Christoph Drobner

Motivated Belief Updating and Rationalization of Information joint with Sebastian J. Goerg

Management Science, 2024, 70 (7), 4583–4592.

We study belief updating about relative performance in an ego-relevant task. Manipulating the perceived ego-relevance of the task, we show that subjects substantially overweight positive information relative to negative information because they derive direct utility from holding positive beliefs. This finding provides a behavioral explanation why and how overconfidence can evolve in the presence of objective information. Moreover, we document that subjects, who receive more negative information, downplay the ego-relevance of the task. Taken together, these findings suggest that subjects use two alternative strategies to protect their ego when presented with objective information.

Misguided Effort (Job Market Paper)

with A. Yeşim Orhun

We experimentally study how miscalibrated prior beliefs about one's own ability affect effort provision through misguided inferences about returns to effort. We demonstrate that both overconfident and underconfident individuals draw misguided inferences about the returns to effort when observing initial labor market outcomes that are jointly determined by their own ability and external fundamentals. Crucially, we establish that misguided inferences lead to suboptimal future effort provision. These findings provide causal evidence for a theorized effect of miscalibrated prior beliefs on economic actions that operates through misguided inferences about the economic environment.

Motivated Risk Assessments (Revise and Resubmit at the Economic Journal)

with Marco Islam

Do people form risk assessments to justify their actions? We investigate this question in a field experiment studying the dynamics of risk assessments for visiting a café during the COVID-19 pandemic. By randomly varying the incentive for a visit, we find that participants with a high incentive visit cafés more often and downplay the risk compared to those participants with a low incentive. Importantly, the downplaying happens in anticipation of the visit and without new information, suggesting that the assessment update justifies engagement in risky behavior. This finding is inconsistent with Bayesian updating but consistent with the notion of motivated reasoning.

Real Incentives Really Matter

with Sebastian J. Goerg and Orestis Kopsacheilis

Incentivizing behavior, a core principle of experimental methods in economics, is currently under scrutiny due to a series of papers that find little to no difference in choices made under real or hypothetical incentives. In this study, we assess the effectiveness of hypothetical incentives to induce subjects' real effort-an integral aspect of reliable experimental data. We find that linking behavior to hypothetical incentives leads to a marginal increase in effort when compared to no reference to such incentives (Cohen's d: 0.16), but they are nowhere near the effort levels achieved under real ones (Cohen's d: 1.41). Our exploratory analysis suggests that providing real incentives is also more effective in eliminating inattention towards the instructions and complete indifference towards the task compared to the non-incentivized alternatives. 

Belief Elicitation under Ambiguity

with Boon Han Koh, Alexander Coutts, and Christopher Woolnough 

Beliefs about Contracts and Productivity

with A. Yeşim Orhun

Motivated Price Elasticities

with Michael Kurschilgen