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on Cognitive and Behavioural Economics |
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Issue of 2022‒01‒03
five papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Marco Piovesan (Dept. of Economics, University of Verona); Helene Willadsen (Dept. of Economics and Copenhagen Center for Social Data Science, University of Copenhagen); Sarah Zaccagni (Dept. of Economics and CEBI, University of Copenhagen) |
| Abstract: | The Cognitive Reflection Test (CRT) measures the tendency to override a prepotent response alternative that is incorrect and to engage in further reflection that leads to the correct response. As cognitive reflection is a form of cognitive ability, the CRT may be used in substitution of Intelligence Quotient (IQ) tests. We test this idea by asking 686 children enrolled in Danish schools to answer both a CRT and an IQ test. We compare the children's performances in these tests and find that CRT is highly correlated with IQ. In our analysis of the correlation, we control for gender and age. Our results confirm that a short CRT can substitute for the more extensive IQ test. In addition to the proof of the interchangeability between IQ and CRT, we show that both measures of cognitive abilities are a significant predictor of behavioral inconsistency when we measure children's time and risk preferences. |
| Keywords: | Intelligence Quotient, Cognitive Reflection, Cognitive Skills, Inconsistent behavior, Time preference, Risk preference, Field Experiment, |
| JEL: | C93 D91 J13 J24 |
| Date: | 2021–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2121&r= |
| By: | Michal Bauer; Jana Cahlíková; Julie Chytilová; Gérard Roland; TomᚠŽelinskı |
| 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:mpi:wpaper:tax-mpg-rps-2021-11&r= |
| By: | Masaki Aoyagi; Guillaume Frechette; Sevgi Yuksel |
| Abstract: | This paper uses a laboratory experiment to study beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoners' dilemma games. We find subjects' beliefs about the other player's action are accurate despite some systematic deviations corresponding to early pessimism in the indefinitely repeated game and late optimism in the finitely repeated game. The data reveals a close link between beliefs and actions that differs between the two games. In particular, the same history of play leads to different beliefs, and the same belief leads to different action choices in each game. Moreover, we find beliefs anticipate the evolution of behavior within a supergame, changing in response to the history of play (in both games) and the number of rounds played (in the finitely repeated game). We then use the subjects' beliefs over actions in each round to identify their beliefs over supergame strategies played by the other player. We find these beliefs correctly capture the different classes of strategies used in each game. Importantly, subjects using different strategies have different beliefs, and for the most part, strategies are subjectively rational given beliefs. The results also suggest subjects tend to overestimate the likelihood that others use the same strategy as them, while underestimating the likelihood that others use less cooperative strategies. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1119r&r= |
| By: | Pablo Garcés (Pontifical Catholic University of Ecuador) |
| Abstract: | Behavioral economics offers an account of actual human behavior. Contrasting with the conventional normative approach to rationality, rational choice theory, describes the deviations from optimal decision making. These are attributed to failures in two systems, one in charge of automatic behavior (System 1) and the other responsible for reflective one (System 2). As important as this is, an elaboration of the interaction between them seems to be lacking. Philosophical pragmatism can contribute to address this want. It provides an evolutionary explanation of how people act accounting for the continuity of behavior including habitual and reflective action. The former is captured by habits and the latter directed towards objects. Additionally, it proposes a dialogical self, consisting of an interaction between the 'I', denoting impulse, and the 'me', referring to reflective action. As such, pragmatism can provide fertile ground on which to cultivate behavioral insights. |
| Keywords: | behavioral economics,pragmatism,rationality,agency,transaction |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03426533&r= |
| By: | Biljana Meiske |
| Abstract: | This paper studies the consequences of productivity shocks on conflict behavior in the presence of loss aversion. In a first step, I incorporate expectation based loss preferences `a la KË oszegi and Rabin (2006, 2007) into a Hirshleifer-Skaperdas conflict game and show that negative productivity shocks entail larger conflict investments if agents are loss averse (and smaller investments if agents are gain-seeking); the reverse holds in case of a positive productivity shock. In a second step, a lab experiment (N=496) was conducted with participants playing repeated guns-and-butter conflict game under changing productivity regimes. The experimental results reveal that while negative productivity shocks (channeled through loss aversion) have the predicted effects, positive productivity shocks lead to the predicted increase in conflict investment among gain-seeking, but fail to reduce conflict investment among loss-averse participants. Furthermore, absent any changes in productivity level, conflict investments are shown to increase in the level of loss aversion. |
| Keywords: | conflict rent-seeking loss aversion reference dependence productivity shocks |
| JEL: | D91 C92 D72 D74 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2021-18&r= |