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Cognitive dissonance, pessimism, and behavioral spillover effects

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Author Info

  • Dickinson, David L.
  • Oxoby, Robert J.

Abstract

A two-stage experiment was designed to examine spillover effects of a type of optimism/pessimism. We first exploit cognitive dissonance to induce optimism/pessimism by random assignment of high/low piece rates for performing a task. Subjects receiving the low piece rate are significantly more pessimistic with respect to performance. In Stage 2 individuals participate in an ultimatum game. Pessimistic subjects have significantly lower minimum acceptable offers, though pessimism was randomly generated in an unrelated environment. These results reveal behaviorally and economically important spillover effects - for example, pessimism regarding one's initial conditions (e.g., living in poverty) may have spillover effects on one's future labor market outcomes.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 32 (2011)
Issue (Month): 3 (June)
Pages: 295-306

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Handle: RePEc:eee:joepsy:v:32:y:2011:i:3:p:295-306

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Web page: http://www.elsevier.com/locate/joep

Related research

Keywords: Optimism Pessimism Bargaining Experiments;

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References

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Cited by:
  1. Anya Savikhin & Roman M. Sheremeta, 2010. "Simultaneous Decision-Making in Competitive and Cooperative Environments," Working Papers 10-09, Chapman University, Economic Science Institute.

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