What Can the Big Five Personality Factors Contribute to Explain Small-Scale Economic Behavior?

Tinbergen Institute Discussion Paper No. 12-028/1

24 Pages Posted: 27 Mar 2012

See all articles by Julia Müller

Julia Müller

University of Muenster - School of Business & Economics

Christiane Schwieren

Heidelberg University

Date Written: March 26, 2012

Abstract

Growing interest in using personality variables in economic research leads to the question whether personality as measured by psychology is useful to predict economic behavior. Is it reasonable to expect values on personality scales to be predictive of behavior in economic games? It is undoubted that personality can influence large-scale economic outcomes. Whether personality variables can also be used to understand micro-behavior in economic games is however less clear. We discuss reasons in favor and against this assumption and test in our own experiment, whether and which personality factors are useful in predicting behavior in the trust or investment game. We can also use the trust game to understand how personality measures fare relatively in predicting behavior when situational constraints vary in strength. This approach can help economists to better understand what to expect from the inclusion of personality variables in their models and experiments, and where further research might be useful and needed.

Keywords: Personality, Big Five, Five Factor Model, Incentives, Experiment, Trust Game

JEL Classification: C72, C91, D03

Suggested Citation

Müller, Julia and Schwieren, Christiane, What Can the Big Five Personality Factors Contribute to Explain Small-Scale Economic Behavior? (March 26, 2012). Tinbergen Institute Discussion Paper No. 12-028/1. Available at SSRN: https://ssrn.com/abstract=2029016 or http://dx.doi.org/10.2139/ssrn.2029016

Julia Müller (Contact Author)

University of Muenster - School of Business & Economics ( email )

Scharnhorststr. 100
Muenster, D-48151
Germany

Christiane Schwieren

Heidelberg University ( email )

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