Sören Harrs

We experimentally study competitive markets with socially responsible production. Our main focus is on the producers' decision whether or not to reveal the degree of social responsibility of their product. Compared to two benchmark cases where either full transparency is enforced or no disclosure is possible, we show that voluntary and costless disclosure comes close to the full transparency benchmark. However, when the informational content of disclosure is imperfect, social responsibility in the market is significantly lower than under full transparency. Our results highlight an important role for transparent and standardized information about social externalities.

Can voluntary contributions to public goods be motivated by identity concerns? In a theory-driven field experiment we test how positive and negative shocks to subjects’ environmental identity beliefs affect voluntary efforts for climate protection. In a real-effort task, subjects can generate donations that off-set carbon emissions. Prior to the task, we manipulate subjects’ beliefs about their environmental identity either positively or negatively compared to a control group. A negative shock to identity (“identity threat”) increases effort by about 17% compared to our control group. This effect is largest for subjects that had a strong prior environmental identity belief. We find no evidence that a positive shock to identity does affect behavior. Our results are in line with some of the main predictions from the belief-based model of identity by Bénabou and Tirole (2011). They also have implications for policy makers and NGOs that want to encourage voluntary contributions to climate protection by leveraging people’s identity concerns.

Narratives are omnipresent in today's media to complement or even substitute ``hard facts''. Opinion leaders use narratives to persuade the audience of their interpretation of reality, especially, when major exogenous shocks hit the economy. Despite the importance of narratives in public discourse, surprisingly little is known about their economic impacts. In this paper we provide experimental evidence that communication through narratives can have severe - potentially unintended - effects on fundamental determinants of financial behavior. In a controlled experiment (N=423) subjects are exposed to news articles that either provide a pessimistic, balanced or optimistic narrative about the exogenous shock of the coronavirus pandemic. We find that the more pessimistic a narrative is about the pandemic, the more pessimistic are subjects' expectations about the stock market, and the more risk averse and impatient subjects behave in incentivized financial decisions. Hence, our results show how narratives can impact financial behavior through forward-looking expectations, but also through behavioral effects on decision making. Our results improve our understanding of how communication about exogenous shocks influences economic behavior.

In 2014 Indian Prime Minister Narendra Modi launched the Clean India Campaign, one of the largest social norm campaigns in the country's history. In order to change prevailing habits of littering and open defecation, the campaign frequently refers to Indian national identity and emphasizes patriotism. This paper first presents a theoretical framework discussing the role of identity in social norm interventions. Second, it provides empirical evidence from a field experiment at cigarette shops in Bangalore, India. Treated subjects see anti-littering signs that prescribe behavior for one specific identity. Identity norm messages that prescribe behavior for the Indian national identity or the local Bangalorean identity reduce littering by 15.5pp and 21.9pp respectively compared to conventional anti-littering messages. The experiment provides evidence that appealing to people's identity can be an effective intervention for promoting behavior change.