We obtain rich measures of the risk preferences of a sample of Vietnamese farmers, and revisit the link between risk preferences and economic well-being. Far from being particularly risk averse, our farmers are on average risk neutral and, thus, more risk tolerant than typical Western subject populations. This generalises recent findings indicating that students in poorer countries are more risk tolerant than students in richer countries to a general population sample. Risk aversion is, furthermore, negatively correlated with income within our (...) sample, but does not correlate with wealth. This also casts doubt on high levels of risk aversion causing failure to adopt new technologies, which we discuss. (shrink)

Does optimism lead to success? Friends of optimism argue that positive beliefs about ourselves and our future contribute to fitness and mental health, and are correlated with good functioning, productivity, resilience, and pro-social behaviour. Sceptics, instead, claim that when we are optimistic we fail to react constructively to negative feedback, and put ourselves at risk because we underestimate threats. Thus, it is controversial whether optimistic beliefs are conducive to success, intended as the fulfilment of our goals in a given domain. (...) According to the traditional view, optimistic beliefs lead to success when they do not involve any distortion of reality, and according to the trade-off view, they lead to success when they involve a distortion of reality, but a small one. Based on the literature about positive illusions in the perception of romantic partners and in the assessment of future health prospects, I suggest that optimistic beliefs lead to goal attainment when they support agency by contributing to the sense that we are competent and efficacious agents and that our goals are both desirable and attainable. (shrink)

The rapid expansion of the public discussion and research on just transition implies the risk of watering down either justice or the (eco-)socio-technical transition itself. We create a theoretical notion of just transition boundaries and propose it to help consider non-negotiable limits to just transition discourse and make sense of negotiations within such limits. Just transition boundaries are comprised of ecological and social boundaries. They determine that just transition-processes must bring societies effectively within the safety thresholds of the two most (...) critical planetary boundaries, climate change and biodiversity loss, and must do that by means and supportive measures that protect vulnerable groups from falling or getting stuck below social minimums in those processes. Boundaries leave room for plural values and visions for realizing transitions and remaining within safe thresholds in community-specific conditions. Context-specific additions to what just transition should cover are possible insofar as they do not contradict or risk just transition boundaries. In addition to justifying and conceptualizing just transition boundaries, we reflect on its implications for policymaking and research. (shrink)

Scarcity sharpens the conflict between short term gains and long term sustainability. Psychological research documents that decision makers focus on immediate needs under scarcity and use available resources more effectively. However, decision makers also borrow too much from future resources and overall performance decreases as a consequence. Using an online experiment, we study how scarcity affects borrowing decisions in groups. We first document that scarcity affects groups in a similar way as individuals. Then, we go on to show that the (...) negative effect of scarcity is weaker for groups than for individuals. Even in a minimal design that excludes direct interaction or communication, the fact that participants know that their own behavior affects and can be partly observed by another participant disciplines their use of scarce resources. Our results thus highlight the benefit of groups as units of human organization. (shrink)

Poverty is associated with a wide range of counterproductive economic behaviors. Scarcity theory proposes that poverty itself induces a scarcity mindset, which subsequently forces the poor into suboptimal decisions and behaviors. The purpose of our work is to provide an integrated, up-to-date, critical review of this theory. To this end, we reviewed the empirical evidence for three fundamental propositions: Poverty leads to attentional focus and neglect causing overborrowing, poverty induces trade-off thinking resulting in more consistent consumption decisions, and poverty reduces (...) mental bandwidth and subsequently increases time discounting and risk aversion. Our findings indicate that the current literature predominantly confirms the first and second proposition, although methodological issues prevent a firm conclusion. Evidence for the third proposition was not conclusive. Additionally, we evaluated the overall status of scarcity theory. Although the theory provides an original, coherent, and parsimonious explanation for the relationship between financial scarcity and economic decision making, the theory does not fully accord with the data and lacks some precision. We conclude that both theoretical and empirical work are needed to build a stronger theory. (shrink)

Imposing “sin” taxes has been the preferred way governments tried to discourage the over-consumption of temptation goods for decades. However numerous evidence shows that consumers exhibit behavioral biases which can affect their reaction to taxes. This paper investigates a potential bias and how it affects demand for temptation: financial worries associated with poverty have been shown to shift attention towards pressing needs, often at the expense of forward-looking decisions. In an online experiment with UK participants, we randomly induce financial worries (...) and ask participants to allocate a budget between basic necessities and temptation goods in an experimental market. We randomly impose “taxes” on temptation by increasing its price. We find that, in the absence of any tax, inducing financial worries lowers demand for temptation, effect stronger for lower-income participants. However, when financial concerns are salient, increasing the tax does not lower demand among lower-income participants. While financial worries might protect against over-consumption of temptation in the absence of tax changes, they also might hurt the poor the most when additional taxes are introduced. (shrink)

Individual choices are often inconsistent with economic theories, which has motivated a variety of ways to measure how far choices are from a given theory. Recent work has investigated the correlation between “measures of rationality” and observable information such as education or income. This paper investigates the sensitivity of this analysis to the units used to measure rationality, in particular we examine measures in percentage expenditure vs dollars expenditure. We find that correlations can change sign when we change the units, (...) but this sensitivity might be mitigated with experimental methods. (shrink)

Several decades of behavioral research have established that variations in socioeconomic status are related to differences in cognitive performance. Neuroimaging and psychophysiological techniques have recently emerged as a method of choice to better understand the neurobiological processes underlying this phenomenon. Here we present a systematic review of a particular sub-domain of this field. Specifically, we used the PICOS approach to review studies investigating potential relationships between SES and scalp event-related brain potentials. This review found evidence that SES is related to (...) amplitude variations in a diverse range of ERPs: P1, N1, N2, Error-Related Negativities, N400, auditory evoked potentials, negative difference waves, P3 and slow waves. These ERPs include early, mid-latency and late potentials that reflect a broad range of cognitive processes. In this review, all SES effects on ERPs appeared to reflect an impairment or a less efficient form of task-related neural activity for low-SES compared to high-SES individuals. Overall, these results confirm that a wide variety of distinct neural processes with different functional meanings are sensitive to SES differences. The findings of this review also suggest that the relationship between SES and some ERP components may depend on the developmental stage of study participants. Results are further discussed in terms of the current limitations of this field and future avenues of research. (shrink)

The three-tenet model, which focuses on ‘distributional justice’, ‘procedural justice’, and ‘justice as recognition’, has emerged as the most influential framework in the field of energy justice. Based on critical reviews of the three-tenet model, we identify three challenges that the model currently still faces: (i) a normative challenge on the grounding of the three-tenet model in philosophical theories; (ii) an ‘elite’ challenge on the justification of the use of power in energy-related decision; and (iii) a practical challenge on the (...) application of the three tenets in situations of conflicting justice demands. In this article, we provide the basic contours of a three-step pluralist and pragmatic dialogue model for questions of energy justice that addresses the three challenges, based on the ‘commonwealth model’ of Luc Boltanski and Laurent Thévenot. The model proposes to create moral legitimacy in the face of plural demands for energy justice by engaging actors in an inclusive dialogue based on an explicit recognition of Boltanski and Thévenot’s commonwealth model. We thereby make three contributions to the existing literature on energy justice. First, the commonwealth model’s rootedness in normative political theory provides a stronger philosophical underpinning than was available up till now in the literature (challenge 1). Second, it allows one to go beyond the (almost exclusive) focus on injustices perpetrated on disempowered or marginalised groups, to include questions on the justified exercise of power (challenge 2). Third, the commonwealth model shows us practical ways out of situations where conflicting demands for justice are being made (challenge 3). (shrink)

ObjectiveTo examine subjective and objective socioeconomic status as predictors, cognitive abilities as confounders, and personal control perceptions as mediators of health behaviours.DesignA cross-sectional study including 197 participants aged 30–50 years, recruited from the crowd-working platform, Prolific.Main Outcome MeasureThe Good Health Practices Scale, a 16-item inventory of health behaviours.ResultsSSES was the most important predictor of health behaviours. Among the OSES indicators, education, but not income, predicted health behaviours. Intelligence and memory were negatively correlated with health-promoting behaviours, and the effect of memory (...) was upheld in the multivariate model. Personal control perceptions did not act as mediators.ConclusionSSES predicted health behaviours beyond OSES. The effect of socioeconomic indicators was not confounded by cognitive abilities. Surprisingly, cognitive abilities were negatively associated with health-promoting behaviours. Future research should emphasise SSES as a predictor of health behaviours. Delineating the psychological mechanisms linking SSES with health behaviours would be a valuable contribution toward improved understanding of socioeconomic disparities in health behaviours. (shrink)

This paper analyzes the impact mechanism of executive poverty experience on innovation performance from the two logics of “innate endowment” and “endogenous power.” It then explores the moderating role of executive characteristics, firm nature, and market competition from the perspective of heterogeneity, and finally proves the influence mechanism. Using the data of Chinese A-share listed companies from 2012 to 2020, the empirical results show that executives’ poverty experience improves corporate innovation performance. Further studies find that female executives with poverty experience (...) have a more significant impact on innovation performance. Additionally, state-owned enterprises weaken the positive effects of executives with poverty experiences on innovation performance. The impact of executive poverty experience on innovation performance is more significant in fierce market competition. The mediating result suggests that executive poverty experience improves innovation performance partly by inhibiting R&D manipulation. The findings remain valid through Propensity Score Matching tests, the Heckman two-stage, and alternative indicator measures. Using the early life poverty experience of executives, this study promotes research on the factors influencing corporate innovation. It also provides empirical evidence for improving corporate innovation performance through a study of moderating effects and influencing mechanisms. (shrink)

This paper studies whether incentivizing performance with competition and cooperation-based incentive schemes, rather than individual compensation, affects peer effects on subsequent risk behaviour. We run a laboratory experiment in which we introduce three different compensation schemes—piece rate, the equal-split-sharing-rule and a tournament—associated with a real effort task and we measure risk behaviour both before and after the effort task. We find that competition more than halves peer influence on risk behaviour compared with piece-rate compensation and in some specifications produces negative (...) peer effects. Competition also significantly reduces an individual’s feeling of attachment to their peers and self-reported peer influence. (shrink)