Discussion Paper No. 88
November 4, 2021
Individual Differences and Contribution Sequences in Threshold Public Goods
Author:
Abstract:
Following the notion that organizations often face public good dilemmas when collective action is needed, we use a real-time provision-point mechanism to experimentally explore the process of achieving cooperative equilibria. Specifically, besides exploring group outcomes, we identify individual antecedents for the timing of the contribution to the public good. In addition, we study the role of different situational factors for sustaining high rates of cooperation: information about others' actions and the number of individuals necessary for public good provision. We find that contribution and implementation rates are relatively high, with only a moderate decline over time, and that social value orientation as well as several personality traits help to explain the observed contribution sequences.
Keywords:
provision-point mechanism; real-time protocol; personality traits;
JEL-Classification:
Download:
Discussion Paper No. 87
The Influence of Overconfidence and Competition Neglect on Entry into Competition
Author:
Abstract:
I investigate whether two mechanisms leading to biased beliefs about success, overconfidence and competition neglect, influence decisions to enter competitive environments. I use a controlled laboratory setting that allows to elicit belief distributions related to absolute as well as relative overconfidence to study it comprehensively and introduce two treatment variations: First, some participants receive detailed performance feedback addressing absolute and relative overconfidence before making their decision. Second, I vary whether the competition group consists of all potential competitors or only of individuals who also chose to compete. I find that there is systematic heterogeneity in perception biases. In addition, both mechanisms influence individuals' decisions. However, choices are closely tied to previous performance and assessments, and there are no significant gender differences.
Keywords:
competition neglect; competitive behavior; feedback; overconfidence;
JEL-Classification:
Download:
Discussion Paper No. 86
Online Fundraising, Self-Image, and the Long-Term Impact of Ask Avoidance
Author:
Abstract:
We provide the first field evidence for the role of pure self-image, independent of social image, in charitable giving. In an online fundraising campaign for a social youth project run on an opera ticket booking platform we document how individuals engage in self-deception to preserve their self-image. In addition, we provide evidence on stark adverse long-run effects of the fundraising campaign for ticket sales. "Avoiding the ask," opera customers who faced more insistent online fundraising buy fewer tickets in the following season. Our results suggest that fundraising management should not decide in isolation about their campaigns, even if very successful. Rather broader operational concerns have to be considered.
Keywords:
online fundraising; quasi-experiment; self-image;
JEL-Classification:
Download:
Discussion Paper No. 85
A Model of Ideological Thinking
Author:
Abstract:
This paper develops a theory in which heterogeneity in political preferences produces a partisan disagreement about objective facts. A political decision involving both idiosyncratic preferences and scientific knowledge is considered. Voters form motivated beliefs in order to improve their subjective anticipation of the future political outcome. In equilibrium, they tend to deny the scientific arguments advocating the political orientations that run counter to their interests. Collective denial is the strongest in societies where contingent policy is the least likely to be implemented, either because of voters' intrinsic preferences or because of rigidities in the political process. The theory predicts that providing mixed evidence produces a temporary polarization of beliefs, but that disclosing unequivocal information eliminates the disagreement.
Keywords:
beliefs; ideology; cognition; disagreement; polarization;
JEL-Classification:
Download:
Discussion Paper No. 84
Risk, Time Pressure, and Selection Effects
Author:
Abstract:
Time pressure is a central aspect of economic decision making nowadays. It is therefore natural to ask how time pressure affects decisions, and how to detect individual heterogeneity in the ability to successfully cope with time pressure. In the context of risky decisions, we ask whether a person's performance under time pressure can be predicted by measurable behavior and traits, and whether such measurement itself may be affected by selection issues. We find that the ability to cope with time pressure varies significantly across decision makers, leading to selected subgroups that differ in terms of their observed behaviors and personal traits. Moreover, measures of cognitive ability and intellectual efficiency jointly predict individuals' decision quality and ability to keep their decision strategy under time pressure.
Keywords:
risk; cognitive ability; selection; time pressure;
JEL-Classification:
Download:
Discussion Paper No. 83
Blaming the Refugees? Experimental Evidence on Responsibility Attribution
Author:
Abstract:
Do people blame refugees for negative events? We propose a novel experimental paradigm to measure discrimination in responsibility attribution towards Arabic refugees. Participants in the laboratory experience a positive or negative income shock, which is with equal probability caused by a random draw or another participant's performance in a real effort task. Responsibility attribution is measured by beliefs about whether the shock is due to the other participant's performance or the random draw. We find evidence for reverse discrimination: Natives attribute responsibility more favorably to refugees than to other natives. In particular, refugees are less often held responsible for negative income shocks. Moreover, natives with negative implicit associations towards Arabic names attribute responsibility less favorably to refugees than natives with positive associations. Since neither actual performance differences nor beliefs about natives' and refugees' performance can explain our finding of reverse discrimination, we rule out statistical discrimination as the driving force. We discuss explanations based on theories of self-image and identity concerns.
Keywords:
refugees; discrimination; responsibility attribution;
JEL-Classification:
Download:
Discussion Paper No. 82
Suspicious Success - Cheating, Inequality, Acceptance, and Political Preferences
Author:
Abstract:
Supporters of left-wing parties typically place more emphasis on redistributive policies than right-wing voters. I investigate whether this difference in tolerating inequality is amplified by suspicious success - achievements that may arise from cheating. Using a laboratory experiment, I exogenously vary cheating opportunities for stakeholders who work on a real effort task and earn money according to their self-reported performances. An impartial spectator is able to redistribute the earnings between the stakeholders, although it is not possible to detect cheating. I find that the opportunity to cheat leads to different views on whether to accept inequality. Left-wing spectators substantially reduce inequality when cheating is possible, while the treatment has no significant effect on choices of right-wing spectators. Since neither differences in beliefs nor differences in norms about cheating can explain this finding, it seems to be driven by a difference in preferences. These results suggest that redistributive preferences will diverge even more once public awareness increases that inequality may be to a certain extent created by cheating.
Keywords:
cheating; inequality; fairness; political preferences; redistribution;
JEL-Classification:
Download:
Discussion Paper No. 81
Unleashing Animal Spirits - Self-Control and Overpricing in Experimental Asset Markets
Author:
Abstract:
One explanation for overpricing on asset markets is a lack of traders' self-control. Self-control is the individual capacity to override or inhibit undesired impulses that may drive prices. We implement the first experiment to address the causal relationship between self-control abilities and systematic overpricing on financial markets. Our setup can detect some of the channels through which individual self-control restrictions could transmit into irrational exuberance in markets. Our data indicate a large direct effect of restricted self-control abilities on market overpricing. Low self-control traders report stronger emotions after the market.
Keywords:
G02; G11; G12; D53; D84;
JEL-Classification:
Download:
Discussion Paper No. 80
Does Having Insurance Change Individuals Self-Confidence
Author:
Abstract:
Recent research in contract theory on the effects of behavioral biases implicitly assumes that they are stable, in the sense of not being affected by the contracts themselves. In this paper, we provide evidence that this is not necessarily the case. We show that in an insurance context, being insured against losses that may be incurred in a real-effort task changes subjects' self-confidence. Our novel experimental design allows us to disentangle selection into insurance from the effects of being insured by randomly assigning coverage after subjects revealed whether they want to be insured or not. We find that uninsured subjects are underconfident while those that obtain insurance have well-calibrated beliefs. Our results suggest that there might be another mechanism through which insurance affects behavior than just moral hazard.
Keywords:
D84; D82; C91;
JEL-Classification:
Download:
Discussion Paper No. 79
Global Evidence on Economic Preferences
Author:
Abstract:
This paper studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey dataset of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 individuals in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and bio-geographic and cultural variables such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors. Within countries and subnational regions, preferences are linked to individual savings decisions, labor market choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts.
Keywords:
JEL-Classification: