Working Papers

Overcoming Time Inconsistency with a Matched Bet: Theory and Evidence from Exercising

Abstract:  This paper introduces the matched-bet mechanism. The matched bet is an easily applicable and strictly budget-balanced mechanism that aims to help people overcome time-inconsistent behavior. I show theoretically that offering a matched bet helps both sophisticated and naive procrastinators to reduce time-inconsistent behavior. A field experiment on exercising confirms the theoretical predictions: offering a matched bet has a significant positive effect on gym attendance. Self-reported procrastinators are significantly more likely to take up the matched bet. Overall, the matched bet proves a promising device to help people not to procrastinate. 

Comparing Crowdfunding Mechanisms: Introducing the Generalized Moulin-Shenker Mechanism

(with Sander Onderstal and Arthur Schram) 

Abstract: Crowdfunding is omnipresent. The rise of the internet and the explosion of social media have made it an important source of funds for, i.a., charities, musicians and startups. Yet, it has received remarkably little attention in the economics literature. In particular, the allocation mechanisms used by crowdfunding platforms remain understudied. We make a first step towards filling this gap by studying the performance of the prevailing All-Or-Nothing mechanism (AON). We also introduce a new, strategy-proof, crowdfunding mechanism, the Generalized Moulin-Shenker mechanism (GMS). We show that in theory GMS outperforms AON in terms of equilibrium profit and funding success. We test these theoretical predictions in a laboratory, distinguishing between a sealed-bid and a dynamic version of GMS. Our results show that the dynamic GMS performs better than the sealed-bid GMS. It outperforms AON when the producer’s objective is to maximize funding success. For crowdfunding in practice, this implies that the current standard of financing projects could be improved upon by implementing a crowdfunding mechanism that is similar to the dynamic GMS.

Should Individuals Choose their own Incentives? Evidence from a Mindfulness Meditation Intervention

(with Giorgia Romagnoli, Birgit M. Probst, Nina Bartmann, Jonathan N. Cloughesy and Jan Willem Lindemans) 

Conditionally accepted at Management Science

Abstract: This paper theoretically and empirically investigates the effects of letting people choose from a menu of increasingly challenging incentive schemes. We derive the conditions under which a policy maker profits from leaving the choice to the individuals by leveraging their private information about the expected benefits from the targeted behavior. We test the theoretical predictions in a field experiment in which we pay participants monetary rewards for completing daily meditation sessions. We randomly assign some participants to one of two incentive schemes and allow others to choose between the two schemes. As predicted, participants sort into schemes in (partial) agreement with the objectives of the policy maker. In contrast to our theoretical predictions, participants who could choose complete significantly fewer meditation sessions than participants that were randomly assigned. Since the results are not driven by poor selection, we infer that letting people choose between incentive schemes may bring in psychological effects that discourage adherence.

How to Increase Public Support for Carbon Pricing (with Taisuke Imai, Davide D. Pace and Klaus M. Schmidt)

R&R at Nature Sustainability

Abstract: The public acceptability of a carbon price depends on how the revenues from carbon pricing are used. In a fully incentivised experiment with a large representative sample of the German population, we compare five different revenue recycling schemes and show that support for a carbon price is maximised by a ``Climate Premium'' that pays a fixed, uniform, upfront payment to each person. This recycling scheme receives more support than tax and dividend schemes, than using revenues for the general budget of the government, and than earmarking revenues for environmental projects. Furthermore, we show that participants and experts underestimate the public support for carbon pricing.

Work in Progress

Reservation Prices and Targets: Producer Behavior in Crowdfunding (with Sander Onderstal and Arthur Schram)

Engaging Learners with Reminders and Deadlines (with Charlotte Cordes and Lisa Spantig)