Working Papers
Too Good to be True - Individual and Collective Decision-Making with Misleading Signals (with Sebastian Fehrler & Moritz Janas) R&R at Management Science.
In many situations, an abundance of misleading evidence—such as fake customer reviews—can lead to false or deceptive conclusions. We experimentally investigate individual and collective decision making in an information structure in which signals can be correlated, depending on the state of the world. In this setting, too much evidence pointing in one direction 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 a benchmark setting with independent signals, thus validating a rather subtle game-theoretic prediction.
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How Tinted Are Your Glasses? Gender Views, Beliefs and Recommendations in Hiring (with Markus Eberhardt, Giovanni Facchini, Valeria Rueda & Fabio Tufano). Submitted.
We study gender gaps at different stages of the hiring process, focusing on recommendations and recruitment. First, we document that women receive fewer ‘ability’ and more ‘grindstone’ recommendation letters in the academic job market. Next, we conduct two experiments — with academic economists and an online college-educated sample — analyzing both recommendation and recruitment stages. While recruiters overall favor women, consistent with efforts to diversify hiring, some groups of recommenders write suboptimal letters for them, undermining the initial advantage. Finally, letter choices correlate with gender views and are driven by strategic but erroneous beliefs about the effectiveness of different letter types.
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Negative income shocks and distributive preferences.
This paper investigates whether negative income shocks affect distribution decisions, using two experiments. While Study 1 randomises whether participants experience an income shock within the experiment, Study 2 examines real-world income shocks during the Covid-19 pandemic. Across both studies, I find that shocks significantly affect how participants distribute earned income. They allocate more to those who experienced a shock, regardless of whether they themselves or another person was affected. This behaviour can be explained by two mechanisms. First, losing income changes need considerations and thus utility-based distribution arguments. Second, the mere experience of a shock matters. Fixing current income levels, and thus need considerations, individuals still give more to a person who suffered a shock. This is in line with a theoretical framework where past earnings serve as fairness reference points, highlighting the role of earning histories in shaping fairness judgements.
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Does Inequality threaten Stability? Evidence from the Lab (with Abigail Barr & Silvia Sonderegger). Submitted.
We investigate the impact of rising inequality on social instability through a novel multi-period laboratory experiment. In each period, members of two groups are randomly matched to play an anti-coordination game, in which payoff is either zero for both or positive but unequal. At the beginning of the game, the implied payoff inequality is low, but it increases over time. Our findings shed light on the role of inequality for social stability. While under low initial inequality, unequal conventions – where one group is systematically better off – tend to emerge, increasing inequality causes destabilization. This is initiated by the group disadvantaged by the unequal convention 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. Finally, we show that history matters; responses to current inequality depend on past experiences of inequality and stability.
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To hide or not to hide? How fear and futility affect the decision to report a mistake (with Malte Baader, Sarah Bowen & Richard Mills). Reject & Resubmit at Experimental Economics.
Even though reporting mistakes could substantially improve work processes and productivity within organisations, employees often hesitate to do so. This paper studies the role of fear (of being fired) and futility (i.e. reports being inconsequential) in explaining such employee silence. Drawing on a principal-agent framework with career concerns, we formalise mistakes as noisy signals of both agent quality and the work environment and show that optimal reporting decisions are affected by fear and futility considerations. We then use a novel experiment to exogenously manipulate the degree of fear and futility and test our theoretical predictions. In a 2x2 between-subject design, we vary the anonymity of reporting and the likelihood of organisational response. Results show that reducing fear and futility are complementary actions. Tackling both significantly increases reporting by about 20pp. This improvement in communication is accompanied by better organisational income, highlighting the value of improved reporting structures for firms and employees.
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