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on Neuroeconomics |
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Issue of 2017‒08‒06
three papers chosen by |
| By: | Markus Dertwinkel-Kalt; Mats Köster |
| Abstract: | We show that continuous models of stimulus-driven attention can account for skewness-related puzzles in decision-making under risk. First,we delineate that these models provide awell-defined theory of choice under risk. We therefore prove that in continuous—in contrast to discrete—models of stimulus-driven attention each lottery has a unique certainty equivalent that is monotonic in probabilities (i.e., it monotonically increases if probability mass is shifted to more favorable outcomes). Second, we show that whether an agent seeks or avoids a specific risk depends on the skewness of the underlying probability distribution. Since unlikely, but outstanding payoffs attract attention, an agent exhibits a preference for right-skewed and an aversion toward left-skewed risks. While cumulative prospect theory can also account for such skewness preferences, it yields implausible predictions on their magnitude. We show that these extreme implications can be ruled out for continuous models of stimulus-driven attention. |
| Date: | 2017–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:kls:series:0097&r=neu |
| By: | Andrew E. Clark; Sarah Flèche; Warn N. Lekfuangfu |
| Abstract: | To what extent do childhood experiences continue to affect adult wellbeing over the life course? Previous work on this link has been carried out either at one particular adult age or for some average of adulthood. We here use two British birth-cohort datasets (the 1958 NCDS and the 1970 BCS) to map out the time profile of the effect of childhood on adult outcomes, including life satisfaction. We find that the effect of many aspects of childhood do not fade away over time, but are rather remarkably stable. In both birth cohorts child non-cognitive skills are the strongest predictors of adult life satisfaction at all ages. Of these, emotional health is the strongest. Childhood cognitive performance is more important than good conduct in explaining adult life satisfaction in the earlier cohort, whereas this ranking is inverted in the more recent BCS. |
| Keywords: | life satisfaction, cohort data, childhood, adult outcomes |
| JEL: | A12 D60 I31 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1493&r=neu |
| By: | Schäfer, Konrad C. |
| Abstract: | This paper investigates the stability of the Big-Five personality traits based on the German Socio-Economic Panel (SOEP) from 2005, 2009, and 2013. The results indicate that the population means only show little variance over the eight year time frame. There is no link between age and mean-levels, and only minor changes of the mean-levels of the Big-Five over time for the working age population (25-64 years of age) in Germany. However, there are intra-individual changes which can partly be explained by adverse life events. They impact the Big-Five traits and thereby contradict the general finding of stability of the traits in the literature. Exploratory fixed effects wage estimations that exploit the intra-individual changes in the Big-Five find no significant effects for men but positive effects of agreeableness and conscientiousness on women's wages. |
| Keywords: | Non-cognitive skills; Big-Five; personality traits, wages |
| JEL: | C18 J3 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-600&r=neu |