1. Social distance and delegation: altruism or expected reciprocity? (with Hamideh Mohtashami Borzadaran)
Abstract: In this paper, we report on two experimental studies that examine the impact of social distance on delegation and uncover the behavioural mechanisms driving delegation in a principal-agent setting. Study 1 shows that reducing the social distance makes principals less likely to delegate. In a separate study, we offer evidence that directed altruism is a better candidate for explaining delegation decisions. Our findings have implications for the underlying sources of pro-social behaviour in organisational settings where managers make their decisions through hiring external agents.
2. The Effects of Induced Emotions on Social Sanctions (with Brit Grosskopf)
Abstract: Emotions are commonly experienced and expressed in human societies; however, their relevance in engaging in social sanctioning has received only limited attention. This paper investigates the direct effects of induced positive and negative emotions on punishment and rewarding behaviour in a one-shot voluntary contributions mechanism game, where personal and social interests are at odds. To capture the direct effects of induced emotions on punishment/rewards, we elicit punishment decisions using the strategy method prior to the induction of moods and after contribution decisions have been made. Our findings demonstrate that social sanctions are a function of induced emotions. Specifically, we find that angry subjects punish group members who contribute a lot less than they do themselves significantly harsher than subjects in a happy mood. The handing out of rewards is not affected by moods.
3. The Effects of Induced Emotions on Leading-by-Example (with Zeyu Qiu)
Abstract: This paper investigates the effects of induced emotions on leading-by example. Using an online sample of more than 1,000 participants, we observe behavior in a one-shot sequential voluntary contribution mechanism game where leaders and followers are induced to be either happy or angry. Our findings show that angry leaders contribute less than happy leaders. The same effect is observed when considering followers’ behavior. Crucially, controlling for leaders’ contributions, the mood effects on followers’ behavior disappear, implying that it is sufficient to induce emotions only on leaders in order to affect followers’ behaviour. Our findings further highlight the role of emotions as a causal force, suggesting that negative changes in well-being can bring about adverse effects on team cooperation.
4. Cognitive ability, risk preferences and errors (with Graeme Pearce)
Abstract: In this paper we examine the link between cognitive ability, risk preferences and the errors that people make. We build a unique dataset that contains over 260,000 decisions made under uncertainty in a variety of tasks by almost 13,000 individuals, with each person having completed a test designed explicitly to measure their cognitive ability. We use both reduced form and structural analyses to distinguish between behavioural differences driven by risk aversion from those that are a consequence of errors. We find that intelligence (1) has a small and behaviourally irrelevant impact on risk preferences and (2) a robust link to errors, reducing the probability of errors through increased preference stability. There is also some evidence of a negative association between intelligence and mistakes. Our results have implications for the development of theories that seek to explain the impact of cognitive ability on decision making.