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Future seminars
2024-04-25Andreas Glöckner(University of Cologne, Max Planck Institute) Modeling Social Preferences in Cross-National Interactions. Room: TBD, 16:00-17:15. When making decisions, individuals do not only take into account their own payoffs but often additionally consider the consequences for others. Models of social preferences (e.g., social value orientation) aim to describe exactly how outcome for the self and for others are integrated. Models widely differ concerning whether and how various factors are taken into account. They contain for example different relative weights for the own and the other outcome, take into account inequality (i.e. differences in outcomes for self and other) and/or efficiency concerns (i.e. the sum of outcomes). Some models, such as Jenkins et al. (2018), also differentiate between cases of advantageous and disadvantageous inequality. Jenkins et al. suggested a Social Perception-Weighted (SPW) model of social valuation, which takes into account perceived competence and warmth from the stereotype content model and show its superiority in predicting behavior. We conduct a comprehensive model comparison by (i) applying SPW to cross-national interactions, (ii) testing SPW against competing models, and (iii) extending SPW by including further variables. We analyze choices from an incentivized, multi-national study (N = 6,182). In the experiment, individuals from 25 nations allocated money between themselves and individuals from the own and each other nation. Stereotype perception, perceived conflict between nations and further factors were measured. Based on these model comparisons, we identify relevant structures and factors and suggest an extended, integrative model of social preference for cross-national interactions taking into account social perception and further psychological influence factors.
2024-05-02Roel van Veldhuizen(Lund Univerisity) Decomposing Trust (with Dirk Engelmann, Jana Friedrichsen, Pauline Vorjohann and Joachim Winter). Room: E0.03, 16:00-17:15. Trust is an important condition for economic growth and other economic outcomes. Previous studies suggest that the decision to trust is driven by a combination of risk attitudes, distributional preferences, betrayal aversion, and beliefs about the probability of being reciprocated. We compare the results of a binary trust game to the results of a series of control treatments that by design remove the effect of one or more of these components of trust. This allows us to decompose variation in trust behavior into its underlying factors. Our results imply that beliefs are a key driver of trust, and that the additional components only play a role when beliefs about reciprocity are sufficiently optimistic. Our decomposition approach can be applied to other settings where multiple factors that are not mutually independent affect behavior. We discuss its advantages over the more traditional approach of controlling for measures of relevant factors derived from separate tasks in regressions, in particular with respect to measurement error and omitted variable bias.
2024-05-16Simeon Schudy(Ulm University ) TBD. Room: TBD, 16:00-17:15. TBD
2024-05-23Katie Coffman(Harvard Business School) TBD. Room: TBD, 16:00-17:15. TBD
2024-06-13Songfa Zhong (Hong Kong University of Science and Technology) TBD. Room: TBD, 16:00-17:15. TBD
Past seminars
2024-03-21Katharina Janezic(University of Oxford) Coordination and Sophistication. Room: TBA, 16:00-17:15. How coordination can be achieved in isolated, one-shot interactions without communication and in the absence of focal points is a long-standing question in game theory. We show that a cost-benefit approach to reasoning in strategic settings delivers sharp theoretical predictions that address this central question. In particular, our model predicts that, for a large class of individual reasoning processes, coordination in some canonical games is more likely to arise when players perceive heterogeneity in their cognitive abilities, rather than homogeneity. In addition, and perhaps contrary to common perception, it is not necessarily the case that being of higher cognitive sophistication is beneficial to the agent: in some coordination games, the opposite is true. We show that subjects’ behavior in a laboratory experiment is consistent with the predictions of our model, and present evidence against alternative coordination mechanisms. Overall, the empirical results strongly support our model.
2024-02-22Hannah Schildberg-Hörisch(Heinrich-Heine-Universität Düsseldorf, DICE) Perceived fairness and consequences of affirmative action policies. Room: TBD, 16:00-17:15. Debates about affirmative action often revolve around fairness. In a laboratory experiment, we study three quota rules in tournaments that favour individuals whose performance is low, either due to discrimination, low productivity, or choice of a short working time. Affirmative action favouring discriminated individuals is perceived as fairest, followed by that targeting individuals with a short working time, while favouring low-productivity individuals is not perceived as fairer than an absence of affirmative action. Higher fairness perceptions coincide with a higher willingness to compete and less retaliation against winners, underlining that fairness perceptions matter for the consequences of affirmative action.
Full paper: https://academic.oup.com/ej/article/133/656/3099/7241527
2024-02-08Ernesto Reuben(New York University Abu Dhabi) Gender biases in job referrals. Room: E5.22, 16:00-17:15. Job referrals through informal networks are an essential channel for disseminating information about the qualifications of job candidates. As such, they play a crucial role in determining the outcomes of hiring and promotion decisions. In this paper, we study gender biases in the referral process. We investigate this question through an online experiment in which university students are asked to nominate their highest-scoring classmates in either a math or a verbal task. Using administrative data, we reconstruct the students’ co-enrolment network. This allows us to identify who is chosen as well as everyone else who was not. In other words, we can measure the quality of the referrals and the characteristics of candidates who are better but not chosen. We find that participants are more likely to refer men than equally qualified women in the math task but not in the verbal task. This difference is partly explained by gender differences in network structure, i.e., who is linked with whom. However, equally important are gender biases in the referral of known contacts. Thus, debiasing the referral process could substantially increase the share of women being referred.
2024-02-01Giacomo Lanzani(Harvard University) Dynamic Concern for Misspecification. Room: E0.04, 16:00-17:15. We consider an agent who posits a set of probabilistic models for the payoff-relevant outcomes. The agent has a prior over this set but fears the actual model is omitted and hedges against this possibility. The concern for misspecification is endogenous: If a model explains the previous observations well, the concern attenuates. We show that different static preferences under uncertainty (subjective expected utility, maxmin, robust control) arise in the long run, depending on how quickly the agent becomes unsatisfied with unexplained evidence and whether they are misspecified. The misspecification concern's endogeneity naturally induces behavior cycles, and we characterize the limit action frequency. This model is consistent with the empirical evidence on monetary policy cycles and choices in the face of complex tax schedules.
2023-12-07Jana Cahlikova(University of Bonn) Youngism: Experimental Evidence . Room: E5.22, 16:00 - 17:15. Preferences over well-being of different generations shape social, political and economic outcomes. We document systematic bias in social preferences against young adults (“youngism”), and show that it is partly due to inaccurate beliefs that young adults face relatively little hardship. In controlled experimental tasks, respondents from a Czech nationally-representative sample allocate less money to younger adults than to their own or older age groups. This bias is widespread and similar in size to discrimination against immigrants. Further, people underestimate the prevalence of mental health problems among young adults, and provision of accurate information increases prosocial behavior toward this age group.
2023-11-30Eugenio Verrina(Sciences Po) Group dishonesty: beliefs, incentives, and complicity. Room: E5.22, 16:00-17:15. Dishonest behavior often takes place in groups. We investigate two key aspects that define the interconnection within a group — the material connection (incentives) and the psychological connection (complicity) — and study how they influence the relationship between beliefs and dishonesty. Our first main result shows that dishonesty increases (decreases) in the belief that the counterpart is dishonest when incentives are complements (substitutes). Our second main result reveals that complicity does not greatly influence the relationship between beliefs and behavior. We only find a level effect of complicity under substitute incentives for subject with high lying costs. We conclude that beliefs and incentives strongly shape group dishonesty, while the psychological connection due to complicity plays a minor role.
2023-11-16Daniel Balliet(VU) Inferences about Interdependence Shape Cooperation. Room: E5.22, 16:00-17:15. During social interactions in daily life, people possess imperfect knowledge of their interdependence (i.e., how behaviors affect each person’s outcomes), and what people infer about their interdependence can shape their behaviors. I will discuss theory and research that suggests people can infer their interdependence with others along several dimensions, including mutual dependence, power, and corresponding-versus-conflicting interests. Specifically, I will discuss agent-based models on the evolution of cooperation that indicate adaptive benefits of being able to infer interdependence and to condition cooperation on these inferences. I will review recent research that people evaluate the interdependence they experience with others during social interactions and across repeated interactions (i.e., within relationships). Finally, I will discuss how perceptions of interdependence are associated with how people cooperate and punish others’ non-cooperative norm violations.
2023-10-10Maël Lebreton(Paris School of Economics & University of Geneva) Learning rules of engagement for social exchange within and between groups. Room: E.0.09, 16:00-17:15. Globalizing economies and long-distance trade rely on individuals from different cultural groups to negotiate agreement on what to give and take. In such settings, individuals often lack insight into what interaction partners deem fair and appropriate, potentially seeding misunderstandings, frustration, and conflict. Here, we examine how individuals decipher distinct rules of engagement and adapt their behavior to reach agreements with partners from other cultural groups. Modeling individuals as Bayesian learners with inequality aversion reveals that individuals, in repeated ultimatum bargaining with responders sampled from different groups, can be more generous than needed. While this allows them to reach agreements, it also gives rise to biased beliefs about what is required to reach agreement with members from distinct groups. Preregistered behavioral (N = 420) and neuroimaging experiments (N = 49) support model predictions: Seeking equitable agreements can lead to overly generous behavior toward partners from different groups alongside incorrect beliefs about prevailing norms of what is appropriate in groups and cultures other than one’s own.
2023-10-05Hakan Holm(Lund University) Reciprocity among CEOs. Room: E0.14, 16:00-17:15. We study reciprocation in an incentivized public good game using a sample of 500 Chinese CEOs of private medium-sized firms. This is interesting since reciprocity is considered central in facilitating cooperation within a firm and between the firm and external parties. In addition, CEOs often make decisions involving public goods with a high economic impact. The difficulties in recruiting this high-profile group to participate in academic research may explain why no other study so far has elicited CEOs’ full strategies in a public good game, which makes it possible to observe the CEOs’ responses to others’ actions and thus their reciprocity behavior. Our first finding is that reciprocal concerns, expressed as conditional cooperation strategies are very common among CEOs. We also report the result from a randomized experiment where we study the CEOs’ sensitivity to unequal contributions of other players. The finding is that even experienced business leaders’ reciprocity strategies are affected, not only by how much the other players contribute on average but also by how such contributions are distributed. Finally, we explore factors that may be linked to reciprocity and thereby correlated with conditional cooperation strategies. Cognitive reflection scores and Buddhist beliefs increase the probability for a CEO to follow a perfectly conditional cooperation strategy while being in a politically favored position decreases the same probability. Perfect conditional cooperation is also positively correlated with the probability that the CEO is the largest shareholder of the firm and that the firm is not involved in business disputes. However, we do not find any strong correlation between firm performance measures and the reciprocity strategy.
2023-09-14Victor Gonzalez Jimenez (Erasmus University) Optimal Incentives without Expected Utility. Room: E0.09, 16:00-17:15. This paper investigates the optimal design of incentives when agents distort probabilities. We show that the type of probability distortion displayed by the agent and its degree determine whether an incentive compatible contract can be implemented, the strength of the incentives included in the optimal contract, and the location of incentives on the output space. Our framework demonstrates that incorporating descriptively-valid theories of risk in a principal-agent setting leads
to incentive contracts that are typically observed in practice such as salaries, lump-sum bonuses, and high-performance commissions.
2023-09-07Double Seminar: Maria Bigoni (Bologna University) The Importance of Being Even: Restitution in the Repeated Prisoner’s Dilemma . Room: E0.09, 15:00- 17:00. We explore the role of restitution as a means to restore cooperation in repeated social dilemmas. In contrast to the memory-one strategies on which the recent experimental literature has focused, restitution strategies “propose” returning to cooperation by restoring payoffs lost for a past breach. They can also be seen as “fair”, as they close the payoff gap created by deviations, making subjects even. We study metadata from experiments on finitely and infinitely repeated Prisoner’s Dilemma, with perfect and imperfect monitoring, and find evidence in support of these strategies in all these classes of games. We then study the theoretical properties and empirical validity of the simplest restitution strategy we could identify - termed Payback - in the imperfect monitoring environment of Fudenberg, Rand and Dreber (2012). Two “puzzling” findings - that Tit-for-Tat is common even though it is not an equilibrium strategy, and that risk dominance loses its predictive power compared to environments with perfect monitoring – disappear once Payback is accounted for.
2023-09-07Double Seminar: Karine Nyborg(Oslo University) Moral motivation as a driver of polarization. Room: E0.09, 15:00 - 17:00. Moral motivation can stimulate voluntary provision of public goods. However, individuals may be reluctant to accept the burden of moral responsibility. We find that social interaction gradually reduces individuals’ perceived moral responsibility, thus lowering actual contributions. With income inequality, biased social learning of ethical views, and migration between social groups, the long-run equilibrium is highly segregated and polarized. Rich and poor individuals self-select into separate groups, while social learning confirms each individual’s limited moral responsibility. The result is minimal voluntary public good contributions. Tax-financed government provision of the public good does not yield similar polarization and segregation.
2023-07-03Jens Grosser(Florida State University) Strategic Communication in Legislative Bargaining: An Experimental Study. Room: E0.14, 16:00 - 17:15. We experimentally study the impact of communication in collective bargaining. A proposer makes an initial policy offer to two voters who have private information about their ideal policies. In symmetric Perfect Bayesian equilibrium, through their ballots the voters (“senders”) reveal some preference clues valuable to the proposer (“receiver”). We examine two communication games. In Tentative, the initial proposal is cheap talk and a final proposal will always follow irrespective of the vote outcome. If the final proposal garners sufficiently many positive votes given the voting rule (i.e., majority or unanimity voting, where the proposal counts as positive vote), the final proposal supplants the status quo policy. In Definite, by contrast, an initial proposal with sufficient support is instantly implemented as the new policy, and otherwise a final proposal and ballot decide the next policy. Many of our predictions find strong support in the laboratory. First, dishonest negative voting is found approximately in the region of ideal policies where it is expected to induce more favorable final offers for the voters. Second, proposers usually make more compromising final offers after observing too few positive votes. Finally, the observed strategic communication among the proposer and voters does indeed help to avoid welfare-reducing policy gridlock and thus to improve their average payoffs, especially so for the proposer.
2023-06-23Rosemarie Nagel(University Pompeu Fabra) Structure of Games and Behavioral Rules in Beauty Contest and 2x2 Games. Room: E0.22, 16:00 - 17:15. The talk consists of three parts, showing the relationship between the game structure and behavioral rules in a class of Beauty Contest games and the class of 2x2 games with ordinal payoffs mainly for first-period behavior: 1. We show through systematic changes of the parameters in Beauty Contest (BC) games how behavior shifts towards or away from the Nash equilibrium, explained and predicted by level-k reasoning. 2. With a generalized BC formulation, we can recover different economic models of aggregative games as a general equilibrium model with sentiments, Cournot, New Keynesian models, auctions, Ultimatum Games, and 2x2 games, amongst others. This parsimony arises because the generalized BC game formulation provides the best-reply functions, the first-order conditions of these different models. 3. We show first results of classifying 2x2 games with ordinal payoffs through behavioral rules and actual behavior. This contrasts the classification by dominance structure and the number of Nash equilibria.
2023-06-20Uri Gneezy(UCSD) IMPROVING HUMAN DECEPTION DETECTION USING ALGORITHMIC FEEDBACK . Room: E0.09, 16:00. Can algorithms help people predict behavior in high-stakes prisoner’s dilemmas? Participants watching the pre-play communication of contestants in the TV show Golden Balls display a limited ability to predict contestants’ behavior, while algorithms do significantly better. We provide participants algorithmic advice by flagging videos for which an algorithm predicts a high likelihood of cooperation or defection. We find that the effectiveness of flags depends on their timing: participants rely significantly more on flags shown before they watch the videos than flags shown after they watch them. These findings show that the timing of algorithmic feedback is key for its adoption.
2023-06-15Ala Avoyan(Indiana University) A Road to Efficiency through Communication and Commitment. Room: TBA, 16:00 - 17:15. We experimentally examine the efficacy of a novel pre-play institution in a well-known coordination game—the minimum-effort game—in which coordination failures are robust and persistent
phenomena. This new institution allows agents to communicate while incrementally committing to their words, leading to a distinct theoretical prediction: the efficient outcome is uniquely selected in the extended coordination game. We find that commitment-enhanced communication significantly increases subjects’ payoffs and achieves higher efficiency levels than various non-binding forms of communication. We further identify the key ingredients of the institution that are central to achieving such gains.
2023-06-08Lorenz Goette(National University of Singapore) The habit-forming effects of feedback: evidence from a large-scale field experiment. Room: E0.22, 16:00 - 17:15. We document the dynamics of persistence using a large-scale field experiment that provides cost salience nudges with different cycles of duration. Households respond asymmetrically: behavior quickly adjusts to these nudges and sluggishly readjusts without them. We then develop a habit formation model that nests traditional consumption-based mechanisms and an attention-based mechanism that allows for dynamic responses to time-varying salience. Combining our field experiment and structural model, we validate the importance of attention dynamics and uncover a new solution concept for optimizing feedback interventions to create sustained behavioral change.
2023-06-01Philipp Strack (Yale University) Selective Memory Equilibrium. Room: E0.22, 16:00-17:15. When agents are more likely to remember some experiences than others but update beliefs as if the experiences they remember are the only ones that occurred, their limit strategy are selective memory equilibria. We illustrate how selective memory equilibrium can be used to understand the long-run effects of several well-documented memory biases. We then extend our analysis to cases where the expected number of recalled experiences is bounded and experiences that are recalled once are more likely to be recalled again, and to agents who are only partially naive about their selective memory.
2023-05-26Matthias Sutter(Max Planck Institute Bonn) MPI Bonn-CREED workshop. Room: A2.04/A2.08, 09:00-16:00. This event has been re-organized as the MPI Bonn-CREED workshop. Please see the attached schedule for more information.
Registration form: https://forms.gle/W1zAHTd1zdXHr6Qz5
2023-05-11Sebastian O. Schneider( Max Planck Institute/University of Cologne) Risk Preferences and Field Behavior: The Relevance of Higher-Order Risk Preferences. Room: E0.15, 16:00-17:15. Using a new method, we measure the intensities of higher-order risk preferences (prudence and temperance) in an experiment with 658 adolescents. In line with theory, we find that higher-order risk preferences are strongly related to adolescents' field behavior, including prevention, health-related, and addictive behavior (like excessive smartphone usage), and financial decision-making. Most importantly, we show that ignoring prudence and temperance might yield largely misleading conclusions about the relation of risk aversion to field behavior. These findings persist in several robustness checks. Thus, we put previous work that ignored higher-order risk preferences into an encompassing perspective.
2023-05-04Severine Tousseart(Oxford University) Stochastic dominance and preference for randomization. Room: E0.03, 16:00 - 17:15. Decision theorists usually take a normative view on stochastic dominance: a DM who chooses a lottery that puts more weight on options he likes less must be making a mistake. In this project I argue that stochastic dominance violations may naturally occur in situations where anticipatory utility is high, such as going on a holiday trip. In such a situation, the DM may trade the certainty of going to his favorite destination for the excitement of not knowing where he will go. To document this phenomenon, I conduct an experiment in which participants make a series of binary choices between a sure destination and a lottery over holiday trips. The outcome of the lottery is revealed close to the date of travel. I vary the characteristics of the lotteries to understand when violations of stochastic dominance are most likely to occur and analyze their properties. I discuss the implications for the modelling of anticipatory utility.
2023-04-20Anya Samek(Rady School of Management ) The Long-Term Impact of Early Childhood Investment on Reducing Covid-19 Learning Loss. Room: E0.03, 16:00-17:15. We leverage a randomized evaluation of an early childhood program to study the impact of early life investments on resilience to negative shocks. When the children in our study were 3-5 years old, they were randomized to a preschool program, a parenting program or to a control group. Ten years later, the children were exposed to school closures during the Covid-19 pandemic. These school closures led to significant declines in test scores, otherwise referred to as Covid-19 learning loss. With nearly 900 observations, we explore the determinants of learning loss in our children. Importantly, we find that the parenting program children were randomly assigned to a decade earlier had a protective impact on learning loss. The control group saw a 0.31 SD decline in standardized test scores during school closures, whereas the parenting group saw only a 0.12 SD decline. Learning loss in the preschool group was similar to the control group. These findings point to the importance of parents during times of negative schooling shocks.
2023-04-18Matthias Weber(University of St. Gallen) Intertemporal Prospect Theory. Room: E0.03, 16:00-17:15. Prospect Theory is well understood in contexts without a time dimension. In intertemporal contexts, however, it is unclear how prospect theory should be applied. In particular, it is unclear whether probabilities should be weighted within time periods or whether probabilities of present values should be weighted. Furthermore, it is unclear what parametric specifications of probability-weighting and value functions should be used. We find in a pre-registered experiment on a representative sample that the version weighting probabilities of present values predicts decisions best. Estimated probability weighting functions are inverse-S shaped, and value functions are almost linear.
2023-04-06Pauline Vorjohann(University of Exeter) Reference-dependent choice bracketing. Room: E0.03, 16:00 - 17:15. I derive a theoretical model of choice bracketing from two behavioral axioms in an expected utility framework. The first behavioral axiom establishes a direct link between narrow bracketing and correlation neglect. The second behavioral axiom identifies the reference point as the place where broad and narrow preferences are connected. In my model, the narrow bracketer
is characterized by an inability to process changes from the reference point in different dimensions simultaneously. As a result, her tradeoffs between dimensions are distorted. While she
disregards interactions between actual outcomes, she appreciates these interactions mistakenly with respect to the reference point.
2023-03-30Ro’i Zultan(Ben-Gurion University of the Negev) Social image and Social distance. Room: E0.03, 16:00 - 17:15. Social image concerns motivate people to behave pro-socially if others are watching—as pro-social behavior leads to an update of the observer’s beliefs about the actor’s intrinsic pro-sociality. Thus, the effect of being observed depends on the magnitude of the shift in the observer’s beliefs. This, in turn, depends on the prior belief distribution. The more prior information available to the observer, the less effect new information has on posterior beliefs. This generates the novel hypothesis that the effect of observation on pro-social behavior increases with the social distance between the observer and the observed. Although people care more about what their friends think, they may be more motivated to impress a stranger who does not know them as well as a friend. We test this hypothesis in a field experiment. Participants were 670 high-school students who walked to generate donations for a public good. Participants were either unobserved, observed by a friend, or observed by another random participant. To identify social image concerns, we also manipulated whether effort up to a certain threshold yielded a personal benefit in addition to the public-good provision. The results provide support for the hypothesis, with age as a moderator.
2023-03-16Marie-Claire Villeval(University of Lyon) The power of leadership in changing social norms (with Fabio Galeotti and Jona Krutaj). Room: B3.09, 16:00 - 17:15. We investigate whether a leader can trigger or impede the change of a social norm in the society. We focus on the dynamic setting introduced by Andreoni et al. (2021) where a norm that was beneficial for the society becomes detrimental over time. In a laboratory experiment we introduce a leader and vary whether the leader’s incentives are aligned or not with the incentives of the rest of the society. Whereas norms are sticky in the absence of a leader, leading to a conformity trap in conservative societies, we find that the leader always manages to change the social norm in the society regardless of the strategy used by the leader (bottom-up or top-down), the type of the leader, or the type of society (advanced vs. conservative).
2023-03-02Urs Fischbacher(Konstanz University) Rights, Duties, and Taboos: The social Codex of Peer Punishment. Room: E0.03, 16:00 - 17:15. Cooperation is a central part of human life but is difficult to establish and uphold by itself. Peer-punishment can boost cooperation when defectors are punished and cooperators are spared. However, peer punishment can also harm cooperation when punishment is used in a dysfunctional way. In an experiment, we investigate how people assess the appropriateness of different forms of punishment, including second order punishment or revenge. By assessing the appropriateness of punishment as well as of non-punishment, we can distinguish between rights, duties and taboos. We find that the most important determinants of the appropriateness of punishment can be described by three “commandments”: 1. It is a taboo to punish cooperators. 2. It is a taboo for defectors to punish. 3. It is a duty to punish people who violate commandments 1 or 2.
2023-02-23Dorothea Kuebler(WZB / Technical University of Berlin) Aversion to hiring algorithms: Transparency, gender profiling, and self-confidence. Room: B3.09, 16:00 - 17:15. We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers or of managers. Workers perform three real-effort tasks: task 1, task 2, and the job task which is a combination of tasks 1 and 2. They choose whether the hiring decision between themselves and another worker is made either by a participant in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more often than the algorithm, and managers also prefer to make the hiring decisions themselves rather than delegate them to the algorithm. When the algorithm does not use workers’ gender to predict their job task performance and workers know this, they choose the algorithm more often. Providing details on how the algorithm works does not increase the preference for the algorithm, neither for workers nor for managers. Providing feedback to managers about their performance in hiring the best workers increases their preference for the algorithm, as managers are, on average, overconfident.
2023-02-09Paul Heidhues(Düsseldorf Institute for Competition Economics (DICE)) Misinterpreting Yourself . Room: B3.09, 16:00 - 17:15. We model an agent who stubbornly underestimates how much his behavior is driven by undesirable motives, and, attributing his behavior to other considerations, updates his views about those considerations. We study general properties of the model, and then apply the framework to identify novel implications of partially naive present bias. In many stable situations, the agent appears realistic in that he eventually predicts his behavior well. His unrealistic self-view does, however, manifest itself in several other ways. First, in basic settings he always comes to act in a more present-biased manner than a sophisticated agent. Second, he systematically mispredicts how he will react when circumstances change, such as when incentives for forwardlooking behavior increase or he is placed in a new, ex-ante identical environment. Third, even for physically non-addictive products, he follows empirically realistic addiction-like consumption dynamics that he does not anticipate. Fourth, he holds beliefs that — when compared to those of other agents — display puzzling correlations between logically unrelated issues. Our model implies that existing empirical tests of sophistication in intertemporal choice can reach incorrect conclusions. Indeed, we argue that some previous findings are more consistent with our model than with a model of correctly specified learning.
2022-12-08Ben Greiner(Vienna University of Economics and Business) The effect of a 'None of the above' ballot paper option on voting behavior and election outcomes. Room: E0.09, 16:00-17:15. We study how an explicit blank vote option None of the above(NOTA) on the ballot paper affects the behavior of voters and political candidates as well as election results. In a series of survey and laboratory experiments we identify a tradeoff regarding making NOTA an explicit voting option. On the one hand it can reduce the vote share of candidates who voters consider as protest candidates, who often come from the extremes of the political spectrum, making it less likely that such a protest candidate wins the election. On the other hand, anticipating the above effect, establishment candidates may care less about the electorate when NOTA is on the ballot. Evidence on voters' reaction to NOTA comes from two online survey experiments conducted in the weeks preceding the 2016 U.S. Presidential Election and the 2016 Austrian run-off election for President. Participants were subjected to either the original ballot paper or to a ballot paper where we added a NOTA option. We investigate the dynamic response of politicians to the presence of NOTA in a laboratory experiment in which an establishment candidate can decide between selfish and fair policy proposals and voters can choose between the establishment candidate and an inefficient protest option.
2022-12-01Amma Panin (Canceled)(University of Louvain) . Room: A1.06, 16:00-17:15. No abstract available.
2022-11-24Boris van Leeuwen (Tilburg University) Lemon faces: Showing pictures of buyers and sellers reduces trade in markets with asymmetric information. Room: E0.14, 16:00-17:15. Many online platforms show pictures of buyers or sellers, presumably to increase trust and trustworthiness. There can also be adverse effects of showing buyers or sellers however, as people may be influenced by irrelevant information on a picture. In this paper we study how showing pictures of buyers or sellers affect outcomes in markets with asymmetric information. In a laboratory experiment, we study classic “lemons” markets where sellers are better informed than buyers about the quality of an asset. We find that showing pictures of buyers or sellers leads to worse market outcomes. Trade is reduced when faces are displayed, and this is driven by more (high-price) offers being rejected. We explore several behavioral mechanisms that could drive this pattern.
2022-11-03Florian Hett(Johannes Gutenberg University Mainz) Polarization, Social Identity, and Ingroup bias in belief formation. Room: E0.04, 16:00-17:15. A large literature in social psychology and experimental economics has documented a broad variety of behavioral reactions to group membership, most famously ingroup-bias in allocation decisions. In this study, we investigate whether this phenomenon also extends to the domain of belief formation. We show that individuals indeed display ingroup bias in the demand for as well as in the processing of information and illustrate how these mechanisms may contribute to political polarization in the context of the US 2020 presidental election. We also show that individual heterogeneity of ingroup bias in belief formation is systematically correlated with ingroup bias in allocation decisions, providing a first indication that the sensitivity to group settings might be a universal and domain-independent individual trait, which is measurable using behavioral experiments.
2022-10-20Melis Kartal(Vienna University) A New Approach to the Analysis of Cooperation Under the Shadow of the Future: Theory and Experimental Evidence (joint with Wieland Müller). Room: E0.09, 16:00 - 17:15. The theory of infinitely repeated games lacks predictive power due to equilibrium multiplicity and its insensitivity to, for example, changes in some game parameters, the timing of players' moves and communication possibilities. We propose a new approach to mitigate the shortcomings of the theory. Specifically, we study a standard infinitely repeated prisoner's dilemma game and its variants with (i) heterogeneous preferences for cooperation and defection, and (ii) strategic risk arising from incomplete information about the opponent's preferences. Our model generates a rich set of comparative static predictions in a variety of settings that go beyond the standard prisoner's dilemma game. We show that, unlike the standard theory and other existing models, our approach organizes the findings of a host of experiments including our novel experiments.
2022-10-13Kristoffer B. Hvidberg(University of Copenhagen) Social Positions and Fairness Views on Inequality (joint with Claus Kreiner and Stefanie Stantcheva). Room: B3.08, 15:30-16:45. We link survey data on Danish people's perceived income positions and fairness views on inequality within various reference groups to administrative records on their reference groups, income histories, and life events. People are, on average, well-informed about the income levels of their reference groups. Yet, lower-ranked respondents in all groups tend to overestimate their own position among others because they believe others' incomes are lower than is the case, while the opposite holds for higher-ranked respondents. Misperceptions of positions in reference groups relate to proximity to other individuals, transparency norms, and visible signals of income. People view inequalities within their co-workers and education groups as significantly more unfair than overall inequality, yet underestimate inequality the most exactly within these groups. Views on the fairness of inequalities are strongly correlated with an individual's current position, move with shocks like unemployment or promotions, and change when experimentally showing people their actual positions. However, the higher perceived unfairness of income differences within co-workers and education groups stays unchanged. The theoretical framework shows that this can have important implications for redistribution policy.
2022-10-07Dmitry Shapiro(Seoul National University) Quality Communication via Cheap-Talk Messages in Auctions: Experimental Analysis (Joint with Jaesun Lee) . Room: E0.22, 16:00-17:15. We provide an experimental analysis of cheap-talk communication of quality information under four different auction formats: first-price (FPA), second-price (SPA), all-pay (APA), and sealed-bid double auctions (DA). We do this under two competition levels: (1) five buyers choosing among two concurrent auctions and (2) two buyers choosing between five concurrent auctions. The seller's product quality is uncertain, either high or low, but can be communicated via cheap-talk claims. We show that under certain circumstances, low-quality sellers can benefit from honestly communicating their low quality. These circumstances are riskier auction formats, such as APA or DA, and buyers having more market power. In all FPA/SPA treatments and APA/DA treatments, where buyers had the weakest market power, making a high-quality claim was more profitable.
2022-07-01Vojtěch Bartoš(University of Munich (LMU)) tbd. Room: REC A2.08, 15:30-16:45. No abstract available.
2022-05-30Frank Schilbach(MIT) The Long-Run Effects of Psychotherapy on Depression, Beliefs, and Economic Outcomes. Room: E0.14, 16:00 - 17:15. No abstract available.
2022-05-19Yesim Orhun (University of Michigan) Intrinsic Information Preferences and Skewness. Room: E0.03, 16:00 - 17:15. We present experimental results from a broad investigation of intrinsic preferences for information. We examine whether people prefer negatively skewed or positively skewed information
structures, and how individual preferences over the skewness and the degree of information relate to one another. The results reveal new insights regarding intrinsic preferences for information, including the possibility that positively skewed information structures may ameliorate information avoidance arising from a desire to preserve hope. We discuss our findings through the lens of existing theories.
2022-04-21Micheal Roos, Chiara Aina, and Vanessa Valero() Miniworkshop on Narratives in Economics. Room: Online (Zoom), 16:00 - 18:00 (CET). No abstract available.
2022-04-07Juan Dubra(University of Montevideo) Incentives and Burnout: Dynamic Compensation Design with Effort Cost Spillover. Room: REC B3.01, 16:00-17:15. No abstract available.
2022-03-30Jonathan Schulz(Georga Mason University) The Church, kinship intensity and global psychological variation. Room: E0:03, 16:00 - 17:15. No abstract available.
2022-03-24Bertil Tungodden, Joanna Lahey, Alex Imas() miniworkshop on Discrimination and Inequality. Room: , 16:30 - 18:30 (CET). No abstract available.
2022-03-17Klaus Schmidt, Elisabeth Gsottbauer, Sally Sadoff() Miniworkshop on Behavioral Climate Policy. Room: Online (Zoom), 16:00 - 18:00 (CET). No abstract available.
2021-11-25Jeongbin Kim, Ye (Wendy) Jin, Willemien Kets() Mini-workshop on Coordination and Bargaining. Room: Zoom (online), 16:00-18:00. No abstract available.
2021-10-26Paul Smeets(Maastricht University) Investor Memory. Room: E1.51 and online, 16:00 - 17:15. How does memory shape individuals’ financial decisions? We find experimental evidence of a self-serving memory bias. Individuals over-remember positive investment outcomes of their chosen investments and under-remember negative ones. In contrast, individuals who did not choose their investments or did not invest but merely observed outcomes do not have this bias. The memory bias affects individual beliefs and decisions to re-invest. After investing, subjects form overly optimistic beliefs about their investment and re-invest even when doing so leads to a lower expected return. Our findings contribute to the understanding of how people learn from experiences in financial markets. More generally, the documented memory bias proposes a consistent explanation for stylized facts about investor behavior as well as dynamic risk taking in many economic domains
2021-06-17Yan Chen, Nicolas Klein, and Stanton Hudja() Miniworkshop on: Experimentation: Learning and Information Design. Room: Online (Zoom), 16:00 - 18:00 (CET). No abstract available.
2021-05-06Pedro Bordalo, Susann Fiedler, and Ian Krajbich () Miniworkshop on: Interactions between Attention, Memory, and Value. Room: Online (Zoom), 16:30 - 18:30 (CET). No abstract available.
2021-04-22Mark Dean, Rahul Bhui, and Nicolette Sullivan () Miniworkshop on: Modeling and Measuring Attention. Room: Online (Zoom), 16:30 - 18:30 (CET). No abstract available.
2021-03-25Marco Casari, Joseph Kantenbacher, Thomas Douenne() Miniworkshop on: Experimental Economics of Climate Change. Room: Online (Zoom), 16:00 - 18:00 (CET). No abstract available.
2021-02-04Pedro Dal Bó, Arthur Robson, Marco Archetti () Miniworkshop on: Evolution. Room: Online (Zoom), 16:30 - 18:30 (CET). No abstract available.
2020-12-03Alistair Wilson, Sevgi Yuksel, and Isabel Trevino() Mini-workshop on: Information transmission and processing. Room: Online (Zoom), 16:30 - 18:30. External guests that would like to attend this workshop can register here: register.
2020-11-19Sam Hirshman, Thomas Graeber, and Marta Serra-Garcia () Miniworkshop on: Attention. Room: Online (Zoom), 16:00 - 18:00 (CET). External guests that would like to attend this workshop can register here: register.
2020-06-25Marta Serra Garcia(Rady School of Management) tba. Room: E0.15 (REC, Uva), 16:00 - 17:15. No abstract available.
2020-05-14Arno Apffelstaedt(University of Cologne) CANCELLED. Room: , 16:00 - 17:15. No abstract available.
2020-05-07Dennie van Dolder(Vrije Universiteit Amsterdam) CANCELLED. Room: , 16:00 - 17:15. No abstract available.
2020-04-09Bob Slonim(University of Sydney) CANCELLED. Room: CK.02 (REC UvA), 16:00 - 17:15. This seminar has been cancelled
2020-04-02Yves Le Yaoaunq(Ludwig-Maximilians-Universität ) CANCELLED. Room: E1.50 (REC UvA), 16:00 - 17:15. This seminar has been cancelled.
2020-03-26Jonathan Schulz(George Mason University) CANCELLED. Room: E1.50 (REC UvA), 16:00 - 17:15. This seminar has been cancelled.
2020-03-19Amma Panin(World Bank) CANCELLED. Room: E1.50, 16:00 - 17:15. This seminar has been cancelled.
2020-03-05Guillaume Frechette(NYU) Beliefs in Repeated Games. Room: E0.07 (REC UvA), 16:00 - 17:15. This paper uses a laboratory experiment to study the formation and evolution of beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoner's dilemma games. This novel data set provides insights on the drivers of non-equilibrium behavior in finitely repeated games, and equilibrium selection in indefinitely repeated games. On average, beliefs reflect actions fairly accurately and thus showing distinct patterns across treatments, in particular for rounds close to the end of finitely repeated games. However, they also display small, systematic, and insightful deviations, such as early pessimism in indefinite games and late optimism in finite games. Using a novel technique to study beliefs over strategies, we show that subjects who play different strategies have different beliefs. Furthermore, those strategy choices can be related to beliefs in a meaningful way.
2020-01-23Johannes Abeler(Oxford University) Shrouded Attributes of Workplace Incentive Contracts: The Case of the Ratchet Effect. Room: E0.07 (REC UvA), 16:00 - 17:15. The ratchet effect is a well-known, and theoretically well understood, side effect of time-varying incentive pay: if future piece rates are set as a function of current effort, then workers should hold back effort to protect future piece rates. The ratchet effect has been cited as a fundamental challenge to making effective use of dynamic incentive pay. We study the hypothesis that firms can strategically introduce complexity into their incentive systems to “shroud” the ratchet effect. We conduct two field experiments with 3000 warehouse workers and find a strong effect of incentives on effort but only a very small ratchet effect. In lab experiments with the same workers, we find that simplifying the incentive system used in the warehouse increases the ratchet effect. Workers who exhibit a ratchet effect in the lab experiments also reduce effort on the shop floor. Additional MTurk experiments show that these findings are robust to changes in the design of the incentive system. Our results underscore the importance of bounded rationality and complexity for the effectiveness of incentive pay.
2019-12-04Sourav Bhattacharya(Indian Institute of Management Calcutta) Group formation and Diversity. Room: E0.07 (REC UvA), 16:00 - 17:15. We consider group formation in a population of individuals with heterogeneous preferences. Group formation involves two considerations: larger/more diverse groups are more efficient, but may make common decisions that are far away from the ideal actions of a large number of individuals. We demonstrate in this paper that the tradeoff between these two effects determines the composition of groups. We show that equilibrium results in maximin groups, where the worst-off individuals' payoffs are maximized. Such groups tend to be too small/homogenous by the utilitarian standard. Finally, we present an application where the efficiency benefit from joining a group comes from sharing private information. We show that an ex-ante improvement in individual agents' information may lead to a less informed society as a whole due to excessive fragmentation into groups.
2019-11-28David Yang(Harvard University) Data, Autocracies, and the Direction of Innovation. Room: E0.07 (REC UvA), 16:00 - 17:15.
Data is a key input for developing certain modern technologies, particularly in the realm of AI. Many AI technologies aim to predict human behaviors, which could greatly benefit the survival of autocratic regimes. How does modern autocracy shape data-intensive innovation and the direction of technological change? We provide a framework to model: (1) data in the technological production process, where data is a non-rival, excludable input whose mass collection is often considered unethical; and (2) political economic incentives to collect data and develop AI algorithms that sustain autocracy. We support this conceptual framework with macro-level empirical evidence on AI innovation across countries, as well as micro-level evidence from China’s world-leading AI facial recognition industry. We examine the facial recognition firms who receive data from the government by providing public security services. We find that service provision with the government puts the firms on a different path in data-intensive innovation, resulting in more product development in commercial sector that relies on accessing the data held by the government.
2019-11-14David Schindler(Tilburg University) Impulse Purchases, Gun Ownership and Homicides: Evidence from a Firearm Demand Shock . Room: E0.07 (REC UvA), 16:00 - 17:15. Do firearm purchase delay laws reduce aggregate homicide levels? Using quasi-experimental evidence from a 6-month countrywide gun demand shock starting in late 2012, we show that U.S. states with legislation preventing immediate handgun purchases experienced
smaller increases in handgun sales. Our findings are hard to reconcile with entirely rational consumers, but suggest that gun buyers behave time-inconsistently. In a second step, we demonstrate that states with purchase delays also witnessed 2% lower homicide rates
during the same period compared to states allowing instant handgun access. We report suggestive evidence that lower handgun sales primarily reduced impulsive assaults and domestic violence
2019-11-07Ingo Zettler(University of Copenhagen) The structure, power, and limitations of (psychological) personality dimensions. Room: E0.07 (REC UvA), 16:00 - 17:15. In Personality Psychology, individual differences in terms of stable personality traits are summarized parsimoniously, yet comprehensively, in basic, broad trait dimensions. In this talk, I will give an introduction into how such personality dimensions can be derived. In particular, I will describe the empirical, conceptual, and theoretical background of the HEXACO Model of Personality, which comprises six broad trait dimensions: Honesty-Humility, Emotionality, Extraversion, Agreeableness vs Anger, Conscientiousness, and Openness to Experience. Further, I will show how these and other dimensions are linked to important outcomes across domains, in line with evolutionary ideas about the emergence of personality traits. Concerning the validity of basic trait dimensions, I will especially focus on examples from the area of Behavioral Economics, and I will illustrate how personality dimensions affect such outcomes not only directly, but also in interaction with situational characteristics.
2019-10-17Tim Cason(Purdue University) A Laboratory Investigation of Price Dispersion and Cycles. Room: E0.07 (REC UvA), 16:00 - 17:15. We report a continuous time laboratory experiment studying the classic Burdett and Judd (1983) model, which features a unique Nash equilibrium (NE) that has dispersed prices. Adaptive dynamics predict that the NE is stable for one parameter set we use, and unstable for another parameter set. We find that time average dispersions are close to the NE distribution for the stable parameter set, but skew towards prices higher than NE for the unstable parameter set. We offer an empirical definition of price
cycles in terms of changes over time in robust measures of central tendency (median) and dispersion (interquartile range). By that definition, the data exhibit persistent cycles in both treatments, with larger cycle amplitudes for the unstable parameters.
2019-10-10Jacopo Perego(Columbia University) Rules and Commitment in Communication: An Experimental Analysis. Room: E0.22, 16:00 - 17:15. We investigate models of cheap talk, information disclosure, and Bayesian persuasion, in a unified experimental framework. Our umbrella design permits the analysis of models that share the same structure regarding preferences and information, but differ in two dimensions: the rules governing communication, which determine whether or not information is verifiable; and the sender’s commitment power, which determines the extent to which she can commit to her communication strategy. Commitment is predicted to have opposite effects on information transmission, depending on whether information is verifiable or not. Our design exploits these variations to explicitly test for the role of rules and commitment in communication. Our experiments provide general support for the strategic rational behind the role of commitment and, more specifically, for the Bayesian persuasion model of Kamenica and Gentzkow (2011). At the same time, we document significant quantitative deviations. Most notably, we find that rules matter in ways that are entirely unpredicted by the theory, suggesting a novel policy role for information verifiability.
2019-06-27Emanuel Vespa(UC Santa Barbara) Failures in Contingent Reasoning: The Role of Uncertainty. Room: E0.15, 16:00-17:15. We propose a new channel to account for the difficulties of individuals with contingent reasoning: the presence of uncertainty. When moving from an environment with one state of known value to one with multiple possible values, two changes occur. First, the number of values to consider increases. Second, the value of the state is uncertain. We show in an experiment that this lack of certainty, or the loss of the Power of Certainty, impedes payoff maximization and that it accounts for a substantial portion of the difficulties with contingent reasoning.
2019-06-24Leeat Yariv(Princeton University) Testing the Waters: Behavior across Participant Pools. Room: E0.15, 16:00-17:15. We leverage a large-scale incentivized survey eliciting behaviors from (almost) an entire university student population, a representative sample of the U.S. population, and Amazon Mechanical Turk (MTurk) to address concerns about the external validity of experiments with student participants. Behavior in the student population offers bounds on behaviors in other populations, and correlations between behaviors are largely similar across samples. Furthermore, non-student samples exhibit higher measurement error. Adding historical lab participation data, we find a small set of
attributes over which lab participants differ from non-lab participants. Using an additional set of lab experiments, we see no evidence of observer effects.
2019-06-13Robert Metcalfe(Boston University) NOTE: this seminar has been postponed. Room: n.a., 16:00 - 17:15. No abstract available.
2019-05-23Tanya Rosenblat(Univesity of Michigan) The Role of Memory in Belief Formation. Room: E0.15, 15:00 - 16:15. A growing body of research has documented both systematic and motivated belief biases in decision making such as correlation neglect and wishful thinking. A better understanding of how people aggregate signals and form beliefs in the first place is crucial for understanding the origin of these biases and potential policy interventions. In this paper, we explore the role of memory in belief formation. We design a simple experiment where subjects read a set of news sources which report naturalistic positive and negative facts about an artificial company. We provide enough information to subjects about the fact-generating process so that they can form a Bayesian posterior on whether the company is 'good' or 'bad'. We then (a) elicit subjects' beliefs about the quality of company based on these narratives and (b) present subjects with a superset of facts to determine whether they recognize previously seen facts. Just like real newspapers, facts can be repeated across several news sources. Unlike most of the existing literature on correlation neglect our experiment introduces repetition through actually repeated signals which we argue is more natural than merely correlated signals. Our design therefore allows us to explore the role of recognition and recall in belief formation which are two fundamental concepts in cognitive psychology. We find that subjects exhibit good recognition which is only slightly increasing by repetition of the signal. Subjects slightly overweigh repeated signals (beyond what is accounted for by the greater recognition) but do not fully double-count. Our framework can help to understand how individual (single-agent) learning differs from social learning.
2019-04-18Malia Mason(Columbia Business School ) The Stories Negotiators Tell and Their Effects on Deal-Making. Room: E0.14, 16:00-17:15. People structure and streamline their interactions with others by embellishing on the available data. In a series of projects, we explore a few ways this approach to navigating social interactions comes to life in negotiations. Not surprisingly, negotiators fill the gaps in their knowledge by drawing various inferences about their counterparts. We examine the origins of these inferences and illustrate the effect they have on deal terms and interpersonal outcomes. In a first project, we show negotiators infer how knowledgeable a counterpart is from the precision of his or her initial offer. This inference, in turn, shapes final settlements. In a second project, we show negotiators infer how a counterpart will react to possible counteroffers from the form (point vs. range) that the counterpart’s initial offer takes. These inferred reactions, in turn, shape final settlements and interpersonal outcomes. We argue that adopting a social attribution lens to study negotiations might call attention to new inferential processes that have consequences for deal-making.
2019-04-11WIllemien Kets(Oxford University ) Costs & Benefits of Strategic Uncertainty: Theory & (Preliminary) Experiments. Room: E5.22, 16:00 - 17:15. We develop a new theory of how strategic uncertainty -- uncertainty about other people's actions -- can influence economic behavior. We do so by building on research in psychology on theory of mind. Importantly, strategic uncertainty can be a cost or a benefit depending on the economic environment. This is true even in settings where people's primary motivation is to coordinate their actions. Preliminary experimental findings offer support for the theory and suggest that theory of mind is an important mediator for the economic effects of strategic uncertainty.
This talk builds on joint work with Nagore Iriberri (University of the Basque Country) and Alvaro Sandroni (Northwestern University).
2019-02-06Lionel Page(Queensland University of Technology) How Success Breeds Success. Room: E0.14, 16:00 - 17:15. We study whether and how success increases the chance of subsequent success using a real-effort laboratory experiment. We identify the causal effect of winning in a simple dynamic contest (best-of-three) using the random component of a stochastic contest success function that determines the winner of each round. We find a positive effect of an initial success on subsequent performance. Replacing either the first round or the last round of the contest with a die selecting the winner at random, we disentangle two competing explanations of the positive effect: strategic thinking and psychological effect of winning. Our results clearly support the existence of a psychological effect of winning. On the contrary, we do not find evidence that strategic thinking can explain the effect of winning. Varying the amount of feedback provided in contest, we find that the psychological effect is likely driven by improved self-confidence after experiencing a success. We suggest that contest models need to venture beyond the framework of games with complete information to explain behaviour in dynamic contests.
2019-01-17Stephanie Heger(University of Sydney) Redesigning the Market for Volunteers: A Donor Registry. Room: REC E5.22, 16:00-17:15. Abstract: This paper addresses volunteer labor markets where the lack of price signals, non-pecuniary motivations to supply labor, and limited fungibility of supply lead to market failure. To address the causes of the market failure, we conduct a field experiment with volunteer whole blood donors where we introduce a market-clearing mechanism (henceforth: the Registry). Our intention-to-treat estimates suggest that subjects invited to the Registry, regardless of joining, are 66 percent more responsive to critical shortage appeals than control subjects. While the registry increases supply during a critical shortage episode, it does not increase supply when there is no shortage; thus the Registry significantly improves coordination between volunteer donors and collection centers, thereby improving market outcomes. We find evidence that the Registry's effectiveness stems from crowding-in volunteers with purely altruistic motives and volunteers with a preference for commitment.
2018-12-13Daniel Schunk(Johannes Gutenberg-Universität Mainz) Causal Effects of a Self-Regulation Training in Primary Schools. Room: E0.14 (REC UvA), 16:00-17:15. Self-control abilities are known to be a central determinant of educational success and a wide range of other important life outcomes. We conducted a randomized-controlled experiment with about 600 first graders to identify the causal effect of a targeted self-regulation training on self-control abilities, concentration, and educational outcomes. Results demonstrate that our self-regulation training increases long-term outcomes 12 months after treatment for attention and inhibition abilities, self-control behavior, as well as reading abilities. There is no treatment effect on math abilities, fluid IQ, and on one of our concentration tasks. We conclude that targeted training of self-control abilities in early years can substantially improve these self-control abilities in the long run, that these improvements potentially serve as a multiplier for the promotion of schooling abilities, and thus that this kind of training might be an effective tool to foster the skill formation process.
2018-11-29Friederike Mengel(University of Essex) Gender Bias in Opinion Aggregation. Room: E0.04, 16:00-17:15. Gender biases have been documented in many areas including hiring, promotion or performance evaluations. Many of these decisions are made by committees. We experimentally investigate whether committee deliberation contributes to gender biases. In our experiment participants perform a real effort task with subjective performance and rate the task performance of other participants. In a 3 x 2 design we vary the extent to which communication among raters is possible and whether or not the experiment is gender-blind. In the absence of communication there is gender bias. The bias disappears under minimal communication, but is strong and highly statistically significant under open communication. In the latter case 60 percent of ratings received by men are revised upwards after communication compared to only 25 percent of ratings received by women. As a consequence of the bias women are ranked on average three positions lower after deliberation. Additional treatments and analysis show that the incentives to agree typically present in committee deliberation work towards reducing the bias. By contrast, open communication seems to provide a platform for individuals with extreme views, who speak more often first in open deliberation than others. We then test two interventions for open deliberation. Randomizing the order of speaking does not reduce gender bias, but an information intervention where raters are informed of gender bias in prior sessions does.
2018-11-15John Hamman(Florida State University) Delegation and Team Selection. Room: E0.04, 16:00-17:15. We model a managerial decision environment in which a manager both determines the skill heterogeneity of her workers and determines whether to retain or delegate the ability to allocate tasks. The manager prefers delegating when uncertainty is sufficiently high relative to the incentive conflict with her workers, which is endoge- nously determined by her chosen team composition. Experimental data supports the direction of the main predictions, though it shows how and why participants deviate from expected behavior. In particular, it shows that managers selecting a team composition closer to the optimal predictions delegate better and have higher payoffs. Deviations from the optimal team composition are consistent with loss aver- sion and heuristic learning rules. Generally, the results highlight the difficulties in navigating complex managerial environments and illustrate potentially costly ways in which managers seek to simplify their decisions.
2018-11-01Florian Zimmerman(BRIQ/University of Bonn) The Dynamics of Motivated Beliefs. Room: E0.04, 16:00-17:15. A key question in the literature on motivated reasoning and self-deception is how motivated beliefs are sustained in the presence of feedback. In this paper, we explore dynamic motivated belief patterns after feedback. We establish that positive feedback has a persistent effect on beliefs. Negative feedback, instead, influences beliefs in the short-run, but this effect fades over time. We investigate the mechanisms of this dynamic pattern, and provide evidence for an asymmetry in the recall of feedback. Finally, we establish that, in line with theoretical accounts, incentives for belief accuracy mitigate
the role of motivated reasoning.
2018-10-18Emeric Henry(Sciences Po) Judicial Delegation. Room: E0.09, 16:00-17:15. Greater delegation of authority to judges allows them to tailor decisions more precisely to the facts of the case and local norms, but also increases the likelihood of judicial capture, especially by repeat litigants. Three main approach have historically been taken to address this in the criminal law realm: judicial elections, judicial rotation and sentencing guidelines. We investigate some of the tradeoffs inherent in the different approaches using data from North Carolina which has the unusual feature of frequent judicial rotation as well as elections and sentencing guidelines. We find that sentences converge over time within a judicial spell in a district to the local average sentence. We also document that the more prior interactions a judge has with a defense attorney, the more sentences decline. Finally, we show that judges respond to electoral cycles and that elections thus can be a way to discipline them.
2018-10-04Double Seminar: Johanna Möllerstrom(Humboldt University) A meritocratic origin of egalitarian preferences. Room: E5.22 (UvA), 15:00 - 17:30 . The meritocratic fairness ideal implies that inequalities in earnings are regarded as fair when they reflect differences in performance, but not when they reflect differences in luck. A straightforward implementation of the meritocratic fairness ideal requires complete information about individual performance, however, and such information is often unavailable. We study the highly realistic, but previously under-studied, context where there is uncertainty about whether a particular inequality reflects performance or luck. We show theoretically that meritocrats in such situations may either be pulled towards an egalitarian behavior, or stay far away from it. The direction in which an individual meritocrat is pulled depends on how she trades off the two main errors that can arise when redistributing under uncertainty – the first error being that the worst performer instead of the best is rewarded, and the second being that whereas the best performer is rewarded, she is not rewarded enough. A laboratory experiment shows results that are well aligned with our model, revealing that it is significantly more common for meritocrats to be pulled towards (as opposed to staying away from) an egalitarian style behavior under uncertainty. The external validity of our framework, and the results from the laboratory, are confirmed in two large-scale surveys conducted on representative samples of the American and the Norwegian populations.
2018-10-04Double Seminar: Aldo Rustichini(University of Minnesota) Stochastic Choice, Time to choose and Individual characteristics. Room: E5.22 (UvA), 15:00 - 17:30. Given a finite data set of choices made by an individual
in an economic choice problem, we want to identify the parameters of a model affecting the individual decision process, including the probability of error and the time to choose. These parameters capture characteristics of the subject different from standard economic preferences (such as time preferences, or risk attitude), and measure instead other characteristics, such as, for example, the care and the skill the individual uses in choosing. These characteristics are important in predicting individual behavior in non-experimental environments. Existing methods, particularly those that rely exclusively on choice data, fail to identify these parameters. We show that they are instead identified if the available data include information on time to choose, within the context of a Drift Diffusion Model (DDM) of choice, if the data satisfy a weak non-collinearity condition. We illustrate the method
using a large (N = 2274) data set set. We then then explore conditions that make the DDM a good approximation of the choice process, exploring two questions. First, we consider whether and in what case the DDM implements an optimal choice process, given the skill of the individual. We find that it is, but under some strong symmetry conditions. We show that the parameters identified in our empirical analysis correspond to those predicted at the optimal solution. Finally, we show that DDM can be taken as a good approximation for a complete, biologically realistic model of choice.
2018-09-06Yan Chen(University of Michigan) Information Acquisition and Provision in School Choice: An Experimental Study. Room: E0.14, 16:00-17:15. When participating in the school choice process, students often spend substantial time and effort acquiring information about different schools. In this study, we compare how two popular school choice mechanisms, the (Boston) Immediate Acceptance and the (Gale-Shapley) Deferred Acceptance, incentivize students' information acquisition. Our results show that only the Immediate Acceptance mechanism incentivizes students to learn their own cardinal and others' preferences. While our lab experiment yields results directionally consistent with our theoretical predictions, we also find that students systematically over-invest in information acquisition, especially when they believe that others invest more and when they are more curious. Our counterfactual policy analyses suggest that it is welfare-enhancing for educational authorities to provide more information to help each student learn both her own and others' preferences, even under strategy-proof mechanisms. Doing so improves match efficiency while reducing the socially wasteful costs of information over-acquisition.
2018-07-05Zachary Grossman(Florida State University) When does ignorance work as an excuse for selfish behavior?. Room: E1.51, 16:00-17:15. Many studies document how people willfully choose ignorance to avoid decision environments in which the pursuit of individual interests transparently conflict with the pursuit of socially favorable outcomes. However, quite a few results, many from the same set of studies, show much lower rates of ignorance in seemingly similar situations. Why does ignorance prevail in some situations but not others? What conditions must hold for it to be useful as an exculpatory tool? Looking at both existing and new data, I argue that, while models of rational signaling with standard inference can account for a wide set of results, other, typically unmodeled features of the environment clearly are important and warrant more attention from both theorists and experimentalists.
2018-06-28David Dillenberger(University of Pennsylvania) Time lotteries and stochastic impatience . Room: E0.03, 16:00-17:15. We study preferences over lotteries that pay a fixed prize at an uncertain future date: what we call time lotteries. The standard model of time preferences, Expected Discounted Utility, implies that individuals must be risk seeking towards such lotteries (RSTL). As a motivation, we show in an incentivized experiment that most subjects actually violate this property. We then make two theoretical contributions. First, we show that risk aversion over time lotteries can be captured by a generalization of Expected Discounted Utility that is obtained
by keeping the postulates of Discounted Utility and Expected Utility. Second, we introduce a new property termed Stochastic Impatience, a risky counterpart of standard Impatience, and show that not only the model above, but also substantial generalizations that allow for non-Expected Utility and non-exponential discounting, cannot jointly accommodate it and even a single instance of risk aversion over time lotteries (or, equivalently, any violation of
RSTL), showing a fundamental tension between the two.
2018-06-14Michael Kosfeld(Goethe University Frankfurt) Incentives, Complementarities, and the Sorting of Motivated Agents. Room: E1.51, 16:00-17:15.
We study experimentally the role of incentives for the sorting of motivated agents if there are complementaries in production. Participants can join groups in which they earn money for themselves but can also generate charitable donations. The inidvidually generated donations depend on the average donations of the other participants in the group. Consistent with Kosfeld and von Siemens (2009,2011) we find that different incentives facilitate sorting and thereby the production of donations. But our experiment also sheds new light on the interplay of self-selection and cooperative behavior. We find that subjects switch more often between teams than theory predicts. We further find that even selfish individuals contribute more to the charity if they are in the materially less attractive team, but only if self-selection is possible.
2018-06-07Alex Imas (double seminar)(Carnegie Mellon University) Heuristics of Retail and Institutional Investors. Room: E1.51, 15:00-17:30. According to standard theories of decision-making, access to leverage should make investors better off. The ability to borrow expands investors' choice sets, allowing them to take advantage of trading opportunities without having to liquidate current holdings. This paper argues that leverage can interact with existing behavioral biases -- specifically, the reluctance to realize losses -- to impair decision-making and hurt performance. Two data sources provide support for this claim. First, we exploit regulation that restricts the amount of leverage available to U.S. retail traders of foreign exchange. Traders constrained by the regulation are more willing to realize losses, exhibiting a smaller disposition effect, and improve their market timing. We corroborate these findings in an experimental asset market. Access to leverage leads to significantly lower earnings. This decrease in performance is driven by levered participants holding on to losses for longer, deviating further from their optimal trading strategy than those without access to leverage. Together, our findings imply more choice may not always be better than less and suggest scope for policy to improve financial decision-making.
2018-06-07Kristof Madarasz (double seminar)(LSE) The Value of Protecting Privacy. Room: E1.51, 15:00-17:30. NA
2018-05-24Alexander Coutts(Nova School of Business and Economics) Performance Beliefs and Allocation of Teamwork: An Experiment. Room: E0.14, 16:00-17:15.
A growing body of evidence suggests that individuals are on average overconfident about their ability, affecting their decisions related to career choice and finances, among others. We consider implications for an important but understudied environment: decision making in groups. In our setting, output in two-person teams depends on the ability of each member, and individuals must choose how much to delegate between themselves and their teammate. Moving beyond one-dimensional updating, we consider learning when feedback involves aggregated team outcomes, a two-dimensional uncertainty problem. In an experiment, we find that individuals are overconfident, and attribute team feedback in different ways to themselves and their teammate. In particular, they over-attribute positive feedback to themselves, while significantly under-weighting negative feedback in general. As an intuitive control, we examine how a third party updates about a different two-person team. In this control, we find no evidence of differential attribution of feedback among team members, and responses to positive and negative feedback are balanced. We conclude by noting that overconfidence and biases in updating lead to inefficient delegation in teams, and that these commonplace environments and associated feedback structures may impede learning and lead to the persistence of overconfidence.
2018-05-17Jean-Francois Bonnefon(Toulouse School of Economics) The Moral Machine Experiment. Room: E0.14, 16:00-17:15. With the rapid development of AI come widespread concerns about how machines will behave in morally charged situations. To address these concerns, we must quantify societal expectations about the ethical principles that should guide machine behaviour.In response to this challenge, we deployed the Moral Machine, an Internet-based experimental platform that is designed to explore the multi-dimensional moral dilemmas faced by autonomous vehicles. This platform enabled us to gather 40 million decisions from millions of users in 200+ countries. In this talk, I will summarise global moral preferences, as well as individual and cultural variations in the strengths of these preferences. In particular, I will describe three major clusters of countries exhibiting substantial differences along key moral preferences about autonomous vehicles. These differences correlate with modern institutions as well as deep cultural traits.
2018-05-03Rachel Kranton(Duke University) Deconstructing Group Bias. Room: E0.14, 16:00-17:15. No abstract available.
2018-04-26Mariska Kret(Leiden University) POSTPONED - check back later for details. Room: E0.15, 16:00-17:15. No abstract available.
2018-04-05Emir Kamenica(University of Chicago) POSTPONED - check back later for details. Room: , . No abstract available.
2018-03-01Peter Schwardmann(LMU Munich) Spin Doctors: Vague Messages in Disclosure Games. Room: E0.14, 16:00-17:15. Voluntary information disclosure by privately informed firms is a key mechanism for reducing information asymmetries in markets. However, firms often have substantial flexibility in how they disclose their private information. We study theoretically and experimentally whether senders will exploit flexibility in disclosure to the detriment of receivers. On the one hand, flexibility allows senders to use vague messages in order to camouflage bad news and fool naive receivers. On the other hand, it incentivizes senders to disclose information that would be too unfavorable if it were communicated precisely. Both theory and experiment show that restricting senders to the use of precise messages is bad for sophisticated receivers, but good for naive receivers and overall information transmission. Our results suggest that there are likely to be redistributive consequences as well as gains in average consumer welfare from policies that restrict flexibility in disclosure.
2018-02-08Uri Gneezy (double seminar)(UCSD/CREED) Drivers of Tipping. Room: REC E0.09 (UvA roeterseiland), 15:00-17:30. No abstract available.
2018-02-08Stefan Trautmann (double seminar)(University of Heidelberg) Inequality, Fairness and Social Capital. Room: REC E0.09 (UvA roeterseiland), 15:00-17:30. We study the effect of unjust inequality on social trust and trustworthiness, and its separate effects on the haves and have-nots, in a controlled economic experiment. We do find evidence for a negative effect of unfair economic inequality on social interactions. Probing the boundaries of this effect, we find that a direct responsibility of the well-off person for the outcome of the worse-off person is necessary for the erosion of social capital in our setting. Moreover, our data do not support the view that higher status or wealth leads to an erosion of pro-social attitudes: the haves are always more generous.
2018-01-18Kristof Madarasz(London School of Economics) The Biases of Others: Projection Equilibrium in an Agency Setting. Room: REC E0.08 (UvA roeterseiland), 16:00-17:15. People fail to fully account for informational differences and instead project their information onto others. In this study, we find that while people naively project their information onto others, they also anticipate the projection of their differentially informed opponents onto them. Specifically, we directly test the model of projection equilibrium, Madarasz (2016), which posits a tight continuous relationship between the extent to which people project onto others and the extent to which they anticipate the projection of others onto them. Consistent with the theory, we find not only that on average better-informed principals exaggerate the extent to which lesser informed agents should act as if they were better-informed, but that on average lesser-informed agents anticipate but underestimate such misperceptions as revealed by their choice of incentive scheme and elicited second-order beliefs. Furthermore, we estimate the distribution of the extent to which players project onto others and the distribution of the extent to which players fail to recognize others' projection onto them and find that the relationship between the two is remarkably consistent with that implied by projection equilibrium.
2017-12-07Wieland Mueller(University of Vienna) Consistency and Stationarity of Time Preferences. Room: E5.22, 16:00-17:15. We report the results of an experiment in which subjects make a series of inter-temporal choices. The design of the experiment allows us to (a) use revealed preference analysis at the individual level to test for consistency with utility maximization as well as for stationarity of inter-temporal choices; and (b) to estimate a standard model of quasi-hyperbolic time preferences at the individual level. We docucment heterogeneity of individual intertemporal choices with respect to patterns of demand behavior and levels of consistency with utility maximization. Our data suggest that lack of consistency with economic rationality may be the driving force of estimated non-stationarities of time preferences. We explore the consequences of parametrically estimating preference parameters even if the assumption of well-defined preferences is questionable (which is a standard approach in the literature). As an aside, choices of subjects can be made visible by simple graphical representations (footprints), which often allow to easily identify basic features of subjects' time preferences without any formal analysis.
2017-11-23Alex Possajennikov(University of Nottingham) Preventing the Tyranny of the Majority - Experiment on the Choice of Voting Thresholds under the Veil of Ignorance. Room: E0.22, 16:00-17:15. In democracies, an absolute majority of voters may choose policies that are harmful to others, even when the harm is larger than the benefit to the majority. We study how individuals choose threshold rules in voting situations, including where sub- or super-majority thresholds are optimal. In our experiment individuals choose thresholds knowing distributions of possible valuations of alternatives but not knowing their own valuation (veil of ignorance). As is optimal, subjects do propose more extreme thresholds for more skewed distributions. However, threshold choices are biased towards simple majority rule, leading to substantial welfare losses. We also identify systematic changes in subjects' decisions in response to variations in distributions of valuations, even when these variations do not change the optimal threshold choice.
2017-10-26Michaela Pagel(Columbia Business School) The Ostrich in Us: Selective Attention to Financial Accounts, Income, Spending, and Liquidity. Room: E0.14, 16:00-17:15. A number of theoretical research papers in micro as well as macroeconomics model and analyze attention but direct empirical evidence remains scarce. This paper investigates the determinants of attention to financial accounts using panel data from a financial management software provider containing daily logins, discretionary spending, income, balances, and credit limits. We find that individuals are considerably more likely to log in because they get paid utilizing exogenous variation in paydays due to weekends and holidays. Beyond looking at the causal effect of income on attention, we examine how attention depends on individual spending, balances, and credit limits within individuals’ own histories. We find that attention is decreasing in spending and overdrafts and increasing in cash holdings, savings, and liquidity. Moreover, attention jumps discretely when balances change from negative to positive. We argue that our findings cannot be explained by rational theories of inattention. Instead our findings are consistent with Ostrich effects and anticipatory utility as the main motivation for paying attention to financial accounts and thus provide new tests for information- or belief- dependent utility models. Furthermore, we show that some of our findings can be explained by a recent influential one of those models (Ko ̋szegi and Rabin, 2009), which assumes individuals experience utility over news or changes in expectations about consumption.
2017-10-19Jason Dana(Yale University) Competition and the nature of gender discrimination: Evidence from The Price Is Right. Room: E5.22, 16:00-17:15. Field evidence of gender discrimination has been demonstrated in a variety of contexts, but linking discrimination to tastes has proven notoriously difficult. We address this gap using evidence from the One Bid game on The Price Is Right television show. One Bid contestants bid sequentially in an attempt to win a prize by coming closest to its price without exceeding it. The last bidder in the game has a dominant 'cutoff' strategy of bidding $1 more than another contestant, leaving the target contestant with almost no chance to win. Despite high stakes for playing impartially and arbitrary assignment of players to contestant groups and bidding orders, our analysis of over 5,000 One Bid rounds shows that for last bidders of both genders, same-gender opponents are less likely to be cut off. For rounds in which the last bid is not the lowest, cutoffs remain significantly more likely when the next lowest bidder is of the opposite-gender. Because the last bidder's revealed belief is that the next lowest bid is the best to cut off, our results demonstrate gender favoritism while holding constant beliefs about the effectiveness of cutting off a given opponent, suggesting that the pattern of cutoffs we observe is due to tastes rather than gender stereotypes about ability. We estimate that final bidders transfer an average of $147 in expected prize winnings to same-gender opponents by cutting them off less often, and as much as $522 in the second to last round of the show.
2017-09-25Marie Claire Villeval(University of Lyon) Exclusion and Reintegration in a Social Dilemma. Room: E0.14, 16:00-17:15. The existing literature on ostracism in social dilemma games has focused on the impact of the threat of exclusion on cooperation within groups but so far, little attention has been paid to the behavior of the excluded members after their reintegration. This paper studies the effect of exclusion by peers followed by reintegration on cooperation once excluded individuals are readmitted in their group. Using a negatively framed public good game, we manipulate the length of exclusion and whether this length is imposed exogenously or results from a vote. We show that people are willing to exclude the least cooperators although it is not an equilibrium strategy. Exclusion has a positive impact on cooperation and compliance to the group norm of withdrawal after reintegration when exclusion is followed by a quick rather than a slow reintegration and that the length of exclusion is chosen by the group. In this environment, a quicker reintegration also limits retaliation. Post-exclusion cooperation and forgiveness depend not only on the length of exclusion but also on the perceived intentions of others when they punish.
2017-09-14Dana Sisak(Erasmus University Rotterdam) Peer Evaluation and Team Performance: An Experiment on Complex Problem Solving. Room: E5.22, 16:00-17:15. Organizations succeed when they are capable of solving complex, non-routine problems. Often, these tasks are done by teams of individuals, usually after the individuals alone have had a chance to think through the issues and possibilities. The interplay of incentives and performance on complex choices is not well understood, neither theoretically nor empirically. In particular, an objective measure of performance is often not available, and thus less-studied incentives relying on subjective evaluation are needed. We study incentives for individual and group performance in a novel complex and non-routine task: guesstimations. In this task, first subjects work individually, then decide on the final answer in a group of three. First we study the group decision relative to individual inputs: Compared to the median quality individual guess, the group significantly improved, but compared to the best individual guess, the group performs significantly worse. Groups do outperform ``mechanical'' ways of aggregating individual answers and are especially valuable when individual answers do not ``straddle'' truth. Individual characteristics are not predictive of group outcomes in our setting. Second we study the effect of incentives on performance: while treatments affected group atmosphere, individual as well as group performance was not significantly affected.
2017-07-10Gary Charness(UCSB) Self-serving Conformism. Room: E5.22, 16:00-17:15. We examine a novel class of conformist preferences that is within the realm of beliefdependent motivations, in that the peers’ expectations about others’ behavior may affect every group-member’s welfare. Similar social-preference motivations (such as guilt aversion) have been inferred from evidence of a belief-behavior correlation, but the issue of causality has been called into question. In examining conformism, we propose a design that verifies the presence of the relevant causality direction while ruling out alternative social-preference motivations. Our data reveal “self-servingly conformist” behavior in that subjects choose to match their strategy to the peers’ expectations when it is in their material interest to do so.
2017-06-15Heikki Rantakari(University of Rochester) Relational Influence. Room: E5.22, 16:00-17:15. An uninformed principal elicits non-contractible recommendations from a privately informed
agent regarding the quality of projects. The agent is biased in favor of implementation and no
credible communication is possible in a one-shot setting. In a repeated setting, the fear of
losing future influence can sustain informative communication, but the agent's willingness to
remain truthful depends on the extent to which he expects the principal to listen to him. In
a stationary equilibrium, the principal always implements mediocre projects at a sub-optimally
high frequency to reward honesty, while she may either favor or discriminate against high-
quality projects. In a non-stationary equilibrium, the principal will further condition the agent's
future influence on today's proposals, with the admission of mediocre alternatives rewarded
with increased future influence while rejections of high-quality projects are further punished by
lowering the agent's future influence. The acceptance of high-quality projects builds up influence
when the agent's current influence is not too high, but erodes the influence when the agent is
already highly influential.
2017-06-01Severine Tousseart(London School of Economics) Eliciting temptation and self-control through menu choices: a lab experiment. Room: E0.15, 16:00-17:15. Unlike present-biased individuals, Gul and Pesendorfer (2001) agents may pay to restrict choice sets despite expecting to resist temptation, thus eliminating self-control costs. I design an experiment to identify these self-control types, where the temptation was to read a story during a tedious task. The identification strategy relies on a two-step procedure. First, I measure commitment demand by eliciting subjects’ preferences over menus, which did or did not allow access to the story. I then implement their preferences using a random mechanism, allowing me to observe subjects who faced the choice, yet preferred commitment. A quarter to a third of subjects can be classified as self-control types according to their preferences. Of those facing the choice, virtually all self-control types behaved as they anticipated and resisted temptation. These findings suggest that policies restricting the availability of tempting options could have much larger welfare benefits than predicted by present bias models.
2017-05-11Luis Santos-Pinto(University of Lausanne) A General Equilibrium Theory of Firm Formation under Optimal Expectations. Room: E0.14, 16:00-17:15. We extend Lucas (1978) by assuming that a fraction of individuals in an economy derive anticipatory utility from entrepreneurship. We show that if these individuals are able to bias their beliefs to inaflate the anticipatory benefits they endogenously become optimists. Optimism has six main effects. First, there is a misallocation of talent which lowers output. Second, optimists are more likely to become entrepreneurs than realists. Third, entrepreneurs are more optimistic than workers. Fourth, when the fraction optimists is high, the majority of entrepreneurs are optimists. Fifth, optimism drives up the wage which makes workers better off. Sixth, optimism lowers the returns to entrepreneurship.
2017-04-20Martijn van den Assem(Vrije Universiteit Amsterdam) Malleable Lies: Communication and Cooperation in a High Stakes TV Game Show. Room: E0.15, 16:00-17:15. We investigate the credibility of non-binding pre-play statements about cooperative behavior, using data from a high-stakes TV game show in which contestants play a variant on the classic Prisoner’s Dilemma. We depart from the conventional binary approach of classifying statements as promises or not, and propose a more fine-grained two-by-two typology inspired by the idea that lying aversion leads defectors to prefer statements that are malleable to ex-post interpretation as truths. Our empirical analysis shows that statements that carry an element of conditionality or implicitness are associated with a lower likelihood of cooperation, and confirms that malleability is a good criterion for judging the predictive power of cheap talk.
2017-04-13Alan Sanfey(Radboud Universiteit Nijmegen) Social motivations in choice: insights from decision neuroscience. Room: E0.15, 16:00-17:15. Our lives consist of a constant stream of decisions and
choices, from the mundane to the highly consequential. The standard approach to experimentally examining decision-making has been to examine choices with clearly defined probabilities and outcomes, however it is an open question as to whether decision models describing these situations can be extended to choices that must be made by assessing the intentions and preferences both of oneself and of another social partner. This class of social decision-making offers a useful approach to examine more complex forms of decisions, which may in fact better approximate many of our real-life choices. I will present data from several experiments where we use economic games to observe how players decide in real, consequential, social contexts, and will discuss how we can use these brain insights to build better models of human social preferences, incorporating both psychological and neurobiological constructs.
2017-03-30Sanjeev Goyal(University of Cambridge) Integration and Segregation. Room: REC E0.15, 16:00-17:15. No abstract available.
2017-03-16Heather Royer(UC Santa Barbara) When Incentives Backfire: Spillover Effects in Food Choice. Room: UvA REC 0.14, 16:00-17:15. How do peers influence the impact of incentives? Despite much work on incentives, little is known about the spillover effects of incentives. We investigate two mechanisms by which these effects can occur: through peers’ actions and peers’ incentives. In a field experiment on snack choice (grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers’ choices are incentivized among over 1,500 children in the school lunchroom. Incentives increase the likelihood of initially choosing grapes. However, peer spillover effects can be large enough to undo these positive effects.
2017-03-02Jean-Robert Tyran(University of Vienna) Voter Motivation and the Quality of Democratic Choice. Room: E0.14, 16:00-17:15. The quality of democratic choice critically depends on voter motivation, i.e. on voters’ willingness to cast an informed vote. If voters are motivated, voting may result in smart choices because of information aggregation but if voters remain ignorant, delegating decision making to an expert may yield better outcomes. We experimentally study a common interest situation in which we vary voters’ information cost and the competence of the expert. We find that voters are more motivated to collect information than predicted by standard theory and that voter motivation is higher when subjects demand to make choices by voting than when voting is imposed on subjects.
2017-02-23Sandro Ambuehl(University of Toronto) The Effect of Financial Education on the Quality of Decision Making. Room: E0.14, 16:00-17:15. We introduce a method for measuring the quality of financial decision making built around a notion of financial competence, which gauges the alignment between individuals' choices and those they would make if they properly understood their opportunities. We use it to document the potential pitfalls of the types of brief rhetoric-laden interventions commonly used for adult financial education. Motivational rhetoric can render the effects of such interventions indiscriminate even when people appear to understand and internalize the targeted concepts. Conventional methods of evaluation involving financial literacy, self-reported decision strategies, and directional effects on choices do not reliably detect these deficiencies.
2017-01-26Ed Hopkins(University of Edinburgh) Lone Wolf or Herd Animal: An Experiment on Choice of Information and Social Learning. Room: UvA REC E0.15, 16:00-17:15. We report on an experiment that uses revealed preference to distinguish between rational social learning and behavioral bias. Subjects are asked to correctly guess the current binary state of the world. They must choose between receiving a private, noisy signal about the current state or observing the past guesses of other subjects in the prior period. The design varies the persistence of the state across time, which determines whether choosing social or private information is optimal, enabling us to separate subjects who choose optimally from those who excessively use either social information (“herd animals”) or private information (“lone wolves”). Aggregate behavior appears unbiased only because the number of lone wolves and herd animals is approximately equal. Our findings cannot be explained by existing behavioral models, with the possible exception of rational inattention.
2016-12-08Michel Marechal(University of Zurich) The Honest Citizen: Evidence from Nationwide Field Experiments. Room: E5.22, 16:00 - 17:15. We use nationwide field experiments to collect a behavioral measure of civic honesty in 68 cities across the United Kingdom, Poland and the United States. Specifically, we turned in 2,932 apparently lost wallets at public and private institutions and then measured whether the recipients contacted the owner to return the wallet. Despite the greater incentive to steal, we find that higher amounts of money left in a wallet increase the likelihood that people report the wallet. We argue that a combination of altruism and theft aversion provides a plausible mechanism for the increase in the reporting rate. An additional treatment and nationally representative survey experiments support the proposed mechanism. Overall, the results suggest that non-pecuniary motives to behave honestly can dominate material incentives, even under considerable stakes up to almost 100 US dollars.
2016-11-23Matthias Sutter(University of Cologne) Costly customers' mistakes in credence goods markets. Room: E0.03, 16:00 - 17:15. We present field experiments on the provision of credence goods and examine costly mistakes of customers when interacting with expert sellers. More precisely, we study how insurance coverage, perceived willingness to pay and inferior knowledge of customers can be exploited by expert sellers in the market for computer repairs. The effects are economically and statistically significant, increasing repair prices by up to 100%, depending on treatment. We are able to disentangle the sources of these price increases into overprovision and overcharging.
2016-11-03Marie Claire Villeval(GATE Lyon) Loss aversion and lying. Room: E0.09, 16:00 - 17:15. We theoretically show that agents with loss-averse preferences are more likely to lie to avoid receiving a financially bad outcome the lower the probability of the bad outcome. We also develop a method to estimate the distribution of dishonesty when agents privately observe the outcome of a random process but can report a different outcome. We find strong support for the loss aversion prediction by comparing lying percentages across the extant literature and within two new experiments. Changes in dishonesty operate through changes in expected payoffs, ceteris paribus, as predicted by loss aversion.
2016-10-27Taisuke Ima(CALTECH) Modeling and Measuring Time Preferences. Room: E5.22, 16:00 - 17:15. This talk covers a series of theoretical and empirical investigations into time preferences. We first present the first revealed-preference characterizations of the most common models of intertemporal choice, the exponentially discounted utility, the quasi-hyperbolic discounted utility, and the time-separable utility. Our characterizations take consumption data as primitives and provide non-parametric revealed-preference tests. We then apply our tests to 12 datasets from 10 recent studies using Convex Time Budget (CTB) design proposed by Andreoni and Sprenger (2012), and deliver new insights on choice datasets that had been analyzed by traditional parametric methods. Finally, we will discuss implications to the design of CTB experiments.
2016-10-20Ben Greiner(Vienna University) Aligning Incentives of Physicians: An Experimental Study of Two-part Tariffs and Separation of Prescription and Treatment in Health Care Markets. Room: E5.22, 16:00 - 17:15. Health care markets are plagued by physician’s incentives to overtreat patients who cannot verify whether the treatment they received was appropriate. In this study, we investigate whether a separation of prescription and treatment prices (a two-part tariff pricing) and a separation of prescribing and treating agents can mitigate overtreatment and hence increase health care market efficiency. We find that agency separation is more effective than two-part tariffs in reducing overtreatment, albeit a rise of undertreatment in the former institution. When both measures are implemented, market efficiency is not improved further because of fewer diagnosis take-up resulting from bargaining failures between prescribing physicians, treating physicians, and patients.
2016-10-13Sonja Vogt(University of Zurich) Changing cultural attitudes on female genital cutting. Room: E0.10, 16:00 - 17:15 subscribe to our mailinglist. Cultural evolutionary processes are often hypothesized to reduce behavioral variation within groups and stabilize variation between groups. This idea has been at the cen- ter of a longstanding debate about how culture affects the evolution of human social behavior. More recently, however, the idea has also figured repeatedly in development programs intended to promote improvements in human health and well-being. Female genital cutting is the most prominent example. Cutting affects millions of girls and women. It can lead to serious lifelong health problems, and governments and development agencies spend considerable resources promoting the abandonment of cutting. Programs promoting abandonment often assume that cutting persists because cultural evolutionary processes have trapped cutting societies in a self-reinforcing cutting equilibrium. If so, individual decision makers cannot afford to unilaterally deviate from the local cutting norm. An outside agency, however, with the right intervention, could po- tentially recruit the cultural evolutionary forces that currently favor cutting so that they favor abandonment. Although this view of female genital cutting has been extremely influential, it has not been rigorously tested. In a first study, we do so with data we collected using novel methods in 45 communities in Sudan. In contrast to the prevailing view, we find tremendous variation in attitudes and behavior at very local scales. In effect, cutting and non-cutting families live door-to-door, which is inconsistent with the notion that cutting persists because of local norms. In a second study, we developed interventions that exploit extreme local heterogeneity in attitudes about cutting. Specifically, we produced various telenovela-style movies that depict the members of an extended family as they confront each other with divergent views about whether the family should continue cutting. The movies dramatize discord within a family, and as a result they focus on heterogeneity that is as local as possible. The movies serve as treatments in two separate randomized controlled experiments in 127 communities in Sudan, and in our talk we will present results from these two experiments.
2016-09-29John McNamara(University of Bristol) Ecological Rationality and Environmental Complexity subscribe to our mailinglist. Room: E5.22, 16:00 - 17:15. Behavioural ecologists have built complex models of optimal behaviour in simple environments. I argue that they need to focus on simple mechanisms that perform well in complex environments. This is, however, a difficult area for a modeller in that various modelling choices are not obvious. In particular, what complexities should a model world include and what sorts of rules should be considered? In my talk I consider an approach that is more limited but which sidesteps these difficulties; I will take rules that have evolved and ask what aspects of the environment make these rules ecological rational. I argue that various psychological phenomena can only be understood in adaptive terms if the environment in which the rules evolved was sufficiently complex. For example, rules may only make sense in adaptive terms if there are specific spatial or temporal heterogeneities. I illustrate this general theme using examples that show that lack of transitivity, contrast effects, aspects of prospect theory, and other behavioural phenomena which are often regarded as irrational can all have adaptive explanations.
2016-09-15Anna Bayona Font(ESADE) Supply Function Competition, Private Information, and Market Power: A Laboratory Study. Room: E5.22, 16:00 - 17:15. In the context of supply function competition with private information, we test in the laboratory whether—as predicted in Bayesian equilibrium—costs that are positively correlated lead to steeper supply functions and less competitive outcomes than do uncorrelated costs. We find that the majority of subjects bid in accordance with the equilibrium prediction when the environment is simple (uncorrelated costs treatment) but fail to do so in a more complex environment (positively correlated costs treatment). Although we find no statistically significant differences between treatments in average behaviour and outcomes, there are significant differences in the distribution of supply functions. Our results are consistent with the presence of sophisticated agents that on average best respond to a large proportion of subjects who ignore the correlation among costs. Experimental welfare losses in both treatments are higher than the equilibrium prediction owing to a substantial degree of productive inefficiency
2016-06-30Charles Sprenger(University of California at San Diego) Taxes and Procrastination: Evidence from Boston Tax-Filers. Room: REC E 0.03, 16:00 - 17:15. No abstract available.
2016-06-13Amos Schurr(Ben-Gurion University Business School) Eyes on the Price – Behavioral and Attentional Processes in Bidding Procedures. Room: E1.51, 16:00 - 17:15. Competitive Bidding is the most common method used by organizations and governments to receive bids from prospective suppliers. Although this method is meant to ensure objective consideration of proposals, recent findings reveal a Lower-Bid-Bias. Evaluators tend to favorably appraise the cheapest rather than the best bid. In five experiments, utilizing eye-tracking techniques and comparing professionals’ to novices’ decisions, we uncover the attentional and behavioral processes underlying the bias and examine its extent. Practical solutions and one analytical model will be discussed.
2016-05-26Alexander Cappelen(Norwegian School of Economics) False positives and false negatives in distributive choices. Room: REC E 0.03, 16:00 - 17:15. Abstract: Major tensions in the welfare debate concern how to handle situations in which we are unable to distinguish between those who are deserving and those who are undeserving. We report from the first economic experiment designed to study how people make trade-offs between giving money to some who are undeserving, false positives, and not giving money to some who are deserving, false negatives. We study the behavior of a representative sample of 2000 participants from the US and Norway, who were asked to distribute a sum of money between two groups of workers. In the first group all workers had done an assignment, but in the second group a number of the workers had falsely reported to have done the assignment. We find that the willingness to equalize income between
the two groups is decreasing in the number such cheaters in the second group. A large majority of the participants in both countries is, however, more concerned with avoiding false negatives than with avoiding false positives. We also find that the aversion to false negatives is related to political preferences, with right-wing voters being more concerned with false negatives than left-wing voters. Our results suggest that political disagreements is not only about what should be viewed as deserving, but also about how to handle situations in which we cannot distinguish between those who are deserving and those who are undeserving.
2016-05-12Martin Osborne(University of Toronto) Information aggregation with costly reporting. Room: Tinbergen Institute Amsterdam, Room 1.01., 16:00 - 17:15. A group of individuals with common interests has to choose a binary option whose desirability depends on an unknown binary state of the world. The individuals independently and privately observe a signal whose distribution depends on the state. Each individual chooses whether to reveal her signal, at a cost. We show that if for all revelation choices of the individuals the option chosen by the group is optimal given the signals revealed and the set of individuals who do not reveal signals, then in a large group few signals are revealed, and these signals are extreme. When sufficiently informative signals exist, each individual reveals only signals that exceed a threshold and the group chooses the action appropriate for the state suggested by a signal above the threshold if and only if at least one signal is revealed. If the group can commit to use an anonymous decision rule that does not necessarily select the best option given the signals revealed, it can do no better, but if the rule can be non-anonymous then an improvement in welfare is possible.
2016-04-21Adriaan Soetevent(Rijksuniversiteit Groningen) A Commercial Gift for Charity. Room: REC E 1.51, 16:00 - 17:15. Commercial firms are increasingly tying the sales of their products with donations to a charitable cause. Apart from a charitable motive, offering these charity-linked bundles could be a strategic instrument for firms to increase profits. We report the results of an experiment that investigates for different of these schemes whether they are able to increase profits net of the donation, and which donation scheme is most profitable. From a theoretical perspective, given rational agents, complete markets, and absent transaction cost, selling charity-linked bundles should not be profitable even when consumers are altruistic. We find however that sellers who donate 5% of their gross revenues or an equivalent absolute amount do attain significantly higher profits. No such effect is observed when the donation is limited to 2%. Offering charity-linked bundles considerably crowds out private donations by buyers.
2016-03-31Ro'i Zultan(Ben Gurion University) Punishment and Reward Institutions with Harmed Minorities. Room: REC E 0.03, 16:00 - 17:15. Public goods benefit the community without the power of exclusion. A public good, however, may be a public bad for certain members of the community, e.g., in not-in-my-backyard (NIMBY) problems. When the benefits of the public good exceed the harm inflicted on a minority, it is still socially desirable to provide the public good, and efficient provision may also be Pareto improving if the harmed minorities are compensated. We study experimentally voluntary contributions to public goods where provision is efficient, but harms a minority in the group. We test the effects of punishment and reward institutions, with and without communication. With harmed minorities, contributions are not viewed as unequivocally desirable and are not increased by communication or punishment. With the reward institution, communication facilitates compensation. Consequently, contribution is no longer viewed as negative, and majority contributions increase. Taken together, our results establish that the existence harmed minorities who are an integral part of the group dramatically change perceptions and behavior in voluntary contributions to public goods. We suggest team reasoning as the underlying mechanism.
2016-03-10Erik Mohlin(Lund University) Observations on Cooperation. Room: REC E 1.51, 16:00 - 17:15. We study environments in which agents are randomly matched to play the Prisoner's Dilemma, and each player observes a few of the partner's past actions against other opponents. We depart from the existing literature in two key aspects: (1) we allow few agents in the population to be commitment types, and (2) we do not assume a time zero in which the entire community start interacting. We show that the presence of few committed agents destabilizes the existing mechanisms to sustain cooperation, and we present a novel mechanism (which is essentially unique) that sustains stable cooperation in many environments.
2016-02-25Lisa Ordonez(University of Arizona) Goals: The good, the bad, and the ugly. Room: E0.07, 16:00 - 17:15. Hundreds of studies and almost half a century of research has shown us that “goals work.” The use of specific, challenging goals has been shown to increase effort, persistence, and performance on various tasks (the good). However, recent research demonstrates that goals can lead to unexpected and unwanted negative outcomes such as narrowed focus, risk taking (the bad) and, more disturbing, unethical behavior (the ugly). I will summarize a series of behavioral experiments conducted with colleagues showing how and why goals can lead to these unwanted outcomes and some suggestions for minimizing their impact.
2016-02-04Daniel Chen(Institute for Advanced Studies Toulouse) Covering: Mutable Characteristics and Perceptions of Voice in the U.S. Supreme Court. Room: E0.04 , 16:00 - 17:15. This paper demonstrates that voice-based snap judgments based solely on the introductory sentences of lawyers arguing in front of the Supreme Court of the United States predict outcomes in the Court. The connection between vocal characteristics and court outcomes is specific to perceived masculinity even when judgment of masculinity is based only on less than three seconds of exposure to a lawyer’s speech sample. Although previous studies suggest a significant role of vocal characteristics in the court room, prior to our work none has identified a definitive connection between such characteristics and court outcomes holding the content of the speech effectively constant. Using data on all oral arguments made by male lawyers between 1999 and 2013, we find that roughly 30% of the association between voice-based masculinity and court outcomes comes from within-male lawyer variation, whereas 70% comes from between-male lawyer variation. Moreover, voice-based first impressions predict both male and female lawyers’ court outcomes, but in different ways: males are more likely to win when they are perceived as less masculine, whereas females are more likely to win when they are perceived as more feminine. Ratings of male lawyers by male subjects and female lawyers by female subjects were more predictive of court outcomes.
Liberal justices were more likely to vote against male lawyers perceived as more masculine while conservative justices were more likely to vote for female lawyers perceived as more feminine. Pre-trial case characteristics were not correlated with voice characteristics. Correlations between perceived masculinity and court outcomes were stronger among petitioners coming from private firms. In mechanism experiments, male voices perceived as more masculine were rated as more likely to win, but the correlation was halved when information or incentives for accuracy was provided. Our findings suggest that vocal characteristics may be relevant in even as solemn a setting as the Supreme Court of the United States, where correlations between malleable advocate characteristics and high-stakes outcomes should not persist if law firms and advocates adjust their behavior to eliminate such correlations.
2016-01-18Michele Belot(University of Edinburgh) Mind, Behaviour and Health - A Randomized Experiment. Room: E0.22 (UvA Roeterseiland), 16:00-17:15. This paper investigates to what extent behavioural traits, such as patience, risk aversion and self-control are trainable. If they are, this would open new prospects to improve lifestyle choices and health. We conduct a randomised field experiment with 139 subjects to investigate the effects of a psychological training intervention - consisting of mindfulness training - affects patience, risk aversion and self-control. We also measure the effects of the intervention on a range of health-related behaviours. We do not find strong evidence that mindfulness training changes decision-making processes. We find evidence that it reduces reported levels of stress, but the effects on health-related behaviours are mixed.
2015-12-17Seda Ertac(Koc University) CANCELLED (will be postphoned, check back later). Room: , 16:00-17:15. No abstract available.
2015-12-08Roberto Galbiati(Sciences Po) Voters’ Response to Public Policies: Evidence from a Natural Experiment. Room: E1.50 (UvA Roeterseiland), 16:00-17:15. This paper analyzes the voters’ response to a public policy by exploiting a natural experiment arising from the 2006 Collective Clemency Bill in Italy. The design of the Bill created idiosyncratic incentives to recidivate across pardoned individuals. Our results show that these individual incen- tives created different policy effects across municipalities. Cities where the incentives to recidivate of pardoned individuals resident in that municipality were higher, experienced a higher recidivism rate. At the same time, a higher incentive to recidivate at the municipal level lead to: a) newspapers reporting more crime news relative to the pre-pardon period (as well as more crime news involving pardoned individuals); b) voters holding worse beliefs on the incumbent government’s crime con- trol policies. Finally, the incumbent government’s experienced a worse electoral performance in the April 2008 elections relative to the opposition coalition in municipalities where pardoned individu- als had a higher incentive to recidivate. Overall, we provide direct empirical evidence showing that voters receive private signals consistent with the effects of public policies. In turn, they use these information to form their posterior beliefs on the quality of the incumbent government’s policies. Ultimately, voters keep the incumbent government accountable by conditioning their vote on their posterior beliefs.
2015-11-26Holger Herz(University of Zurich) Economic Preferences, Dropout from Education, and Transition to the Labor Market. Room: E0.10 (UvA Roeterseiland), 16:00-17:15. Evidence suggests that acquiring human capital is related to better life outcomes, yet young peoples’ decisions to stop or continue acquiring human capital are still poorly understood. In this paper, we investigate the role of economic preferences and behavioral biases in such decisions. Using a data set that is unique in its combination of real-world observations on student outcomes and experimental data on preferences, we first analyze dropout behavior in upper-secondary education and show that a low degree of patience is one of its key determinants. Further, we investigate the impact of preferences on students’ decisions to enter the labor market or to continue education at the end of upper-secondary education. Three months before termination of their current program, we find that present-biased students are less likely to have concrete continuation plans, and that more loss averse students are more likely to enter the labor market and to have a definite job offer. These findings empirically inform how students’ make decisions about the acquisition of human capital, and have implications for policy aimed at increasing human capital.
2015-11-20Lise Vesterlund(University of Pittsburgh) Breaking the Glass Ceiling with “No”: Gender Differences in Accepting and Receiving Requests for Non-Promotable Tasks. Room: E 1.50, 16:00 - 17:15. Gender differences in task allocations may help sustain vertical gender segregation in labor markets. If women hold more non-promotable tasks then they may progress more slowly than men in organizations. Examining environments where a volunteer must be found for a task that everyone prefers be completed by someone else (writing a report, serving on a committee, etc.) we find that, relative to men, women more frequently volunteer, more frequently are asked to volunteer, and more frequently accept requests to volunteer. These differences are consistent with the belief that women, less than men, say ‘No’ to request to perform non-promotable tasks.
2015-11-12Double Seminar: Maja Adena(WZB Berlin) Radio and the Rise of Nazis in Pre-War Germany. Room: E0.07 (UvA Roeterseiland), 15:00-16:00. How do the media affect public support for democratic institutions in a fragile democracy? What role do they play in a dictatorial regime? We study these questions in the context of Germany of the 1920s and 1930s. During the democratic period, when the Weimar government introduced pro-government political news, the growth of Nazi popularity slowed down
in areas with access to radio. This effect was reversed during the campaign for the last competitive election as a result of the pro-Nazi radio broadcast following Hitler’s appointment as German chancellor. During the consolidation of dictatorship, radio propaganda helped the Nazis to enroll new party members. After the Nazis established their rule, radio propaganda incited anti-Semitic acts and denunciations of Jews to authorities by ordinary Germans. The effect of anti-Semitic
propaganda varied depending on the listeners’ predispositions toward themessage. Nazi radio was most effective in places where anti-Semitism was historically high and had a negative effect in places with historically low anti-Semitism.
2015-11-12Double Seminar: Drazen Prelec(MIT) Brain mechanisms of self-signaling, under oath. Room: E0.07 (UvA Roeterseiland), 16:15-17:15. Decisions often reveal something about of one’s preferences, to others but also to oneself. After the fact, this can be a source of pleasure or pain; before the fact, anticipation of these feelings can influence what one chooses to do. Such self-signaling of internal characteristics through actions is probably unique to humans, and is implicated in both self-control and in the maintenance of social norms. It also presents a challenge to economic and philosophical conceptions of rational action. I will briefly discuss theoretical approaches to self-signaling, and then turn to some recent behavioral and neuroimaging results obtained in our lab.
2015-10-22Joshua Miller(Bocconi University) Surprised by the Gambler's and Hot Hand Fallacies? A Truth in the Law of Small Numbers. Room: E1.50 (UvA Roeterseiland), 16:00-17:15. We find a subtle but substantial bias in a standard measure of the conditional dependence of present outcomes on streaks of past outcomes in sequential data. The mechanism is a form of selection bias, which leads the empirical probability (i.e. relative frequency) to underestimate the true probability of a given outcome, when conditioning on prior outcomes of the same kind. The biased measure has been used prominently in the literature that investigates incorrect beliefs in sequential decision making --- most notably the Gambler's Fallacy and the Hot Hand Fallacy. Upon correcting for the bias, the conclusions of some prominent studies in the literature are reversed. The bias also provides a structural explanation of why the belief in the law of small numbers persists, as repeated experience with finite sequences can only reinforce these beliefs, on average.
2015-10-08Mohammed Abdellaoui(HEC Paris) Temporal Resolution in Decision under Risk: Do We Need A More Descriptive Model?. Room: E1.50 (UvA Roeterseiland), 16:00-17:15. Few years after the seminal works of von Neumann & Morgenstern (1944) and Savage (1954) that established the formal and logical basis of expected utility (EU), it was observed that
this model failed to recognize that decision makers might be non-neutral towards the timing of resolution of uncertainty (TRU). For instance, Markowitz (1959) and Mossin (1969) pointed
out that choice between lotteries should take into account when the outcomes will become known (Machina, 1984). In fact, most economically important decisions such as investment,
portfolio / risk management, and production, among others, typically involve delayed resolution of uncertainty. For many decisions, the TRU may generate anxiety or hopefulness about the final outcomes (e.g. prenatal diagnosis, stock owners selling decisions during a financial crisis).
We propose an empirical investigation on non-neutrality towards the TRU where uncertainty is allowed to be resolved at a variable date t laying between now and a fixed horizon T, in which monetary gains are received. Non-neutral attitude towards the TRU is captured through three approaches. The first approach accounts for preference for early resolution through probability discounting. The second assumes Kreps & Porteus (1978) recursive expected utility. The third postulates a temporal version of rank-dependent utility, assuming that delayed resolution of uncertainty impact probability weighting rather than utility (as under Kreps and Porteus, 1978).
Our data show that a combination of the first and the third approaches fits data in a satisfactory fashion.
2015-09-24Gijs van der Kuilen(Tilburg University) Measuring Multivariate Risk Preferences. Room: E1.50 (UvA Roeterseiland), 16:00-17:15. Many risky decisions involve tradeoffs between multiple attributes. According to theory, the cross-risk attitudes correlation aversion, cross-prudence and cross-temperance determine how risk preferences over multiple attributes co-vary and interact. We obtain model-free measurements of these cross-risk attitudes in three economic domains, viz., time preferences, social preferences, and preferences over waiting time. This first systematic empirical exploration of multivariate risk preferences provides evidence for assumptions made in economic models on inequality, labor, time preferences, saving, and insurance. We observe correlation seeking and cross-intemperance in a condition involving social preferences, which is in line with models predicting inequality aversion. Results from a condition involving time preferences cast doubt on the separability of utility across time, an assumption often invoked by models of inter-temporal decision making.
2015-06-25Pedro Rey-Biel(Universitat Autonoma de Barcelona) Satisfaction and Payment with Experience Goods: Experimenting in the Theatre. Room: JK 2.50, 15:00-16:15. We take a new look at the relationship between utility derived from a product and willingness to pay by doing experiments with an experience good, theatre plays, in which audience members use a pay-what-you-want system for their tickets. Using several satisfaction measures, including ex-ante and ex-post questionnaires and facial recognition software, we find that, after controlling for observables, payment increases with the degree in which a product actually meets individual expectations.
2015-06-18Ingela Alger(Toulouse School of Economics) Evolution leads to Kantian morality. Room: JK 2.50, 16:00-17:15. What preferences or moral values should one expect evolution to favor? We provide a generalized deÖnition of evolutionary stability of heritable traits in arbitrarily large aggregative interactions under random matching that may be assortative. We establish stability results when these traits are strategies in games, and when they are preferences or moral values in games in which each playerís preferences or moral values are the playerís private information. We show that certain moral preferences, of a kind that exactly reáects the assortativity in the matching process, are evolutionarily stable. In particular, selÖshness is evolutionarily unstable as soon as there is any assortativity. We also establish that evolutionarily stable strategies are the same as those played in equilibrium by rational individuals with evolutionarily stable moral preferences. We provide simple operational criteria for evolutionary stability and apply these to canonical examples.
2015-05-28Herve Moulin(University of Glasgow) One dimensional prior-free mechanism design. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. The three perenial goals of prior-free mechanism design, efficiency, incentive compatibility (strategyproofness) and fairness (horizontal equity) are known to be incompatible for abstract voting (Gibbard-Satterthwaite (1974)), the dis-
tribution of private goods (Hurwicz (1972) Serizawa (2002)), the provision of public goods (Green La¤ont (1977) Serizawa (1999)), and more. Two notable one-dimensional exceptions are voting with single-peaked preferences (Black (1958), Dummett and Farquharson (1961), Pattanaik (1974)) and dividing a
non disposable commodity with convex private preferences (Sprumont (1991), Ching (1994)). We show that these three goals are still compatible in any collective decision problem where each agent cares about a one-dimensional parameter and prefer-
ences are convex, provided the range of allocation pro…les is an arbitrary convex and closed set. We construct a mechanism equalizing bene…ts from a benchmark allocation, that is efficient, (strongly) groupstrategyproof, peak-only, continu-
ous, and fair: it respects the symmetries of the problem and rules out envy between symmetric agents.
Applications of our result include: the division of shares in a joint venture under quota and other linear constraints; the coordination of workloads between workers and managers, or between several teams in a production chain when inputs are substitutes or complementary; and the distribution of shipping loads under bilateral constraints. In contrast to the negative message of the seminal results, in the one-dimensional contexts we expect an embarrassment of riches, leaving much ‡flexibility to the mechanism designer.
2015-05-13Carsten de Dreu(CREED and Department of Psychology, UvA) The Neurobiology of Greedy Predation and Fear-Driven Defense in Economic Contests. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Human cooperation often gives way to a desire for self-expansion, or to fear-driven tendencies to protect against such predatory tendencies in others. In fact, “a great proportion of all efforts in the world are employed in merely neutralizing one another…energies…spent by mankind in injuring one another, or in protecting against injury (John Stuart Mill).” Mill’s observation has its game-experimental analogue in predator-prey contests that are used here to unravel the neurobiological underpinnings of greedy predation and fear-driven defense. I will present “work in progress” (with Frans van Winden, Michael Giffin, Mariska Kret, Richard Ridderinkhof, and Ilja Sligte, among others) examining two key brain circuitries–the amydgala (involved in threat-detection) and the prefrontal cortex (involved in self-control), along with three neurohormonal modulators–oxytocin, cortisol, and testosterone. Results converge on the possibility that (i) greedy predation is relatively calculative, conditioned by the prefrontal cortex, and reduced by empathy-inducing oxytocin, whereas (ii) fear-driven defense is more intuitive, conditioned by the amygdala, and modulated by stress-regulating cortisol. A study using neuro-navigated Theta-Burst Stimulation suggests that activated (versus disrupted) prefrontal cortex reduces predation but also increased prey-defense. Accordingly, cooperation can be rescued, and wasteful conflict reduced, by increasing (prefrontal cortex modulated) self-control and risk-aversion among those desiring to increase relative wealth while, simultaneously, relaxing control and risk-aversion among those fearing possible predation.
2015-04-14Dan Benjamin(Cornell University) Biased Beliefs About Random Samples: Evidence from Two Integrated Experiments. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. This paper describes results of a pair of incentivized
experiments on biases in probabilistic judgments about random samples. Consistent with the Law of Small Numbers (LSN), participants exaggerated the likelihood that short sequences of coin flips would be balanced between heads and tails. Consistent with the Non-Belief in the Law of Large Numbers (NBLLN), participants underestimated the likelihood that large samples would be close to 50 percent heads. However, we identify some shortcomings of existing models of LSN, and we find that NBLLN may not be as strong or stable as previous studies suggest. Our within-subject design of asking many different questions about the same data lets us disentangle the biases from: (i) possible rational alternative interpretations; and (ii) bin effects a la support theory, whereby the total probability assigned to outcomes systematically depends on the categories used to elicit beliefs. The bin effects are large and systematic, and controlling for them affects some results, but we find LSN and NBLLN even after removing bin effects as a confound.
2015-04-07David Cesarini(New York University) Wealth, Health, and Child Development: Evidence from Administrative Data on Swedish Lottery Players. Room: Tinbergen Institute Amsterdam, 16.00-17.15. We use administrative data on Swedish lottery players to estimate the causal impact of wealth on players' own health and their children's health and developmental outcomes. Our estimation sample is large, virtually free of attrition, and allows us to control for the factors ‒ such as the number of lottery tickets ‒ conditional on which the prizes were randomly assigned. In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs.
Our estimates allow us to rule out effects on 10-year mortality one sixth as large the cross-sectional gradient. In our intergenerational analyses, we find that wealth increases children's health care utilization in the years following the lottery and may also reduce obesity risk. The effects on most other child outcomes, which include drug consumption, scholastic performance, and skills, can usually be bounded to a tight interval around zero. Overall, our findings suggest that correlations observed in affluent, developed countries between (i) wealth and health or (ii) parental income and children's outcomes do not reflect a causal effect of wealth.
2015-03-11Zachary Grossman(University of California at Santa Barbara) Silence is Golden: Communication Cost and Team Problem Solving. Room: J/K 2.50 (Roeterseiland), 16:00-17:15. We study team performance solving a complex class of logic problems, nonograms. The value of solving the puzzles quickly and the cost of sending messages are systematically varied. Either adding a bonus for fast solutions or a cost for sending message significantly increases the likelihood that the group is able to solve the problem quickly (faster than median). Groups communicate frequently and are almost always on task, but sending more messages seems to harm performance. This suggests that teams are harming performance rather than helping it.
2015-02-26Stefan Trautmann(University of Heidelberg) Understanding Bank-Run Contagion. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We study experimental coordination games to examine through which transmission channels, and under which information conditions, a panic-based depositor-run at one bank may trigger a panic-based depositor-run at another bank. We find that
withdrawals at one bank trigger withdrawals at another bank by increasing players’ beliefs that other depositors in their own bank will withdraw, making them more likely to withdraw
as well. Importantly though, observed withdrawals affect depositors’ beliefs, and are thus contagious, only when depositors know that there are economic linkages between their bank and the observed bank.
2015-02-12Martin Dufwenberg(University of Arizona/Bocconi) Frustration and Anger in Games. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. The economic consequences of anger may be important, concerning e.g. pricing, traffic safety, violence, and politics. Drawing on insights from psychology, we develop a formal approach to exploring how frustration and anger, via blame and aggression, shape interaction and outcomes in economic settings.
2015-01-29Anna Dreber(Stockholm School of Economics) Using Prediction Markets to Estimate the Reproducibility of Science. Room: J/K 2.50 (Roeterseiland), 12:00-13:15. There is increasing concern about reproducibility in science. Factors contributing to a lack of reproducibility include low statistical power, the testing of hypotheses with low prior probability of being true, and publication bias. In a number of projects we are testing whether prediction markets can be used as a tool to assess the reproducibility of published scientific results. We compare prediction market forecasts to surveys of market participant’s individual forecasts. The prediction market also allows us to estimate probabilities for the hypotheses to be true. We show that such probabilities can be assigned to a hypothesis for different points in the testing process: before and after the replication has been performed, and even before the original study has been performed. We discuss in detail our first prediction market on the reproducibility of psychology studies from prominent psychology journals, which is part of the Open Science Collaboration Reproducibility Project.
2015-01-15Matthew Embrey(Maastricht University) Bargaining with a Residual Claimant: An Experimental Study. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We experimentally investigate a bargaining environment in which players negotiate over a fixed payment to one player, while the other player receives the residual from a random pie realization after subtracting the fixed payment. Contrary to the intuition that risk exposure is detrimental, we show that residual claimants are able to extract a risk premium, which is increasing in risk exposure. In some cases the premium is so high that it is advantageous to bargain over a risky pie rather than a risk-less pie. Contrary to theory, the comparatively less risk averse residual claimants benefit the most. Moreover, bargaining frictions increase as risk increases, and we document more frequent disagreements as risk increases. When given the chance to choose a less or more risky distribution over which to bargain, residual claimants tend to choose the more risky distribution only when there is the possibility of an equal-split ex-post. Our results suggest that theoretical bargaining models require some separation between the determinants of bargaining power and fair compensation for risk exposure.
2014-12-11Double Seminar: Martin Sefton(University of Nottingham) Team Incentives and Leadership. Room: J/K 2.50 (UvA, Roeterseiland), 15:00 - 17:30. We study, experimentally, how two alternative incentive mechanisms affect team performance, and how a team chooses between alternative mechanisms. In our team production setting team output is either shared equally among team members or allocated by a team leader. We find that team output is higher when a leader has the power to allocate output. However, this mechanism also generates large differences between earnings of leaders and other team members. When team members can choose how much of team output is to be shared equally and how much is to be allocated by a leader, they tend to restrict the leader's power to distributing less than half of the pie.
2014-12-11Double Seminar: Daniele Nosenzo(University of Nottingham) The effects of voluntary participation on cooperation: entry or exit? . Room: J/K 2.50 (UvA, Roeterseiland), 15:00 - 17:30. Individual cooperation for the provision of public goods is vital for human societies. However, individual material incentives to free-ride on others' contributions are detrimental to cooperation, especially when reputation and punishment mechanisms are absent. We study voluntary participation to public good provision as an alternative mechanism to reputation and punishment. Voluntary participation may foster public good contributions through two distinct mechanisms. On the one hand, cooperation may increase through assortative selection of interaction partners. On the other hand, the fact that participation is voluntary gives group members the opportunity to leave the group as a mean to resist exploitation by free-riders, thus reducing the incentives to free-ride. We examine the relative effectiveness of these two mechanisms in a one-shot two-person public goods game experiment. Across three treatments we vary the extent to which subjects can voluntarily participate in the game: in a Baseline treatment subjects are forced to take part into the public goods game. In an Entry treatment, before interacting in the game, subjects choose whether or not to opt in; if at least one player does not opt in, players receive an outside option payoff. In an Exit treatment, after having interacted in the public goods game (and having learned the outcome of the interaction), players can opt out of the game and secure the outside option payoff. Our results point to the crucial relevance of the exit option over the entry one in increasing public good provision. Assortative selection of interaction partners seems to play a minor role in our setting, whereas the threat of retaliation through exits seems to be a powerful force that disciplines free-riding.
2014-12-04Rebecca Morton(New York University) Political Polarization and Support for Reform: Experimental Evidence from Egypt. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We examine whether political polarization in elections is an obstacle to reform in an incentivized laboratory experiment using natural ideological differences in Egypt. Specifically, we create political societies which subjects join based on ideological preferences. Then, voters choose between enacting a reform, which will lead to higher
payoffs for all (but has a differential benefit for supporters of one of the political societies) versus not enacting the reform and everyone facing the same lower payoffs. We find that when voters are provided with information that support for the reform varies across ideological societies in previous sessions, they are significantly more likely to report that their vote choices are influenced by their society membership to a greater extent than when such information is not provided. We also find some evidence that the information influences voter choices in the election. Our results suggest that ideological polarization can impede reform in elections.
2014-11-27Bertil Tungodden(Norwegian School of Economics) Sorry, this seminar has been cancelled. Room: , . No abstract available.
2014-11-20Andreas Leibbrandt(Monash University) This seminar has been cancelled. Room: , 16.00-17.15. No abstract available.
2014-10-09Jon Levin(Stanford University) Sales Mechanisms in Online Markets: What Happened to Internet Auctions?. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Consumer auctions were very popular in the early days of internet commerce, but today online sellers mostly use posted prices. Data from eBay shows that compositional shifts in the items being sold, or the sellers offering these items, cannot account for this evolution. Instead, the returns to sellers using auctions have diminished. We develop a model to distinguish two hypotheses: a shift in buyer demand away from auctions, and general narrowing of seller margins that favors posted prices. Our estimates suggest that the former is more important. We also provide evidence on where auctions still are used, and on why some sellers may continue to use both auctions and posted prices. Link to paper: http://www.stanford.edu/~jdlevin/Papers/InternetAuctions.pdf
2014-09-25Ben Vollaard(Tilburg University) Turning a bad example into a warning. A natural field experiment into salience of law enforcement. Room: J/K 2.50 (UvA, Roeterseiland), 13.00-14.15. We present evidence that efforts to make law enforcement activity more salient at minimal cost greatly reduce illegal behavior. We conduct a natural field experiment into illegal disposal of household garbage on the sidewalk. In the control condition, law enforcement officers patrol the streets, and occasionally look for name and address identifiers in illegally disposed garbage bags. In a number of randomly selected locations, in addition to the regular surveillance activities, illegally disposed garbage bags were marked with bright yellow warning labels saying 'This bag has been found by law enforcement. 90 euro fine for illegal disposal'. We find residents to respond to the warning labels by reducing illegal disposal of garbage. We also find residents to become less likely to leave name and address identifiers in disposed garbage bags, which subverts law enforcement.
2014-09-11Roberto Weber(University of Zurich) Do Markets Erode Social Responsibility?. Room: JK2.50, 16:00-17:15. This paper studies socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs mitigates the externality. Our first study, conducted in Switzerland, reveals a persistent preference among many consumers and firms for avoiding negative social impact in the market, reflected both in the composition of product types and in a price premium for socially responsible products. Socially responsible behavior is generally robust to varying market settings, such as increased seller competition and limited consumer information, and it responds to costs and prices in a manner consistent with a model in which positive social impact is a utility-enhancing feature of a consumer product. In a second study, we investigate whether market social responsibility varies across societies by comparing market behavior in Switzerland and China. While subjects in Switzerland and China do not differ in their degree of social concern in non-market contexts, we find that low-cost production that creates negative externalities is significantly more prevalent in markets in China. Across both studies, consumers in markets exhibit less social concern than subjects in a comparable individual choice context, though the difference is much smaller in Switzerland. (with Björn Bartling and Lan Yao)
2014-06-26Marta Serra Garcia(UCSD) Education and Intertemporal Choice: Can Interventions Reduce Time Inconsistency?. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We examine the impact of a randomly assigned financial education program on adolescents' intertemporal choices, using an incentivized experiment with 994 participants. Time inconsistent choices as well as the choices inconsistent with the law of demand become less frequent among treated adolescents, compared to adolescents who did not participate in the program. Further, adolescents' intertemporal choices in the control group exhibit significant aggregate present-bias, while those in the treatment group do not. Hence, the educational intervention leads to more consistent intertemporal choices, both in the dimension of price
(law of demand) and time.
2014-06-12David Cooper(Florida State University) Coordination with Endogenous Contracts: Incentives, Selection, and Strategic Anticipation. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Existing work on overcoming coordination failure suggests that an exogenous increase in incentives to coordinate can help groups escape from the productivity trap, but the effect is far from perfect. Previous work on coordination games (Van Huyck, Battalio, and Beil, 1993), as well as related lab and field studies on incentives (i.e. Lazear, 2000; Dohmen and Falk, 2011), suggest that endogenous changes in incentives with self-selection into contracts will yield a larger effect than exogenously imposed contracts. Our experimental design allows us to confirm this prediction and decomposes the causes of this effect between the direct effect of changing incentives, selection, and strategic anticipation. We find that the difference between endogenous and exogenous contract is primarily due to selection. Fitting a structural model of learning to our data, the key feature needed to track the data is heterogeneity in initial beliefs. We use this model to predict a “zero sum” effect of incentive contracts.
2014-05-28Arthur Robson(Simon Fraser University) Biology and the Arguments of Utility. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Why did evolution not give us a utility function that is offspring alone? Why do we care intrinsically about other outcomes, such as food, and what determines the intensity
of such preferences? A common view is that such other outcomes enhance fitness and the intensity of our preference for a given outcome is proportional to its contribution to fitness. We argue that this view is incomplete. SpeciÖcally, we show that in the
presence of informational asymmetries, the evolutionarily most desirable preference for a given outcome is determined not only by the significance of the outcome, but by the Agent's degree of ignorance regarding its significance. Our model also sheds light on the phenomena of peer effects and prepared learning, whereby some peer attitudes are more influential than others.
2014-05-22Nora Szech(Karlsruher Institute of Technology) Moral Transgression in the Pursuit of Excellence. Room: J/K 2.50 (UvA, Roeterseiland), 15.00-17.15. -
2014-05-22Subhasish Chowdhury(University of East Anglia) An Experimental Analysis of Anti-trust Enforcement under Avoidance. Room: JK2.50, 15:00-17:00. Competition law offenders use a multitude of avoidance activities – such as consulting with anti-trust experts, destroying or covering up of incriminating evidence, lobbying for favourable policy guidelines, restructuring of a firm’s finance – to reduce their potential anti-trust fines. This paper explores the effect of such activities on formation, activity and stability of cartels by means of a market experiment. We implement a 2x2 factorial design with and without the ability to incur avoidance activities vs. the existence (or non-existence) of a leniency. To the extent of our knowledge, we are the first to address avoidance activities from a behavioral perspective, and our results indicate that many of the theoretical predictions are confirmed in an experimental setting, while some critical results turn out to be different in the data.
The results show that the possibility to avoid punishment may trigger more risk-averse firms to collude, which translates into a higher rate of cartel formation. We find that not only avoiding firms charge higher prices, while in general the possibility to use avoidance reduces the rate of price deviations; firms that engage in avoidance deviate more than twice as often when a leniency programme exists. Additionally, there is evidence that some firms utilize avoidance as an alternative means to avoid being punished for price deviations by other self-reporters.
2014-05-02CREED-NYU Meeting(UvA and NYU) CREED-NYU Meeting. Room: J/K 2.50 (UvA, Roeterseiland), 09.00-16.45. Workshop organized by Tinbergen/CREED and New York University. For more information about the program, please contact Theo Offerman (T.J.S.Offerman@uva.nl).
2014-04-17Jonathan Woon(University of Pittsburgh) Candidates, Campaigns, and Gender Differences in Political Behavior. Room: J/K B.18 (UvA, Roeterseiland), 15.00-16.15. We conduct experiments to investigate whether differences in behavior between men and women in political settings might contribute to the lack of diversity in many political decision-making bodies, focusing on decisions to become candidates and choices about campaign communication when group members’ payoffs depend on selecting the best member to complete a real effort task. We find that candidate decisions depend on the selection mechanism: men and women are equally likely to volunteer when the representative is chosen randomly, but that women are less likely to become candidates when the representative is chosen by an election (even controlling for task ability, beliefs, and risk preferences). With respect to campaign messages, the evidence is mixed: women tend to be more ambiguous and men tend to exaggerate more when the message space is unconstrained, but differences disappear when the message space is restricted.
2014-04-10Alex Peysakhovich(the Human Cooperation Lab (Yale) and Harvard Program for Evolutionary Dynamics.) Habits of Virtue: Creating norms of cooperation and defection in the laboratory. Room: JK2.50, 16:00-17:00. Cooperation between unrelated individuals is a key element of human behavior. So how can we explain the great variation in cooperative norms that has been observed across cultures? A potential answer comes from understanding the cognitive underpinnings of cooperation: individuals internalize the cooperative or selfish strategies that are successful in their daily social interactions. Thus, when forces such as repetition, reputation and sanctions effectively promote prosociality, they also cause individuals to adopt cooperation as a default response; and this intuitive predisposition towards cooperation then continues to operate even in one-shot anonymous interactions beyond the reach of these mechanisms. Here we provide experimental evidence for this hypothesis by creating in vitro cultures of cooperation or defection in the laboratory. Our subjects play a series of repeated Prisoner’s Dilemma games constructed to make cooperation either an advantageous or disadvantageous strategy. In doing so, we immerse our subjects in environments where both themselves and those around them are consistently cooperating or defecting. We then test whether these behaviors become internalized by examining behavior in a subsequent battery of one-shot anonymous interactions. As predicted, subjects randomized into the cooperative environment are substantially more prosocial afterward, as well as more likely to punish selfishness. We provide evidence that this acculturation effect is driven by the remodeling of cooperative intuitions. We also show that the baseline behavior of American college students (who developed under strong institutions) matches that of our in vitro cooperative environment. Furthermore, this effect extends beyond economic games: our in vitro cooperative culture causes subjects to be more trusting, as measured by a standard survey instrument used in cross-cultural studies. These results provide direct evidence for the social heuristics hypothesis and shed light on the co-evolution of norms and institutions.
2014-03-27Michele Belot(University of Edinburgh) The Spillover Effects of Monitoring: A Field Experiment. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We provide field experimental evidence of the effects of monitoring in a context where productivity is multi-dimensional and only one dimension is monitored and incentivised. We hire students to do a job for us. The job consists of identifying euro coins. We study the effects of monitoring and penalising mistakes on work quality, and evaluate spillovers on non incentivised dimensions of productivity (punctuality and theft). We find that monitoring improves work quality only if incentives are large, but reduces punctuality substantially irrespectively of the size of incentives. Monitoring does not affect theft, with ten per cent of participants stealing overall. Our setting also allows us to disentangle between possible theoretical mechanisms driving the adverse effects of monitoring. Our findings are supportive of a reciprocity mechanism, whereby workers retaliate for being distrusted.
2014-03-20Ragan Petrie(George Mason University) The Effect of Decision Context on Risk Preferences of Children by Sex and Race. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. This project presents evidence on the heterogeneity of risk preferences of children by sex and race and shows that these differences might be driven more by decision context than innate differences in risk attitudes. Expressed preferences over identical risky prospects change depending on the context in which they are presented. Differences by race can be eliminated, and differences by sex can be reversed.
2014-02-20Erwin Bulte(Wageningen University) Corruption, Investments and Contributions to Public Goods: Experimental Evidence from Rural Liberia. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Tba
2014-02-13Federico Valenciano(Universidad del País Vasco) Unilateral vs. Bilateral link-formation: Bridging the gap. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We provide a model that bridges de gap between two benchmark models of strategic network formation. Namely, Jackson and Wolinsky's conections model based on bilateral formation of links, and Bala and Goyal's two-way flow model, where links can be unilaterally formed. In the model introduced and studied here, a link can be created unilaterally, but when it is only supported by one of the two players the flow through the link suffers a certain decay, while when it is supported by both the flow runs without friction. When the decay in links supported by only one player is maximal (i.e. there is no flow) we have Jackson and Wolinsky's connections model without decay, while when flow in such links is perfect we have Bala and Goyal's two-way flow model. We study Nash, strict Nash and pairwise stability for the intermediate models.
2014-01-30Joel Sobel(UCSD) Persuasive Arguments. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Social Psychologists have identified a tendency for groups composed of like-minded individuals to make decisions that are more extreme, but biased in the same direction as decisions taken by individual members of the group. This tendency is a called the group-polarization phenomenon. One explanation for the phenomenon is the ``persuasive argument theory.'' Loosely, the persuasive argument theory asserts that individuals become more convinced on their view when they hear new arguments that support their position and that group deliberations bring out these arguments. I provide one formalization of this theory and investigate the extent to which the persuasive argument theory leads to polarization and conditions under which group decisions are not necessarily better than decisions made by group members. I argue that group polarization is not necessarily a sign of non-optimizing behavior and does not require persuasive arguments, but that either when there is a conflict of interest between decision makers or limits on the ability to communicate, novel arguments will receive disproportional weight in deliberations and may lead to biased group decision making.
2014-01-23DOUBLE SEMINAR Michal Krawczyk(Warsaw University) Trust me, I am an economist. On suspiciousness in laboratory experiments. Room: J/K 2.50 (UvA, Roeterseiland), 14.00-16.15. This study investigates the eff ect of informing subjects that no
deception will be used in a laboratory experiment. When implemented as a part of recruitment procedure, this information makes no diff erence in participants' suspiciousness. Conversely, no-deception reminders placed in the instructions substantially reduce self-reported suspiciousness but not actual (trust-dependent) behavior.
2014-01-23DOUBLE SEMINAR Bettina Rockenbach(University of Cologne) Consumer Social Responsibility. Room: J/K 2.50 (UvA, Roeterseiland), 14.00-16.15. The collapse of a garment factory building in Bangladesh, the fires in Pakistan garment factories, the working conditions at Nike, Foxconn and Amazon fired the public debate on socially responsible production of (western) firms. The public calls for political interventions and prompts firms to act socially responsible. But what about consumers? Are they able to enforce socially responsible production through their purchasing behavior? The fact that the market for socially responsible goods is small although the majority of questionnaire respondents say that they would pay a mark-up for those goods motivates our experimental investigation. We experimentally study small economies and vary the market form as well as the policy regulations in our treatments. The results guide us to new insights on market design promoting socially responsible production through consumer behavior.
2014-01-16Maros Servatka(University of Canterbury) Status Quo Effects in Fairness Games: Reciprocal Responses to Acts of Commission vs. Acts of Omission. Room: JK2.50, 16:00-17:00. Both the law and culture make a central distinction between acts of commission that overturn the status quo and acts of omission that uphold it. In everyday life acts of commission often elicit stronger reciprocal responses than do acts of omission. In this paper we compare reciprocal responses to both types of acts and ask whether behavior of subjects in three experiments is consistent with existing theory. The design of the experiments focuses on the axioms of revealed altruism theory (Cox, Friedman, and Sadiraj, 2008) that make it observationally distinct from other theories. We find support for this theory in all three experiments.
2013-12-19Michalis Drouvelis(University of Birmingham) The Effects of Anger and Happiness on Pro-Social Behaviour. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Emotions are commonly expressed in human societies; however, their consequences on economic behaviour have received only limited attention. This paper investigates the effects of induced positive and negative emotions on cooperation and sanctioning behaviour in a one-shot voluntary contributions mechanism game, where personal and social interests are at odds. We concentrate on two specific emotions: anger and happiness. Our findings provide clear evidence that our measures of social preferences are sensitive to subjects’ current emotional states. Specifically, angry subjects contribute, on average, less than happy subjects and overall welfare as measured by average net earnings is lower when subjects are in an angry mood. We also find that how punishment is used is affected by moods: angry mood subjects punish harsher than happy mood subjects, ceteris paribus. To this extent, we show that anger, when induced, causes a negative impact on economic behaviour.
2013-11-21Rosemarie Nagel(Universitat Pompeu Fabra) Correlated Shocks in Keynesian Beauty Contest Game: An Experimental Study. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. We extend the Beauty Contest Game by an idiosyncratic shock for each player based on the theoretical paper “Sentiments and Aggregate Demand Fluctuations”by Benhabib, Wang, and Wen (2013). The payoff for a player depends on the distance between his choice and the sum of the idiosyncratic shock and other players´ choices. Prior to deciding, players receive a precise or imprecise signal about their shock. While in the original game there is a unique equilibrium in which all choose zero, in the game with signals there are multiple equilibria. As a theoretical result the games with signals are computationally more difficult and also the coordination issue is much more difficult. However, the experimental results show that coordination is much easier when shocks are present than when not as measured by realized payoffs. The reason is that in the new games the shocks serve as anchors, which are not present in the original game where each player comes with his homegrown belief, modeled as a level k theory.
2013-10-23Uri Gneezy(UCSD) Why don't people lie more?. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. No abstract available.
2013-10-17Joan Esteban(CSIC Barcelona GSE) Ethnic Diversity and Civil Conflict. Room: TI Amsterdam, Room 1.60, 16.00-17.15. Over the second half of the twentieth century, conflicts within national boundaries have become increasingly dominant. One third of all countries have experienced civil conflict. Many (if not most) such conflicts involve violence along ethnic lines. Based on recent theoretical and empirical research, this paper provides evidence that pre-existing ethnic divisions do influence social conflict. The analysis also points to particular channels of influence. Specifically, it is shown that two different measures of ethnic division — polarization and fractionalization — jointly influence conflict, the former more so when the winners enjoy a “public” prize (such as political power or religious hegemony), the latter more so when the prize is “private” (such as looted resources, government subsidies or infrastructures). The available data appear to stand in strong support of existing theories of inter-group conflict. Our argument also provides indirect evidence that ethnic conflicts are likely to be instrumental, rather than driven by primordial hatreds. (joint work with Laura Mayoral and Debraj Ray)
2013-10-10Astrid Hopfensitz(Toulouse School of Economics) The Modular Nature of Trustworthiness Detection. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. The capacity to trust wisely is a critical facilitator of success and prosperity, and it has been conjectured that people of higher intelligence were better able to detect signs of untrustworthiness from potential partners. In contrast, this article reports five Trust Game studies suggesting that reading trustworthiness of the faces of strangers is a modular process. Trustworthiness detection from faces is independent of general intelligence (Study 1) and effortless (Study 2). Pictures that include non-facial features such as hair and clothing impair trustworthiness detection (Study 3) by increasing reliance on conscious judgments (Study 4), but people largely prefer to make decisions from this sort of pictures (Study 5). In sum, trustworthiness detection in an economic interaction is a genuine and effortless ability, possessed in equal amount
by people of all cognitive capacities, but whose impenetrability leads to inaccurate conscious judgments and inappropriate informational preferences.
2013-09-19Sacha Kapoor(Erasmus University Rotterdam) Having it Easy: Consumer Discrimination and Specialization in the Workplace. Room: J/K 2.50 (UvA, Roeterseiland), 16.00-17.15. Most studies analyzing the adjustments of workers to discrimination focus on sorting decisions, such as occupations workers pursue. We instead analyze on-the-job adjustments, focusing on the effects of discrimination by consumers. Specifically, using extraordinary data from a large-scale restaurant, we investigate the! effects of an outward yet immutable physical trait - symmetry of the facial attributes of workers - on trade offs workers make, and the extent to which the trade offs are shaped by consumer preference for the trait. A large scale restaurant is well-suited for studying these issues because, as with many jobs in the services sector, workers must trade off quality of service for the quantity of consumers they serve. Using a combination of observational data and data generated by a field experiment, we find consumers have a preference for the trait and that preferred workers deliver lower service quality. Instead they specialize in serving more consumers. The findings imply that when outward physical traits substitute for service quality in consumer preferences, preferred workers specialize in tasks having no services component because consumers punish them less for poor performance. We conclude that consumer discrimination shapes comparative advantage and, in doing so, generates earnings inequality in the workplace.
2013-08-23ABEE 2013(2 day symposium) A Dialogue Between Laboratory Experiments and Neuroeconomics. Room: Het Trippenhuis, Amsterdam, August 23-24. In 2013 the Amsterdam School of Economics of the University of Amsterdam will host the Amsterdam Symposium on Behavioral and Experimental Economics for the fifth time. This year's symposium is entitled "A Dialogue Between Laboratory Experiments and Neuroeconomics". Go to the ABEE website for more information. You can register by sending an e-mail to abee2013-feb@uva.nl.
2013-06-20Gary Charness(UCSB) Let’s talk: How communication affects contract design. Room: JK.2.50, 16:00-17:15. We study experimentally how communication changes the relative frequency and effectiveness of contracts types where sellers choose unenforceable trade quality after observing a post-contractual cost shock. Without communication, we find that rigid contracts (where the price cannot be changed) are slightly more frequent and lead to higher earnings for both buyer and seller. By contrast, with free-form communication, flexible contracts (where the buyer can voluntarily increase the price paid) are much more frequent and yield higher earnings, both for buyers and sellers. Also, both buyer and seller earn considerably more from flexible contracts
with communication than from rigid ones without communication. A treatment with a form of restricted communication finds little effectiveness, although earnings for sellers with flexible contracts are slightly higher. Our results show quite strongly that free-form communication, a normal feature in contracting, can remove the potential cost of flexibility (disagreements caused by conflicting perceptions). Analysis of the free-form communication content shows that the underlying factors that facilitate this effect are clarification of the amount to be added to the price after a cost shock and establishing a good personal rapport through communication.
2013-04-18Alexander Sebald(University of Copenhagen) T.b.a.. Room: UvA REC J/K 2.50, 16.00 - 17.15. No abstract available.
2013-03-14Dan Levin(Ohio State University) Separating Insight from Bayesian Updating: An Experimental Investigation. Room: UvA REC J/K 2.50, 16.00 - 17.15. Through a series of decision tasks involving colored cards, we provide separate measures of Bayesian updating skills and ability to draw insights. We apply these measures to (and are the first to study) a common-value Dutch auction, whose format is more salient than the strategically equivalent first-price auction and "silent Dutch" formats in hinting that one should condition one’s estimate of the value on having the highest bid. Both Bayesian updating skills and ability to draw insights are shown to help subjects correct for the winner’s curse, as does the saliency of the active-clock Dutch format.
2013-02-21Shaul Shalvi(Ben Gurion University) Cheating for our loved ones: Oxytocin drives group supporting dishonesty. Room: UvA REC J/K 2.50, 16.00 - 17.15. How far will people go for their loved ones? Are people willing to lie for the benefit of those they care about? What are the biological foundations for such dishonesty? And what are the underlying psychological processes driving it? I will present experimental evidence suggesting that oxytocin, a hormone released during bonding behaviors such as hugging or breastfeeding and associated with trust and cooperation, plays a role in modulating group supporting dishonesty. The findings evoke the question - is lying always immoral?
2013-01-30Bernd Irlenbusch(University of Cologne) Moral hypocrisy. Room: UvA REC J/K 2.50, 16.00 - 17.15. Positioning moral motivations within the framework provided by Schwartz’ (1992) values theory, we ran three dictator game studies (total N = 256) investigating moral integrity and moral hypocrisy. We adapted Batson’s (et al., 1997; et al., 1999; et al., 2002) landmark research design into the experimental economics laboratory (Study 1), and showed that the behavioral inconsistency – out of 64 dictators, all 26 who chose to flip a coin to determine the allocation of money ended up with the self-favoring outcome – revealed in such a design is indeed indicative of dishonest claims to morality (arguably the core of moral hypocrisy), and not overpowered moral integrity. Supporting this interpretation, dictators who masked their selfishness behind the coin flip were motivated by high Conformity values (Study 1), and thereby similar to participants who made more obviously disingenuous claims to morality (Study 2). Further, dictators did generally not select the coin flip in case the result could not be rigged (only four out of 32 dictators did this; Study 3). Universalism and Benevolence values were predictive of moral integrity (Studies 1 and 3). Morality ratings of behavior generally showed both self-serving and outcome bias.
2013-01-17Micheal Kosfeld (Goethe University Frankfurt) The Dark Side of Solidarity. Room: UvA REC J/K 2.50, 14.00 - 15.15. This paper investigates the hypothesis that solidarity obligations hinder entrepreneurial activity and thus investment and long term economic progress. We conduct a field experiment and a real effort experiment with small entrepreneurs in Burkina Faso in which participants are made a lucrative job offer under different treatment conditions. Results show that implicit and explicit solidarity obligations as well as the expectation of future demands for financial support lead to a significant reduction in entrepreneurial activity.
2012-11-29Andreas Ortmann (University of New South Wales) Social Impact Bonds: Theory and Evidence. Room: UvA REC J/K 2.50, 16.00 - 17.15. No abstract available.
2012-11-08Aniol Llorente-Saguer(Max Planck Institute) Divided Majority and Information Aggregation: Theory and Experiment. Room: UvA REC J/K 2.50, 16.00 - 17.15. In this paper we study the properties of the plurality and approval voting in the case in which the majority is divided between two alternatives as a result of information imperfections and the minority backs a third alternative, which the majority views as strictly inferior. The majority thus faces two problems: aggregating information and coordinating to defeat the minority candidate. We show that under plurality voters have to concentrate all their strength in fighting one of this problems. With approval voting instead, voters can face both problems simultaneously. We then test the pivotal voter model in the lab, and we observe that most predictions are indeed satisfied. Under plurality we only find evidence of Duverger's Law under the threat of a large minority. Under approval voting, majority voters double vote less than predicted but, still, double-voting increases with the size of the minority. Finally, approval voting performs very well from a welfare viewpoint, and vastly outperforms plurality.
2012-10-11Marie Claire Villeval (GATE, University of Lyon) Moral hypocrisy, power and social preferences. Room: UvA REC J/K 2.50, 16.00 - 17.15. We show with a laboratory experiment that individuals adjust their moral principles to the situation and to their actions, just as much as they adjust their actions to their principles. We first elicit the individuals’ principles regarding the fairness and unfairness of allocations in three different scenarios (a Dictator game, an Ultimatum game, and a Trust game). One week later, the same individuals are invited to play those same games with monetary compensation. Finally in the same session we elicit again their principles regarding the fairness and unfairness of allocations in the same three scenarios.
Our results show that individuals adjust abstract norms to fit the game, their role and the choices they made. First, norms that appear abstract and universal take into account the bargaining power of the two sides. The strong side bends the norm in its favor and the weak side agrees: Stated fairness is a compromise with power. Second, in most situations, individuals adjust the range of fair shares after playing the game for real money compared with their initial statement. Third, the discrepancy between hypothetical and real behavior is larger in games where real choices has no strategic consequence (Dictator game and second mover in Trust game) than in those where they do (Ultimatum game). Finally the adjustment of principles to actions is mainly the fact of individuals who behave more selfishly and who have a stronger bargaining power.
The moral hypocrisy displayed (measured by the discrepancy between statements and actions chosen followed by an adjustment of principles to actions) appears produced by the attempt, not necessarily conscious, to strike a balance between self-image and immediate convenience.
2012-09-20Christoph Brunner (University of Heidelberg ) Premium Auctions and Risk Preferences: An experimental Study. Room: UvA REC J/K 2.50, 16.00 - 17.15. In premium auctions, the highest losing bidder receives a reward from the seller. This paper studies the English premium auction (EPA) for the canonical case of symmetric private values with risk averse and risk loving bidders. We explicitly derive the symmetric equilibrium for bidders with CARA utilities and conduct an experimental study to test the theoretical predictions. In our experiment, subjects are sorted into risk-averse and risk loving groups using the method proposed by Holt and Laury (2002). Each group is invited to separate sessions and we find that revenue in the EPA is significantly higher when bidders are risk loving rather than risk averse. These results are partly consistent with theory and confirm the general view that bidders’ risk preferences constitute an important factor that affects bidding behavior and consequently also the seller’s expected revenue. However, individual subjects rarely follow the equilibrium strategy and as a result, revenue in our experiment is lower than in the symmetric equilibrium.
2012-08-31ABEE 2012 symposium (two days) Markets and Organizations. Room: Het Trippenhuis Kloveniersburgwal 29 Amsterdam, 8.30. In 2012 the Amsterdam School of Economics of the University of Amsterdam will host the Amsterdam Symposium on Behavioral and Experimental Economics for the fourth time. This year the focus will be on Behavioral Economics in Markets and Organizations.
2012-05-10Joachim Weimann(Universität Magdeburg) Public-good experiments with large groups. Room: 2.50, Building J/K, REC, Valckenierstraat 65, 16.00 - 17.00. Many of real-world public goods are characterized by a marginal per capita return (MPCR) close to zero and have to be provided by large groups. Up until now, there is almost no evidence on how large groups facing a low MPCR behave in controlled public-good laboratory experiments involving financial incentives. Connecting four experimental laboratories located in four different German universities via Internet, we are able to run such experiments. In addition to the group size (60 and 100 subjects), we vary the MPCR which is as small as 0.02 or 0.04. Our data reveal a strong MPCR effect, but almost no group-size effect. Our data demonstrates that, even in large groups and for low MPCRs, considerable contributions to public goods can be expected. Interestingly, the contribution patterns observed in large and very small groups are very similar. To the best of our knowledge, this study is the first one that includes large-group laboratory experiments with a small MPCR under conditions comparable to previous small-group standard public-good experiments.
2012-05-03Roy Baumeister (Florida State University) New Directions in Self-Regulation Research (DOUBLE SEMINAR WITH ROLAND BENABOU). Room: 2.50, Building J/K, REC, Valckenierstraat 65, 15.00 - 17.15. Just when we thought we had worked out the main outlines of self-regulation theory, several new findings have emerged to challenge that picture. This talk presents results from laboratory, longitudinal, and meta-analytic studies. High self-control may specialize less in resisting temptation than in avoiding it. Self-control is often highly effective but does grow weaker (ego depletion) as the day wears on. Ego depletion intensifies subjective desires and feelings, rather than just weakening powers of restraint. Similarity in trait self-control is not the best predictor of relationship satisfaction. Powerful leaders self-regulate task performance in unusual ways, sometimes performing better but sometimes worse than subordinates.
2012-05-03Roland Benabou(Princeton University) Groupthink: Collective Delusions in Organizations and Markets (DOUBLE SEMINAR WITH ROY BAUMEISTER). Room: 2.50, Building J/K, REC, Valckenierstraat 65, 15.00 - 17.15. This paper investigates collective denial and willful blindness in groups, organizations and markets. Agents with anticipatory preferences, linked through an interaction structure, choose how to interpret and recall public signals about future prospects. Wishful thinking (denial of bad news) is shown to be contagious when it is harmful to others, and self-limiting when it is bene…cial. Similarly, with Kreps-Porteus preferences, willful blindness (information avoidance) spreads when it increases the risks borne by others. This general mechanism can generate multiple social cognitions of reality, and in hierarchies it implies that realism and delusion will trickle down from the leaders. The welfare analysis di¤erentiates group morale from groupthink and identi…es a fundamental tension in organizations' attitudes toward dissent. Contagious exuberance can also seize asset markets, generating investment frenzies and crashes.
2012-04-19Johannes Abeler(Oxford University) Preferences for truth-telling. Room: 2.50, Building J/K, REC, Valckenierstraat 65, 16.00 - 17.00. How people report their private information is important for many areas in economics. Economic theory assumed so far that people misreport their private information if this is to their advantage. Recent experimental evidence suggests, however, that many people are more honest than assumed. I develop a model that can align the stylized facts of the existing data on reporting behavior and present new evidence that further distinguishes between potential mechanisms driving behavior. I also show data on truth-telling in a field experiment.
2012-04-05Ayelet Gneezy(UCSD) Self Identity in Markets. Room: 2.50, Building J/K, REC, Valckenierstraat 65, 16.00 - 17.00. No abstract available.
2012-03-29Sanjeev Goyal (University of Cambridge ) Competitive Contagion in Networks. Room: E0.03, Building E, Roetersstraat 11, 16.00 - 17.00. We introduce and develop a framework for the study of competition between firms who have budgets to “seed” the initial adoption of their products by consumers located in a social network. The payoffs to the firms are the eventual number of adoptions of their product through a competitive stochastic diffusion process in the network. This framework yields a very rich class of competitive strategies, which depend in subtle ways on the stochastic dynamics of adoption, the relative budgets of the players, and the underlying structure of the social network.
We identify a general property of the adoption dynamics — namely, decreasing re- turns to local adoption — for which the inefficiency of resource use at equilibrium (the Price of Anarchy ) is uniformly bounded above, across all equilibria and networks. We also show that if this property is even slightly violated, the Price of Anarchy can be unbounded, thus yielding sharp threshold behavior for a broad class of dynamics.
We also introduce a new notion, the Price of Budgets , that measures the extent that imbalances in player budgets can be amplified at equilibrium. We again identify a general property of the adoption dynamics — namely, proportional local adoption between competitors — for which the (pure) Price of Budgets is uniformly bounded above, across all equilibria and all networks. We show that even a slight departure from this property can lead to unbounded Price of Budgets, again yielding sharp threshold behavior for a broad class of dynamics.
(joint work with Michael Kearns)
2012-03-08Sally Sadoff(UCSD) The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance. Room: REC, Building J/K, room 2.50, Valckenierstraat 65-67, 16.00-17.00 . Decades of research on behavioral economics have established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence student outcomes. Several insights emerge. First, we find that incentives framed as losses have consistently larger effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps.
2012-02-28Martin Sefton(University of Nottingham) Information and Overdissipation in Rent-Seeking Contests. Room: REC, Building J/K, room 2.50, Valckenierstraat 65-67, 11.00-12.00. We investigate deterministic and stochastic repeated rent-seeking contests. In the deterministic contest a contestant receives a share of the rent equal to her share of rent-seeking expenditures. When subjects get feedback about the choices and earnings of all contestants we find that changes in behavior can be explained partially by adjustments in the direction of best response to rivals’ choices in the previous round and partially by adjustments in the direction of imitating the most successful contestant. The implication of imitating the most successful contestant is over-dissipation relative to Nash equilibrium expenditures levels. When subjects are only informed of own earnings imitating the most successful player is no longer possible and average behavior converges to Nash equilibrium levels. In the stochastic contest a contestant wins the entire rent with probability equal to her share of rent-seeking expenditures. Here we also see over-dissipation relative to Nash equilibrium in a full information feedback treatment. However, when we restrict information feedback to own earnings we observe the highest over-dissipation rates of all.
2012-02-03Jean-Robert Tyran (University of Vienna) The Price of Prejudice. Room: REC, Building J/K, room 2.50, Valckenierstraat 65-67, 16.00. This paper presents a new type of field experiment to investigate ethnic prejudice in the workplace. Our design allows us to study how potential discriminators respond to changes in cost of discrimination. We find that ethnic discrimination is common but remarkably responsive to the price of prejudice, i.e. to the opportunity cost of choosing a less productive worker on ethnic grounds. In addition, we find that accurate statistical discrimination fails to explain observed choices, and that taking ethnic prejudice into account helps to predict the incidence of discrimination.
2012-01-19Ariel Rubinstein(Tel Aviv University and New York University) A Personal Journey in the Wonderland of Neuroeconomics. Room: REC- building E, room 0.20, Roetersstraat 11, 16.00. In the lecture I will describe my attempts to understand the last decade developments of Neuroeconomics. I will describe some results concerning response time and eye-tracking. The results will be the platform of a discussion of the possible role or (the lack of a role) of Neuroeconomics in economic theory.
2011-12-15Dirk Engelmann(University of Mannheim) Choosing how to choose: efficiency concerns and constitutional choice. Room: Tinbergen Institute, 16.00-17.00. We study group decision making in a two-step process. In the first step, group members decide by a random dictator mechanism upon the rule they will use in the second step of their decision process. In the second step, all group members then vote between two alternatives and the decision is implemented according to the rule chosen in the first step. One alternative implies zero payoffs for all group members, the other alternative can have positive and negative valuations for each different group member, where valuations are drawn independently. Selfish players should choose a rule in the first stage that implements their preferred choice for sure in the second stage. Inequality averse players should choose even for small positive valuations a rule that implements the alternative that yields zero payoffs for all and subjects that are concerned with maximizing efficiency should for small positive or negative valuations choose majority voting as the decision rule (or a rule between majority voting and one that implements their payoff-maximizing outcome for sure). We find that in the second stage group members almost always vote in favor of the alternative that maximizes their own payoff, whereas the rule choice is often inconsistent with selfish payoff maximization. Furthermore, the rule choice shows no evidence of inequality aversion, but is consistent with efficiency concerns.
2011-12-15John O'Doherty(Californian Institute of Technology) Neural mechanisms of goal-directed and habitual behavioral control in the human brain. Room: Tinbergen Institute, 15.00-16.00. In this talk I will review evidence for the existence of at least two distinct mechanisms for behavioral control in the human brain: a deliberative goal-directed system in which actions are selected with reference to both the current subjective utility of the associated outcomes and the causal nature of the relationship between such actions and the production of outcomes; and a more reflexive habitual system in which actions are performed in a given context due to a history of prior reinforcement but without consideration of either the utility of the outcome or the causal structure of the action-outcome relationship. I will provide evidence from a series of human fMRI studies that these two distinct mechanisms appear to depend on distinct brain structures in the prefrontal cortex and striatum.
Whereas the ventromedial prefrontal cortex and anterior medial striatum are more involved in goal-directed control, the posterior lateral striatum is engaged more under conditions when action selection is under habitual control. These findings resonate with evidence from behavioral and lesion data in rodents for the existence of similar dichotomies in cortico-striatal systems for action-selection. Collectively, these results suggest that mechanisms for behavioral selection are remarkably conserved across mammalian species.
2011-10-20Gary Charness(UC Berkeley) Equilibrium Selection and Random Networks in Experimental Games. Room: REC, building J/K, room 2.50, Valckenierstraat 65-67, 16.00 - 17.00. We study how people arranged in a random network play games involving either strategic substitutes or strategic complements and either complete or incomplete information about the structure of the network, so that our results will have more applicability to field environments.
Under complete information, we find that people quite frequently play the stochastically-stable(inefficient) equilibrium when the game involves strategic substitutes, but instead play the efficient one if the game involves strategic complements. In practical terms, this means that equilibrium multiplicity may not be a major concern. We find that the actions and realized
outcomes under incomplete information depend both strongly on both the degree and the
connectivity. With strategic complements, characterized by multiple equilibria, people begin by
playing the efficient equilibrium, but eventually converge to the inefficient one. Finally, our
results provide an impressive behavioral confirmation of the theoretical predictions derived by
Galeotti, Goyal, Jackson, Vega-Redondo and Yariv (2010).
2011-10-05Botond Koszegi(UC-Berkeley) A Model of Focusing in Economic Choice. Room: REC, building J/K, room 2.50, Valckenierstraat 65-67, 16.00-17.00 . We present a generally applicable theory of focusing based on the hypothesis that a person focuses more on, and hence overweights, attributes in which her options differ more. Our model predicts that the decisionmaker is too prone to choose options with concentrated advantages relative to alternatives, but maximizes utility when the advantages and disadvantages of alternatives are equally concentrated. In intertemporal choice, because the relative concentrations of an option's costs and benefits can be different from the perspective of a single period and the perspective of the entire choice problem, the decisionmaker often exhibits a form of time inconsistency. She is present-biased when the costs of current misbehavior are distributed over many future dates (such as in harmful consumption), but "future-biased" when the benefit of many periods' effort is concentrated in a single goal (such as in career advancement). In a market setting, a profit-maximizing firm selling to a consumer with focus-dependent behavior chooses a product with one core attribute, and splits its price into multiple components. A strong firm wants to be especially strong on its competitor's weak attribute, while a weak firm wants to be relatively strong on its competitor's strong attribute.
2011-09-21Jason Shachat(Xiamen University) Informational price cascades and non-aggregation of asymmetric information in experimental asset markets. Room: REC, building J/K, room 2.52, Valckenierstraat 65-67, 16.00-17.00. We report on experimental markets for a contingent claim asset that eight subjects traded for nine periods before the state was revealed. There is an informative binary signal that arrives after each of the first eight trading rounds. In our baseline treatment the realization of the signal is public information, and in another treatment, market participants are randomly sequenced and receive the signal as private information. In the latter case, we observe zero information aggregation and prices lock in on home grown norms, which we call informational price cascades. We test the fragility of the price cascades in two further treatments. First, we break the monopoly on each signal by revealing it to two subjects, and then we increase that number to four. It is only when we inform four participants, or one-half of the market, that cascades fail to form and information starts to aggregate in the market.
2011-06-23Georg Kirchsteiger(ECARES, Université Libre de Bruxelles ) How (Not) To Decide: Procedural Games. Room: Tinbergen Institute, Symphony Building, room 1.01, 16.00-17.00. Using Psychological Game Theory we develop a general framework allowing players to exhibit procedural concerns. We present two areas in which procedural concerns play a key role. First, we apply our framework to policy experiments and show that the way in which researchers allocate subjects into treatment and control groups influences the experimental results. Second, we analyze the problem of appointing agents into jobs that differ in terms of their desirability. Because of procedural concerns the principal.s choice of appointment procedure aspects the subsequent effort choice of agents. We test this hypothesis in a field experiment and find consistent results.
2011-06-23Harold Houba(VU University Amsterdam) The Condorcet Paradox Revisited. Room: Tinbergen Institute, Symphony building, room 1.01, 15.00-16.00. We analyze the Condorcet paradox within a strategic bargaining model with majority voting. Consistent subgame perfect equilibria (CPE) exist whenever the
geometric mean of the players' risk coefficients, ratios of utility differences between
alternatives, is at most one. CPEs are Pareto efficient and ensure agreement within
finite expected time. For generic parameter values, CPEs are unique and in a CPE
either all players propose their best alternative with probability one or two players
do so and the third player randomizes between proposing his best and middle
alternative. Agents accept best alternatives, may reject middle alternatives with
positive probability, and reject otherwise. Bargaining power as modeled by recognition probabilities is a key factor in determining expected delay. Irrespective of the utility functions, no delay occurs for a suitable choice of bargaining power, whereas expected delay goes to infinity if one of the players has almost all the bargaining power. For generic parameter values, Condorcet cycles do not occur. Contrary to the case with unanimous approval, a player benefits from an increase in his risk aversion.
2011-06-16Kenneth Williams(Michigan State University ) The Effects of Identities, Incentives, and Information on Voting . Room: Room E0.03, E building, Roetersstraat 11, 16.00. We report on majority rule voting experiments where subjects are randomly assigned identities in common with a candidate. However, subjects sometimes receive a financial incentive from voting contrary to their identity. We vary the size of the incentive as well as information voters have about the advantage of the incentive. We find that subjects are influenced by their assigned identities and the effect is stronger when voters have less information. Nevertheless, financial incentives reduce this influence when voters have full information. Our results suggest that identity may have an important affect on voter choices in elections where incentives or information are low. The experiment also allow us to discuss how learning is impacted when financial incentives and the complexity of the experiment varies.
2000-06-23Vojtěch Bartoš() . Room: , 15:30-16:45. No abstract available.
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0000-00-00Mariska Kret(University of Leiden) tbd. Room: tbd, 16:00-17:15. No abstract available.
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Previous Seminars
2010/2011
Eric van Damme, Which Words Bond? An Experiment on Signaling in a Public Good Game
Thomas Kittsteiner, Opportunism and Incomplete Contracts
Tim Salmon, Maintaining Efficiency While Integrating Entrants From Lower-Performing Environments: An Experimental Study
Christian Zehnder, Did we overestimate the role of social preferences? The case of self-selected student samples
2009/2010
Ayala Arad, Colonels and Tennis Coaches'Depth of Strategic Reasoning
Ethan Bueno de Mesquita, Regime Change and Revolutionary Entrepreneurs
Gary Charness, Participation
Stefano DellaVigna, Testing for Altruism and Social Pressure in Charitable Giving
Jan Eeckhout, Assortative Learning
Dan Houser, Competition for Trophies Promotes Male Generosity
Navin Kartik, Advising on Alternatives:Pandering to Persuade
Dan Levin, Violations of First-Order-Stochastic-Dominance and Conjunction Rule: Experimental Study of Robustness using Groups.
Daniele Nosenzo, On the Impact of Pay Comparisons on Effort Behavior
Wieland Mueller, Allais for all: Revisiting the paradox
Arno Riedl, Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations
Bettina Rockenbach, We Are Not Alone: The Impact of Externalities on Public Good Provision
2008/2009
Charlie Holt, Collusion in Auctions for Emission Permits: An Experimental Analysis
Veronika Nemes, Overcoming the Split Incentives Problem in Energy Efficiency Investments in Rental Properties
Aldo Rustichini, Skill and Luck modulate the brain’s coding of relative outcomes
Andrea Galeotti, Strategic information transmission in networks
Graham Loomes, Modelling Noise and Imprecision in Individual Decisions
Dino Gerardi, A Principal-Agent Model of Sequential Testing
J. Philipp Reiss, Heterogeneous bids with rational and markdown bidders - Theory and Experiment
Jeffrey Carpenter, Why Volunteer? Evidence on the role of altruism, reputation, and incentives
Andrew Newman, Loopholes: Social Learning and the Evolution of Contract Form
Flavio Toxvaerd, Foundations of Strategic Epidemiology: Recurrent Infection and Treatment
Jan Boone, Selective contracting in health care
Jan Potters, Spurious Product Differentiation and Consumer Confusion
Kenneth Shepsle, Choosing Institutional Microfeatures: Endogenous Seniority
Armin Falk, Reference-Dependent Preferences and Work Effort
Erik Sorensen, The development of fairness views in children
WORKSHOP ON INDEX NUMBER THEORY:
Erwin Diewert, Measuring the Effects of Changes in the Terms of Trade
Robert Hill, Flexible Spatial and Temporal Hedonic Price Indexes for Housing in the Presence of Missing Data and Spatial Correlation
Prasada Rao, Consistent Comparisons of real Incomes across Time and Space
Matthijs van Veelen, Wealth in the Eye of the Beholder: The Axiomatic Approach, the Economic Approach and Consumer Heterogeneity
Peter Neary, Theoretical Foundations for International Comparisons of Living Standards and GDP
Marcel Timmer, Productivity Levels: Is More Detailed Data Better?
Bert Balk, Searching for the Holy Grail of Index Number Theory
Marco Battaglini, The Swing Voter’s Curse in the Laboratory
Roger D. Congleton, The Rise of the Modern Welfare State, Ideology, Institutions, and Income Security: Analysis and Evidence
Zvika Neeman, Renegotiation-proof mechanism design
Steffen Huck, Testing Consumer Theory in The Field: Private Consumption vs Charitable Goods
Martin Hellwig, Public-Good Provision in a Large Economy
Marcel Timmer, Innovation, Productivity and Welfare of Nations
Gary Charness, The Origin of the Winner’s Curse: A Laboratory Study
Karim Sadrieh, Implicit Incentives in International Joint Ventures
Arnaud Costinot, Heterogeneity and Trade
Masanori Takezawa, Children's group decision making in dictator and ultimatum games
Ed Hopkins, Testing the TASP: an Experimental Investigation of Learning in Games with Unstable Equilibria
Martin Sefton, "Determinants of aggressive bidding in the "buying a company" task"
Erik Hoelzl, "Social comparison and risk-seeking in economic decisions"
HÃ¥kan Holm, "Endogenous Communication and Tacit Coordination in Market Entry Games: An explorative experimental study"
Shmuel Nitzan, "Contest efforts in light of behavioral considerations"
Simon Gächter, "Measuring individual-level loss aversion"
Ferdinand von Siemens, "Envy and Moral Hazard with Multiple Agents"
Conrado Manuel, Georg Weizsacker, Jean-Jaques Herings, "Time-inconsistent preferences in a General Equilibrium Model"
Nick Vriend, "On the Role of Focal Points as Non-equilibrium Coordination Device"
George Baker, "Wage Policies and Incentives to Invest in Firm-Specific Human Capital"
Jeroen van de Ven, "Discretionary bonuses as a feedback mechanism"
Mike Ball, Dirk Engelmann, "Overcoming Incentive Constraints? The (In-)effectiveness of Social Interaction"
2004/2005
Tore Ellingsen, Trust as an Incentive
Henrik Orzen, The common ratio effect and timing (in-)dependence in dynamic choice problems: an experiment
Jose M. Zarzuelo, Consistency and strategic bargaining in cost sharing problems
Marie-Claire Villeval, Do (wo)men prefer (non)competitive jobs?
Pieter Ruys, The effectivity of governance systems in selecting and managing services
Dirk Sliwka, (Dis-)Trust as a Signal of a Social Norm: The hidden costs of incentive contracts
Marcin Malawski, Procedural values for cooperative games
Michael Kosfeld, Distrust - The Hidden Cost of Control
Guillermo Owen, Modified Power Indices for Indirect Voting
Avner Shaked, Cumulative Gift Exchange
Martin Weber, Overconfidence and Trading Volume
Jeroen Kuipers, Myopic solutions for games in effectiveness form
Robert Dur, Incentives and Workers' Motivation in the Public Sector
Kfir Eliaz, Group Decision Making in the Shadow of Disagreement
Quan Wen, Repeated Games with Asynchronous Moves
Roald Ramer, Three common fallacies in testing game theory experimentally
Timothy Cason, An Experimental Study of Price Dispersion in a Search Model with Advertising
2003/2004
Enrico Perotti, Circulation of Ideas
Jim Cox, Implications of Small- and Large-Stakes Risk Aversion for Decision Theory
Sam Bowles, Is Inequality an Evolutionary Universal?
Javier Arien, Implementing with veto players: simple mechanisms.
Erwin Amann, Non-linear pricing in oligopoly
Shmuel Nitzan, Transparency and Lobbying
Axel Ockenfels, Reputation, Information and Matching on Internet Market Platforms - Experiments and Some Theory.
Timothy Besley, Competition and Incentives with Motivated Agents
Agnieska Rusinowska, Consensus reaching in coalition formation and committees
Roland Strausz, Honest Certification and the Threat of Capture
Bernd Irlensbusch Endogenous Group-Selection in Public Goods
Holger Meinhardt, Stability of Cartels and the Incentive for Merger in Oligopoly Situations without Transferable Technologies
Jordi Brandts, Forward induction and the excess capacity puzzle: An experimental investigation
Johan van Benthem, Games in the perspective of a logician
Jozsef Sakovics, Contractual Remedies to the Holdup Problem: A Dynamic Perspective
Dries Vermeulen, The economic effects of outsourcing
Ulrike Malmendier, Contract Design and Self-Control: Theory and Evidence
Georg Kirchsteiger, Does Learning Lead to Coordination on Market Clearing Institutions?
Dinko Dimitrov, On Collective Identity
Charles Noussair, Production, Trade, and Exchange Rates in Large Experimental Economies
Paul van Lange, The Power of Negativity in Social Dilemmas & How to Overcome the Detrimental Effects of Noise in Social Interaction: The Benefits of Generosity
Rene Levinsky, Ultimatum Offers and the Role of Transparency: An Experimental Study of Information Acquisition
Antoni Calvo-Armengol, Networks in Labor Markets: Wage and Employment Dynamics and Inequality
Eric Eyster, Rationalising the Past: A Taste for Consistency
Herman Monsuur, Centrality and Stability, with application to Network Formating
Jose Luis Moraga-Gonzalez, Entry and competition in segmented markets
Vladimir A. Karamychev, Multi-Store competition: Market segmentation or Interlacing?
2002/2003
Charles Holt, "An Explanation of Anomalous Behavior in Binary-Choice Games: Entry, Voting, Public Goods, and the Voluteers' Dilemma"
Frank Steffen, "Power and Success of a Chairman"
Ted Bergstrom, "Evolution of Social Behavior: Individual and Group Selection"
Ignacio GarcÃa-Jurado, "Values for strategic games in which players cooperate"
Klaus M. Schmidt, "Fairness, Incentives and Contractual Incompleteness"
Encarna Algaba Duran, "A Generalization of the Myerson Value"
Oliver Kirchkamp, "No imitation --- on local and group interaction, learning, reciprocity, and repeated game strategies in prisoners' dilemma experiments"
Ronald Peeters, "Stochastic Games: Computation and Application"
Eline van der Heijden, "Leading by example? Investment decisions in a mixed sequential-simultaneous public bad experiment"
David De Meza, "Should Unequals Have Equal Opportunities?"
Stanley S. (Stan) Reynolds, "Ascending Bid Auctions with a Buy-Now Price"
Marco Haan, "License Auctions When Winning Bids Are Financed Through Debt"
Martin Sefton, "Experiments on Price Dispersion"
Andreas Roider, "Herding in Financial Markets: An Internet Experiment"
2001/2002
Urs Fischbacher, "Local Polities and Global Public Goods"
Jim Cox, "Barking Up the Right Tree: Are Small Groups Rational Agents?"
Sabine Kroeger, "Durable-Goods Monopoly with Privately Known Impatience -- A theoretical and experimental study"
Jorgen Weibull, "Testing game theory"
Andrew Schotter, "Talking Ourselves to Efficiency : Coordination in Inter-Generational Minimum Games with Private, Almost Common and Common Knowledge of Advice"
Rodica Branzei, "Cooperation and Information"
Josef Falkinger, "Employability and the Power to Organize Jobs"
Eyal Winter, "Scapegoats and Optimal Allocation of Responsibility"
Hans-Theo Normann, "Mergers and the Perception of Market Power: An Experimental Study"
Martin Dufwenberg, "Existence and Uniqueness of Maximal Reductions under Iterated Strict Dominance"
Glenn W. Harrison, "Estimating individual discount rates with field experiments"
