Research
Publications
Strategic Behavior with Tight, Loose and Polarized Norms (with Eugen Dimant, Michele Gelfand & Silvia Sonderegger). Management Science, 2024.
Descriptive norms -the behavior of other individuals in one's reference group - play a key role in shaping individual decisions in managerial contexts and beyond. Organizations are increasingly using information about descriptive norms to nudge positive behavior change. When characterizing peer decisions, a standard approach in the literature is to focus on average behavior. In this paper, we argue both theoretically and empirically that not only averages but also the shape of the whole distribution of behavior can play a crucial role in how people react to descriptive norms. Using a representative sample of the U.S. population, we experimentally investigate how individuals react to strategic environments that are characterized by different distributions of behavior, focusing on the distinction between tight (i.e., characterized by low behavioral variance), loose (i.e., characterized by high behavioral variance), and polarized (i.e., characterized by u-shaped behavior) environments. We find that individuals indeed strongly respond to differences in the variance and shape of the descriptive norm they are facing: loose norms generate greater behavioral variance and polarization generates polarized responses. In polarized environments, most individuals prefer extreme actions - which expose them to considerable strategic risk - to intermediate actions that minimize such risk. Furthermore, in polarized and loose environments, personal traits and values play a larger role in determining actual behavior. These nuances of how individuals react to different types of descriptive norms have important implications for company culture, productivity, and organizational effectiveness alike.
5 minute presentation on this paper (NoBeC Early Career Researchers series)
Working Papers
Fairness in times of crisis: Negative shocks, relative income, and preferences for redistribution. CeDEx Working Paper Series.
Do negative income shocks affect preferences for redistribution? Informed by a conceptual framework, I design two experiments where individuals are exposed to income shocks before they have to distribute resources between themselves and another person. In Study 1, I compare individuals who have the same income when taking their redistribution decision but differ with respect to their income history. Some suffered a negative shock and thus had higher earnings in the past while others already had lower earnings from the beginning. This allows to isolate the effect of shocks while holding other motives for redistribution constant. I find that people respond to shocks and allocate more to those who had a higher income in the past. Study 2 incorporates information about real world income shocks into the experiment and shows that effects are even larger once need considerations come into play.
[PDF]
Does Inequality threaten Stability? Evidence from the Lab (with Abigail Barr & Silvia Sonderegger). CeDEx Working Paper Series.
We investigate the impact of rising inequality on social instability through a novel laboratory experiment where two groups interact repeatedly and have an incentive to coordinate. We then vary the extent of the inequality implied by coordination. Our results show that increasing inequality causes destabilisation. This effect is initiated by the disadvantaged and is observed even when the absolute situation of the disadvantaged is unchanging. These findings are consistent with a simple model incorporating disadvantageous inequality aversion and myopic best response. Finally, we show that history matters; responses to current inequality depend on past experiences of inequality and stability.
Too Good to be True - Individual and Collective Decision-Making with Misleading Signals (with Sebastian Fehrler & Moritz Janas)
This study is motivated by a peculiar ancient rule which highlights the need for thorough examination and dissent in decision-making processes. It is stated in the Babylonian Talmud and demands that if a defendant is unanimously convicted by all judges, they should be acquitted. In today’s world, too, there are many cases, where overwhelming evidence, such as fabricated customer reviews, can result in deceptive conclusions. We experimentally investigate individual and collective decision-making within information structures with correlated signals in one state of the world, where too much evidence has the potential to mislead, necessitating a level of sophistication for rational decision-making. Overall, participants’ performance is poor with only small differences in collective and individual decision-making accuracy. Interestingly, the more complex environment tends to encourage greater honesty within heterogeneous groups, as compared to the benchmark setting with independent signals, thus validating a rather subtle game-theoretic prediction.
Work in Progress
Avoidable mistakes: to hide or not to hide? (with Malte Baader, Sarah Bowen & Richard Mills)
Even though reporting mistakes within organisations could substantially improve the productivity of firms, in practice employees often hesitate to do so. An intuitive explanation for this behaviour is that reporting a mistake represents a noisy signal of a worker’s ability and the work environment they interact with. In this paper, we develop a principal-agent model and use a pre-registered experiment (N=894) to study the role of fear (of being fired) and futility (of reports being inconsequential) for an agent's reporting decision. We design four treatments that exogenously reduce fear or futility to test how these affect mistake reporting. We find that while reducing fear or futility alone only leads to marginal improvements, combining both dimensions significantly increases reporting of mistakes by about 20%.
Working paper in preparation
Gender differences in reference letters: Economic significance and behavioural mechanisms
(with Markus Eberhardt, Giovanni Facchini, Valeria Rueda & Fabio Tufano)
Working paper in preparation
Improving Equity in Education through Youth Mentoring: An Evaluation of a Randomized Intervention in Colombia
(with Diego Amador, Diego Aycinena, Sebastian Fehrler, Urs Fischbacher, Andrés Moya, Guido Schwerdt & Angélica Serrano)
Data collection ongoing