Do negative economic shocks affect cognitive function, adherence to social norms and loss aversion?

Francesco Bogliacino, Felipe Montealegre

Research output: Contribution to journalArticlepeer-review

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 languageEnglish
Pages (from-to)57-67
Number of pages11
JournalJOURNAL OF THE ECONOMIC SCIENCE ASSOCIATION
Volume6
DOIs
Publication statusPublished - 2020

Keywords

  • Cognitive function
  • Cheating
  • Social norm
  • Asset
  • Negative shock
  • Income
  • Loss aversion

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