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on Cognitive and Behavioural Economics |
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Issue of 2023‒05‒15
six papers chosen by Marco Novarese Università degli Studi del Piemonte Orientale |
| By: | Lia Q. Flores; Julian Jamison |
| Abstract: | Automatic thinking conditions decisions with intertemporal trade-offs which can matter greatly for life outcomes. Systematically choosing immediate gratification may result in different forms of antisocial behavior and also damage one’s economic circumstances. Based on a dataset of almost 1000 Liberian men over the course of one year, we evaluate the predictive power of three proxies of automatic thinking that have been used in different branches of the behavioral science literature: time preferences, executive function and self-control. We find that time preference is a robust predictor of both antisocial behavior and economic performance. Self-control only reliably predicts antisocial behavior, while executive function predicts neither significantly. |
| Date: | 2023–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:1005&r=cbe |
| By: | Caliendo, Marco (University of Potsdam); Cobb-Clark, Deborah A. (University of Sydney); Silva Goncalves, Juliana (University of Sydney); Uhlendorff, Arne (CREST) |
| Abstract: | We conduct a laboratory experiment to study how locus of control operates through people's preferences and beliefs to influence their decisions. Using the principal-agent setting of the delegation game, we test four key channels that conceptually link locus of control to decision- making: (i) preference for agency; (ii) optimism and (iii) confidence regarding the return to effort; and (iv) illusion of control. Knowing the return and cost of stated effort, principals either retain or delegate the right to make an investment decision that generates payoffs for themselves and their agents. Extending the game to the context in which the return to stated effort is unknown allows us to explicitly study the relationship between locus of control and beliefs about the return to effort. We find that internal locus of control is linked to the preference for agency, an effect that is driven by women. We find no evidence that locus of control influences optimism and confidence about the return to stated effort, or that it operates through an illusion of control. |
| Keywords: | locus of control, preference for agency, decision-making, beliefs, optimism, confidence, illusion of control |
| JEL: | D83 D87 D91 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16061&r=cbe |
| By: | Ginzburg, Boris; Guerra, José-Alberto Guerra |
| Abstract: | We study the role of collective action in creating shared identity and shaping subsequent social interactions. In a laboratory experiment, we offer subjects to sign an online petition, or ask whether they had participated in recent street protests. Afterwards, subjects interact in games that measure prosocial preferences. We find more altruism, trust, and trustworthiness within a pair of subjects who participated in collective action than in any other pair. Our structural estimation recovers individual prosocial preferences, showing that they increase as a result of joint participation. We then show that participating individuals receive private payoffs in subsequent interactions with fellow participants. Because of this, expecting higher participation by peers makes an individual more likely to participate. This mechanism suggests a reason why citizens participate in political collective action, and helps explain the role of coordination and signalling. |
| Keywords: | political identity, collective action, petitions, protests, social preferences, laboratory experiment |
| JEL: | C91 D72 D74 |
| Date: | 2022–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117140&r=cbe |
| By: | Ginzburg, Boris; Guerra, José-Alberto; Lekfuangfu, Warn N. |
| Abstract: | Using a laboratory experiment, we study the incentives of individuals to contribute to a public good that is provided if and only if the fraction of contributors reaches a certain threshold. We jointly vary the size of the group, the cost of contributing, the required threshold, and the framing of contributions (giving to the common pool, or not taking from the common pool). We find that a higher threshold makes individuals more likely to contribute. The effect is strong enough that in a small group, making the required threshold higher increases the probability that the public good is provided. In larger groups, however, the effect disappears. At the same time, we do not find a consistent effect of framing on the probability of contributing or on the likelihood of success. |
| Keywords: | threshold public goods, critical mass, framing effect, laboratory experiment |
| JEL: | C92 D71 H41 |
| Date: | 2023–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117139&r=cbe |
| By: | Guilhem Lecouteux (Université Côte d'Azur; GREDEG, CNRS, France) |
| Abstract: | A common narrative among some behavioural economists and policy makers is that experimental psychology highlights that individuals are more like Homer Simpson than the Mr Spock imagined by neoclassical economics, and that this justifies policies aiming to 'correct' individual behaviours. This narrative is central to nudging policies and suggests that a better understanding of individual cognition will lead to better policy prescriptions. I argue that this Homer economicus narrative is methodologically flawed, and that its emphasis on cognition advances a distorted view of public policies consisting in fixing malfunctioning individuals, while ignoring the possibly malfunctioning environment within which they evolve. |
| Keywords: | Homer Simpson and Mr Spock; homo economicus; rational choice; replication crisis; behaviourally informed policy |
| JEL: | A12 B41 C91 D04 D91 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-29&r=cbe |
| By: | Alexandre Truc (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | Disciplinary mobility occurs when researchers publish outside their disciplines of origin. It is an important mechanism of interdisciplinarity and knowledge transfer. New behavioral economics (BE) was founded by two psychologists, Daniel Kahneman and Amos Tversky, who used disciplinary mobility to influence economics. In this article, we study the disciplinary mobility of seven core behavioral economists to better understand how it has influenced the early development of BE and the interdisciplinary practices of later behavioral economists. Besides the movement of psychologists towards the center of economics, we identify an outward movement of economists away from the discipline. This movement away from economics has allowed some behavioral economists to gain new scientific legitimacy, while escaping some of the normative traditions of economics. This has enabled them to push the frontiers of economics and promote a more radical approach to BE. |
| Keywords: | Behavioral Economics, Interdisciplinarity, Social Network Analysis |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-27&r=cbe |