Investigating the Effect of Cognitive biases (hot-hand effect and Hyperbolic discount Rate) on Environmental Attitudes and Behaviors in Iran

Habib Morovat, Mostafa Sharif () and Peyman Nezakat ()
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Mostafa Sharif: Faculty Member of Economics, Allameh Tabataba’i University
Peyman Nezakat: Master's Student of Economics, Allameh Tabataba’i University

Quarterly Journal of Applied Theories of Economics, 2020, vol. 6, issue 4, 163-190

Abstract: The theoretical and empirical literature of behavioral economics shows that people in their decision making have a behavioral and cognitive bias. Therefore, the actual behavior of individuals is not always consistent with economic and rational human behavior. Two of the most important behavioral biases that can play an important role in people's environmental attitudes and behavior are the hot-hand effect and hyperbolic discount rate. In this study, we tried to study the effect of these two biases on the attitude and environmental behavior of individuals in Tehran using the semi-experimental approach and difference in difference regression. In this regard, a sample of 90 subjects was divided into two groups (control and treatment group). The data were collected through a questionnaire in two stages before and after the test. And the difference in difference regression was done. the results showed that: First, the training and awareness of behavioral and cognitive bias improve the environmental attitudes and behavior of individuals. Therefore, policymakers should consider information and education about cognitive bias. Second, demographic variables such as level of education, age, gender, and marriage do not have a significant effect on differences in environmental attitudes and behaviors of individuals.

Keywords: Cognitive bias; Environment; Difference in difference; hot-hand effect; Hyperbolic discount rate (search for similar items in EconPapers)
JEL-codes: C90 D91 Q59 (search for similar items in EconPapers)
Date: 2020
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