WORK IN PROGRESS
Arbitrage Or Narrow Bracketing?
On Using Money to Measure Discounting with James Andreoni, Mike Kuhn, Silvia Saccardo and Yang Yang
If experimental subjects arbitrage against market interest rates when making intertemporal allocations of cash, the data will reveal nothing about subjects' discounting, only uncovering subjects' market interest rates. If subjects instead frame choices narrowly, they will plan to spend cash rewards when received, implying cash has properties similar primary rewards. We test arbitrage directly by forcing all transactions with subjects to go exclusively through their financial institutions via instant electronic transfers. If subjects wish to arbitrage, this should make it as easy and salient as possible. Our evidence contradicts arbitrage, and finds evidence of present bias, supporting the view that money payments in experiments can be treated as a primary reward.
Because of you I did not give up - Peers effects in perseverance with Leonie Gerhards
Various empirical papers have shown that peers affect productivity and behavior at work. In the present experiment we focus on one specific mechanism. We consider a situation in which individuals look at their peers' behavior to motivate themselves to endure in a task that requires perseverance. We find that peers increase their observers' perseverance, while being observed does not significantly alter behavior. In a second experiment we investigate (i) the motives to self-select into the role of an observing subject or that of a subject that is observed and (ii) which kind of peers individuals deliberately choose. Our findings provide first insights into the perception of peer situations and offer new empirical evidence on how peer groups emerge.
When nudges aren't enough: Incentives and habit formation in public transport usage with Linus Olsson Collentine
In three large-scale field experiments with over 32,500 individuals, we investigate whether public transport uptake can be influenced by behavioral interventions and by economic incentives. Despite their effectiveness in other domains, we find a tightly estimated zero for social norms and implementation intentions on ridership. Increasing the economic incentive significantly increases uptake and long-term usage. This increase is sustained for months after removing the incentive. The effect is mainly driven by initial low users, which is evidence for habit formation and highlights the heterogeneous effects of the policy. While there is scope for long-term behavior change, nudging might not be the right approach.
Beliefs and actions: How a shift in confidence affects choices with Kai Barron
Confidence is often seen as the key to success. Empirical evidence about whether such beliefs causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one’s own ability on two central choices made by workers in the labor market: choosing between jobs with different incentive schemes, and the subsequent choice of how much effort to exert within the job. An increase in confidence leads to an increase in self-selection into uncertain ability-contingent payment schemes. This is detrimental for low ability workers. Policy implications are discussed.
Lack of Ability or Lack of Luck? Gender Differences in Reactions to Negative Feedback
We conduct a laboratory experiment to investigate how individuals react to negative feedback depending on whether the feedback provided attributes failure to a lack of luck, effort or ability. We find large gender differences in reactions to negative feedback when failure is attributed to a lack of ability, but no gender differences when failure is attributed to a lack of luck or a lack of effort. When failure is attributed to a lack of ability, women internalize the feedback and are less likely to compete in the next round, while men show the opposite reaction and start competing more.
Peer Evaluation in Tournaments with Martin Dufwenberg and Katja Görlitz
We want to win, but we also care about our reputation. We conduct a psychological game-theoretic analysis of the tradeoff between increasing ones chances of winning a tournament and not being identified as a cheater by fellow contestants. We extend the model by Dufwenberg & Dufwenberg (2018) on perceived cheating aversion to a multi-player setting with subjective performance evaluations. We then test the model predictions
in a lab experiment.
Attention, Information or Emotions? What drives the response to medical adherence reminders? with Kai Barron, Mette Trier Damgaard and Lisa Norrgren
In this study, we focus on the effect of a popular nudge - namely reminders - on increasing medication adherence for expectant, young mothers in South Africa. We develop a simple theoretical model which captures three mechanisms which could drive response behavior: 1) emotions, 2) limited attention and 3) lack of information. We test our model in a text-message based field experiment with 30,000 women across South Africa.