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on Neuroeconomics |
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Issue of 2013‒10‒18
five papers chosen by |
| By: | Salamanca N.; Fouarge D.; Montizaan R.M.; Grip A. de (GSBE) |
| Abstract: | Using representative household panel data, we show that the investment behavior of households is related to the economic locus of control of household heads. A households internal locus of control in economic issues is positively related to its decision to hold risky assets as well as its share of risky investments. We find evidence that these relations are due to a lower perception of the risk of investing in risky assets Those who have an internal economic locus of control perceive less variance in risky assets, which makes these assets more attractive. The relation between investmentin risky assets and locus of control cannot be explained by risk and time preferences or by personality traits such as optimism and the Big Five traits. Furthermore, the relation is independent of household socioeconomic background in terms of wealth or knowledge-- it holds for sophisticated and unsophisticated households alike. |
| Keywords: | Personal Finance; Household Behavior and Family Economics: Other; Portfolio Choice; Investment Decisions; |
| JEL: | G11 D14 D19 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013052&r=neu |
| By: | Daniel D. Schnitzlein; Jens Stephani |
| Abstract: | We investigate whether non-cognitive skills – in particular Locus of Control – are important determinants of the labour market processes at the low-wage margin. Based on data from the German Socio-Economic Panel, we estimate dynamic multinomial logit models with random effects and investigate whether Locus of Control influences the probability of being higher-paid or low-paid as well as the probability of escaping low wages by moving up to higher-paid employment. Our results reveal a significant amount of state dependence in low pay even after controlling for Locus of Control and other non-cognitive skills. Furthermore, compared to individuals with an external Locus of Control, individuals with a more internal Locus of Control have a significantly higher probability of being higher-paid instead of low-paid. Conditional on being low-paid, individuals with an internal Locus of Control additionally have a significantly higher probability of moving to higher-paid employment in the following year than individuals with an external Locus of Control. |
| Keywords: | low-wage, wage mobility, personality, non-cognitive skills, inequality, SOEP |
| JEL: | J30 J60 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp589&r=neu |
| By: | Boschini, Anne (Dept. of Economics, Stockholm University); Muren, Astri (Dept. of Economics, Stockholm University); Persson, Mats (Institute for International Economic Studies, Stockholm University) |
| Abstract: | People cooperate more in one-shot interactions than can be explained by standard textbook preferences. We discuss a set of non-standard preferences that can accommodate such behavior. They are social, in the sense of incorporating the payoffs of other persons; they are also norm-based, in the sense of taking into account the behavior of other persons. We show theoretically that, with such preferences, a Nash equilibrium with a strictly positive cooperation rate can exist. We use experimental data on within-subject decisions to show that such preferences are empirically plausible. The data show that, in addition to the well-known types (egoist, altruist, reciprocator), there is an important group: the social egoist. Such individuals care for people who have cooperated, but ignore people who have broken the implicit cooperation norm in society. The social egoists, who turn out to be different from “conditional cooperators”, account for one third of the observations in our experiment. |
| Keywords: | social norms; prisoner’s dilemma; hawk-dove game; egoism; altruism; reciprocity; conditional cooperation |
| JEL: | C91 D03 D64 |
| Date: | 2013–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2013_0014&r=neu |
| By: | Christian von Scheve; Frederike Esche; Jürgen Schupp |
| Abstract: | Unemployment continues to be one of the major challenges in industrialized societies. Aside from its economic dimensions and societal repercussions, questions concerning the individual experience of unemployment have recently attracted increasing attention. Although many studies have documented the detrimental effects of unemployment for subjective well-being, they overwhelmingly focus on life satisfaction as the cognitive dimension of well-being. Little is known about the emotional antecedents and consequences of unemployment. We thus investigate the impact of unemployment on emotional well-being by analyzing the frequency with which specific emotions are experienced in anticipation of and reaction to job loss. Using longitudinal data of the German Socio-Economic Panel (SOEP) and fixed effects regressions, we find that becoming unemployed leads to more frequent experiences of unpleasant emotions only in the short run and that adaptation occurs more rapidly as compared to life satisfaction. Contrary to existing studies, we find decreases on emotional well-being but not in life satisfaction in anticipation of unemployment. |
| Keywords: | Unemployment, emotions, well-being, life satisfaction, SOEP |
| JEL: | A14 D63 J17 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp593&r=neu |
| By: | Aurélie Bonein (CREM UMR CNRS 6211, University of Rennes 1, France); Laurent Denant-Boèmont (CREM UMR CNRS 6211, University of Rennes 1, France) |
| Abstract: | This paper focuses on the relationship between individual self-control and peer pressure. To this end, we implement a laboratory experiment that proceeds in two parts. The first part involves an individual real-effort task in which subjects may commit themselves to achieve a certain level of performance while being tempted by an alternative recreational activity. The second part consists of bargaining in a power-to-take game in which previously earned revenues are at stake. Experimental treatments represent variations in the available information given to peers regarding previous individual behavior. The results show that many subjects commit them-selves strongly and that future revelation of commitment decisions induces subjects to increase the credible components of commitment decisions. Past individual be-haviors also play a role in bargaining behavior: (i) partners who have committed themselves benefit from both lower take and destruction rates, and (ii) partners who have succumbed to temptation suffer from both higher take and destruction rates. |
| Keywords: | Self-control, temptation, commitment, willpower, laboratory experiment, peer pressure |
| JEL: | C91 C92 D63 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201328&r=neu |