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Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects

  • David L. Dickinson

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.

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Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2007-09.

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Date of creation: 26 Oct 2007
Date of revision: 26 Oct 2007
Handle: RePEc:clg:wpaper:2007-09
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