Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects

David Dickinson and Robert Oxoby

No 07-11, Working Papers from Department of Economics, Appalachian State University

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.

Date: 2007
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http://econ.appstate.edu/RePEc/pdf/wp0711.pdf (application/pdf)

Related works:
Journal Article: Cognitive dissonance, pessimism, and behavioral spillover effects (2011)
Working Paper: Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:apl:wpaper:07-11

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