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Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects

David Dickinson and Robert Oxoby

No 2832, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: experiments; bargaining; pessimism; optimism (search for similar items in EconPapers)
JEL-codes: C91 D84 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2007-06
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Journal of Economic Psychology, 2011, 32 (3), 295-306

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Related works:
Journal Article: Cognitive dissonance, pessimism, and behavioral spillover effects (2011) Downloads
Working Paper: Cognitive Dissonance, Pessimism, and Behavioral Spillover Effects (2007) Downloads
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