Good or Bad,We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Intertemporal tradeoffs are ubiquitous in decision making, yet preferences for current versus future losses are rarely explored in empirical research. Whereas rational‐economic theory posits that neither outcome sign (gains vs. losses) nor outcome magnitude (small vs. large) should affect delay discount rates, both do, and moreover, they interact: in three studies, we show that whereas large gains are discounted less than small gains, large losses are discounted more than small losses. This interaction can be understood through a reconceptualization of fixed‐cost present bias, which has traditionally described a psychological preference for immediate rewards. First, our results establish present bias for losses—a psychological preference to have losses over with now. Present bias thus predicts increased discounting of future gains but decreased (or even negative) discounting of future losses. Second, because present bias preferences do not scale with the magnitude of possible gains or losses, they play a larger role, relative to other motivations for discounting, for small magnitude intertemporal decisions than for large magnitude intertemporal decisions. Present bias thus predicts less discounting of large gains than small gains but more discounting of large losses than small losses. The present research is the first to demonstrate that the effect of outcome magnitude on discount rates may be opposite for gains and losses and also the first to offer a theory (an extension of present bias) and process data to explain this interaction. The results suggest that policy efforts to encourage future‐oriented choices should frame outcomes as large gains or small losses. Copyright © 2012 John Wiley & Sons, Ltd.     

True Overconfidence in Interval Estimates: Evidence Based on a New Measure of Miscalibration

Overconfidence is often regarded as one of the most prevalent judgment biases. Several studies show that overconfidence can lead to suboptimal decisions of investors, managers, or politicians. Recent research, however, questions whether overconfidence should be regarded as a bias and shows that standard “overconfidence” findings can easily be explained by different degrees of knowledge of agents plus a random error in predictions. We contribute to the current literature and ongoing research by extensively analyzing interval estimates for knowledge questions, for real financial time series, and for artificially generated charts. We thereby suggest a new method to measure overconfidence in interval estimates, which is based on the implied probability mass behind a stated prediction interval. We document overconfidence patterns, which are difficult to reconcile with rationality of agents and which cannot be explained by differences in knowledge as differences in knowledge do not exist in our task. Furthermore, we show that overconfidence measures are reliable in the sense that there exist stable individual differences in the degree of overconfidence in interval estimates, thereby testing an important assumption of behavioral economics and behavioral finance models: stable individual differences in the degree of overconfidence across people. We do this in a “field experiment,” for different levels of expertise of subjects (students on the one hand and professional traders and investment bankers on the other hand), over time, by using different miscalibration metrics, and for tasks that avoid common weaknesses such as a non‐representative selection of trick questions. Copyright © 2012 John Wiley & Sons, Ltd.     

First and second language in the brain: Neuronal correlates of language processing and spelling strategies

This study explores oscillatory brain activity by means of event-related synchronization and desynchronization (%ERS/ERD) of EEG activity during the use of phonological and orthographic-morphological spelling strategies in L2 (English) and L1 (German) in native German speaking children. EEG was recorded while 33 children worked on a task requiring either phonological or orthographic-morphological spelling strategies. L2 processing elicited more theta %ERS than L1 processing (particularly at bilateral frontal and right posterior parietal sites) which might suggest a stronger involvement of semantic encoding and retrieval of the less familiar L2. The highest level of theta %ERS was revealed for the orthographic-morphological strategy in L2 which might indicate a more intense way of lexical retrieval compared to the phonological strategy in L2 and the orthographic-morphological strategy in L1. Analyses moreover revealed that phonological processing (both in L1 and L2) was associated with comparatively strong left-hemispheric %ERD in the upper alpha frequency band.     

Moral Foundations and Heterogeneity in Ideological Preferences

Scholars have documented numerous examples of how liberals and conservatives differ in considering public policy. Recent work in political psychology has sought to understand these differences by detailing the ways in which liberals and conservatives approach political and social issues. In their moral foundations theory, Haidt and Joseph contend the divisions between liberals and conservatives are rooted in different views of morality. They demonstrate that humans consistently rely on five moral foundations. Two of these foundations—harm and fairness—are often labeled the individualizing foundations, as they deal with the role of individuals within social groups; the remaining three foundations—authority, ingroup loyalty, and purity—are the binding foundations as they pertain to the formation and maintenance of group bonds. Graham, Haidt, and Nosek demonstrate that liberals tend to disproportionately value the individualizing foundations, whereas conservatives value all five foundations equally. We extend this line of inquiry by examining whether different types of liberals and conservatives value the moral foundations to varying degrees. Using survey data (n = 745), we rely on a mixed‐mode latent class analysis and identify six ideological classes that favor unique social and fiscal policy positions. While most of the respondents belonging to these classes self‐identify as conservative, they endorse the moral foundations in varying degrees. Since our findings demonstrate considerable heterogeneity with respect to ideology and moral preferences, we conclude by encouraging scholars to consider this heterogeneity in detailing the motivational and psychological foundations of ideological belief.     

Keyboard Gangsters: Analysis of Incidence and Correlates of Cyberbullying in a Large Urban Student Population

The prevalence and pervasive nature of technology has fundamentally changed how individuals interact. Social networking has significantly altered communication and interaction patterns and created a dynamic venue for perpetration and victimization of bullying. A large population of middle and high school students was surveyed on perceptions and engagement in drug and alcohol usage, school violence, social networking usage, and cyberbullying victimization and perpetration. Findings indicate that although cyberbullying has many similarities to traditional bullying, there are important differences. Participation in school violence and usage of alcohol, tobacco, and illegal drugs predict both victimization and perpetration of cyberbullying.     

Predictors of Smoking Status After Eight Years: The Interaction of Stages of Change and Addiction Variables

Abstract

With a smoking rate of 30% of the population Switzerland has one of the highest rates of all industrialised countries. Changes in smoking status over eight years are examined by analysing the course of non-smokers, former smokers and current smokers between 1987 and 1995. Stages of change and addiction variables, as well as their interaction, are analysed for 1987 as predictors of smoking status in 1995.A sample of 953 non-smokers and former and current smokers was interviewed in 1987 and followed up in 1995. Between 1987 and 1995 every fifth non-smoker (20.9%) began smoking. The higher one is in the stage hierarchy the higher the probability of forward than of backward movement. Within the stages of change the likelihood of cessation is moderated by addiction variables. Thus, in the case of contemplating smokers in 1987, the more cigarettes they smoked daily at that time the less likely they were to be former smokers by 1995, but for preparating smokers who had already made an attempt to quit the converse holds - the more they smoked in 1987, the more likely they were to be non-smokers eight years later. The same holds for former smokers in 1987: former moderate smokers then were more likely to relapse than former heavy smokers. The implications for prevention and intervention are discussed.     

The World Wide Wait: Exploring Physiological and Behavioral Effects of Download Speed

ABSTRACT

When people use humorous media content, their behavior and assessments of the content may depend on the emotional expressions (e.g., laughter) of those around them. In a laboratory experiment in which 80 participants watched a movie clip with a confederate who either laughed or remained silent, we identified two parallel processes. The confederate’s laughter induced behavioral responses in our participants (laughing or smiling). Through those responses, a corresponding appraisal of the media content was generated: The content was rated funnier in comparison to situations in which the confederate did not laugh. This effect corresponds to emotional contagion processes and was especially pronounced in introverts. Additionally, participants who were low in conscientiousness directly elevated their funniness ratings (more than their own emotional expressions would suggest) when the confederate laughed. Those who were high in conscientiousness, however, lowered their ratings of the content’s funniness in the presence of a laughing confederate. This finding suggests the existence of an additional cognitive process that links confederate’s laughter and participant’s content ratings beyond automatic contagion. Participants with low conscientiousness use the confederate’s laughter as a heuristic cue for the content’s funniness, while highly conscientious participants discount the confederate’s laughter as a cue for content funniness.     

Birth Order Position and Prosocial Tendencies

This study investigated the relationship between psychological birth order position and different types and levels of prosocial tendencies. An ex postfacto, between-family research design was used. Data on prosocial tendencies were obtained from 888 college students (females = 80.4%, mean age = 20.94 yrs, SD = 2.83; males = 19.6%, mean age = 21.62 yrs, SD = 2.44). Participants completed a biographical questionnaire as well as the Prosocial Tendencies Measure (Carlo & Randall, 2002). Data were analysed to compare and contrast prosocial tendencies between demographics using parametric ANOVAs, t tests and the Mann-Whitney Test. Significant differences in prosocial tendency scores were only found between middle-borns and last-borns on altruism, with middle-borns scoring significantly higher in prosocial tendencies than last-borns. There is no evidence to suggest that a definitive link between prosocial tendencies and birth order exists in this study.