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on Cognitive and Behavioural Economics |
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Issue of 2021‒08‒16
eight papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Nils Köbis (Center for Humans and Machines); Jean-François Bonnefon (UT1 - Université de Toulouse 1 Capitole); Iyad Rahwan (Center for Humans and Machines) |
| Abstract: | Machines powered by Artificial Intelligence (AI) are now influencing the behavior of humans in ways that are both like and unlike the ways humans influence each other. In light of recent research showing that other humans can exert a strong corrupting influence on people's ethical behavior, worry emerges about the corrupting power of AI agents. To estimate the empirical validity of these fears, we review the available evidence from behavioral science, human-computer interaction, and AI research. We propose that the main social roles through which both humans and machines can influence ethical behavior are (a) role model, (b) advisor, (c) partner, and (d) delegate. When AI agents become influencers (role models or advisors), their corrupting power may not exceed (yet) the corrupting power of humans. However, AI agents acting as enablers of unethical behavior (partners or delegates) have many characteristics that may let people reap unethical benefits while feeling good about themselves, indicating good reasons for worry. Based on these insights, we outline a research agenda that aims at providing more behavioral insights for better AI oversight. |
| Keywords: | machine behavior,behavioral ethics,corruption,artificial intelligence |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03292360&r= |
| By: | Hernan Bejarano (Center of Economics Research and Teaching, Economics Division (CIDE), Mexico.); Joris Gillet (Middlesex University, Business School.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | We experimentally investigate the effect of a negative endowment shock that can cause inequality in a trust game. Our goal is to assess whether different causes of inequality have different effects on trust and trustworthiness. In our trust game, we vary whether there is inequality (in favor of the second mover) or not and whether the inequality results from a random negative shock (i.e., the outcome of a die roll) or exists from the outset. Our findings suggest that inequality causes firstmovers to send more of their endowment and second-movers to return more. However, we do not find support for the hypothesis that the cause of the inequality matters. Behavior after the occurrence of a random shock is not significantly different from the behavior in treatments where the inequality exists from the outset. Our results highlight the need to be cautious when interpreting the effects on trust and trustworthiness of negative random shocks in the field (such as natural disasters). Our results suggest that these effects are primarily driven by the inequality caused by the shock and not by any of the additional characteristics of the shock, like saliency or uncertainty. |
| Keywords: | Trust game, endowment heterogeneity, random shocks, inequality aversion, experimental economics. |
| JEL: | C91 D02 D03 D69 |
| Date: | 2021–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:21/06&r= |
| By: | Michal Bauer; Jana Cahlikova; Julie Chytilova; Gerard Roland; Tomas Zelinsky |
| Abstract: | This paper provides experimental evidence showing that members of a majority group systematically shift punishment on innocent members of an ethnic minority. We develop a new incentivized task, the Punishing the Scapegoat Game, to measure how injustice affecting a member of one’s own group shapes punishment of an unrelated bystander (“a scapegoat”). We manipulate the ethnic identity of the scapegoats and study interactions between the majority group and the Roma minority in Slovakia. We find that when no harm is done, there is no evidence of discrimination against the ethnic minority. In contrast, when a member of one’s own group is harmed, the punishment ”passed” on innocent individuals more than doubles when they are from the minority, as compared to when they are from the dominant group. These results illuminate how individualized tensions can be transformed into a group conflict, dragging minorities into conflicts in a way that is completely unrelated to their behavior. |
| Keywords: | punishment; minority groups; inter-group conflict; discrimination; scapegoating; lab-in-field experiments; |
| JEL: | C93 D74 D91 J15 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp697&r= |
| By: | Haering, Alexander |
| Abstract: | In this study I analyze how lottery framing and lottery display type affect the degree of higher-order risk preferences. I explore differences by comparing reduced and compound lottery framing, and by comparing lotteries in an urn-style and in a spinner-style display format. Overall, my findings show that individual behavior is influenced by lottery framing but not by display format. |
| Keywords: | Risk aversion,prudence,temperance,higher-order risk preferences,lottery framing |
| JEL: | C91 D81 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:913&r= |
| By: | Bauer, Michal (Charles University, Prague); Cahlíková, Jana (Max Planck Institute for Tax Law and Public Finance); Chytilová, Julie (Charles University, Prague); Roland, Gerald (University of California, Berkeley) |
| Abstract: | This paper provides experimental evidence showing that members of a majority group systematically shift punishment on innocent members of an ethnic minority. We develop a new incentivized task, the Punishing the Scapegoat Game, to measure how injustice affecting a member of one's own group shapes punishment of an unrelated bystander ("a scapegoat"). We manipulate the ethnic identity of the scapegoats and study interactions between the majority group and the Roma minority in Slovakia. We find that when no harm is done, there is no evidence of discrimination against the ethnic minority. In contrast, when a member of one's own group is harmed, the punishment "passed" on innocent individuals more than doubles when they are from the minority, as compared to when they are from the dominant group. These results illuminate how individualized tensions can be transformed into a group conflict, dragging minorities into conflicts in a way that is completely unrelated to their behavior. |
| Keywords: | punishment, minority groups, inter-group conflict, discrimination, scapegoating, lab-in-field experiments |
| JEL: | C93 D74 D91 J15 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14608&r= |
| By: | Lia Q. Flores (School of Economics and Management, University of Porto); Miguel A. Fonseca (Department of Economics, University of Exeter) |
| Abstract: | Psychologists have long identified the tendency of humans to overestimate their skill relative to their peers (overplacement). We investigate whether this phenomenon is exacerbated by group affiliation: social identity theory predicts people evaluate in-group members more positively than out-group members, and we hypothesized that this differential treatment may result in greater overplacement when interacting with an out-group member. We tested this hypothesis with 301 US voters affiliated with either the Republican or Democratic party in the run-up to the 2020 Presidential election, a time when political identities were salient and highly polarized. We found there is a higher tendency for overplacement when faced with an out-group opponent than with an in-group opponent. Decomposition analysis suggests this difference is due to underestimating the opponent, as opposed to overestimating one's own performance to a higher degree. Moreover, any tendency to incur in overplacement is mitigated when faced with an opponent with the same political-identity relative to one with a neutral one. While group affiliation biases initial priors, such effect is unchanged when participants are asked to update their beliefs. |
| Keywords: | overconfidence, belief updating, motivated beliefs, overplacement, social identity, political affiliation, competition |
| JEL: | D18 D91 Z1 C9 |
| Date: | 2021–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2103&r= |
| By: | Fang Liu |
| Abstract: | It is common to encounter the situation with uncertainty for decision makers (DMs) in dealing with a complex decision making problem. The existing evidence shows that people usually fear the extreme uncertainty named as the unknown. This paper reports the modified version of the typical regret theory by considering the fear experienced by DMs for the unknown. Based on the responses of undergraduate students to the hypothetical choice problems with an unknown outcome, some experimental evidences are observed and analyzed. The framework of the modified regret theory is established by considering the effects of an unknown outcome. A fear function is equipped and some implications are proved. The behavioral foundation of the modified regret theory is further developed by modifying the axiomatic properties of the existing one as those based on the utility function; and it is recalled as the utility-based behavioral foundation for convenience. The application to the medical decision making with an unknown risk is studied and the effects of the fear function are investigated. The observations reveal that the existence of an unknown outcome could enhance, impede or reverse the preference relation of people in a choice problem, which can be predicted by the developed regret theory. |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2108.01825&r= |
| By: | Antonio Palestrini; Domenico Delli Gatti; Mauro Gallegati; Bruce C. Greenwald |
| Abstract: | Agents forming adaptive expectations generally make systematic mistakes. This characterization has fostered the rejection of adaptive expectations in macroeconomics. Experimental evidence, however, shows that in complex environments human subjects frequently rely on adaptive heuristics – model-consistent expectations being simply too difficult or impossible to implement – but their forecasting performance is not as inadequate as assumed in the characterization above. In this paper we show that adaptive agents may not be as gullible as we used to think. In a model with adaptive expectations augmented with a Belief Correction term (which takes into account the drift of the macroeconomic variable of interest) the average forecasting error is frequently close to zero, hence (belief amended) adaptive expectations are close to unbiasedness. |
| Keywords: | heterogeneous adaptive expectations, belief correction, agent based models |
| JEL: | C63 D83 D84 E71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9205&r= |