- Anticipatory Anxiety and Wishful Thinking, with Jan Engelmann, Maël Lebreton, Peter Schwardmann, and Li-Ang Chang, Tinbergen working paper 042/2019. (Revision requested at the American Economic Review).
[.pdf] AbstractIt is widely hypothesized that anxiety and worry about an uncertain future lead to the adoption of comforting beliefs or “wishful thinking”. However, there is little direct causal evidence for this effect. In our experiment, participants perform a visual pattern recognition task where some patterns may result in the delivery of an electric shock, a proven way of inducing anxiety. Participants engage in significant wishful thinking, as they are less likely to correctly identify patterns that they know may lead to a shock. Greater ambiguity of the pattern facilitates wishful thinking. Raising incentives for accuracy does not significantly decrease it.
- The Social Construction of Ignorance: Experimental Evidence, with Shaul Shalvi, Ivan Soraperra and Marie-Claire Villeval, Tinbergen working paper 071/2019. (Revision requested at Games and Economic Behavior).
[.pdf] AbstractWe experimentally study the social transmission of inconvenient information, that is, information about externalities generated by one’s own decision, through the matching of supply and demand for ignorance. We show that willful ignorance arises from two, interacting sources. First, informed senders suppress a substantial amount of “inconvenient” information, driven by the wish to relieve the decision maker as well as the sender’s own preferences for information. Second, about one-third of decision makers avoids senders who transmit inconvenient information (“shooting the messenger”). On aggregate, this leads to assortative matching between senders and decision makers based on preferences for information states. Compared to random matching, assortative matching leads to a stronger expression of individual preferences: selfish senders remain ignorant and donate less, while altruistic senders seek out informative senders and give more. We discuss applications to information sharing in social networks and to organizational design.
- Curbing carbon: An experiment on information and uncertainty about CO2 emissions, with Davide Pace, Tinbergen Working paper 059/2020. (Revision requested at Nature Climate Change).
[.pdf] AbstractWe investigate how consumers respond to uncertainty about CO2emission size. In an incentivized online experiment, participants can acquire a valuable good that emits an unknown amount of CO2. We find that beliefs about emission size are strongly predictive of purchases, even exceeding the effect of substantial changes in the price of the good. Moreover, information that makes beliefs more precise causes a 26% reduction in overall emissions, even though average beliefs are unchanged. The reduction occurs as the marginal willingness to pay for emission reduction declines with emission size, so people who are too optimistic about emissions are more responsive to information. We also test for the formation of self-serving beliefs. Contrary to theories of motivated reasoning, increasing the surplus from buying the product does not change patterns of attention or belief formation about emissions. Overall, the results suggest that information about CO2impact can be an important policy lever, and that willingness-to-pay for emission reductions should take into account the size of emissions.
- Fair Shares and Selective Attention, with Dianna Amasino and Davide Pace, Tinbergen Institute Discussion paper 21-066.
[.pdf] AbstractAttitudes towards fairness and redistribution differ along socio-economic lines, resulting in political conflict. To understand the formation of such views and find levers to affect them, we study the role of attention. In a large online experiment, we investigate how subjects allocate their visual attention to the contributions of merit and luck in the generation of a surplus and how they decide on its division. We find that subjects who randomly obtained an advantaged position pay less attention to information about true merit and retain more of the surplus. Both the attentional and behavioral patterns persist, although with smaller effect sizes, when dictators subsequently divide money between pairs of advantaged and disadvantaged subjects in the role of a benevolent judge. Moreover, attention has a substantial causal effect: forcing subjects to look for one second more at merit information relative to overall outcomes reduces the effect of having an advantaged position on allocations by about 40%. The evidence is consistent with a habit formation effect of attention in fairness decisions. These findings open a new window on socio-economic cleavages in attitudes towards redistribution, and suggest that attention-based policy interventions may be effective in reducing polarized views on inequality.
- Top Down or Bottom-Up? Disentangling the Channels of Attention in Risky Choice, with Alejandro Hirmas and Jan Engelmann, Tinbergen Institute Discussion paper 21-031.
[.pdf] AbstractEconomists have become increasingly interested in using attention to explain behavioral patterns both on the micro and macro level. This has resulted in several disparate theoretical approaches. Some, like rational inattention, assume a “top-down” model of executive optimization. Others, like salience theory, assume a “bottom-up” influence where attention is driven by contextual factors. This distinction is fundamental for the economic implications of attention, but so far there is little understanding of their relative importance. We propose a multi-attribute random utility model that unifies prior theoretical approaches by distinguishing between the impact of top-down and bottom-up attention. We accomplish this by separating agent-specific and decision specific variation in attention and verify our framework in an eye-tracking experiment on risky choice. We find that both top-down and bottom-up attention are connected to important choice variables: both are associated with the weighting of the attributes of choice options, while top-down attention is additionally associated with measures of loss aversion. We discuss the insights regarding the nature of attention and its role in economic theory.
Eternal working papers
(Unless you have an idea to lift this to a new level)
- Inconvenient truths: determinants of strategic ignorance in moral dilemmas, SSRN working paper.
[.pdf] AbstractPeople often have incomplete information about the consequences of their actions for the payoffs of others. In an experimental allocation game I investigate how the choice to learn about such consequences depends on the costs and benefits of altruistic actions. The results show an asymmetric pattern: while the size of others’ potential benefit has little effect, ignorance and selfish behavior go up when information is more `inconvenient’, i.e. the fair/efficient alternative is more costly to the decision maker. Thus, in situations of payoff uncertainty, subsidizing fair choices affects prosocial behavior both directly and by increasing the willingness to confront negative consequences of one’s actions.