How to Organize Monitoring and Punishment: Experimental Evidence. (with Beatrix Haberl and Timo Goeschl). [pdf] NEW!
Punishment institutions for curtailing free-riding in social dilemmas rely on information about individuals’ behavior collected through monitoring. We contribute to the experimental study of cooperation-enhancing institutions by examining how cooperation and efficiency in a social dilemma change in response to varying how monitoring and punishment are jointly organized. Specifically, we evaluate - against a no-monitoring baseline - combinations of two imperfect monitoring regimes (centralized vs. decentralized) and three punishment regimes (self- vs. peer- vs. delegated punishment) in a repeated public goods game. As hypothesized, we find that delegated punishment outperforms other punishment regimes, irrespective of the monitoring regime, both in terms of cooperation and efficiency. Monitoring, both centralized and decentralized, cannot raise cooperation relative to the baseline unless accompanied by a credible punishment. When combined with a punishment institution, both monitoring regime outperforms the baseline.
Strategic Ignorance and Perceived Control. (with Anca Balietti, Angelika Budjan and Tillmann Eymess). [pdf] NEW!
Information can trigger unpleasant emotions. As a result, individuals might be tempted to willfully ignore it. We experimentally investigate whether increasing perceived control can mitigate strategic ignorance. Participants from India were presented with a choice to receive information about the health risk associated with air pollution and later asked to recall it. We find that perceived control leads to a substantial improvement in information retention. Moreover, perceived control mostly benefits optimists, who show both a reduction in information avoidance and an increase in information retention. This latter result is confirmed with a US sample. A theoretical framework rationalizes these findings.
(Un)Trustworthy Pledges and Cooperation in Social Dilemmas. (with Timo Goeschl). R&R at JEBO [pdf]
Pledges feature in international climate cooperation since the 2015 Paris Agreement. We explore how differences in pledgers’ trustworthiness affect outcomes in a social dilemma that parallels climate change. In an online experiment, two participants interact with a randomly matched third player in a repeat maintenance game with a pledge stage. Treatments vary whether participants are matched with a player that is more or less trustworthy as revealed by behavior in a promise-keeping game; and whether they observe that trustworthiness. We find that participants knowingly matched with more trustworthy players cooperate more than participants matched with less trustworthy players (knowingly or unknowingly), but also more than participants unknowingly matched with more trustworthy players. In contrast, participants knowingly matched with less trustworthy players do not cooperate less than participants who are unknowingly so. Our findings suggest that the use of pledges, as per the Paris Agreement, can leverage the power of trustworthiness to enhance cooperation.
Avoiding the Cost of Your Conscience: Belief-Dependent Preferences and Information Acquisition. R&R Experimental Economics (with Claire Rimbaud). R&R at Experimental Economics [pdf]
Pro-social individuals face a trade-off between their monetary and moral motives. Hence, they may be tempted to exploit the uncertainty in their decision environment in order to reconcile this trade-off. In this paper, we investigate whether individuals with belief-dependent preferences avoid the monetary cost of behaving according to their moral standards by strategically acquiring information about others’ expectations. We test the predictions of an information acquisition model in an online experiment. We use a modified trust-game in which we introduce uncertainty about the second movers’ beliefs about first-movers’ expectations. Our design enables to (i) identify participants with belief-based preferences and (ii) investigate their information acquisition strategy.Consistent with our predictions of subjective preferences, we find that most individuals classified as belief-dependent strategically select their source of information to avoid the cost of their conscience.
Competitive vs. Random Audit Mechanisms: Regulatory Performance and the Role of Peer Information. Journal of the Association of Environmental and Resource Economists (with Timo Goeschl and Marcel Oestreich). [pdf][Appendix][Replication Material]
How to design audit mechanisms that harness the benefits of self-reporting for achieving compliance with regulatory targets while limiting misreporting is a pressing question in many regulatory contexts, from climate policies to public health. Contrasting random audit and competitive audit mechanisms, this paper theoretically and experimentally studies their performance in regulating socially undesirable emissions when peer information about others’ emissions is present or absent. Our focus is on the compliance of emission levels with regulatory targets, going beyond existing results on truthfulness of reporting. Confirming theoretical predictions, the experiment shows that in contrast to the random audit mechanism, the competitive audit mechanism can leverage peer information for compliance: emission levels are closer to the social optimum. Yet, emission levels fall somewhat short of full compliance. The results highlight the considerable potential of competitive audit mechanisms for achieving not only more truthfulness, but also more compliance.
Soldà, Alice, Changxia Ke, William von Hippel, and Lionel Page (2021). "Absolute Versus Relative Success: Why Overconfidence Creates an Inefficient Equilibrium." Psychological Science. [pdf][Appendix]
Overconfidence is one of the most ubiquitous biases in the social sciences, but the evidence regarding its overall costs and benefits is mixed. To test the possibility that overconfidence might yield important relative benefits that offset its absolute costs, we conducted an experiment (N=298 university students) in which pairs of participants bargain over the unequal allocation of a prize that was earned via a joint effort. We manipulated confidence using a binary noisy signal to investigate the causal effect of negotiators’ beliefs about their relative contribution on the outcome of the negotiation. Our results provide evidence that high levels of confidence lead to relative benefits (how much one earns compared to one’s partner) but absolute costs (how much money one receives overall). These results suggest that overconfidence creates an inefficient equilibrium whereby overconfident negotiators benefit over their partners even as they bring about joint losses.
Soldà, Alice, and Marie Claire Villeval (2020). "Exclusion and Reintegration in a Social Dilemma." Economic Inquiry, 58(1), 120-149. [pdf]
Using a social dilemma game, we study the cooperative behavior of individuals who reintegrate their group after being excluded by their peers. We manipulate the length of exclusion and whether this length is imposed exogenously or results from a vote. We show that people are willing to exclude the least cooperators and they punish more, and more severely, chronic defections. In return, a longer exclusion has a higher disciplining effect on cooperation after reintegration, but only when the length of exclusion is not chosen by group members. Its relative disciplining effect on cooperation after reintegration is smaller when the length of exclusion results from a vote. In this environment, a quicker reintegration also limits retaliation. The difference in the impact of long versus short exclusion on retaliation is larger when the length of exclusion is chosen by group members than when it is exogenous. Post‐reintegration cooperation and forgiveness depend not only on the length of exclusion but also on the perceived intentions of others when they punish.
We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. To address this question, we design an experiment in which participants are incentivized either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results show that participants are more likely to (1) overestimate their performance when they anticipate that they will try to persuade others and (2) bias their information search in a manner conducive to receiving more positive feedback, when given the chance to do so. In addition, we also find suggestive evidence that this increase in confidence has a positive effect on participants’ persuasiveness.
Work in Progress
Confidence, Demand for Information and Responsiveness to Feedback. (single authored).
Overconfidence and Deterrence in Contests. (with Si Chen).
Overconfidence, Inequality and Leadership Striving. (with Changxia Ke, Lionel Page, and William von Hippel).
Playing Dumb: The Effect of Information Complexity on Attitudes Towards Information. (with Claire Rimbaud).
Centralized versus decentralized enforcement mechanisms under imperfect monitoring: Impacts on compliance in a public good game. (with Timo Goeschl and Beatriz Haberl).
Narratives and Motivated Beliefs (with Marie Claire Villeval)
Perceived Control and Coping With Threats We Want to Forget, Psychology Today
Keeping Up Appearances and Willful Ignorance, Psychology Today
Why Overconfidence Is So Common and So Costly, Psychology Today
Deceiving Yourself to Better Deceive Others, behavioraleconomics.com