Monday, May 6, 2013

Psychology and Economics

1. Conditional Cooperators
Preference heterogeneity: Many people are conditional cooperators whereas others are best characterized as free riders.

Ratio of conditional cooperators has an impact on social efficiency.

Beliefs about others' behavior are highly relevant for voluntary cooperation. Policy should not only take into account the incentive effects on an individual's behavior, but also how policy affects the beliefs and behavior of the majority of citizens who are conditional cooperators.

2. Prosocial behavior
People differ substantially in their prosocial preferences. Even the same person might show different patterns of prosocial behavior depending on the situation.

3. Trust and gender
Women's behavior is more in line with the assumptions of traditional economic theory than is men's. Women's trust decisions are not affected by concerns about others' payoffs or intentions; they base their decisions on (relatively accurate) expectations of return and their risk preferences.

Intranasal administration of oxytocin decreased men's betrayal aversion in the investment game (Kosfeld et al 2005)

Unfairness in an ultimatum game triggered activity in the anterior insula, an area of the brain well known for its involvement in negative emotions.

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