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on Cognitive and Behavioural Economics |
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Issue of 2022‒04‒11
seven papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Jonathan Chapman (NYUAD); Mark Dean (Columbia University); Pietro Ortoleva (Princeton University); Erik Snowberg (Caltech); Colin Camerer (Caltech) |
| Abstract: | We study the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision- making. We elicit 21 behaviors using an incentivized survey on a representative sample (n = 1,000) of the U.S. population. Our data show a clear and relatively simple structure underlying the correlations between these measures. Using principal components analysis, we reduce the 21 variables to six components corresponding to clear clusters of high correlations. We examine the relationship between these components, cognitive ability, and demographics. Common extant theories explain some of the patterns in our data, but each theory we examine is also inconsistent with some patterns. |
| Keywords: | Econographics, Reciprocity, Altruism, Trust, Costly Third-Party Punishment, Inequality Aversion, Risk Aversion, Common-Ratio Effect, Endowment Effect, WTA, WTP, Ambiguity Aversion |
| JEL: | C90 D64 D81 D90 D91 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-75&r= |
| By: | Ziyun Suo (Graduate School of Economics, Kobe University, JAPAN); Qinxin Guo (School of International Economics and Trade, Shanghai Lixin University of Accounting and Finance, CHINA); Junyi Shen (Research Institute for Economics and Business Administration, Kobe University, JAPAN) |
| Abstract: | In a trust game experiment with Chinese participants, we investigate the effects of trustworthy faces and attractive appearances on trust and trustworthiness behavior. The participants played the role of trustor and made decisions on how much money to transfer to their paired trustees while looking at the trustees' photos presented on a large screen. After that, the trustees decided how much money to return to their paired trustors. Results indicate that trust decisions are influenced by both a trustworthy face and an attractive appearance. In addition, a gender effect on trust decisions was found. Men are more trusting than women are, regardless of whether their counterparts are male or female. However, females are less likely to trust their male counterparts than female counterparts. Finally, it is observed that the trustees with a more attractive appearance are more likely to betray the trust they have, while this is not the case for those with more trustworthy faces. |
| Keywords: | Trustworthy face; Attractive appearance; Trust behavior; Trustworthiness behavior; Trust game experiment |
| JEL: | C72 C91 D63 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2022-03&r= |
| By: | Diederich, Johannes; Goeschl, Timo; Waichman, Israel |
| Abstract: | The exogenous manipulation of choice architectures to achieve social ends ('social nudges') can raise problems of effectiveness and ethicality because it favors group outcomes over individual outcomes. One answer is to give individuals control over their nudge (`self-nudge'), but the trade-offs involved are poorly understood. We examine how subjects self-nudge in a paradigmatic social dilemma setting and whether outcomes differ between the self-nudge and two exogenous nudges in line with perfect free-riding or full cooperation. Subjects recruited from the general population play a ten-round VCM online in fixed groups of four with one daily contribution decision. The nudge takes the shape of a non-participation default contribution, comparing zero, full, and self-determined levels. We find that the average self-nudge is 44% of the endowment and only 7% of subjects choose one of the two exogenous defaults. Yet, there is a hard trade-off between ethicality and effectiveness: Self-nudging groups do not better than groups under the perfect free-riding nudge. The reason is that non-defaulting subjects contribute less. Groups under the full cooperation default exhibit no reactance against the nudge and outperform both alternative choice architectures. |
| Keywords: | choice architecture; defaults; nudging; public goods; behavioral economics; experiment |
| Date: | 2022–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0710&r= |
| By: | Long, Iain W (Cardiff Business School); Matthews, Kent (Cardiff Business School); Sivarajasingam, Vaseekaran (Cardiff University,School of Dentistry) |
| Abstract: | Alcohol has long been known as the demon drink; an epithet owed to numerous social ills associated with it. Our lab-in-the-field experiment assesses the extent to which intoxication leads to changes in overconfidence or cognitive ability that are often linked to problematic behaviours. Results suggest that it is the joint effect of being intoxicated in a bar that matters. Subjects systematically underestimated their magnitude, suggesting that they cannot be held fully accountable for their actions. |
| Keywords: | Alcohol intoxication, overconfidence |
| JEL: | C93 D91 I18 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2022/6&r= |
| By: | Shabnam Mousavi (Max Planck Institute for Human Development); Shyam Sunder (Cowles Foundation, Yale University) |
| Abstract: | We propose framing human action in physics before reaching to biology and social sciences, rearranging the order of their usual deployment. As an example, consider efforts to model altruism that start in a frame of psychological or social attributes such as reciprocity, empathy, and identity. Evolutionary roots might also be used by appeal to survival of the species from biology. Only then the modeler abstracts to work on notations, and to establish relationships using mathematical apparatus from physics. This top-down deployment of principles from various scientific disciplines has generated a body of coherent models, partially generalizable theories, and disagreements. In this paper we present a definition of action as a movement between two points in the relevant space, and explore reversing the direction of deploying scientific theories, starting with the principle of least action in physics to frame observed human action. Used as an organizing principle of the whole universe, optimization element in human behavior does not have to be presumed to arise from animate aspects of adaptive and cognitive faculties; emergence of social phenomena, when optimal, can be disconnected from methodological individualism. Our three-tier framework makes room for physical, biological and social science principles, proposing a new perspective on human behavior, sans reductionism. |
| Keywords: | Action, Modeling behavior, Optimization, Physics, Social phenomena |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2326&r= |
| By: | Giuseppe Attanasi (Sapienza Università di Roma, Dipartimento di Economia e Diritto, Via del Castro Laurenziano, 9 00161 Roma); Claire Rimbaud (University of Innsbruck, Department of Public Finance, Universitätsstrasse 15/4, 6020 Innsbruck, Austria); Marie Claire Villeval (Univ Lyon, CNRS, GATE UMR 5824, 93 Chemin des Mouilles, F-69130, Ecully, France. IZA, Bonn, Germany) |
| Abstract: | We investigate whether a player’s guilt aversion is modulated by the co-players’ vulnerability or whether it is only activated by the willingness to avoid disappointing them. We also explore whether the nature of vulnerability (ex-post vs. ex-ante) matters. Ex-post vulnerability arises when a player’s material payoff depends on another player’s action (e.g., recipients in a dictator games). Ex-ante vulnerability arises when her initial endowment can be entrusted to another player (e.g., trustors in trust games). Treatments vary whether trustees can condition their decision on the belief of another player who is ex-post and/or ex-ante vulnerable. We find that trustees’ guilt aversion is insensitive to the nature of the co-player’s vulnerability and to the role of the co-player. Guilt is activated even absent vulnerability of co-players. It is mainly triggered by the willingness to respond to others’ expectations, regardless of their responsibility or the kindness of their intentions. |
| Keywords: | Guilt Aversion, Vulnerability, Psychological Game Theory, Dictator Game, Trust Game, Experiment |
| JEL: | C72 C91 D91 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2203&r= |
| By: | Jonathan Chapman (NYUAD); Mark Dean (Columbia University); Pietro Ortoleva (Princeton University); Erik Snowberg (UBC, CESifo, NBER); Colin Camerer (Caltech) |
| Abstract: | A vast literature documents that willingness to pay (WTP) is less than willingness to accept (WTA) a monetary amount for an object, a phenomenon called the endowment effect. Using data from three incentivized studies with a total representative sample of 4,000 U.S. adults, we add one additional finding: WTA and WTP for a lottery are (essentially) uncorrelated. In contrast, independent measures of WTA (or WTP) are highly correlated, and relatively stable across time. Leading models of reference dependent preferences are compatible with a zero correlation between WTA and WTP, but only for specific parameterizations and ruling out popular special cases. These models also predict a relationship between the endowment effect and loss aversion, which we do not find. |
| Keywords: | Willingness To Pay, Willingness To Accept, Endowment Effect, Loss Aversion |
| JEL: | C90 D81 D91 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2021-90&r= |