Research
Publications
The shortage of kidneys for transplant: Altruism, exchanges, opt in vs. opt out, and the market for kidneys - published in Journal of Economic Behavior & Organization (2022)
(with Gary S. Becker and Julio Jorge Elías)
[paper] [video] [Al Roth's blog post]
Abstract: In 2007 we published a paper on organ transplants that used data from 1990–2005. We proposed a radical solution of paying individuals to donate kidneys, and claimed that this would clean out the waiting list for kidney transplants in a short period of time. In this paper, we revisit the topic, and examine 14 years of additional data to see if anything fundamental has changed. We show that the main altruistic based policies implemented, such as kidney exchanges or opt out systems for organ procurement, have been unable to solve the problem of shortages. Our analysis suggests that, because of the reaction of direct living donors to increases in other sources of donations, the supply curve of kidney transplants is highly inelastic to altruistic policies. In contrast, a market in organs would eliminate organ shortages and thereby eliminate thousands of needless deaths.
Experienced traders modulate anterior insula to reduce the endowment effect - published in PNAS (2016)
(with Lester C. P. Tong, Kentaro Asai, Seda Ertac, John A. List, Howard C. Nusbaum, and Ali Hortaçsu)
[paper] [poster] [news article] [news article]
Abstract: People often demand a greater price when selling goods that they own than they would pay to purchase the same goods---a well-known economic bias called the endowment effect. The endowment effect has been found to be muted among experienced traders, but little is known about how trading experience reduces the endowment effect. We show that when selling, experienced traders exhibit lower right anterior insula activity, but no differences in nucleus accumbens or orbitofrontal activation, compared with inexperienced traders. Furthermore, insula activation mediates the effect of experience on the endowment effect. Similar results are obtained for inexperienced traders who are incentivized to gain trading experience. This finding indicates that frequent trading likely mitigates the endowment effect indirectly by modifying negative affective responses in the context of selling.
Working papers
Parental beliefs about child development: Community vs. expert knowledge - working paper available upon request (2024)
(with Julie Pernaudet and Julia Seither)
Abstract: Policymakers commonly use information campaigns to shift individuals' beliefs and behaviors. However, the effectiveness of those policies may be limited if the information provided goes against prevalent community beliefs. We focus on the context of early parenting practices, where beliefs about early skill formation have been shown to be important determinants of parental investments, and subsequently, child outcomes. This paper explores how signals sent by experts or policymakers interact with signals sent by community members in people's belief updating process. We conducted an artefactual field experiment among 18 villages in the province of Tucumán, Argentina, and exogenously varied exposure to scientific information and exposure to beliefs held by friends or other village members. We find that while participants initially update their beliefs about parenting when presented with scientific evidence, these changes can be reversed when confronted with conflicting community beliefs. Furthermore, taking the randomly selected lab participants as seeds in their community network, we show that the impacts on parenting beliefs do not spread to the rest of the village and fade, as measured in a follow-up survey three months later.
Understanding peer effects in educational decisions: Theory and evidence from a field experiment - working paper (2023)
Abstract: While a large literature documents the presence of peer effects in teenagers' educational decisions, researchers know very little about the underlying mechanisms. In this paper, I focus on the decision by high school students to participate in an educational program. Seeing a peer's decision influences a student in three ways: she may be influenced by her peer because she wants to participate together with her peer (joint consumption). In contrast, a student may learn from her peer's decision about the program value (social learning) or the social norms of participation (social norms). I develop a theoretical model with these three channels, and conduct a field experiment in three Chicago high schools to disentangle the channels. In the experiment, I measure students' sign-up rates for a college application assistance program where I randomize (a) whether a student sees a peer's decision, and (b) which type of peer's decision they see. I find large peer effects in the participation decision that are entirely driven by seeing a peer choose not to participate – seeing a peer choose "No" decreases the sign-up rate by 26.9 percentage points. The peer effects are driven by changing students' beliefs about the social norms of participation. In this context, high-achieving students' decisions are especially influential. I estimate the model and combine the structural estimates with collected school social network data to run a policy counterfactual. I find that when there are negative peer effects and costly initial adoption, programs targeting high-achieving students may have lower sign-up rates compared to programs targeting other students.
The impact of language on decision-making: Auction winners are less cursed in a foreign language - Revise & Resubmit at The Journal of Economic Psychology (2023)
(with Fang Fu, Leigh H. Grant, Ali Hortaçsu, Boaz Keysar, and Jidong Yang)
Abstract: As foreign language use becomes more commonplace in the globalized market, we ask whether using a foreign language systematically impacts financial decisions. We conducted a lab experiment in Beijing, China, with 357 native Mandarin Chinese speakers who know English as a foreign language. We ran a series of sealed-bid, common value auctions, where winning bidders often pay more than the object is worth and hence suffer from the “winner’s curse.” Here we show that using a foreign language reduces the winner’s curse, as winning bidders were less likely to overbid for the object. When using a native tongue, bidders adopted a naïve strategy, while with a foreign language they got closer to the Nash equilibrium bid. However, as bidders received feedback on others’ bidding behavior across consecutive auctions, bidding across the language treatments converged to the naïve bid. These results suggest that the language through which individuals make bidding decisions can have influential effects on financial decision making in market settings.
Early childhood programs change test scores but do they change brain activity? - Reject & Resubmit at The Economic Journal (2022)
(with Anya Samek, Keith J. Yoder, Jean Decety, Ali Hortaçsu, and John A. List)
Abstract: Early childhood programs impact test scores, but do they affect brain activity, and how do such neural changes impact future skills? To study these questions, we use a field experiment that randomized children to preschool or to a control group for one year. Following the intervention, we collected data on children’s neural activity during academic and executive functioning tasks using electro-encephalography (EEG). Compared to children in the control group, children assigned to preschool had greater brain activity related to executive functioning. Further, this activity was predictive of executive functioning skills up to four years after the intervention.
Research in progress
Learning by teaming - piloting data collection
(with Michael A. Kuhn, John A. List, and Sally Sadoff)
Reducing college dropout using mentoring programs in Latin America - piloting data collection
(with Catherine Michaud-Leclerc)
Misbeliefs about peers' career investments - under development
(with Amanda Chuan)