Research

Publications

"To Insure or Not to Insure? Promoting Trust and Cooperation with Insurance Advice in Markets" (with Franziska Tausch, Chengsi Wang, and Erte Xiao). European Economic Review (2023).

We design and test a novel insurance advice mechanism aimed at promoting trust and cooperation in markets with asymmetric information. In a buyer-seller game with third-party insurance, sellers have the option to advise buyers on whether to purchase insurance against the potential losses from the opportunistic behavior of strategic sellers. We hypothesize that advising not to purchase insurance introduces a psychological cost for defection. We develop a theoretical model that selects a pooling equilibrium where both cooperative and strategic sellers advise buyers not to purchase insurance. Once this advice has been given, strategic sellers choose not to defect if the associated psychological costs are sufficiently large. Data from a controlled laboratory experiment shows that the insurance advice mechanism significantly increases market efficiency, with buyers being more likely to purchase from sellers and sellers being more likely to cooperate. Furthermore, we find that the insurance advice mechanism is more effective when sellers can observe buyers’ insurance purchase decisions.

"Demanding the Morally Demanding: Experimental Evidence on the Effects of Moral Arguments and Moral Demandingness on Charitable Giving" (with Philipp Schoenegger). Journal of Behavioral and Experimental Economics (2023)

What are the effects of confronting people with moral arguments and morally demanding statements to perform certain actions, such as donating to charity? To investigate this question, we conduct an online randomized experiment via Prolific (n=2500) where participants can donate to charity. Using a between- subject design, we provide some participants with a moral argument as to why they should donate. We then add a single sentence on top of the moral argument that expresses and varies moral demandingness at different levels. In a follow-up experiment (n=1200) we provide the moral argument and demandingness via an external party’s website—the non-profit Giving What We Can. In both experiments, we find that moral arguments significantly increase both the frequency and amount of donations compared to the control. However, we fail to find evidence that increasing the level of the moral demandingness affects donation behavior in either experiment. Our findings suggest that charities should employ moral arguments to increase giving, but not morally demanding statements.

"Concrete Over Abstract: Experimental Evidence of Reflective Equilibrium in Population Ethics" (with Philipp Schoenegger) In H. Viciana, F. Aguiar, & A. Gaitan (Eds.), Issues in Experimental Moral Philosophy. Routledge. (2023)

One central method of ethics is narrow reflective equilibrium, which relates to the conflict between intuitions about general moral principles and intuitions about concrete cases. In these conflicts, general principles are refined, or judgements in concrete cases are changed until no more conflicts exist. In this paper, we present empirical data on this method in the context of population ethics. We conduct an online experiment (n=543) on Prolific where participants can endorse moral principles relevant to population ethics. They also judge concrete population ethical cases that may conflict with their endorsed principles. When conflicts arise, they can choose to revoke the principle, revise their intuition about a case, or continue without having resolved the conflict. We find that when there is conflict, participants are significantly more likely to revoke their endorsements of general principles, than their judgements about concrete cases. This evidence suggests that for a lay population, case judgements play a central revisionary role in reflective equilibrium reasoning in the context of population ethics.

"Thumbs Down for the Thumbs Up Emoji: Experimental Evidence on the Impact of Instantaneous Positive Reinforcement on Charitable Giving" Journal of Economic Behavior and Organization. (2024)

Historically, positive reinforcement (PRI) for charitable giving happens after the fact; thank-you letters, calls, or gifts from the charities to donors. With online giving becoming more prominent, this creates an opportunity for instantaneous PRI. Our study offers the first evidence, to our knowledge, of the effect of instantaneous PRI on donation behavior. We conduct a large-scale online experiment on Amazon Mturk (n=2,375). Participants are randomly assigned to either a baseline with no PRI; a treatment in which subjects receive a static PRI thumbs up emoji (a general recognized gesture of approval); a treatment in which subjects receive a dynamic PRI thumbs up emoji [that increases (decreases) in size as the size of the donation increases (decreases)]; and two other controls. We find that, consistent with much of the findings on thank-you letters, calls, and gifts, our instantaneous dynamic PRI has no significant positive effects on donation behavior. Surprisingly, we also find that static PRI results in significantly less being donated. These results suggest that organizations and policymakers should be hesitant in using instantaneous PRI, as it ranges from null to negative effects.

Working Papers

"No Intention to Profit, yet Still Repugnant: Experimental Evidence for Outcome-Based Repugnance" (with Erte Xiao, and Nina Xue).

We study whether and why people feel repugnance towards harmless transactions that profit off others’ misfortune, without causing the misfortune itself. Examples of such transactions include second-hand markets for life insurance and prediction markets for disasters. Repugnance in these contexts can be a constraint on market efficiency. In a series of online experiments (N>2000) that vary in the moral intensity of misfortune—from monetary losses in a game to deaths from road accidents—we find robust evidence of repugnance, measured using costly third-party punishment towards the party profiting from others' bad luck. Intentions to profit from others’ misfortune play a limited role in punishment decisions. Repugnance is observed even when profits are associated with good outcomes. Overall, people dislike profit-making when it is attached to others’ fortunes, suggesting repugnance is mainly outcome-based.

"The Effect of Compassion Fade on Altruistic Behavior: Experimental evidence for a guilt mitigation account" (with Toby Handfield, and Matthew Kopec).

In this paper we investigate the phenomenon of compassion fade: a tendency to act less altruistically when faced with more, rather than fewer individuals in need. Using variations of the dictator game, our design allows us to explore both the determinants of compassion fade, and the mechanism by which it operates. In our first experiment, which uses a between-subject design (n=187), we find that adding a second recipient to a dictator game who always receives a payoff of zero, regardless of the decision-maker’s choice, significantly increases selfish behavior. We follow up with a large-scale experiment on Amazon mTurk using a within-subject design (n= 711). We again find that adding a second unhelpable individual who is in a needy state significantly increases the rate of selfish behavior. However, we also find that compassion fade is sensitive to the level of “need” – of the additional individual. When the unhelpable recipient is not in a needy state, decision makers act significantly less selfishly, compared to when they are in a needy state. Finally, we present evidence that the mechanism of compassion fade is diminishing negative affect (e.g., guilt) that arises from selfish decisions, rather than through the diminishment of warm glow.

Work In Progress

Paying It Forward (and back): An Experiment on Sequential Giving (with Zach Freitas-Groff, Oliver Hauser, and Johannes Lohse).

Within both families and states, important policies involve pay-it-forward schemes where one cohort invests in the next cohort (e.g., via education), sometimes with an expectation of a future reward (e.g., retirement support). We study whether altruism, reciprocity, social information, or self-interested equilibriums can sustain forward transfers in an experimental setting. A sequence of players choose whether to allocate some of an endowment to be multiplied and given to a future, prior, or contemporary player. By varying the option set and the information set, we can separate possible mechanisms for sustaining investment in the future.We find that the ability to give back increases the willingness to give forward, but a social preference for reciprocity rather than individual rationality drives the result.