on the dynamic interdependence of attention: how paying attention now may affect performance later. In this paper, we exploit high-frequency data on decision-making by Major League Baseball umpires to examine this. We find that umpires not only apply greater effort to higher-stakes decisions, but also that effort applied to earlier decisions increases errors later. These findings are consistent with the umpire having a depletable 'budget' of attention. There is no such dynamic interdependence after breaks during the game (at the end of each inning) suggesting that even short rest periods can replenish attention budgets. We also find that an expectation of higher stakes future decisions leads to reduced attention to current decisions, consistent with forward-looking behavior by umpires aware of attention scarcity. |
| Keywords: | rational inattention, dynamic decision-making, cognitive capital, decision fatigue, bounded rationality, behavioral economics |
| JEL: | D83 D91 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14440&r= |
| By: | John List |
| Abstract: | All happy families are alike; each unhappy family is unhappy in its own way. -Leo Tolstoy, Anna Karenina |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00733&r= |
| By: | Alexandra Baier; Loukas Balafoutas; Tarek Jaber-Lopez |
| Abstract: | Ostracism, or exclusion by peers, has been practiced since ancient times as a severe form of punishment against transgressors of laws or social norms. The purpose of this paper is to offer a comprehensive analysis on how ostracism affects behavior and the functioning of a social group. We present data from a laboratory experiment, in which participants face a social dilemma on how to allocate limited resources between a productive activity and theft, and are given the opportunity to exclude members of their group by means of majority voting. Our main treatment features an environment with heterogeneity in productivity within groups, thus creating inequalities in economic opportunities and income. We find that exclusion is an effective form of punishment and decreases theft by excluded members once they are re-admitted into the group. However, it also leads to some retaliation by low-productivity members. A particularly worrisome aspect of exclusion is that punished group members are stigmatized and have a higher probability of facing exclusion again. We discuss implications of our findings for penal systems and their capacity to rehabilitate prisoners. |
| Keywords: | ostracism, social dilemma, theft, rehabilitation, heterogeneous groups |
| JEL: | C91 C92 K42 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-19&r= |
| By: | Gabriele Camera (Economic Science Institute, Chapman University and DSE, University of Bologna); Lukas Hohl (University of Basel) |
| Abstract: | We stress-test the limits of the power of group identity in the context of cooperation by constructing laboratory economies where participants confront an indefinitely repeated social dilemma as strangers. Group identity is artificially induced by ran-dom assignment to color-coded groups, and reinforced by an initial cooperation task played in-group and in fixed pairs. Subsequently subjects interact in-group and out-group in large economies, as strangers. Indefinite repetition guarantees full cooperation is an equilibrium. Decision-makers can discriminate based on group aÿliation, but cannot observe past behaviors. We find no evidence of group biases. This suggests that group e ects are less likely to emerge when players cannot easily observe and compare characteristics on which to base categorizations and behaviors. |
| Keywords: | large groups, indefinitely repeated game, social norms |
| JEL: | C70 C90 D03 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:21-10&r= |
| By: | Estepa-Mohedano, Lorenzo; Espinosa, Maria Paz |
| Abstract: | Eliciting risk preferences usually involves tasks that subjects may find complex, such as calculations of expected values and assessment of probabilities in multiple price lists (MPL). There is a serious concern that the decisions of the subjects may be driven by miscalculations or miscalibration of probabilities, rather than by their risk preferences. In this paper, we test whether introducing aids to the usual lottery choiceswould help to reduce the error rate and possibly change risk aversion elicitation. The experiment was run with subjectsfrom a rural area in Honduras. We compare the risk elicitation results of a multiple price list and two different treatments, one with visual aids (graphical representation of probabilities) and the other with contextual framing aids (bills to represent rewards and a distribution of ten beans between the two rewards to represent a lottery). Our results indicate that risk attitudes elicitation was affected with contextual framing aids, reducing risk aversion. For the treatment with visual aids we observe no effect. |
| Keywords: | risk elicitation, visual aids, contextual framing aids |
| JEL: | C93 D81 |
| Date: | 2021–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:108440&r= |
| By: | Hernando-Jorge, Laura; Azagra-Caro, Joaquín M.; Tur Porcar, Ana M. |
| Abstract: | Scientific excellence is one of the main sources of wealth and economic development in modern society. This is due to the knowledge generated by scientists, which is the result of an interaction between cognitive, emotional and social factors. Indeed, emotional factors and the way of relating to one’s surroundings are linked to the ability to make plans to achieve proposed goals. This study aims to study the relationships between personality traits, emotional intelligence (EI) and positive and negative affect among the scientific population. There were 7,463 researchers that took part, who have authored publications included in the Web of Science (WoS) from 2013 to 2016. The results show significant relationships between EI, personality traits and affects, and the weight of personality traits in predicting EI, with an R2 close to 40%. Furthermore, positive affect positively moderates the relationship between the desirability of personality traits and EI, whereas negative affect moderates this relationship negatively. The results are discussed as regards the importance of handling positive emotional states in order to regulate emotional experiences with a view to increasing productivity, via the publications considered in the WoS. |
| Date: | 2021–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ing:wpaper:202103&r= |
| By: | Axel Börsch-Supan (Munich Center for the Economics of Aging, Max Planck Institute); Michael D. Hurd (RAND); Susann Rohwedder (RAND) |
| Abstract: | Based on the belief that many people have under-saved and that the reason for under-saving is procrastination, paternalistic nudging to foster saving is often advocated by policy researchers. However, there is little empirical evidence that on hindsight individuals would wish to have saved more than they did, which is an implication of under-saving due to procrastination. To fill this empirical gap, we fielded surveys in the RAND American Life Panel and in the Singapore Life Panel. We asked persons ages 60 to 74 whether, if they were given the chance to do it over again, they would have saved differently earlier in their lives. If they wished to have saved more, we say they have “saving regret.†We also fielded a psychometric battery designed to classify people according to their tendency to procrastinate. We found both in the United States and in the Singapore data that about half the population expressed saving regret with the proportion being higher in the U.S. The likelihood of expressing regret was uncorrelated with our measures of procrastination: That is, individuals who affirm statements that plainly indicate a tendency to put off difficult tasks are no more likely to express saving regret than individuals who do not have that tendency. We also asked respondents whether, over their lifetimes, they had experienced unexpected events or shocks that harmed their economic situation, such as unemployment. Substantially higher fractions of the U.S. sample experienced such shocks. That experience explained the greater frequency of saving regret in the U.S. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp413&r= |
| By: | Lippens, Louis (Ghent University); Baert, Stijn (Ghent University); Derous, Eva (Ghent University) |
| Abstract: | Using a choice experiment, we test whether taste-based employee discrimination against ethnic minorities is susceptible to loss aversion. In line with empirical evidence from previous research, our results indicate that introducing a hypothetical wage penalty for discriminatory choice behaviour lowers discrimination and that higher penalties have a greater effect. Most notably, we find that the propensity to discriminate is significantly lower when this penalty is loss-framed rather than gain-framed. From a policy perspective, it could therefore be more effective to financially penalise taste-based discriminators than to incentivise them not to discriminate. |
| Keywords: | taste-based discrimination, employee discrimination, loss aversion, ethnicity |
| JEL: | J70 J24 J60 C92 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14438&r= |