We consider a market where “standard” risk-neutral agents coexist with “goal-oriented” agents who, in addition to the expected income, seek a high-enough monetary payoff (the “trigger”) to fulfill a goal. We analyze a two-sided one-to-one matching model where the matching between principals and agents and incentive contracts are endogenous. In any equilibrium contract, goal-oriented agents are matched

This paper analyzes experimental data to better understand self-punishment and compensation as potential means for making amends for having caused distributional harm and inefficiency. Our design allows for and disentangles intended harm and unintended harm. In our data, subjects infrequently self-punish, whereas they frequently offer compensation. Appeasement tactics are used particularly when the

Around the developed world, the need for graduates from Science, Technology, Engineering and Mathematics (STEM) fields is growing. Research on educational and occupational choice has traditionally focused on the cognitive skills of prospective students, and on how these determine the expected costs and benefits of study programs. Little work exists that analyzes the role of personality traits on study

A sizable proportion of individuals act reciprocally. They punish and reward depending on the (un)kindness of those with whom they interact. In this paper, I explore whether individuals still reciprocate intentions when others lack full control over the consequences of their actions. By means of a dictator game with punishment opportunities, I show that unkind intentions are enough to trigger punishments

Gambling and investment are two domains that involve financial decisions. The present research investigates people’s lay theories about gambling and investment, and how these lay theories affect loss aversion in these domains. Lay people’s understanding of gambling and investment is often largely based on information that is immediately available to them. Moreover, information about losing money by

This paper tests the conjecture that involuntary job loss erodes trust. Using the German Socio-Economic Panel and considering how trust evolves over a quinquennial time interval, we find that job loss decreases trust by about 9 percent of a standard deviation.

Beliefs about others’ cooperativeness are among the strongest determinants of cooperative behaviours. Beliefs about different others, however, are not necessarily uniform, nor necessarily related to past behaviours: Different expectations about different others might solely originate from differences in observed individual characteristics. Finally, not all such beliefs need drive conditional behaviour

We use data from the well-being module of the American Time-Use Survey (ATUS) 2010–2013 to reexamine the relationship between unemployment and emotional well-being. We replicate two previous studies (Krueger & Mueller, 2012; Dolan, Kudrna, & Stone, 2017) which have produced differing findings on this relationship, and analyze what factors cause the differences in their outcomes. We find that the results

A recent literature emphasizes that gender differences in the labor market may in part be driven by a gender gap in willingness to compete. However, whereas experiments in this literature typically investigate willingness to compete in private environments, real world competitions often have a more public nature, which introduces potential social image concerns. If such image concerns are important

We compared the effectiveness of basket goal-setting to product information strategies on sustainable consumption in a simulated online supermarket. Experiment 1 found a significant effect of basket goal setting techniques with carbon basket feedback in either numerical or graphical form on the carbon content of baskets purchased but no effect of numerical product information alone or in combination

This study investigates how individuals assess imprecise information. We focus on two essential dimensions of decision under uncertainty, outcomes and probabilities, and their respective precision. We believe the precision of information is highly relevant in the investment setting, as reflected in the well-known “home (familiarity) bias”, and the outcome and probability dimensions, separately or jointly

As a consequence of digital transformation, individuals are often confronted with prefilled forms or prefilled data entry masks. In situations where cheating and lying are of concern, prefilling might reduce dishonest behavior. In a controlled experiment, we investigate how correctly and incorrectly prefilled forms influence compliance behavior. We frame our experiment as filing the annual income tax

Shafir et al. (1997) described money illusion as people’s inclination to think of money without taking inflation sufficiently into account, i.e., in nominal terms rather than in real terms. We successfully replicated Problems 1 to 4 of Shafir, Diamond, and Tversky’s study (1997) on money illusion (MTurk; N = 604). We found effect sizes in line with the original ones for assessments of income (Problem

Does uncertainty about an outcome influence decisions? The sure-thing principle (Savage, 1954) posits that it should not, but Tversky and Shafir (1992) found that people regularly violate it in hypothetical gambling and vacation decisions, a phenomenon they termed “disjunction effect”. Very close replications and extensions of Tversky and Shafir (1992) were conducted in this paper (N = 890, MTurk)

Advice processes are omnipresent in our professional and private lives. We use a laboratory experiment to study how gender and gender matching affect advice giving and how gender matching affects advice following about entry into a real-effort tournament. For advice giving we find that women are less likely than men to recommend tournament entry to advisees than are intermediate performers. Furthermore

We examine a superstition for which adherence is nearly universal among its target population. Using a combination of field interventions that involve unsuspecting participants and a lab-style value elicitation, we investigate the nature and strength of peoples’ underlying preferences. While a substantial minority of people are willing to incur a relatively high individual cost in order to adhere to

Social pressure may have relevant consequences in many contexts but it is hard to evaluate it empirically. In this paper we exploit a natural experiment in soccer to provide clear evidence of its effects. We aim to study how social pressure from the crowd in a stadium affects both players and referees. While in normal matches crowd support may be correlated to a host of variables affecting the outcome

We introduce simple guilt into a generic prisoner’s dilemma (PD) game and solve for the equilibria of the resulting psychological game. It is shown that for all guilt parameters, it is a pure strategy equilibrium that both players defect. But if the guilt parameter surpasses a threshold, a mixed strategy equilibrium and a pure strategy equilibrium in which both players cooperate emerge. We implement

Birth order supposedly influences individuals’ cooperative attitudes: firstborns are more family-oriented and favor their kin, while laterborns are more likely to turn to non-kin. However little direct experimental evidence exists concerning costly resource sharing between full siblings. The present study investigates sharing decisions with respect to a monetary resource by full sisters when either:

This paper investigates the effects of framing in intertemporal choice by elementary school children. Sutter, Yilmaz, and Oberauer (2015) recently demonstrated that intertemporal choice in children is malleable with respect to simple defaults. Using a similar approach, we replicated their study. We also found that children are more willing to select the immediate option in (standard) control frames

While previous studies on post-decisional regret have exclusively focused on externally provided options, the present study is the first to examine post-decisional regret in situations with self-generated options. Applying a metacognitive perspective, we predicted that a large option set-size leads to less post-decisional regret than a small option set-size. This hypothesis is in contrast to the classic

For blood transfusion centres, studying anticipated emotions (AEs) related to blood donation is essential, since these variables influence donation decision. For this reason, this work addresses the need to identify the antecedents and consequences of AEs, which will help explain their origin and their role in donation behaviour. Our purpose is to make further progress with the application of the AE

The implications of the method of payment to financial advisors on the behavior of individuals are of interest to economists and regulators around the globe. This paper uses an experimental approach to compare two common alternative forms of payment. The first is “out-of-pocket” (an upfront payment from a checking account), and the second is “out-of-investment” (a deferred payment from an investment

Researchers increasingly elicit beliefs to understand the underlying motivations of decision makers. Two commonly used methods are the quadratic scoring rule (QSR) and the binarized scoring rule (BSR). Hossain and Okui (2013) use a within-subject design to evaluate the performance of these two methods in an environment where subjects report probabilistic beliefs over binary outcomes with objective

Most people pay their taxes most of the time, even if the expected disutility from enforcement is too low to deter tax evasion. One potential reason is tax morale and, more specifically, rule following. In a lab experiment, we show that the willingness to pay taxes just because participants are told they are supposed to pay is indeed pronounced. Yet compliance is reduced if participants learn that

It has been shown that both perseverance as well as peer effects affect performance. In our experiment, we investigate the interplay between these two factors. Participants work on a wordplay task where we quantify perseverance as the decision to continue working hard in the face of challenges. We find that persevering on the task is significantly correlated with the psychological questionnaire measure

A confidence-based climate between public administrations and citizens is essential. This paper argues and provides empirical evidence that depending on the perceived interaction history, different policies are needed to build versus maintain confidence. Applying the extended Slippery Slope Framework of tax compliance, an online and a laboratory experiment were conducted to explore whether tax authorities’

We propose a theoretical perspective on framing effects where decision makers violate the axiom of description invariance. We first propose a framework that makes this axiom explicit and then we weaken it to allow for description dependence. This framework provides a structure to disentangle different violations of description invariance. We then identify a particular class of violations that we call

Financial management differs across households with consequences for financial outcomes and well-being of partners in households. A large-sample study has been performed, investigating the relationship between financial management of households and the occurrence of financial problems. To our knowledge, this is the first study on this relationship. Data from both partners was collected on having joint

High quality contact and customer relationships are key services for all types of firms. To achieve this high quality performance standard, companies need highly motivated and committed employees, and human resources managers are responsible for designing and implementing practices capable of satisfying both economic exchanges and social exchanges in employee-organization relationships. The aim of

We analyse betting behaviour patterns of the visitors of the specialized betting website dedicated to the popular eSports game Counter-Strike: Global Offensive. The reverse favourite-longshot bias is found, which is rather unusual for parimutuel betting markets, where favourite-longshot bias is more common. We define simple betting strategies based on the bets on underdogs and show that these strategies

We examine whether inflated perceptions of financial literacy affect financial decision making. Gaps between objective financial literacy and self-reported (perceived) financial literacy (blind spots) predict 19 financial behaviors better than age, gender, income, ethnicity, marital status, self-employment status, and general education levels. Only two predictors, perceived financial literacy and financial

This paper adds to the “costs of recessions” literature by examining whether the Great Recession caused an increase in body mass index (BMI) among economically insecure working age adults. Using a difference-in-differences (DiD) design and two panels of the Canadian National Population Health Survey, we compare the pre-recession era (2004–2005) with the Great Recession (2008–2009). In addition to stratifying

Can self-set normative goals restrain free-riding in a social dilemma? In a first experimental study, we test the effect of two different types of self-set normative goals on people’s willingness to cooperate in a public good game. Focusing on the level of contributions that one can at least be expected to make proves effective at restraining the material incentive to free-ride. Yet in two later studies

This study examined the differences in risk behavior between men and women using a household survey that captured the risk preferences of two members in a household and recorded wealth at the individual level instead of the usual approach of representing wealth at the household level. After controlling for commonly used explanatory variables, such as gender, education, age, and wealth, household fixed

We examine whether changes in perceived norm of dishonesty can offset the effects of changes in benefit from the dishonest action. We find partial support for the hypothesis in laboratory experiments on lying behavior in a cheap-talk sender-receiver game, conducted in two countries. In the experiments, we vary benefit from lying and shift senders’ norm perception by providing them information on lying

In recent years, correlational evidence has accumulated in support of a positive relationship between positive affect and pro-environmental behavior. In contrast, it remains unclear whether the induction of positive affect can causally promote pro-environmental behavior. Previous attempts to examine the effects of experimental affect induction were constrained by the difficulty to study pro-environmental

This paper aims to analyze the impact of different intra-household arrangements, defined in terms of income pooling and decision-making responsibilities, on individual subjective well-being in a number of European countries. Using the EU-SILC 2010 module on intra-household sharing of resources and self-assessed health, as a dimension of subjective well-being, we find that the relationship between self-reported

Most evidence on survey response effects is based in the Western world. We use data from two randomized experiments built into a nation-wide representative household survey in Tunisia to analyze the effects of framing and priming on responses to gender attitudes in the Arab context. Our first experiment shows that questions on attitudes towards decision-making power when framed in an equality frame

A large number of observational and experimental studies have explored the determinants of individual preferences for redistribution. In general, inequalities are more likely to be accepted by people of higher socioeconomic status, in richer societies and when inequalities are perceived as justifiable owing to differences in productivity. Almås et al. (2020) show that in a relatively unequal society

We use the coin-flip paradigm and a short survey about moral attitudes under three conditions to answer three questions: (i) Do people cheat more when financial incentives are present in comparison with no incentives? (ii) Do they find it more difficult to maintain their ethical standards when they have been given a small amount of money? and (iii) Do moral attitudes predict cheating behavior? Using

The administration of tax policy has shifted its focus from enforcement to complementary instruments aimed at creating a social norm of tax compliance. In this paper we provide an analysis of the effects of information regarding the past degree of tax evasion at the social level on the current individual tax compliance behavior. We build an experiment where subjects declare their income after receiving

We conduct an experiment in which subjects participate in a first-price auction against an automaton that bids randomly in a given range. The subjects first place a bid in the auction. They are then given an incentivized elicitation of their beliefs of the opponent’s bid. Despite having been told that the bid of the opponent is drawn from a uniform distribution, we find that a majority of subjects

We study how to foster engagement in the energy sector, where signals about consumption are opaque and infrequent. We evaluate an energy company's large-scale communication campaign for promoting natural gas self-reading. Self-readings allow utilities to bill customers on the basis of real - as opposed to estimated - consumption. Exploiting variation in campaign messages, we test the impact of imposing

Computerized versions of population inferred cheating tasks (C-PICT)—i.e., tasks in which dishonesty is statistically determined on the aggregate by comparing self-reported outcomes with a known probability distribution—have become increasingly popular. To this date no study has investigated whether non-computerized population inferred cheating tasks (PICT) and C-PICT as well as different implementations

In dynamic contests, strategic momentum and psychological momentum potentially coexist, which makes it difficult to distinguish between the two. We employ the setting of professional tennis, which allows us to separate psychological from strategic momentum. In tennis, converting a break point potentially triggers both strategic momentum—due to a change in the relative position of the players—and psychological

Despite recent empirical evidence on the importance of perceived inequality, its analysis is still underexplored. In this paper we study whether unobserved perceptions of inequality are reflected in observed individual opinions in a consistent fashion. Inconsistency is relevant to ealuate the level of agreement that individuals share with respect to different domains of inequality. Using the wave from

Understanding the motivations behind charitable giving and the identification of donor types have aroused growing interest among researchers. The economic literature has highlighted the model of pure altruist and subsequently the more realistic model of impure altruist or warm-glow giver. The need to distinguish and empirically identify these types of donors has given rise to some economic experiments

We experimentally tested whether individuals behave differently when they interact with other individuals whose disability is salient in dictator and ultimatum games. We found that participants are more generous and fairer with disabled people, and that this behavior is not strategic. These effects are driven by the specific nature of the disability not by the difference per se. The evidence regarding

Family financial stress research has typically examined negative effects of deprivation on mental health, which in turn erode financial coping. While this work acknowledges family support’s role in buffering these effects, it has typically overlooked how family identification can act to structure the experience of, and response to, economic challenge. We adopt a Social Identity approach, arguing that

Trust-based interactions with robots are increasingly common in the marketplace, workplace, on the road, and in the home. However, a valid concern is that people may not trust robots as they do humans. While trust in fellow humans has been studied extensively, little is known about how people extend trust to robots. Here we compare trust-based investments and self-reported emotions from across three

We conducted a trust game experiment to investigate whether women are trusted more when they wear makeup than when they do not. Facial attractiveness, which was manipulated through the application of makeup by a professional makeup artist, was measured before and after makeovers. Trustors were shown a photograph of their female counterparts before they made decisions about money transfers to trustees

Using US household panel data, we provide evidence of a strong negative association between consumer fraud victimization and individuals’ perception of their financial well-being. We show that this effect is homogenous among the population and mainly stems from victimization through misrepresentation of information as well as misusage of money by third parties. We disentangle two potential channels

Rules are often installed in order to constrain unethical behavior. Rules can be framed either in specific (“Don’t accepts gifts from clients.”) or general terms (“Don’t engage in conflicts of interest.”). The current investigation examines the effect of specific and general rules on unethical behavior and how this effect depends on personal gain resulting from the unethical behavior. The results of

In this study, by employing large-scale survey data from four waves of the US Health and Retirement Study (HRS), we explore the (potentially long-lasting) effects of individuals’ exposure to psychologically traumatic life experiences on their subjective well-being. To this aim, we exploit the richness of our dataset, that contains information about occurrence and timing of a set of extreme events out

Significant parts of populations in developed countries frequently worry and ruminate about their finances. Financial worry and rumination can have serious psychological consequences, resulting in lower psychological well-being, mental-health problems, and impaired cognitive functioning. The literature lacks studies investigating the socio-demographic antecedents of and the financial processes underlying

Self-interested paid advisors should try to sell their solutions no matter how they came about. However, we present evidence that advisor persuasiveness depends on two dimensions of their prior problem solving: solution difficulty and demonstrability. We report a laboratory experiment with repeated advisor-client interactions where both these dimensions are independently varied. Persuasion rises in

One’s personal identity can play an important role in decision-making. We propose that a key identity that shapes behavior among poor populations is conceptualizing oneself as financially insecure, which we term “poverty identity.” Two experiments suggest that this identity can influence one’s propensity to engage in challenging tasks. We first demonstrate in a lab experiment with students that making

While a growing body of evidence suggests that healthcare workers in low and middle-income countries often provide poor quality of care, the reasons behind such low performance remain unclear. The literature on medical decision-making suggests that cognitive biases, or failures related to the way healthcare providers think, explain many diagnostic errors. This study investigates whether one cognitive