Research

Publications

1. "Reputation or Court: Individualism, Collectivism, and the Choice of Enforcement Mechanism in Exchange". Journal of Economic Behavior & Organization, Volume 217, January 2024, Pages 184-206

Courts and reputation-based enforcement mechanisms are often employed to mitigate the problem of cheating in trade relationships. The choice between these two enforcement mechanisms in conducting trade is closely associated with cultural dispositions toward individualism and collectivism. Nevertheless, the selection process of a court/formal or a reputation/informal enforcement mechanism and how it relates to the reliability of third-party enforcement is unknown. I designed a laboratory experiment in which the options for both a safe local trade and a risky yet more profitable long-distance trade are available. Long-distance trade is governed by either a formal or an informal enforcement mechanism. I examined the choice of informal versus formal enforcement mechanisms while controlling for the cultural disposition of subjects. I found that subjects with an individualist cultural orientation used formal enforcement when strong formal enforcement was available significantly more frequently than those with a collectivist orientation. A belief elicitation task revealed that those with individualistic cultural orientation perceive stranger trade partners as more cooperative than their collectivist counterparts when trades are registered in a strong court.

2."God Games: An Experimental Study of Uncertainty, Superstition, and Cooperation" with Laurence Iannaccone, Games and Economic Behavior, Volume 139, May 2023, Pages 88-116

This paper tests classic claims about the origins and functions of religion. We do so by modifying the standard VCM public goods game, adding a god-like agent that adjusts group earnings in a manner that, though actually random, might plausibly be keyed to players' rates of cooperation. Although players' earnings and the agent's adjustments are reported separately, the mere presence of adjustments leads to radically higher rates of group investment -whether the adjustments are described as purely "random" or "chosen" by an AI who monitors players' contributions. Investment patterns, survey responses, and intra-group chat all witness to the superstitions that emerge in response to Knightian uncertainty and (to a lesser extent) in response to statistical risk. Some superstitions promote cooperation. But counterproductive superstations also arise, especially when group members can communicate via text.

3."Individualism, Collectivism, and Trade" with Erik Kimbrough, Experimental Economics, Volume 22, Issue 2, June 2019, pp 294–324 (Lead Article)

While economists recognize the important role of formal institutions in the promotion of trade, there is increasing agreement that institutions are typically endogenous to culture. The question remains how institutions interact with cultural variables when they are imposed exogenously. In social psychology, the individualism/collectivism distinction is thought to be an important cultural variable underlying many behavioral differences. We design an experiment to explore the relationship between subjects’ dispositions to individualism/collectivism and their willingness to engage in trade under enforcement institutions of varying strength. Overall, we find a positive effect of strong institutions on trade, but once we control for individualism/collectivism, institutions have no significant effect, and we observe that individualists engage in trade more often than collectivists. This suggests that cultural dispositions may even outweigh institutions in the promotion of trade.

4. "From Shocks to Solidarity and Superstition: Exploring the Foundations of Faith" with Jared Rubin Journal of Law, Economics, and Organization, Volume 35, Issue 1, March 2019, Pages 192–237

Prinicpal-agent problems can reduce the gains from exchange available in long distance trade. One solution often employed to mitigate this problem is multilateral punishment, whereby institutions incentivize groups of principals to jointly punish cheating agents by giving them bad reputations. But how does such punishment work when there is uncertainty regarding whether an agent actually cheated or was just the victim of bad luck? And how might such uncertainty be mitigated-or exacerbated-by non-observable, pro-social behavioral characteristics? We address these questions by designing a simple modified trust game with uncertainty and the capacity for principals to employ multilateral punishment. We find that a modest amount of uncertainty increases overall welfare because principals are more willing to trust agents with a bad reputation.

Working Papers

1. "Shocks, Superstition, and Solidarity: How Seemingly Irrelevant Risk Raises Public Goods Giving" with Laurence Iannaccone (previously circulated as Gods and Cooperation) (R&R at Journal of Economic Behavior & Organization)

Additive shocks can substantially increase cooperation in otherwise standard public goods game experiments. We study shocks that randomly adjust players’ earnings by a fixed positive or negative amount reported at the end of each round. These adjustments change neither the return to players’ contributions nor the information about other group members. We compare results across four treatments that employ the same group-level adjustment algorithm but frame it differently, with pre-play descriptions that range from omitting all useful information to accurately revealing its 50/50 random nature. In each treatment, overall contributions run about 50% higher than those obtained in the standard no-adjustment game. Contributions run higher still, nearly 80% over baseline, in a treatment that individualizes the adjustments, truthfully describing them as both 50/50 random and separately calculated for each player. Our results contrast with those of previous studies, which add risk to public goods games in ways that directly interact with players’ contributions and typically reduce cooperation. Players’ contributions and post-play feedback strongly suggest that our results trace back to a pair of deep-rooted impulses, which boost solidarity in response to external risk and rationalize the response with superstitious thinking.

2. "Uncertainty, Superstition, and Endogenous Group Formation: An Intergenerational Experiment"

I report on an intergenerational lab experiment that adapts the classic public goods game by adding a computer algorithm that adjusts the payoffs. Adjustments were additive, reported separately from the contribution decisions, and unbeknownst to the subjects, random. Subjects were incentivized to advise future participants on how to play the game and reveal their beliefs about the underlying mechanism of the adjustments. In the second generation, subjects with superstitious beliefs contribute more to the public good than others do. In the two supplementary treatments, the subjects had the option of sacrificing their personal gains to form new groups. Superstitious subjects were more willing than others to sacrifice and contribute to the public good. Hence, by sacrificing their personal gains, superstitious subjects endogenously form ultrasocial groups that, on average, contribute 85% of their endowments to the public good, fostering the highest level of collective welfare across all treatments.

3. "Do Individualists and Collectivists Cooperate Differently?" with Erik Kimbrough and Brock Stoddard

4."Testamentary Power and Wealth Accumulation: Islamic Inheritance Law versus Primogeniture"

In this study, I used an overlapping generation model to study the impact of the Islamic inheritance law versus primogeniture on wealth accumulation. In the model, I defined two types of households: nobles and peasants. Nobles engaged in a sequential bargaining game with an extractive sovereign to determine the tax rate of each generation. Findings demonstrated that primogeniture led to a lower tax rate and higher wealth level for both types of households. I argue that Islamic jurists invented the waqf contract to circumvent the negative implications of Islamic inheritance laws for tax rates and wealth accumulation. According to this contract, a person dedicates a revenue-producing immovable asset to provide a public service in perpetuity. The founder of a waqf can also appoint a manager who is the residual claimant of the income stream generated by the waqf asset. Importantly, waqf contracts render such assets forever indivisible and inalienable. I further show that, in a static world, waqf creates a primogeniture-like environment with the redistribution of wealth from nobles to peasants. Due to waqf rigidities, however, in a dynamic world with positive technological shocks, primogeniture leads to a higher level of wealth.

Selected Work in Progress

1. "Are you Lucky or Better? Inequality Acceptance under Uncertainty" (Data Collected)

3. "Extractive Sovereign, Property Rights, and Enforcement Mechanisms"

4. "Temple: An Experimental Study of the Origin of the Monetary Authority" with Justin Rietz

5. "Cooperation in Chaos"