Published & Forthcoming Papers:
+ Preferences for the Resolution of Uncertainty and the Timing of Information
Journal of Economic Theory, September 2020
If it has happened/ you want to know it sooner./ Otherwise, you’ll wait.
[60-min presentation]
We present results from a laboratory experiment designed to elicit preferences over the resolution of uncertainty and timing of non-instrumental information acquisition in a rich choice set. Treatments vary whether the uncertainty is framed as a compound lottery or information structure. We find that individuals prefer to delay uncertainty resolution when the choice is framed as a compound lottery and prefer to expedite uncertainty resolution when framed as an information structure. Preferences are strict, as individuals are willing to pay for information in one treatment and they pay to avoid information in the other. We find no evidence of an aversion to gradual resolution in either context.
We present results from a laboratory experiment designed to elicit preferences over the resolution of uncertainty and timing of non-instrumental information acquisition in a rich choice set. Treatments vary whether the uncertainty is framed as a compound lottery or information structure. We find that individuals prefer to delay uncertainty resolution when the choice is framed as a compound lottery and prefer to expedite uncertainty resolution when framed as an information structure. Preferences are strict, as individuals are willing to pay for information in one treatment and they pay to avoid information in the other. We find no evidence of an aversion to gradual resolution in either context.
+ Timing of Communication
with Puja Bhattacharya and Arjun Sengupta
The Economic Journal, August 2020
Promises are good/ but cooperation fades./ Reports are better.
[Instructions] [30-min presentation]
Using an experiment, we demonstrate that a communication regime where a worker communicates about his intended effort is less effective in i) soliciting truthful information, and ii) motivating effort, than a regime where he communicates about his past effort. Our experiment uses a real-effort task, which additionally allows us to demonstrate the effects of communication on effort over time. We show that the timing of communication affects the dynamic pattern of work. In both treatments, individuals are most cooperative closest to the time of communication. Our results reveal that the timing of communication is a critical feature that merits attention in the design of mechanisms for information transmission in strategic settings.
Using an experiment, we demonstrate that a communication regime where a worker communicates about his intended effort is less effective in i) soliciting truthful information, and ii) motivating effort, than a regime where he communicates about his past effort. Our experiment uses a real-effort task, which additionally allows us to demonstrate the effects of communication on effort over time. We show that the timing of communication affects the dynamic pattern of work. In both treatments, individuals are most cooperative closest to the time of communication. Our results reveal that the timing of communication is a critical feature that merits attention in the design of mechanisms for information transmission in strategic settings.
+ Teams Promise But Do Not Deliver
with Puja Bhattacharya, John Kagel, and Arjun Sengupta
Games & Economic Behavior, September 2019
People will promise./ It makes them cooperate./ But don’t trust a group!
[Published Version][Instructions] [20-min presentation]
Individuals and two-person teams play a hidden-action trust game with pre-play communication. We replicate previous results for individuals that non-binding promises increase cooperation rates, but this does not extend to teams. While teams promise to cooperate at the same rate as individuals, they consistently renege on those promises. Additional treatments begin to explore the basis for team behavior. We rule out explanations hypothesizing that concern for partner’s payoffs is the basis for team outcomes, as absent within-team communication, promise fulfillment rates increase compared to individuals. Rather, the results are consistent with the idea that communication between teammates provides support for self-serving behavior.
Individuals and two-person teams play a hidden-action trust game with pre-play communication. We replicate previous results for individuals that non-binding promises increase cooperation rates, but this does not extend to teams. While teams promise to cooperate at the same rate as individuals, they consistently renege on those promises. Additional treatments begin to explore the basis for team behavior. We rule out explanations hypothesizing that concern for partner’s payoffs is the basis for team outcomes, as absent within-team communication, promise fulfillment rates increase compared to individuals. Rather, the results are consistent with the idea that communication between teammates provides support for self-serving behavior.
+ Dynamic Risk Preferences Under Realized and Paper Outcomes
Journal of Economic Behavior & Organization, May 2019
More risk after wins/but play safe after losses./Realized and paper.
[Published Version]
We conduct a large-scale test of dynamic risk preferences. While most of the literature on dynamic risk restricts attention to positively skewed gambles, subjects in our experiment tend to choose negatively skewed lotteries. This allows us to study dynamic risk preferences in an environment that the literature has not analyzed. We find evidence of the reinforcement effect—individuals take on more risk after a gain and take on less risk after a loss. Furthermore, we exogenously vary whether these outcomes are “realized” or on paper, according to the distinction put forth by Imas (2016). We find little difference in the responses to realized and paper outcomes in environments of negatively skewed risk.
We conduct a large-scale test of dynamic risk preferences. While most of the literature on dynamic risk restricts attention to positively skewed gambles, subjects in our experiment tend to choose negatively skewed lotteries. This allows us to study dynamic risk preferences in an environment that the literature has not analyzed. We find evidence of the reinforcement effect—individuals take on more risk after a gain and take on less risk after a loss. Furthermore, we exogenously vary whether these outcomes are “realized” or on paper, according to the distinction put forth by Imas (2016). We find little difference in the responses to realized and paper outcomes in environments of negatively skewed risk.
Working Papers:
+ When Choices are Mistakes
with John Rehbeck
Revision Requested, American Economic Review
You like a choice rule/but then you violate it./Which was a mistake?
[60-min presentation]
Using a laboratory experiment, we identify whether decision makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report which of several axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their stated axiom preferences. We give them the opportunity to re-evaluate their decisions when lotteries conflict with desired axioms. We find that a majority of individuals want to follow the axioms and revise their lottery choices to be consistent with them. We interpret this to mean that many axiom violations in our sample were mistakes.
Using a laboratory experiment, we identify whether decision makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report which of several axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their stated axiom preferences. We give them the opportunity to re-evaluate their decisions when lotteries conflict with desired axioms. We find that a majority of individuals want to follow the axioms and revise their lottery choices to be consistent with them. We interpret this to mean that many axiom violations in our sample were mistakes.
+ Stable Randomization
with Marina Agranov and Paul J. Healy
You randomize here?/ You will randomize there, too./ It’s a stable trait.
[30-min presentation]
We provide a unifying experimental framework in which to study randomization behavior in games and individual choice questions. In each decision, subjects face twenty simultaneous repetitions of the same choice, whereby randomizing constitutes making different choices across the twenty repetitions. We find very high rates of randomization, even in questions that offer a first-order stochastically dominant option. Randomization is highly correlated across domains, while more individuals randomize in games than in analogous decision problems. Experimental treatments test theories of randomization behavior, ruling out most theoretically-based explanations. Results suggest that dominated randomization stems, in part, from a failure of contingent reasoning.
We provide a unifying experimental framework in which to study randomization behavior in games and individual choice questions. In each decision, subjects face twenty simultaneous repetitions of the same choice, whereby randomizing constitutes making different choices across the twenty repetitions. We find very high rates of randomization, even in questions that offer a first-order stochastically dominant option. Randomization is highly correlated across domains, while more individuals randomize in games than in analogous decision problems. Experimental treatments test theories of randomization behavior, ruling out most theoretically-based explanations. Results suggest that dominated randomization stems, in part, from a failure of contingent reasoning.
+ A Systematic Test of the Independence Axiom Near Certainty
with Ritesh Jain
Independence fails/Not from certainty effect./It’s the opposite!
A large literature has documented violations of expected utility consistent
with a preference for certainty (the “certainty effect”). We design a laboratory experiment to investigate the role of the certainty effect in explaining violations of the independence axiom. We use lotteries spanning over the entire probability simplex to detect violations systematically. We find that violations of independence consistent with the reverse certainty effect are much more common than violations consistent with the certainty effect. Results hold as we test robustness along two dimensions: varying the mixing lottery and moving slightly away from certainty.
with a preference for certainty (the “certainty effect”). We design a laboratory experiment to investigate the role of the certainty effect in explaining violations of the independence axiom. We use lotteries spanning over the entire probability simplex to detect violations systematically. We find that violations of independence consistent with the reverse certainty effect are much more common than violations consistent with the certainty effect. Results hold as we test robustness along two dimensions: varying the mixing lottery and moving slightly away from certainty.