Papers by Joel van der Weele
Gender differences in voting patterns and political attitudes towards redistribution are well-doc... more Gender differences in voting patterns and political attitudes towards redistribution are well-documented. The experimental gender literature suggests several plausible behavioral explanations behind these differences, relating to gender differences in confidence concerning future relative income position, risk aversion, and social preferences. We use data from lab experiments on preferences for redistribution conducted in the U.S. and several European countries to disentangle these potential mechanisms. We find that when choosing to redis- tribute income as a disinterested observer, women choose higher tax rates than men when initial income depends on performance in a task but not when it is randomly allocated. In a veil of ignorance condition with uncertainty about the income position of the decision maker, this effect is even stronger, leading to a 10ppt gender difference in average chosen tax rates in the performance conditions. We find that this gender difference is mainly due to men being more (over)confident about their task performance and the resulting income position, with gender differences in risk aversion and social preferences playing a minor role.
People typically update their beliefs about their own abilities too little in response to feedbac... more People typically update their beliefs about their own abilities too little in response to feedback, a phenomenon known as "conservatism", and some studies suggest that they overweight good relative to bad signals ("asymmetry"). We measure individual conservatism and asymmetry in three tasks that test different cognitive skills, and study entry into a winner-takes-all competition based on similar skills. We show that individual differences in feedback responsiveness explain an important part of the variation in confidence and competition entry decisions. Conservatism is correlated across tasks and predicts competition entry both by influencing beliefs and independently of beliefs, suggesting it can be considered a personal trait. Subjects tend to be more conservative in tasks that they see as more ego-relevant and women are more conservative than men. Asymmetry is less stable across tasks, but predicts competition entry by increasing self-confidence.
We experimentally investigate the determinants of overconfidence and test the hypothesis, advance... more We experimentally investigate the determinants of overconfidence and test the hypothesis, advanced by Robert Trivers, that overconfidence serves to more effectively persuade or deceive others. After performing a cognitively challenging task, half of our subjects are informed about the possibility of earning money by convincing others of their high relative performance in a structured face-to-face interaction. Privately elicited beliefs show that informed participants are 50% more overconfident than those in a control condition, and are less responsive to objective feedback on their performance. Using random variation in confidence generated by our feedback mechanism, we find that increased confidence indeed causes higher evaluations in the ensuing interactions, unless the evaluators have been explicitly instructed to watch out for lies. These results support the idea that confidence is a strategic variable in human interaction.
We show how to elicit the beliefs of an expert in the form of a “most likely interval”, a set of ... more We show how to elicit the beliefs of an expert in the form of a “most likely interval”, a set of future outcomes that are deemed more likely than any other outcome. Our method, called the Most Likely Interval elicitation rule (MLI), asks the expert for an interval and pays according to how well the answer compares to the actual outcome. We show that the MLI performs well in economic experiments, and satisfies a number of desirable theoretical properties such as robustness to the risk preferences of the expert.
Previous economic experiments on dual-process reasoning in altruistic decisions have yielded inc... more Previous economic experiments on dual-process reasoning in altruistic decisions have yielded inconclusive results. However, these studies do not create a conflict between affective and cognitive motives, resulting in imperfect identification. We interact standard cognitive and affective manipulations in a giving task, and hypothesize that the affective manipulation has stronger effects when we simultaneously put the cognitive system under load. In line with earlier results, we find little evidence for dual-process reasoning in giving. Our independent treatment checks cast doubt on the effectiveness of standard treatment manipulations and show that both cognitive and affective manipulations consistently have opposite effects on the two sexes. We discuss the implications of our findings for economic experiments in this nascent research field.
Previous research has documented strong peer effects in risk taking, but little is known about ho... more Previous research has documented strong peer effects in risk taking, but little is known about how such social influences affect market outcomes. The consequences of social interactions are hard to isolate in financial data, and theoretically it is not clear whether peer effects should increase or decrease risk sharing. We design an experimental asset market with multiple risky assets and study how exogenous variation in real-time information about the portfolios of peer group members affects aggregate and individual risk taking. We find that peer information ameliorates under-diversification that occurs in a market without such information. One reason is that peer information increases risk aversion and induces a concern for relative income position that may reduce or amplify risk taking, depending on whether the context highlights the most or least successful trader. Thus, contrary to conventional wisdom, we show that social interactions may help to reduce earnings volatility in financial markets, and we discuss implications for institutional design.
Experimental Economics
Incentivized methods for eliciting subjective probabilities in economic
experiments present the ... more Incentivized methods for eliciting subjective probabilities in economic
experiments present the subject with risky choices that encourage
truthful reporting. We discuss the most prominent elicitation methods and their underlying assumptions, provide theoretical comparisons and give a new justification for the quadratic scoring rule. On the empirical side, we survey the performance of these elicitation methods in
actual experiments, considering also practical issues of implementation
such as order effects, hedging, and different ways of presenting
probabilities and payment schemes to experimental subjects. We end with
a discussion of the trade-offs involved in using incentives for belief elicitation and
some guidelines for implementation.
Evidence from inside and outside the laboratory indicates that strategically ignoring the negativ... more Evidence from inside and outside the laboratory indicates that strategically ignoring the negative social consequences of self-interested decisions drives anti-social behavior, cor- ruption and even genocide. In an experimental allocation game taken from behavioral economics, I investigate when subjects decide not to know the consequences of a self- interested decision for another person. On the one hand, decision makers remain ignorant more often if fairness requires a larger sacrifice. On the other hand, a larger expected loss for others does not lead to significant changes in ignorance or prosocial behavior. The results show that subjects consciously choose to avoid inconvenient information, and this decision is mainly driven by the desire to avoid personal sacrifices. These findings have consequences for the design of public policies to promote awareness of social problems, like unsustainable consumption patterns and climate change.
Avoiding information about adverse welfare consequences of self-interested decisions, or strategi... more Avoiding information about adverse welfare consequences of self-interested decisions, or strategic ignorance, is an important source of corruption, anti-social behavior and even atrocities. We model an agent who cares about self-image and has the opportunity to learn the social benefits of a personally costly action. The trade-off between self-image concerns and material payoffs can lead the agent to use ignorance as an excuse, even if it is deliberately chosen. Two experiments, modeled after Dana, Weber, and Kuang (2007), show that a) many people will reveal relevant information about others’ payoffs after making an ethical decision, but not before, and b) some people are willing to pay for ignorance. These results corroborate the idea that Bayesian self-signaling drives people to avoid inconvenient facts in moral decisions.
Several studies have shown that dictator-game giving declines substantially if the dictator can e... more Several studies have shown that dictator-game giving declines substantially if the dictator can exploit situational “excuses” for not being generous. In this experimental study we investigate if this result extends to more natural social interactions involving reciprocal behavior. We provide the second mover in a reciprocal game with an excuse for not reciprocating, an excuse which has previously been shown to strongly reduce giving in dictator games. We do not find that the availability of the excuse has any effect at all on reciprocal behavior, and conclude that reciprocity is a more stable disposition than dictator game generosity.
This paper offers a new argument for why a more aggressive enforcement of minor offenses (‘zero-t... more This paper offers a new argument for why a more aggressive enforcement of minor offenses (‘zero-tolerance’) may yield a double dividend in that it reduces both minor offenses and more severe crime. We develop a model of criminal subcultures in which people gain social status among their peers for being ‘tough’ by committing criminal acts. As zero-tolerance keeps relatively ‘gutless’ people from committing a minor offense, the signaling value of that action increases, which makes it attractive for some people who would otherwise commit more severe crime. If social status is sufficiently important in criminal subcultures, zero-tolerance reduces crime across the board.
The introduction of sanctions provides incentives for more pro-social behavior, but may also be a... more The introduction of sanctions provides incentives for more pro-social behavior, but may also be a signal that non-cooperation is prevalent. In an experimental minimum-effort coordination game we investigate the effects of the information contained in the choice to sanction. We compare the effect of sanctions that are introduced exogenously by the experimenter to that of sanctions which have been actively chosen by a subject who has superior information about the previous effort of the other players. We find that cooper- ative subjects perceive actively chosen sanctions as a negative signal which significantly reduces the effect of sanctions.
Evidence from field and laboratory experiments indicates that a large fraction of the people beha... more Evidence from field and laboratory experiments indicates that a large fraction of the people behave like conditional cooperators in public good games. In this article, I investigate the implications of the existence of both conditional cooperators and egoists for optimal law enforcement strategies. When norms of cooperation exist between conditional cooperators, sanctions set by an authority can be lower than in a “Hobbesian" setting where everybody is egoistic. Moreover, if the authorities have private information about the fraction of egoists in society, low sanctions can be optimal because they signal that there are few defectors and thus “crowd in" trust and cooperation between agents. In social dilemmas where conditional cooperation is an important factor, as is the case in tax compliance, the model provides a rationale for the low observed sanctions in the real world and the mixed evidence on the effectiveness of deterrence.
The standard economic model of crime emphasizes the individual rationality and agency of criminal... more The standard economic model of crime emphasizes the individual rationality and agency of criminals. On the other hand, sociological theories typically emphasize the importance of social forces. This essay surveys a recent strand of literature on law enforcement that bridges these two approaches. Using the tools of game theory, it investigates crime as the outcome of the interaction between rational individuals. The survey shows that this analysis leads to a substantially richer set of hypotheses regarding the effect of enforcement than the standard economic model, depending on the classification of the social context, or game, in which agents operate. In doing so, it brings rational choice theories in line with long-standing insights in the field of criminology, as well as providing new analytical distinctions and generalizations.
A natural way to obtain information about the concentration and dispersion of an expert’s beliefs... more A natural way to obtain information about the concentration and dispersion of an expert’s beliefs is to ask for a confidence interval. Our objective is to design an elicitation mechanism that rewards the expert on the basis of the realized event and satisfies a set of desirable properties. We show that the existing mechanisms fail some of these properties, and formulate a new mechanism - the Truncated Interval Scoring Rule - that has all properties and is easily implementable in experimental work.
We are interested in incentivizing experimental subjects to report their beliefs truthfully, with... more We are interested in incentivizing experimental subjects to report their beliefs truthfully, without imposing assumptions on their risk preferences. We prove that if subjects are not risk neutral, it is not possible to elicit subjective probabilities or the mean of a subjective probability distribution truthfully using deterministic payments schemes, which are pre- dominant in the literature. We present a simple randomization trick that transforms deterministic rewards into randomized rewards, such that agents with arbitrary risk preferences report as if they were risk neutral. Using this trick, we show how to elicit probabilities, means, medians, variances and covariances of the underlying distribution without assuming risk neutrality.
Uploads
Papers by Joel van der Weele
experiments present the subject with risky choices that encourage
truthful reporting. We discuss the most prominent elicitation methods and their underlying assumptions, provide theoretical comparisons and give a new justification for the quadratic scoring rule. On the empirical side, we survey the performance of these elicitation methods in
actual experiments, considering also practical issues of implementation
such as order effects, hedging, and different ways of presenting
probabilities and payment schemes to experimental subjects. We end with
a discussion of the trade-offs involved in using incentives for belief elicitation and
some guidelines for implementation.
experiments present the subject with risky choices that encourage
truthful reporting. We discuss the most prominent elicitation methods and their underlying assumptions, provide theoretical comparisons and give a new justification for the quadratic scoring rule. On the empirical side, we survey the performance of these elicitation methods in
actual experiments, considering also practical issues of implementation
such as order effects, hedging, and different ways of presenting
probabilities and payment schemes to experimental subjects. We end with
a discussion of the trade-offs involved in using incentives for belief elicitation and
some guidelines for implementation.