nep-neu 2019-11-04 papers

on Neuroeconomics

Issue of 2019‒11‒04
three papers chosen by

Selection into Experiments: Evidence from a Population of Students Abstract: This study investigates the selection into lab experiments among university students based on data from two cohorts of a university's first-year students. The analysis combines two experiments: a classroom experiment in which we elicited measures for risk, time, social preferences, confidence, and cognitive skills using standard measures from the experimental literature; and a recruitment experiment that varied information provided in a typical e-mail recruitment procedure for lab participants. In the recruitment experiment, students were randomly assigned to four conditions that highlighted altruistic motives or financial incentives. We find significant treatment effects: mentioning financial incentives boosts the participation rate in lab experiments by 50 percent. In terms of selection, we find that more selfish individuals and individuals with higher cognitive reflection scores are more likely to participate in experiments, but we find little evidence for selection along risk preferences, time preferences, and overconfidence. Although the recruitment conditions affect participation rates, they do not alter the composition of the participant sample in terms of behavioral measures and cognitive skills. By Jonathan Schulz; Uwe Sunde; Petra Thiemann; Christian Thoeni
Dual decision processes: retrieving preferences when some choices are automatic By Francesco Cerigioni
O Youth and Beauty: Children’s Looks and Children’s Cognitive Development By Daniel S. Hamermesh; Rachel A. Gordon; Robert Crosnoe

Selection into Experiments: Evidence from a Population of Students Abstract: This study investigates the selection into lab experiments among university students based on data from two cohorts of a university's first-year students. The analysis combines two experiments: a classroom experiment in which we elicited measures for risk, time, social preferences, confidence, and cognitive skills using standard measures from the experimental literature; and a recruitment experiment that varied information provided in a typical e-mail recruitment procedure for lab participants. In the recruitment experiment, students were randomly assigned to four conditions that highlighted altruistic motives or financial incentives. We find significant treatment effects: mentioning financial incentives boosts the participation rate in lab experiments by 50 percent. In terms of selection, we find that more selfish individuals and individuals with higher cognitive reflection scores are more likely to participate in experiments, but we find little evidence for selection along risk preferences, time preferences, and overconfidence. Although the recruitment conditions affect participation rates, they do not alter the composition of the participant sample in terms of behavioral measures and cognitive skills.

By:	Jonathan Schulz (George Mason University); Uwe Sunde (University of Munich); Petra Thiemann (Lund University); Christian Thoeni (University of Lausanne)
Keywords:	selection, laboratory experiments
Date:	2019–09
URL:	http://d.repec.org/n?u=RePEc:not:notcdx:2019-09&r=all

Dual decision processes: retrieving preferences when some choices are automatic

By:	Francesco Cerigioni
Abstract:	Evidence from the cognitive sciences suggests that some choices are conscious and reflect individual volition while others tend to be automatic, being driven by analogies with past experiences. Under these circumstances, standard economic modeling might not always be applicable because not all choices are the result of individual tastes. We propose a behavioral model that can be used in standard economic analysis that formalizes the way in which conscious and automatic choices arise by presenting a decision maker comprised of two selves. One self compares past decision problems with the one the decision maker faces and, when the problems are similar enough, it replicates past behavior (Automatic choices). Otherwise, a second self is activated and preferences are maximized (Conscious choices). We then present a novel method capable of identifying a set of conscious choices from observed behavior and discuss its usefulness as a framework for studying asymmetric pricing and empirical puzzles in different settings.
Keywords:	Dual processes, similarity, revealed preferences, fluency, automatic choice
JEL:	D01 D03 D60
Date:	2019–10
URL:	http://d.repec.org/n?u=RePEc:upf:upfgen:1673&r=all

O Youth and Beauty: Children’s Looks and Children’s Cognitive Development

By:	Daniel S. Hamermesh; Rachel A. Gordon; Robert Crosnoe
Abstract:	We use data from the 11 waves of the U.S. Study of Early Child Care and Youth Development 1991-2005, following children from ages 6 months through 15 years. Observers rated videos of them, obtaining measures of looks at each age. Given their family income, parents’ education, race/ethnicity and gender, being better-looking raised subsequent changes in measurements of objective learning outcomes. The gains imply a long-run impact on cognitive achievement of about 0.04 standard deviations per standard deviation of differences in looks. Similar estimates on changes in reading and arithmetic scores at ages 7, 11 and 16 in the U.K. National Child Development Survey 1958 cohort show larger effects. The extra gains persist when instrumenting children’s looks by their mother’s, and do not work through teachers’ differential treatment of better-looking children, any relation between looks and a child’s behavior, his/her victimization by bullies or self-confidence. Results from both data sets show that a substantial part of the economic returns to beauty result indirectly from its effects on educational attainment. A person whose looks are one standard deviation above average attains 0.4 years more schooling than an otherwise identical average-looking individual.
JEL:	I24 I26 J71
Date:	2019–10
URL:	http://d.repec.org/n?u=RePEc:nbr:nberwo:26412&r=all

General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.

NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.