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Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects

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  • David L. Dickinson
  • Robert J. Oxoby

Abstract

This paper reports results from a unique two-stage experiment designed to examine the spillover effects of optimism and pessimism. In stage 1, we induce optimism or pessimism onto subjects by randomly assigning a high or low piece rate for performing a cognitive task. We find that participants receiving the low piece rate are significantly more pessimistic with respect to performance on this task. In stage 2 individuals participate in an ultimatum game. We find that minimum acceptable offers are significantly lower for pessimistic subjects, though this pessimism was generated in a completely unrelated environment. These results highlight the existence of important spillover effects that can be behaviorally and economically important - for example, pessimism regarding one’s initial conditions (e.g., living in poverty) may have spillover effects on one’s future labor market outcomes.

Suggested Citation

  • David L. Dickinson & Robert J. Oxoby, 2007. "Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects," Working Papers 07-11, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:07-11
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp0711.pdf
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    References listed on IDEAS

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    1. Grammar schools & stereotype threat
      by chris in Stumbling and Mumbling on 2016-09-16 18:22:19

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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