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Do Negative Economic Shocks Affect Cognitive Function, Adherence to Social Norms and Loss Aversion?

Author

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  • Bogliacino, Francesco

    (Universidad Nacional de Colombia)

  • Montealegre, Felipe

    (Universidad Nacional de Colombia)

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.

Suggested Citation

  • Bogliacino, Francesco & Montealegre, Felipe, 2020. "Do Negative Economic Shocks Affect Cognitive Function, Adherence to Social Norms and Loss Aversion?," SocArXiv y4zaw_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:y4zaw_v1
    DOI: 10.31219/osf.io/y4zaw_v1
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    References listed on IDEAS

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    4. Vincent Bignon & Eve Caroli & Roberto Galbiati, 2017. "Stealing to Survive? Crime and Income Shocks in Nineteenth Century France," Economic Journal, Royal Economic Society, vol. 127(599), pages 19-49, February.
    5. Vincent Bignon & Eve Caroli & Roberto Galbiati, 2017. "Stealing to Survive? Crime and Income Shocks in Nineteenth Century France," Economic Journal, Royal Economic Society, vol. 127(599), pages 19-49, February.
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