Fostering Patience in the Classroom: Results from a Randomized Educational Intervention (with Sule Alan), forthcoming, Journal of Political Economy
We report results from the impact
evaluation of a randomized educational intervention targeted at
elementary school children.
The program uses case studies, stories
and classroom activities to improve the ability to imagine future
selves, and emphasizes forward-looking
behavior. We find that treated students
make more patient intertemporal choices in incentivized experimental
tasks. The effect is stronger for
students who are identified as
present-biased in the baseline. Furthermore, using official
administrative records, we find that treated children
are significantly less likely to receive
a low “behavioral grade”. These results are persistent one year after
the intervention, replicate well
in a different sample, and are robust
across different experimental elicitation methods.
Transmission of Risk Preferences from Mothers to Daughters (with Sule Alan, Nazli Baydar, Teodora
Boneva and Thomas F. Crossley) Journal of Economic Behavior and Organization (2017) 134, 60-77.
We study the transmission of risk
attitudes in a unique survey of mothers and children
in which both participated in an
incentivized risk preference elicitation task. We document that
risk preferences are correlated between
mothers and children when the children are just 7 to 8
years old. This correlation is only
present for daughters. We show that a measure of parental
involvement is a strong moderator of the
association between mothers' and daughters' risk
tolerance. These findings support a role
for socialization in the intergenerational transmission of
preferences that predict economic
behavior.
The Role of Verifiability and
Privacy in the Strategic Provision of Performance Feedback: Theory and
Experimental Evidence (with Levent Kockesen and Duygu Ozdemir), Games and Economic Behavior (2016) 100, 24-45.
We theoretically and
experimentally analyze the role of verifiability and privacy in
strategic
performance feedback using a “one principal-two agent”
context with real effort. We confirm
the theoretical prediction that information transmission
occurs only in verifiable feedbackmechanisms
and private-verifiable feedback is the most informative
mechanism. Yet, subjects also
exhibit some behavior that cannot be explained by our
baseline model, such as telling the truth
even when this will definitely hurt them, interpreting “no
feedback” more optimistically than they
should, and being influenced by feedback given to the
other agent. We show that a model with
individual-specific lying costs and naive agents can
account for some, but not all, of these findings.
We conclude that in addition to being naive, some agents
also suffer from self-serving biases
and engage in non-Bayesian social comparisons in their interpretation of
performance feedback.
Trading experience modulates anterior insula to reduce the
endowment effect (with Lester Tong, Karen Ye, Kentaro Asai, John A.
List, Howard Nusbaum, and Ali Hortacsu) Proceedings of the National Academy of Sciences, (2016), 113(33), 9238-9243.
People often demand a greater price when selling
goods that they own than they would pay to purchase the same goods—a
well-known economic bias called the endowment effect. The endowment
effect has been found to be muted among experienced traders, but little
is known about how trading experience reduces the endowment effect. We
show that when selling, experienced traders exhibit lower right anterior
insula activity, but no differences in nucleus accumbens or
orbitofrontal activation, compared with inexperienced traders.
Furthermore, insula activation mediates the effect of experience on the
endowment effect. Similar results are obtained for inexperienced traders
who are incentivized to gain trading experience. This finding indicates
that frequent trading likely mitigates the endowment effect indirectly
by modifying negative affective responses in the context of selling.
Patience, Self-Control, and the Demand for Commitment:
Evidence from a Large-Scale Field Experiment (with Sule Alan) Journal of Economic Behavior and Organization (2015), 115, 111-122.
This paper reports results from an
experiment that measures time preference and the
demand for a commitment device in the
context of actual consumption. Specifically, we elicit (1)
planned allocations of a consumption
good (chocolate) over two future periods, (2) the demand
for a commitment device that restricts
choices, and (3) desired and actual consumption levels. 4
The experiment is conducted as part of a
large field study on children's preferences, which allows
us to correlate behavior with variables
related to the subjects' socio-economic background and
educational environment, as well as
preference parameters elicited through other tasks and
surveys. We find a large demand for
commitment among children. In addition, we find a strong
correlation between time preference
identified through a multiple-price-list time discounting task
and the demand for commitment in our
consumption task, such that (1) the more patient are more
likely to opt for commitment, (2)
children who are not hyperbolic or exponential discounters
(children who display "increasing
impatience") are less likely to demand commitment. We also
find that school success and family
wealth as well as several personality traits predict
consumption plans, commitment choices
and present bias.
Gender, Competitiveness and Socialization at a Young Age: Evidence from a
Matrilineal and a Patriarchal Society (with Steffen Andersen, Sandra
Maximiano, Uri Gneezy and John List), Review of Economics and Statistics (2013), 95(4), pp. 1438-1443.
Recent literature presents evidence that
men are more competitively inclined than women. Since top-level careers
usually require
competitiveness, competitiveness
differences provide an explanation for gender gaps in wages and
differences in occupational choice.
A natural question is whether women are
born less competitive, or whether they become so through the process of
socialization.
To pinpoint when in the socialization
process the difference arises, we compare the competitiveness of
children in matrilineal and
patriarchal societies. We find that
while there is no difference at any age in the matrilineal society,
girls become less competitive
around puberty in the patriarchal
society.
Deciding to Decide: Gender, Leadership and Risk-Taking in Groups (with Mehmet Y. Gurdal)
Journal of Economic Behavior and Organization (2012), 83(1), 24-30.
Being the leader in a group often
involves making risky decisions that affect the payoffs of all members,
and the decision to take this
responsibility in a group is endogenous
in many contexts. In this paper, we experimentally study: (1) the
willingness of men and women
to make risky decisions on behalf of a
group, (2) the amount of risk men and women take for the group, in
comparison to their individual
decisions. We observe a striking
difference between males and females, with a much lower fraction of
women being willing to make the
group decision than men. The amount of
risk taken for the group is generally lower than in the case where
subjects decide for themselves
only, indicating a cautious shift. The
women that would like to make the group decision and the women that do
not are no different in
terms of how much risk they take for
themselves, nor for their group. For men, on the other hand, we find
that the ones who would like
to lead tend to take more risk on behalf
of the group. We also present several results on the relationship of
risk-taking and leadership
decisions with personality traits.
Entry into Auctions: An Experimental Study (with Ali Hortacsu and James Roberts)
International Journal of Industrial Organization (2011), 29(2), 168-178.
This paper investigates entry decisions into first
and second-price auctions using an experimental design to extract
information on
willingness-to-pay to enter (WTE). We find that
subjects tend to overpay to enter both auction formats. In particular,
if the subjects
believe they will be bidding against bidders
following the risk-neutral Nash strategy, their WTE is greater than the
optimal risk-neutral
amount 97% of the time for first-price auctions
(FPA) and 90% for second-price auctions (SPA). If they believe that they
are bidding
against subjects who bid as do the other subjects,
they submit a WTE that is too high 92% of the time for FPA and 69% of
the time for
SPA. We also find, in line with previous
studies, significant overbidding in both the FPA and SPA. We then
investigate whether
introducing risk aversion (RA) or Òjoy
of winningÓ (JOY) can explain the joint observation of over-entry and
overbidding. In particular,
using bid data alone, we structurally
estimate three models, one allowing RA only, one allowing for JOY only
and one allowing for both
RA and JOY. While a model with JOY alone
overestimates WTE, we find that RA alone can explain 38% of WTE but a
model with both RA and
JOY (where RA is estimated using FPA
bids, and JOY is estimated using SPA bids) can explain 65% of WTE.
Moreover, JOY appears to explain
nearly all of the male WTE but only 44%
of the female WTE.
Stakes Matter in Ultimatum Games (with Steffen Andersen, Uri Gneezy, Moshe Hoffman and John List)
American Economic Review (2011), 101(7), 3427-39.
One of the most robust findings in
experimental economics is that many individuals in one-shot ultimatum
games reject unfair offers,
leaving themselves and their bargaining
partner with a zero payoff. Puzzlingly, rejection rates are robust to
substantial increases in
stakes, leading players to forego
significant sums of money. This study uses a new approach to measure
price effects in ultimatum games.
By combining an experimental design that
elicits a significant number of low offers with an environment that
permits use of much larger
stakes than in the literature, we are
able to examine price effects over ranges of data that are heretofore
unexplored. Our main result
is that proportionally equivalent offers
are significantly less likely to be rejected with high stakes, even in
one-shot play with
inexperienced subjects. In fact, our
paper is the first to present evidence that as stakes increase-to 1600
labor market hours-individual
behavior approaches the subgame perfect
equilibrium prediction.
Does Self-Relevance Affect Information Processing? Experimental Evidence
on the Response to Performance and Non-Performance Feedback
Journal of Economic Behavior and Organization (2011), 80(3), 532-545.
In many settings, individuals are
confronted with decision problems that involve information relevant to
their self-image. This paper
uses an experiment to explore whether
the self-relevance of information influences information processing. The
experiment implements
two information processing tasks that
are identical from a theoretical perspective, but differ in the type of
information provided:
performance feedback versus information
within the context of a purely statistical updating problem. The results
suggest that
information processing differs
significantly across self-relevant and self-irrelevant contexts. In the
self-relevant context, except in
cases where initial self-confidence is
high, subjects overweigh unfavorable performance feedback, leading to
overly pessimistic beliefs.
This is in contrast to the corresponding
self-irrelevant setup, where departures from BayesÕ rule do not follow a
consistent pattern in
terms of direction, and are smaller in
magnitude. In addition, I find that women may interpret positive
feedback more conservatively
than men, leading to more pessimistic
posteriors.
Mental attributes and temporal brain dynamics during bargaining: EEG
source localization and neuroinformatic mapping (with Burak Guclu, Ali
Hortacsu and John List)
Social Neuroscience (2012), 7(2), pp. 159-177.
This paper studies the neural basis of
decision-making in the ultimatum bargaining game using the EEG
technique. Our main goal is to
explore the methodological potential in
employing EEG in neuroeconomics, using a well-studied game.
Specifically, the paper aims to
understand: (i) whether the EEG
procedure can generate similar results to those found in the previous
ultimatum game experiments
conducted using fMRI (Sanfey et al.,
2003), (ii) whether the superior temporal resolution of the EEG can
generate additional insights.
Our main methodology is to study the
correlation of electrical activation in different areas of the brain
with behavior in the ultimatum
game, using previous fMRI studies for
interpretation. We find that neural activity is able to explain a
significant part of the variation
in rejection decisions, with interesting
localization results that replicate and extend previous fMRI studies.
The results along the time
dimension also illustrate that the EEG
method can identify novel patterns in the time course of neural activity
thanks to its superior
temporal resolution.
Working Papers
Ever Failed, Try Again, Succeed Better: Results from a
Randomized Educational Intervention on Grit(with Sule Alan and Teodora
Boneva)
We show that grit, a non-cognitive skill that has been shown to be
highly predictive of achievement, is malleable in the childhood period
and can be fostered in the classroom environment.
Our evidence comes from the evaluation of a randomized educational
intervention implemented in two independent elementary school samples in
Istanbul. Outcomes are measured via a novel
incentivized real effort task and performance in standardized tests. We
find that treated students are 1) more likely to choose to undertake a
more challenging and more rewarding task against an
easier but less rewarding alternative, 2) less likely to give up after
failure, 3) more likely to exert effort to accumulate task-specific
ability, and consequently, 4) more likely to succeed and collect
higher payoffs. The intervention also has a large positive impact on
students’ standardized test scores. Treated students score 0.28 standard
deviations higher in a standardized math test, and
0.13 standard deviations higher in a standardized Turkish test at
follow-up.
On the Cultural Basis of Gender Differences in
Negotiation (with Steffen Andersen, Uri Gneezy, John List and Sandra
Maximiano)
We study the nature versus nurture
distinction in bargaining behavior across gender, by observing the
negotiation
culture in matrilineal and patriarchal
societies. Combining data from a laboratory experiment and a natural
field
experiment conducted in matrilineal and
patriarchal societies permits us to explore how culture affects
bargaining
behavior. One interesting result is that
in both the actual marketplace and in the laboratory bargaining game,
women
in the matrilineal society earn more
than men, at odds with years of evidence observed in the western world.
We find that this result is critically
driven by which side of the market the person is occupying: female
(male)
sellers in the matrilineal (patriarchal)
society extract more of the bargaining surplus than male (female)
sellers.
In the buyer role, however, we observe
no significant differences across societies.
Mitigating the Gender Gap in the Willingness to Compete: Evidence from a Randomized Field Experiment (with Sule Alan)
The lower willingness of
females to compete is extensively documented, and has a wide range of
implications including gender gaps in occupational
choice, achievement and labor market outcomes.
In this paper we evaluate the impact on
competitiveness of two randomized interventions that
involve (1) targeted education to foster grit, a
non-cognitive skill that has been shown to be highly
predictive of achievement, (2) exposure to
successful female role models. The interventions are
implemented in a large sample of elementary schools,
and we measure their impact using a dynamic
competition task with interim performance feedback.
We find that competitiveness is malleable in
both girls and boys. Specifically, when children are
exposed to a worldview that encourages goalsetting
and perseverance, the gender gap in the willingness
to compete disappears. Introducing
successful female role models to all children, however, does not
replicate this effect, as it leads both boys and girls to compete more
relative to control group, leaving the gender gap intact.
We explore the effect of treatments on self-confidence and the response
to performance feedback as a potential mechanism to explain these
results.
Understanding Gender Differences in Leadership (with Sule Alan, Gyongyi Loranth and Elif Kubilay)
We study the evolution of gender differences in the willingness to assume the decision-maker
role in a group, which is a major component of leadership. Using data from a large-scale field experiment, we show that while there is no gender difference in the willingness to make risky
decisions on behalf of a group in a sample of children, a large gap emerges in a sample of adolescents.
In particular, the proportion of girls who exhibit leadership willingness drops by 39% going from childhood to adolescence. We explore the possible causes of this drop and find that a significant
part of it can be explained by a dramatic decline in “social confidence”, measured by the willingness to perform a real effort task in public. We show that it is possible to capture the observed link
between public performance and leadership by estimating a structural model that incorporates costs related to social concerns. These findings are important in addressing the lower propensity
of females to self-select into high-level positions, which are typically subject to greater public scrutiny.
Preference Communication and Leadership in Group Decision-Making (with Mehmet Y. Gurdal)
We report results from a laboratory
experiment that explores the effects of preference
communication and leader selection
mechanisms in group decision-making. In a setting where
all members of a group get the same
payoff based on the group leaderÕs decision of how much
risk to take, we study the effects of
two treatment variables: (1) whether group members can
communicate their preferences to the
leader, (2) whether the leader is exogenously appointed or
voluntarily self-selects into the
position. We find that the leader selection mechanism crucially
affects the integration of group
preferences into the leaderÕs decision: the communicated
preferences have a significant effect on
the actual group decision only when the leader is
appointed. We also find that preference
communication by non-leaders is frequently strategic.
Demand for Decision Autonomy and Willingness to
Take Responsibility in Risky Environments: Experimental Evidence (with
Mert Gumren and Yigit Gurdal)
This paper experimentally studies individuals’ willingness to pay to make risky decisions (1) for
themselves, and (2) on behalf of another person. We use a setup involving a pair of individuals, where
one individual is designated to make both parties’ decisions by default. However, depending on treatment,
either party can express a willingness to pay to change this situation. If one’s willingness to pay
to make her own decision herself is positive, we interpret it as a demand for autonomy; whereas if it
is negative, it shows a desire to delegate. On the flip side, if the willingness to pay to make a decision
on behalf of another person is positive (negative), we interpret it as a demand for taking (desire to
avoid) responsibility. Results suggest that: (1) the demand for autonomy is significantly positive, (2)
the willingness to take responsibility is significantly positive but lower than that for autonomy, (3) the
willingness to pay for both autonomy and responsibility are lower among women, (4) males demand
more autonomy when the person making the decision for them is male. We also explore differences
between individuals’ own decisions and the decisions they make on behalf of others, and their correlates.
Overall, the results have implications for the allocation of decision-making authority in groups
and leadership.
Personality, Group Decision-Making and Leadership (with Mehmet Y. Gurdal)
We report results from a laboratory
experiment that explores the effects of preference
communication and leader selection
mechanisms in group decision-making. In a setting where
all members of a group get the same
payoff based on the group leaderÕs decision of how much
risk to take, we study the effects of
two treatment variables: (1) whether group members can
communicate their preferences to the
leader, (2) whether the leader is exogenously appointed or
voluntarily self-selects into the
position. We find that the leader selection mechanism crucially
affects the integration of group
preferences into the leaderÕs decision: the communicated
preferences have a significant effect on
the actual group decision only when the leader is
appointed. We also find that preference
communication by non-leaders is frequently strategic.
Optimal Information Revelation in the Presence of Social Comparisons: Theory and Experiments
I analyze a principal-multiple agent
model in which agents have imperfect information
about their abilities. When performance
is affected by shocks that are common to everyone (such
as task difficulty), performance
comparisons with others are useful in forming beliefs about own
ability. Beliefs, in turn, affect effort
and hence subsequent performance. In this context, I explore
the principalÕs organizational design
problem where the amount of interim information disclosed
to agents about each otherÕs
performances is a choice variable. I find that the optimal disclosure
policy depends on: (1) the degree of
substitutability of the agentsÕ performances in the
principalÕs payoff function; and (2) the
amount of discretion the principal has over manipulating
contracts. With exogenous contracts, if
agentsÕ performances are sufficiently complementary,
withholding social comparison
information may be optimal. However, when the principal can
choose the wage scheme in addition to
the information policy, full information revelation,
coupled with a ÒcooperativeÓ incentive
scheme, is universally optimal. The paper also presents
findings from a laboratory experiment,
which confirm many of the theoretical predictions. The
results are potentially applicable to
many real-world situations, ranging from the revelation of
grade distributions in classrooms to
interim performance evaluations and team formation policies
in firms.
The Effect of Information on Gender Differences
in Competitiveness: Experimental Evidence (with Balazs Szentes)
An important line of recent literature
has found that there are gender differences in attitudes toward
competition, with men being more
likely to choose competitive incentive
schemes, even when factors such as ability and risk aversion are
controlled for. This paper
examines the effect of performance
feedback on the gender gap. We present experimental evidence that the
difference between men and
women in terms of tournament entry
decline significantly when individuals are given performance feedback
before making their incentive
scheme choice. The results suggest that
policies that reduce uncertainty can reduce the gender gap in tournament
entry.
Work in Progress
Default and Feedback Effects Mitigate Gender Gaps in Competition (with Sandra Maximiano)
We investigate whether gender
differences in competitiveness can be eradicated through exposing
individuals to competition before
they make a choice. We run an experiment
where subjects in the "default=tournament" treatment perform a real
effort task under
competitive incentives for 5 periods,
before making a choice between piece-rate and competition in the 6th
period. In another
treatment ("default=piece-rate"), the
first 5 periods are run under a piece-rate. We find that in the
treatment where the default has
been to compete, there are no gender
differences in competition choice. We also look at the effects of
performance
feedback on a 2nd competition choice and
find that men might be less adversely affected by negative feedback
after an initial
competitive choice.
Escalation of Commitment and Ego Relevance (with David Eil and Justin Rao)
We study escalation of commitment in
cases where the decision-making problem is related to ego versus when it
is not.
We design a decision-making problem
where subjects can make repeated investments into the underlying state
that they deem "correct",
and receive noisy feedback about the
true state in between investments. We run the experiment with business
experts and fashion experts,
and have three decision-making tasks:
one related to business, one related to fashion, and one that is
completely irrelevant to the
subject's self-perceived expertise.
We are thus able to study the effects of
ego-relevance on both belief updating and commitment of resources in
decision problems.
Rubinstein Meets Abraham: An Analysis of
Bargaining Behavior During the Festival of Sacrifice (with Burak
Dindaroglu)
We estimate a dynamic model of
sequential bargaining using field data collected from the market for
livestock (sheep) before the Festival
of Sacrifice in Turkey. This market is
characterized by frequent and aggressive bargaining, which occurs in the
form of sequential price
offers. A distinguishing feature of our
study is that we are able to elicit detailed information on both buyers
and sellers. We elicit
each seller's outside option by means of
an incentive compatible mechanism. We also obtain data on seller costs,
demographics and
inventory. On the buyer side, we obtain
demographic information (age, household income, education, hometown,
gender, group/dyad
characteristics) on each buyer
(bargainer), a reported maximum willingness to pay, and information on
the buyer's search history,
including the number of total price
offers/bargains and experience in the market.
Social Information and Gender Differences in Competitiveness (with Marie Claire Villeval)
This project investigates whether
observing other men and women's choices changes the propensity to
compete for men and women.
Subjects receive information about the
choices of 4 peers, two men and two women, and the informational content
is randomly varied.
We study the effects of information on
tournament entry, and compare this with a control condition where there
is no information on
peers' choices. We also elicit beliefs
about (1) own performance,
(2) the performance of other men and
women in the tournament as well as risk preferences to assess their
moderating role in the effects
of social information.
