a basic public good game consists of a group playing together where each person has some money and can give some to the public kitty. the sum amount is then multiplied and divided back amongst the group. it creates a dilemma where you really should not contribute, keeping all of your money, but let everyone else contribute and get some of their money. of course, if everyone did this, no one would contribute and everyone would earn less than if they all contributed everything.

the game has been done a million times with many different manipulations. one manipulation is to allow others to punish free riders - those that didn't contribute - by reducing their earnings. this tends to increase contributions, maintaining them at a higher level than without punishment, and generally increase efficiency of the system.

but what of well-being? perhaps people prefer to live in a world without punishment? not the case, says a new study:

...harsher punishment possibilities lead to signifcantly [sic] higher well-being, controlling for earnings and other relevant variables. People derive independent satisfaction from interacting under the protection of strong punishment possibilities.

what does this say about humans? do we enjoy living in an environment where we can punish? or are punished? or can injure lazy people? a follow-up should separate satisfaction from punishing from satisfaction and reducing the incomes of their opponents... they attempted it with the hard vs. soft punishment (hard punishment reduced the punished's income much more at the same cost), and it seems to indicate that more than anything they enjoyed the hard punishment - that is, the more they could reduced the free rider's income, the more they enjoyed the game. and, although they controlled for income, can income really be completely separated from punishment when it increases along with income, and "causes" that increase?

Labels: economics, social

it seems a natural conclusion from the theory of temporal discounting is that individuals that expect to die soon should have high discount rates. that is, people in poor health will want things now, as opposed to in the future, even if the benifit now is slightly smaller. afterall, they may die before getting the future reward.

a new working paper suggests this is the case, but with a twist. they found high discount rates in the sick, but also in the very healthy. this is how they explain the high discount rate for health individuals:

according to Trostel & Taylor (2002) and Olsho (2006), the ability to enjoy consumption depends on an individual’s health, and the healthier an individual, the greater the enjoyment of the same commodity bundle. Because health generally declines over the life cycle, individuals should have a high subjective discount rate when healthy and, thus, enjoy the consumption while they still can.

also interesting, age was found to be significant for discount rate, but only until health was entered into the regression.

it's worth a read, although there are problems with the study such biased sample selection (mostly younger business owners).

related post on neural correlates of discounting

Labels: decision making, economics

a working paper indicates that the neurodegeneration involved in the early stages of alzheimer's disease does not alter typical behaviors in a dictator game.

in the dictator game, the patient had a certain amount of money and is given the option to allot some to another player. most people give at least some money to the other participant. it's a simple game, and the researchers were trying to see whether alzheimer's induces loss of "social" memory along with other memory losses.

results show no significant difference between alzheimer's and normal subjects, indicating that they (paraphrasing the researchers) continue to be bound by the same learned social norms despite loss of other types of memory.

how interesting is this for economics? probably not very. however, it's a good illustration of how economic games are now being used for other purposes, for better or worse. that is, it's still an open debate whether the dictator game says anything about norms (e.g. list 2007). saying a subpopulation conforms to social norms based on this game misleads their audience, who likely knows nothing of the dictator game literature.

Labels: economics, misc. psych

i've had a good excuse. okay, not really. but who has time to blog when they're...

• training for a marathon
  
• entertaining out of towners (e.g. alabamians)
  
• crashing a totally awesome conference
  
• "finishing" up a master's thesis
  
• watching videos, e.g. this or this. (this one is very important)
  
• pondering the necessity of auto-flush toilets

anyway, i'm not going to say i'm back, because i always do that and then stop blogging again. so, i'll just say i will post some more stuff soon, probably short links to cool articles. perhaps i should blog about why in the world we have all auto-flush toilets, which malfunction half the time so you have to go press the nasty button instead of using your foot to flush which is much cleaner. was there some huge un-flushed toilet epidemic that necessitated replacing every flusher in existence with a testy sensor that flushes when it's not supposed to? please help me understand this, particularly from an economic perspective.

thanks for proving skinner wrong by checking the site!