2011-04-09 papers

on Neuroeconomics

Issue of 2011‒04‒09
two papers chosen by

Personality Psychology and Economics By Mathilde Almlund; Angela Lee Duckworth; James J. Heckman; Tim D. Kautz
Challenging the Intrapersonal Empathy Gap An Experiment with Self-Commitment Power By Matthias Uhl

By:	Mathilde Almlund; Angela Lee Duckworth; James J. Heckman; Tim D. Kautz
Abstract:	This paper explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the “situational specificity” of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared to cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage.
JEL:	I2 J24
Date:	2011–02
URL:	http://d.repec.org/n?u=RePEc:nbr:nberwo:16822&r=neu

Challenging the Intrapersonal Empathy Gap An Experiment with Self-Commitment Power

By:	Matthias Uhl (Max Planck Institute of Economics, IMPRS "Uncertainty", Jena, Germany)
Abstract:	Loewenstein (1996, 2005) identifies an intrapersonal empathy gap. In the respective experiments, subjects make choices with delayed consequences. When entering the state where these consequences would unfold, they get the possibility to revise their initial choice. Revisions are more substantial when these two choices are made in different emotional states. The concept of the empathy gap suggests that the initial choice represents a misprediction of future preferences. However, it might alternatively be based on a well understood disagreement with future preferences. In this sense, people would like to add: "But don't ask me again!" To disentangle both explanations, we induce two different emotional states in each subject and offer a self-commitment device in the first state. In one condition, subjects move from a "cold" state of reflection to a "hot" state of impulsiveness. In the other condition, this order is reversed. We find evidence for the hot-to-cold empathy gap, but not for the cold-to-hot empathy gap when subjects can self-commit to their initial choice.
Keywords:	Intrapersonal empathy gap, self-commitment, intrapersonal conflict, naiveté, sophistication
JEL:	C90
Date:	2011–04–04
URL:	http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-019&r=neu

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