Abstract
Households are frequently subject to income and asset shocks. We performed a lab experiment, inducing losses on a real effort task, after which we measured cognitive performance, loss aversion and cheating behavior. We found that asset losses, but not income losses, act as a cognitive load, by decreasing accuracy and increasing response times. We did not detect any change in dishonesty or loss aversion.
Original language | English |
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Pages (from-to) | 57-67 |
Number of pages | 11 |
Journal | JOURNAL OF THE ECONOMIC SCIENCE ASSOCIATION |
Volume | 6 |
DOIs | |
Publication status | Published - 2020 |
Keywords
- Cognitive function
- Cheating
- Social norm
- Asset
- Negative shock
- Income
- Loss aversion