Cognitive skills affect economic preferences, strategic behavior, and job attachment

Datos Bibliográficos

ID23325632
AutoresStephen V Burks (0000-0003-4524-2954, University of Minnesota), John P Carpenter (0000-0002-9228-3962, Middlebury College), Jeffrey P Carpenter (0000-0003-0969-5876, Middlebury College), Lorenz Goette (0000-0002-1050-0354, University of Geneva), Aldo Rustichini (0000-0003-3232-351X, Department of Economics, University of Minnesota, 1925 Fourth Street South, 4-101 Hanson Hall, Minneapolis, MN 55455-0462; and)
Año2009
Volumen106
Número19
Páginas7745-7750
Fecha de publicación2009-05-12
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaProceedings of the National Academy of Sciences (JOURNAL)
Identificadores de la revistaISSN: 0027-8424 • E-ISSN: 1091-6490
EditorialNational Academy of Sciences (PUBLISHER • US)
DOI10.1073/pnas.0812360106
PMID19416865
PMCIDPMC2683075
OpenAlexW1973459881
IdiomaEN
Citas recibidas70
Referencias citadas19

Economic analysis has so far said little about how an individual's cognitive skills (CS) are related to the individual's economic preferences in different choice domains, such as risk taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings. First, there is a strong and significant relationship between an individual's CS and preferences. Individuals with better CS are more patient, in both short- and long-run. Better CS are also associated with a greater willingness to take calculated risks. Second, CS predict social awareness and choices in a sequential Prisoner's Dilemma game. Subjects with better CS more accurately forecast others' behavior and differentiate their behavior as a second mover more strongly depending on the first-mover's choice. Third, CS, and in particular, the ability to plan, strongly predict perseverance on the job in a setting with a substantial financial penalty for early exit. Consistent with CS being a common factor in all of these preferences and behaviors, we find a strong pattern of correlation among them. These results, taken together with the theoretical explanation we offer for the relationships we find, suggest that higher CS systematically affect preferences and choices in ways that favor economic success.

Affect (linguistics) · Cognition · Dilemma · Economics · Game theory · Microeconomics · Prisoner's dilemma · Sample (material) · Social dilemma · Decision-Making and Behavioral Economics · Economic theories and models · Experimental Behavioral Economics Studies · Psychology · Social Psychology