Publications:
Redesigning the Market for Volunteers: A Donor Registry (with Robert Slonim, Ellen Garbarino, Carmen Wang and Daniel Waller)
[pdf][supplemental material]
Management Science (2020).
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 natural 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 assigned to the Registry condition are 18-30% more likely to volunteer and are 50% more responsive to critical shortage appeals than control subjects. 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.
We Should Totally Open a Restaurant: How Optimism and Overconfidence Affect Beliefs (with Nicholas W. Papageorge) [pdf] [online appendix]
Journal of Economic Psychology (2018), 67, 177-190.
Wishful thinking, defined as the tendency to over-estimate the probability of high-payoff outcomes, is a widely-documented phenomenon that can affect decision-making across numerous domains, including finance, management, and entrepreneurship. We design an experiment to distinguish and test the relationship between two easily-confounded biases, optimism and overconfidence, both of which can contribute to wishful thinking. We find that optimism and overconfidence are positively correlated at the individual level and that both help to explain wishful thinking. These findings suggest that ignoring optimism results in an upwardly biased estimate of the role of overconfidence in explaining wishful thinking. To illustrate this point, we show that 30% of our observations are misclassified as under- or over-confident if optimism is omitted from the analysis. Our findings have potential implications for the design of information interventions since how agents incorporate information depends on whether the bias is ego-related.
Waiting To Give: Stated and Revealed Preferences (with Ashley Craig, Ellen Garbarino and Robert Slonim) [pdf] [supplementary material]
Management Science 63.11 (2017): 3672-3690.
We estimate and compare the effect of increased time costs on consumer satisfaction and behavior. We are able to move beyond the existing literature, which focuses on satisfaction and intention, and estimate the effect of waiting time on return behavior. Further, we do so in a prosocial context and our measure of cost is the length of time a blood donor spends waiting. We find that relying on satisfaction data masks important time cost sensitivities; namely, it is not how the donor feels about the wait time that matters for return behavior, but rather the actual duration of the wait. Consistent with theory we develop, our results indicate that waiting has a significant longer-term social cost: we estimate that a 38% increase (equivalent to one standard deviation) in the average wait would result in a 10% decrease in donations per year.
Altruism or Diminishing Marginal Utility? (with Romain Gauriot & Robert Slonim) [pdf]
Accepted at The Journal of Economic Behavior and Organization.
We challenge a commonly used assumption in the literature on social preferences and show that this assumption leads to significantly biased estimates of the social preference parameter. Using Monte Carlo simulations, we demonstrate that the literature's common restrictions on the curvature of the decision-makers utility function can dramatically bias the altruism parameter. We show that this is particularly problematic when comparing altruism between groups with well-documented differences in risk aversion or diminishing marginal utility, i.e., men versus women, giving motivated by pure versus warm glow motives, and wealthy versus poor.
Working Papers:
Altruism begets altruism (with Robert Slonim) [pdf]
Under Review.
Guided by Bem's (1972) self-perception theory, we design an experiment to ask whether morally-motivated behaviour, e.g., charitable giving, is history-dependent. Using a popular policy nudge, the default option, we exogenously vary altruism "now" and show that the nudge-induced choice to give "now" causes a 41 percentage point (or 200%) increase in the probability of giving "later"; that is, altruism begets altruism. We further show that, consistent with self-perception theory, the choice to behave altruistically "now", rather than the nudge itself, is the crucial element in the causal relationship. These findings are consistent with positive path-dependence, which we interpret as moral consistency.
Exploration & Self-Selection: Revisiting Roy (with Barton Hamilton) [pdf]
Under Review.
We study how selection shapes exploratory versus exploitative behavior. Using a laboratory experiment, we decompose Roy's (1951) theory of selection and study the effect of traits on innovative behavior when information type is assigned versus when it is selected. Consistent with theory, when information type is assigned, we find that (1) there are distinct behavioral patterns leading to earnings' disparities and (2) the returns to personality traits are ambiguous, and significantly depend on the type of information assigned. By contrast, when individuals self-select their information type, we show that they leverage their trait-based advantage, their information choice is optimal and, as predicted by Heckman & Honore (1990), the earnings' disparities disappear.
Self-Serving Truthfulness (with Robert Slonim & Franziska Tausch) [pdf]
Under Review.
We conjecture and experimentally examine a novel explanation for dishonesty, self-serving truthfulness. We conjecture that when the objective truth is uncertain, people will provide self-reports that financially benefit them. To examine \emph{self-serving truthfulness}, we asked a sample of U.S. car owners to respond to an auto insurance underwriting questionnaire that affects their price of insurance (i.e., premium), and investigated how financial incentives affect the honesty of their responses. We find, consistent with the current literature, that people have a strong preference for truthfulness, but only when they are confident of the objective truth. However, when people are not completely certain of the objectively correct response, significant dishonesty occurs in a self-serving manner. We also find that self-serving truthfulness is not strategic and thus distinct from self-deception. Further, interventions aimed at mitigating dishonesty by targeting commonly used strategies to justify dishonesty, e.g., moral wiggle room, consequence attenuation, and attenuation through victim deservingness, are minimally effective.
In Progress:
Vice and Virtue Behaviours: Substitution and Non-Substitution Effects (with Alex Cornish)
We examine how tax policy that encourages charitable giving spills over into other morally motivated behaviours. We examine behaviours that are seemingly unrelated to charitable giving, but that are easily classified as virtuous or vice behaviours—exercise and smoking—to study how people jointly engage in virtuous behaviours (charitable giving and exercise) as well as how people jointly engage in a mixed or vice-virtue bundle (charitable giving and smoking). Using the Panel Study of Income Dynamics, we estimate marginal tax rates for 17,181 individuals over 5 panels from which we can calculate the effective price of giving to charity. We then estimate the structural model developed by Dinardo & Lemieux (1992, 2001) to disentangle substitution effects (i.e., changes in behaviour that arise from changes in relative prices) from non-substitution effects (i.e., changes in behaviour that arise through behavioural channels). Contrary to reduced form results which confound substitution and non-substitution effects, we find that charitable giving and exercise are substitutes in consumption, but the positive non-substitution effect dominate, rendering a positive relationship between charitable giving and exercise. Charitable giving and smoking are also substitutes in consumption and the negative non-substitution effects contribute to a negative relationship between charitable giving and smoking. Together, we interpret both the dominance and the direction of the non-substitution effects as evidence consistent with moral consistency.
Learning to Give: Professional versus Consumer Reviews
We estimate and compare the effect of information from professional versus consumer reviews on consumer behavior. We do so in a pro-social context and examine how information about a charity's effectiveness impacts willingness to donate. We move beyond the existing literature to examine how two distinct sources of information, professional reviews versus consumer reviews, differentially affect individual's willingness to give. We find that individuals place significantly more value on professional reviews than on equivalent consumer reviews. However, when individuals receive a second piece of information they update their willingness to donate similarly regardless of the source: individuals' willingness to donate is unaffected by ``good news" about the charity, but significantly negatively affected by ``bad" news.
Codes of Conduct at Work
Eliciting Risk and Altruism Preferences: Experimental Evidence (with Romain Gauriot & Robert Slonim)
Spending on Image: Substitution and non-Substitution Effects
Parents' Investments in Children and Children's Investment in Themselves (with Robert A. Pollak)
Redesigning the Market for Volunteers: A Donor Registry (with Robert Slonim, Ellen Garbarino, Carmen Wang and Daniel Waller)
[pdf][supplemental material]
Management Science (2020).
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 natural 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 assigned to the Registry condition are 18-30% more likely to volunteer and are 50% more responsive to critical shortage appeals than control subjects. 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.
We Should Totally Open a Restaurant: How Optimism and Overconfidence Affect Beliefs (with Nicholas W. Papageorge) [pdf] [online appendix]
Journal of Economic Psychology (2018), 67, 177-190.
Wishful thinking, defined as the tendency to over-estimate the probability of high-payoff outcomes, is a widely-documented phenomenon that can affect decision-making across numerous domains, including finance, management, and entrepreneurship. We design an experiment to distinguish and test the relationship between two easily-confounded biases, optimism and overconfidence, both of which can contribute to wishful thinking. We find that optimism and overconfidence are positively correlated at the individual level and that both help to explain wishful thinking. These findings suggest that ignoring optimism results in an upwardly biased estimate of the role of overconfidence in explaining wishful thinking. To illustrate this point, we show that 30% of our observations are misclassified as under- or over-confident if optimism is omitted from the analysis. Our findings have potential implications for the design of information interventions since how agents incorporate information depends on whether the bias is ego-related.
Waiting To Give: Stated and Revealed Preferences (with Ashley Craig, Ellen Garbarino and Robert Slonim) [pdf] [supplementary material]
Management Science 63.11 (2017): 3672-3690.
We estimate and compare the effect of increased time costs on consumer satisfaction and behavior. We are able to move beyond the existing literature, which focuses on satisfaction and intention, and estimate the effect of waiting time on return behavior. Further, we do so in a prosocial context and our measure of cost is the length of time a blood donor spends waiting. We find that relying on satisfaction data masks important time cost sensitivities; namely, it is not how the donor feels about the wait time that matters for return behavior, but rather the actual duration of the wait. Consistent with theory we develop, our results indicate that waiting has a significant longer-term social cost: we estimate that a 38% increase (equivalent to one standard deviation) in the average wait would result in a 10% decrease in donations per year.
Altruism or Diminishing Marginal Utility? (with Romain Gauriot & Robert Slonim) [pdf]
Accepted at The Journal of Economic Behavior and Organization.
We challenge a commonly used assumption in the literature on social preferences and show that this assumption leads to significantly biased estimates of the social preference parameter. Using Monte Carlo simulations, we demonstrate that the literature's common restrictions on the curvature of the decision-makers utility function can dramatically bias the altruism parameter. We show that this is particularly problematic when comparing altruism between groups with well-documented differences in risk aversion or diminishing marginal utility, i.e., men versus women, giving motivated by pure versus warm glow motives, and wealthy versus poor.
Working Papers:
Altruism begets altruism (with Robert Slonim) [pdf]
Under Review.
Guided by Bem's (1972) self-perception theory, we design an experiment to ask whether morally-motivated behaviour, e.g., charitable giving, is history-dependent. Using a popular policy nudge, the default option, we exogenously vary altruism "now" and show that the nudge-induced choice to give "now" causes a 41 percentage point (or 200%) increase in the probability of giving "later"; that is, altruism begets altruism. We further show that, consistent with self-perception theory, the choice to behave altruistically "now", rather than the nudge itself, is the crucial element in the causal relationship. These findings are consistent with positive path-dependence, which we interpret as moral consistency.
Exploration & Self-Selection: Revisiting Roy (with Barton Hamilton) [pdf]
Under Review.
We study how selection shapes exploratory versus exploitative behavior. Using a laboratory experiment, we decompose Roy's (1951) theory of selection and study the effect of traits on innovative behavior when information type is assigned versus when it is selected. Consistent with theory, when information type is assigned, we find that (1) there are distinct behavioral patterns leading to earnings' disparities and (2) the returns to personality traits are ambiguous, and significantly depend on the type of information assigned. By contrast, when individuals self-select their information type, we show that they leverage their trait-based advantage, their information choice is optimal and, as predicted by Heckman & Honore (1990), the earnings' disparities disappear.
Self-Serving Truthfulness (with Robert Slonim & Franziska Tausch) [pdf]
Under Review.
We conjecture and experimentally examine a novel explanation for dishonesty, self-serving truthfulness. We conjecture that when the objective truth is uncertain, people will provide self-reports that financially benefit them. To examine \emph{self-serving truthfulness}, we asked a sample of U.S. car owners to respond to an auto insurance underwriting questionnaire that affects their price of insurance (i.e., premium), and investigated how financial incentives affect the honesty of their responses. We find, consistent with the current literature, that people have a strong preference for truthfulness, but only when they are confident of the objective truth. However, when people are not completely certain of the objectively correct response, significant dishonesty occurs in a self-serving manner. We also find that self-serving truthfulness is not strategic and thus distinct from self-deception. Further, interventions aimed at mitigating dishonesty by targeting commonly used strategies to justify dishonesty, e.g., moral wiggle room, consequence attenuation, and attenuation through victim deservingness, are minimally effective.
In Progress:
Vice and Virtue Behaviours: Substitution and Non-Substitution Effects (with Alex Cornish)
We examine how tax policy that encourages charitable giving spills over into other morally motivated behaviours. We examine behaviours that are seemingly unrelated to charitable giving, but that are easily classified as virtuous or vice behaviours—exercise and smoking—to study how people jointly engage in virtuous behaviours (charitable giving and exercise) as well as how people jointly engage in a mixed or vice-virtue bundle (charitable giving and smoking). Using the Panel Study of Income Dynamics, we estimate marginal tax rates for 17,181 individuals over 5 panels from which we can calculate the effective price of giving to charity. We then estimate the structural model developed by Dinardo & Lemieux (1992, 2001) to disentangle substitution effects (i.e., changes in behaviour that arise from changes in relative prices) from non-substitution effects (i.e., changes in behaviour that arise through behavioural channels). Contrary to reduced form results which confound substitution and non-substitution effects, we find that charitable giving and exercise are substitutes in consumption, but the positive non-substitution effect dominate, rendering a positive relationship between charitable giving and exercise. Charitable giving and smoking are also substitutes in consumption and the negative non-substitution effects contribute to a negative relationship between charitable giving and smoking. Together, we interpret both the dominance and the direction of the non-substitution effects as evidence consistent with moral consistency.
Learning to Give: Professional versus Consumer Reviews
We estimate and compare the effect of information from professional versus consumer reviews on consumer behavior. We do so in a pro-social context and examine how information about a charity's effectiveness impacts willingness to donate. We move beyond the existing literature to examine how two distinct sources of information, professional reviews versus consumer reviews, differentially affect individual's willingness to give. We find that individuals place significantly more value on professional reviews than on equivalent consumer reviews. However, when individuals receive a second piece of information they update their willingness to donate similarly regardless of the source: individuals' willingness to donate is unaffected by ``good news" about the charity, but significantly negatively affected by ``bad" news.
Codes of Conduct at Work
Eliciting Risk and Altruism Preferences: Experimental Evidence (with Romain Gauriot & Robert Slonim)
Spending on Image: Substitution and non-Substitution Effects
Parents' Investments in Children and Children's Investment in Themselves (with Robert A. Pollak)
