Gergely Hajdu
Assistant Professor
Department of Economics
Vienna University of Economics and Business
My research interests are behavioral economics, experimental economics and decision making.
PUBLICATIONS
Nature Human Behaviour (2022)
Proceedings of the National Academy of Sciences (2020)
Press coverage: Ungleichheit der Einkommen steigt (ORF, May 1st, 2020)
WORKING PAPERS
Choosing between payment based on one’s own performance or others’ is inherent in most delegation decisions. We propose and test that such self-reliance dilemma could result in motivated reasoning about own and others’ performances. Participants in an experiment face this dilemma and learn about it either before or after reporting their beliefs. We find that learning about the dilemma decreases participants’ beliefs about their counterpart’s performance advantage (CPA) by an average of 17%. Furthermore, it causes an average overestimation of one’s own performance and increases the fraction of participants who falsely believe they outperformed their counterpart. Organizations should, therefore, carefully manage delegation decisions and implement measures to curb overconfidence.
The experience of waiting is ubiquitous in all areas of life. In many instances, waiting is followed by decisions where moral conduct is crucial. With a lab-in-the-field study we analyze the effect of (un)expected waiting time on moral behavior. Passengers who had just joined the check--in line at the Ben Gurion Airport guessed how long they would have to wait to check in. Once they completed check-in we measured their moral behavior by the die-under-the-cup task. Specifically, they had to roll a die privately and report the score, knowing that the higher score they report, the more money they would get. We find that both expected and unexpected waiting erode moral behavior, with unexpected waits being more influential. For comparison, an expected 100--minute delay or an unexpected 25--minute delay both result in the same average increase of one dot in reported values. One possible explanation of the effects is that longer (un)expected waiting times lead people to feel entitled to compensation. Our trust in the estimated effects is corroborated by finding no selections on observables, and we argue that the setup provides variations that are as good as random. The study highlights that managing waiting time expectations can potentially play an important role in mitigating subsequent immoral behavior.
[Instruction]
I investigate whether people distort beliefs about third parties – such as the ability of scientists to offset one’s environmental impact – to excuse self interested behavior. In a laboratory experiment, participants choose how much money to take. The money is either taken from passive participants or comes from another source. Which one it is depends on the success of a third party in solving a riddle. I use a between-subject design with two treatment conditions that only differ in whether it is the success or the failure that results in taking the chosen amount from passive participants. After choosing the amount, participants report beliefs about the success of the third party. Indeed, beliefs are 13 percentage points higher when it is the failure that results in taking the chosen amount from passive participants. With monetary incentives for correct guesses the inference is inconclusive. Nevertheless, the difference in beliefs decreases to 6 percentage points and becomes statistically insignificant. The results suggest that people use belief-based excuses about third-party success.
After purchasing a product, people usually receive information and update their beliefs about both chosen and non-chosen products. This, in turn, can affect future buying and selling decisions. In this paper, we study how choosing a product affects learning about products after the choice has been made. We design an experiment where participants learn about the fundamental quality of financial investments by observing price changes in multiple rounds. Using a between-subject design, we compare beliefs of participants who choose some of the investments themselves (Choice condition) to participants who receive investments exogenously (Allocation condition). We find that learning is stickier after making a choice: participants respond less to price changes in the Choice condition than in the Allocation condition. This result holds for both own and non-owned investments and for both good news and bad news. We also show that participants in the Choice condition do not pay more attention to the investments; neither when they choose, nor after they have made the choice. We estimate a structural model and demonstrate that learning is not significantly different from the Bayesian benchmark after exogenous product allocation, while it is too sticky after making a choice.
People tend to think more favorably about a product when they own it compared to when they do not own it. Going beyond the effect of ownership, we study in the lab how choosing a product affects beliefs about the values of products in the choice set. Using a between-subject design, we compare a person who chooses a product from a binary choice set to a person who receives the same product exogenously. To deal with the endogeneity in choices, we construct information that is both sufficiently clear to make choices predictable and sufficiently unclear to leave room for belief distortions. We find that making a choice increases the difference in beliefs between the two alternatives, and the effect is driven by pessimism about not chosen products: participants who do not choose a product believe it is worse than participants who do not receive it, while beliefs about chosen and received products are similar. When participants choose a product but their attention is shifted towards product evaluation, pessimism disappears suggesting that the effect of choice is driven by attention. As choices are often made under uncertainty, the mechanism we identify may play a role in a potentially wide range of settings. Our findings also have policy implications: active choice policies may be more effective tools than opt-out defaults.
We analyze the consequences of managers’ health shocks on the separation rate of their employees. We hypothesize that previous illness experience of division leaders may affect their attitudes towards their employees. Using an event-study approach combined with matching, we compare the separation rate of employees assigned to managers before and after the managers’ illness episode. We find that separation rate increases by 8% after the manager’s illness episode, mostly driven by dismissals as opposed to voluntary leave. Regarding managers’ own employment outcome, adverse employment effects are present even four years after the illness episode. While 18.23% of previously ill managers has no job by this time, the corresponding ratio is only 13.02% for the control group. Managers staying at the firm experience on average a 13.4% wage drop compared to their matched healthy counterparts in the year following the illness episode.