Published papers
Cognitive Biases: Mistakes or Missing stakes?
Benjamin Enke, Uri Gneezy, Brian Hall, David Martin, Vadim Nelidov, Theo Offerman, Jeroen van de Ven
Accepted at Review of Economics and Statistics
Abstract: Despite decades of research on heuristics and biases, evidence on the effect of large incentives on cognitive biases is scant. We test the effect of incentives on four widely documented biases: base-rate neglect, anchoring, failure of contingent thinking, and intuitive reasoning. In laboratory experiments with 1,236 college students in Nairobi, we implement three incentive levels: no incentives, standard lab payments, and very high incentives. We find that very high stakes increase response times by 40\% but improve performance only very mildly or not at all. In none of the tasks do very high stakes come close to de-biasing participants.
Fight or Flight: Endogenous Timing in Conflicts
Boris van Leeuwen, Theo Offerman, and Jeroen van de Ven
Accepted at Review of Economics and Statistics
Abstract: We study a dynamic game in which players compete for a prize. In a waiting game with two-sided private information about strength levels, players choose between fighting, fleeing, or waiting. Players earn a “deterrence value” on top of the prize if their opponent escapes without a battle. We show that this value is a key determinant of the type of equilibrium. For intermediate values, sorting takes place with weaker players fleeing before others fight. Time then helps to reduce battles. In an experiment, we find support for the key theoretical predictions, and document suboptimal predatory fighting.
Doing Bad to Look Good: Negative Consequences of Image Concerns on Pro-social Behavior
Ivan Soraperra, Anton Suvorov, Jeroen van de Ven, and Marie Claire Villeval
Accepted at Revue Economique (special issue in honor of Marie Claire Villeval)
Abstract: Several studies show that social image concerns stimulate pro-social behavior. These studies focus on settings where social image and pro-social behavior are aligned. In contrast, we study a setting in which the quest for a better social image can conflict with genuinely pro-social behavior. This conflict happens when there is uncertainty about which action is pro-social. Such is the case for many types of credence goods: recommending an inexpensive treatment by a car mechanic or a dentist reduces the expert’s profits and may not satisfy the true needs of the client, but is generally good for the expert's image (as it signals the lack of greed). We test experimentally if people start to act bad in order to look good when social image and pro-social behavior get misaligned. We find that people care about their social image, but image concerns alone do not induce them to sacrifice surplus. However, if building up a good image has instrumental value (reputational concerns), we do find evidence of Pareto-damaging behavior.
Is Dishonesty Persistent?
Michele Belot and Jeroen van de Ven (2019)
Journal of Behavioral and Experimental Economics 83
Abstract: We study if (dis)honest behavior is persistent. We investigate this by exposing participants to different incentives to lie over time. Some participants are first exposed to high incentives and then to lower incentives; for others the reverse. If (dis)honest behavior is persistent, the propensity to lie depends on past incentives. We find no evidence of persistence in honest or dishonest behavior. Exposing participants first to high incentives does not result in a lasting positive effect on dishonesty after the incentives are lowered away. Similarly, after correcting for a time trend, subjects still respond strongly to high incentives after facing low incentives.
Theory of Mind among Disadvantaged Children: Evidence from a Field Experiment
Gary Charness, John A. List, Aldo Rustichini, Anya Samek and Jeroen van de Ven (2019)
Journal of Economic Behavior and Organization 166, 174-194.
Abstract: Theory of Mind (ToM), the ability to correctly attribute mental states to others, is important in social interactions. We conduct a study with a large group of disadvantaged young children to investigate their development of ToM. We find that ToM scores among our sampled children are substantially lower than those of children from higher socio-economic backgrounds. We also show that performance in ToM improves substantially in environments in which the presence of other children is made salient. This result has important implications for interpreting differences in ToM scores across socio-economic backgrounds, suggesting policies that might reduce the skills gap.
The Power and Limits of Sequential Communication in Coordination Games
Simin He, Theo Offerman and Jeroen van de Ven (2019)
Journal of Economic Theory 181, 283-273.
Abstract: We study theoretically and experimentally the extent to which communication can solve coordination problems when there is some conflict of interest. We investigate various communication protocols, including a new one in which players chat sequentially and free-format. We develop a model based on the `feigned-ignorance principle', according to which players ignore any communication unless they reach an agreement in which both players are (weakly) better off. With standard preferences, the model predicts that communication is effective in Battle-of-the-Sexes but futile in Chicken. A remarkable implication is that increasing players' payoffs can make them worse off, by making communication futile. Our experimental findings provide strong support for these and some other predictions.
Self-confidence and strategic behavior
Gary Charness, Aldo Rustichini and Jeroen van de Ven (2018)
Experimental Economics 21(1), 72–98. link to paper open access
Abstract: We suggest that overconfidence (conscious or unconscious) is motivated in part by strategic considerations, and test this experimentally. We find compelling supporting evidence in the behavior of participants who send and respond to others’ statements of confidence about how well they have scored on an IQ test. In two-player tournaments where the higher score wins, a player is very likely to choose to compete when he knows that his own stated confidence is higher than the other player’s, but rarely when the reverse is true. Consistent with this behavior, stated confidence is inflated by males when deterrence is strategically optimal and is instead deflated (by males and females) when luring (encouraging entry) is strategically optimal. This behavior is consistent with the equilibrium of the corresponding signaling game. Overconfident statements are used in environments that seem familiar, and we present evidence that suggests that this can occur on an unconscious level.
Predictably Angry: Facial cues provide a credible signal of destructive behavior
Boris van Leeuwen, Charles Noussair, Theo Offerman, Sigrid Suetens, Matthijs van Veelen and Jeroen van de Ven
Management Science, accepted. link to paper
Abstract: Evolutionary explanations of anger as a commitment device hinge on two key assumptions. The first is that it is predictable, ex-ante, whether someone will get angry when feeling that they have been badly treated. The second is that anger is associated with destructive behavior. We test the validity of these two assumptions. We collected photos of responders in an ultimatum game before they were informed about the game that they would be playing, and filmed responders with webcams during play. We then showed pairs of photos, consisting of one responder who rejected, and one responder who accepted, a low offer, to an independent group of observers. We find that observers are better than chance at detecting who rejected the low offer; they do 10% better than random guessing would. We also find that anger at receiving a low offer is associated with rejection.
How Private is Private Information? The Ability to Spot Deception in an Economic Game
Michèle Belot and Jeroen van de Ven (2017)
Experimental Economics 1, 19-43. link to paper
Abstract: We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the value of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary whether buyers can interrogate the seller and the contextual richness. The buyers’ prediction accuracy is above chance, and is substantial for confident buyers. There is no evidence that the option to interrogate is important and only weak support that contextual richness matters. These results show that the information asymmetry is partly eliminated by people’s ability to spot deception.
The Sources of the Communication Gap
Simin He, Theo Offerman and Jeroen van de Ven (2017)
Management Science 63(9), 2832-2846. link to paper
Abstract: Face-to-face communication drastically increases cooperation rates in social dilemmas. We test which factors are the most important drivers of this communication gap. We distinguish three main categories. First, communication may decrease social distance. Second, communication may enable subjects to assess their opponent’s cooperativeness (“type recognition”) and condition their own action on that information. Third, communication allows subjects to make promises, which create commitment for subjects who do not want to break a promise. We find that communication increases cooperation very substantially. In our experiment we find that commitment value is an important factor, but the largest part of the increase can be attributed to type recognition. We do not find evidence that social distance plays a role.
No Aspiration to Win? An Experimental Test of the Aspiration Level Model
Enrico Diecidue, Moshe Levy, and Jeroen van de Ven (2015)
Journal of Risk and Uncertainty 51(3), 245-266. link to paper
bstract: A growing body of literature studies the effects of aspiration levels on people’s choices. Researchers often assume an aspiration level at zero, which helps to explain several empirical phenomena. In two experiments, we test this assumption. Our experimental design exploits the discontinuity in the utility function at the aspiration level. The lotteries vary in complexity in terms of the number of outcomes and the use of round or non-round probabilities. We do not find support for an aspiration level at zero, neither for simple lotteries nor for complex lotteries. Overall, our aggregate results are consistent with prospect theory, but can also be explained by a population with heterogeneous aspiration levels, instead of a homogeneous aspiration level at zero.
Dishonesty Under Scrutiny
Jeroen van de Ven and Marie Claire Villeval (2015)
Journal of the Economic Science Association 1, 86-99. link to paper
Abstract: We investigate how different forms of scrutiny affect dishonesty, using Gneezy’s (2005) deception game. We add a third player whose interests are aligned with those of the sender. We find that lying behavior is not sensitive to revealing the sender’s identity to the observer. The option for observers to communicate with the sender, and the option to reveal the sender’s lies to the receiver also do not affect lying behavior. Even more striking, senders whose identity is revealed to their observer do not lie less when their interests are misaligned with those of the observer.
Bad News: An Experimental Study On The Informational Effects Of Rewards
Andrei Bremzen, Elena Khokhlova, Anton Suvorov and Jeroen van de Ven (2015)
Review of Economics and Statistics 97, 55-70. link to paper
Abstract: Both psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task is difficult. Our experiment tests if high rewards embody such bad news and if this is correctly perceived by their recipients. Our design allows us to decompose the overall effect of rewards on effort into a direct incentive and an informational effect. The results show that participants correctly interpret high rewards as bad news. In accordance with theory, the negative informational effect co-exists with the direct positive effect.
Self Rewards and Personal Motivation
Alexander Koch, Julia Nafziger, Anton Suvorov and Jeroen van de Ven (2014)
European Economic Review, 68, 151-167. Link to paper
Abstract: Self-administered rewards are ubiquitous. They serve as incentives for personal accomplishments and are widely recommended to increase personal motivation. We show that in a model with time-inconsistent and reference-dependent preferences, self-rewards can be a credible and effective tool to overcome self-control problems. We also characterize the type of self-rewards that can be used, such as vice goods and virtue goods, and analyze which types of goods will be preferred by the individual.
Beauty and the Sources of Discrimination.
Michele Belot, V. Bhaskar and Jeroen van de Ven (2012)
Journal of Human Resources 47(3), 851-872.
link to paper links to press coverage: New Scientist, Daily Mail, Telegraph, Telegraaf (in Dutch), Parool (in Dutch), DAG (in Dutch)
Abstract We analyze behavior on a TV game show where players' earnings depend upon several factors. Attractive players fare better than less attractive ones, even though they perform no differently on every dimension. They also exhibit and engender the same degree of cooperativeness. Nevertheless, they are substantially less likely to be eliminated by their peers, even when this is costly. Our results suggest that discrimination arises due to consumption value considerations. We investigate third party perceptions of discrimination by asking experimental subjects to predict elimination decisions. Subjects' predictions implicitly assign a role for attractiveness but underestimate its magnitude.
Can Observers Predict Trustworthiness?
Michele Belot, V. Bhaskar and Jeroen van de Ven (2012)
Review of Economics and Statistics 94(1), 246-259. link to paper
Abstract We analyze experimental evidence on whether untrained subjects can predict how trustworthy an individual is. Two players on a TV show play a high stakes prisoner’s dilemma with pre-play communication. Our subjects report probabilistic beliefs that each player cooperates, before and after communication. Subjects correctly predict that women, and players who voluntarily promise that they will cooperate, are more likely to cooperate. They are also able to distinguish truth from lies when a player is asked about his or her intentions by the host. In consequence, and in contrast with the psychology literature, our naive subjects are able to distinguish defectors from cooperators, with the latter inducing beliefs that are 7 percentage points higher. We also study Bayesian updating in the natural and complex context, and find mean reversion in beliefs, and reject the martingale property.
Friendships and Favoritism at School - Evidence from the field
Michele Belot and Jeroen van de Ven (2011)
Economic Journal 121 (557), 1228-1251. link to paper link to press release.
Abstract This study presents evidence from a field experiment on the prevalence of favoritism at school. Children compete in teams in a tournament in a real effort experiment with two rounds. They report which group member they prefer to do the task in the second round, providing them with a small privilege. Using information about their social network and their individual performance, we are able to identify the importance of friendship ties. We find that friendships are very important for all age groups. Performance is an important criterion for the older children, but not for the younger ones. While this suggests that the children favor their friends, we also find an offsetting effect: children who are favored increase their subsequent performance. This means that, what looks like favoritism ex ante, may actually maximize performance ex post.
Discretionary Rewards as a Feedback Mechanism.
Anton Suvorov and Jeroen van de Ven (2009)
Games & Economic Behavior 67(2), 665-681. link to paper
Abstract This paper studies the use of discretionary rewards in a finitely repeated principal-agent relationship with moral hazard. The key aspect is that rewards have informational content. When the principal obtains a private subjective signal about the agent's performance, she may pay discretionary bonuses to provide credible feedback to the agent. Consistent with the often observed compression of ratings, we show that in equilibrium the principal communicates the agent's interim performance imperfectly, i.e. she does not fully differentiate good and bad performance. Furthermore, we show that small rewards can have a large impact on the agent's effort provided that the principal's stake in the project is small.
Promises and Cooperation: Evidence from a TV Game Show
Michele Belot, V. Bhaskar and Jeroen van de Ven (2009)
Journal of Economic Behavior & Organization 73(3), 396-405. link to paper
Abstract: We study the role of communication in a high stakes prisoner’s dilemma, using data from a television game show. 40 Percent of the players voluntarily promise to cooperate, and these players are 50 percentage points more likely to cooperate than players who do not volunteer a promise. However, promises that arise in response to an explicit question by the presenter of the show are uninformative about behavior. These results augment and qualify recent experimental findings on communication—people do not want to volunteer lies but may have no compunction in lying if they feel compelled to do so.
Aspiration Level, Probability of Success and Failure, and Expected Utility.
Enrico Diecidue and Jeroen van de Ven (2008)
International Economic Review 49(2), 683-700. link to paper
Abstract: Aspiration levels are a relevant aspect of decision making. We develop a model that includes the overall probabilities of success and failure relative to the aspiration level into an expected utility representation. This turns out to be equivalent to expected utility with a discontinuous utility function. We give a behavioral foundation to the proposed model and provide conditions to determine the relative weights of the overall probabilities of success and failure. An aspiration level reinforces loss aversion, can account for simultaneous risk-averse and risk-seeking behavior, and can explain choices violating the mean-variance approach.