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Castagnetti, Sergio Alessandro (2021) Essays in behavioural economics. PhD thesis, University of Warwick.
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Official URL: http://webcat.warwick.ac.uk/record=b3782374~S15
Abstract
This thesis consists of three essays on Behavioural Economics. The first two chapters study how individuals form beliefs and whether they systematically end up with biased (posterior) beliefs due to psychologically motivated biases (e.g. the desire to hold positive views about oneself) and cognitive biases (e.g. cognitive failures) in information processing. The third chapter studies how (negative) emotions drive behavior. In particular, it investigates the implications of anger and sadness on strategic reasoning and performance.
In “the Ego is No Fool: Absence of Motivated Belief Formation in Strategic Interactions” (Chapter 1), I use an online experiment to investigate whether individuals are more easily fooled by others when they enhance their personal characteristics and abilities. Literature in economics and psychology suggests that individuals may want to believe good news about themselves, even if it comes from people who will gain economically from inducing such beliefs. I use an experiment in which participants complete an IQ test and then play a sender-receiver game. I find that receivers are not more likely to believe senders when they provide news that carries positive information about their IQ, compared to the cases in which the news carries no ego-relevant information or negative information about themselves. These results show that the desire to form favorable beliefs about oneself does not make individuals blind to the motives of the person who sends the information.
In “Attribution Bias by Gender: Evidence from a Laboratory Experiment” (Chapter 2), I conduct a laboratory experiment to study whether principals are prone to attribution bias by gender (i.e., if they reward male agents for good luck, while punishing female agents for bad luck). In the experiment, agents perform tasks for the principals and the realized outcomes depend on both the agents’ performance and luck. Principals then assess agents’ performances and decide what to pay the agents and are asked their beliefs. Our experimental results do not show evidence consistent with attribution bias by gender. While principals’ payments and beliefs about agent performance are heavily influenced by realized outcomes, they do not depend on the gender of the agent.
In “Anger Impairs Strategic Behavior: A Beauty-Contest Based Analysis” (Chapter 3), I look at whether anger is a credible commitment device because it limits the capacity for strategic reasoning. In the lab experiment, I externally induce anger in a subgroup of subjects following a standard procedure (treatment) and no emotion in the other subgroup (control). Results show that angry subjects choose numbers further away from the best response level and earn significantly lower profits in a beauty contest game, compared to subjects in the control. This suggests that anger does indeed impair the individual’s capacity to think strategically. Moreover, in a second experiment, I find that this effect is not common to all negative emotions: sad subjects do not play significantly further away from the best response level than the control group.
Item Type: | Thesis (PhD) | ||||
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Subjects: | B Philosophy. Psychology. Religion > BF Psychology H Social Sciences > HB Economic Theory H Social Sciences > HM Sociology |
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Library of Congress Subject Headings (LCSH): | Economics -- Psychological aspects, Emotions -- Economic aspects, Belief and doubt, Anger, Sexism, Knowledge, Theory of, Attitude (Psychology) | ||||
Official Date: | December 2021 | ||||
Dates: |
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Institution: | University of Warwick | ||||
Theses Department: | Department of Economics | ||||
Thesis Type: | PhD | ||||
Publication Status: | Unpublished | ||||
Supervisor(s)/Advisor: | Akerlof, Robert J. ; Proto, Eugenio ; Massaro, Sebastiano | ||||
Sponsors: | Leverhulme Trust | ||||
Extent: | vii, 135 leaves : illustrations, charts | ||||
Language: | eng |
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