The standard framing effect demonstrates a deviation from expected utility theory (and rational choice theory) that is consistent with prospect theory. Findings by Mishra and Fiddick (2012) suggest that such framing effects may be better explained in terms of a sensitivity to minimal acceptable thresholds, or needs, as described in risk-sensitivity theory. To evaluate the reliability of the findings reported by Mishra and Fiddick (2012), we conducted a close preregistered replication of their Experiment 3 with a larger, well-powered sample (N = 399) of UK students recruited via Prolific. Our results partly replicated the original findings: In line with the original study, we observed the standard framing effect and that individuals with higher need more often selected the risky option. Results for the crucial hypothesis were mixed: In the original study, the framing effect disappeared when the analysis stratified by need. In the replication, when we stratified by need, we observed a framing effect among participants with low need, but not among participants with high need. These findings contribute to the understanding of both prospect theory and risk-sensitivity theory in explaining the standard framing effect.
Aviation is a major contributor to global greenhouse gas emissions, highlighting the urgent need for behavioral interventions that encourage a shift toward more sustainable modes of transportation, such as rail travel. This research investigates how ecolabels influence travel mode decisions by promoting trains over flights. In an online experiment with a fictitious booking travel platform, 330 participants indicated their purchase intention and actual selection between three travel options: a flight (high emissions), a bus (moderate emissions), and a train (low emissions), across four experimental conditions. These included a control condition (no label), an implicit color-coded label, an explicit label informing about the CO₂ emissions, and a combined label incorporating both the implicit and explicit formats. Results indicate that the implicit label significantly decreased participants' intention and actual selection of air travel and increased their intention and choice for train travel. No significant effects were observed on bus travel choices. Furthermore, the combined label did not yield additional benefits beyond those achieved by either label alone. These findings contribute to the research on behavioral economics and environmental psychology by addressing a critical gap in understanding how interventions that are effective in low-impact, low-effort contexts (e.g., food and packaging choices) affect people's decisions regarding high-impact, high-effort behavior changes, such as rethinking travel behavior.
We conduct a laboratory experiment using one-shot Prisoner's Dilemma (PD) and finitely Repeated Prisoner's Dilemma (RPD) games to study cooperation with an artificial agent that both mimics human behavior and acts on behalf of a human stakeholder. Controlling for beliefs, emotions, and personal characteristics, we investigate the underlying drivers of cooperation differences between a human baseline (“Humans”) and the artificial agents (“AA”) treatment. We find that the likelihood of cooperation does not depend on whether the counterpart is human or artificial in the one-shot PD games. In the RPD games, however, cooperation is less likely when participants play with an artificial agent than when they play with other humans. By combining individual decisions and beliefs, we identify an “exploiting-the-partner” behavior: choosing to defect while expecting the partner to cooperate. Our results suggest that participants are persistently more likely to exploit artificial agents than human partners when they anticipate cooperation, including across repeated interactions and even if the artificial agent is acting on behalf of a human counterpart.
Menopause, a biological transition marked by the permanent cessation of menstruation, affects millions of women each year, bringing about significant physical, emotional, mental, and social changes. Yet, its potential influence on economic behavior remains largely unexplored. This study investigates whether menopause affects women’s risk preferences, using an incentivized lottery task and psychological questionnaires in a large online sample of over 1700 UK women. While menopausal participants initially appear less risk-taking than non-menopausal women, this difference vanishes once age is controlled for. Across multiple model specifications and robustness checks, menopausal status has no independent effect on investment behavior. Instead, risk aversion increases gradually with age, regardless of menopausal classification. These findings suggest that the economic implications often attributed to menopause may, in fact, reflect broader age-related trends. By disentangling the effects of age and menopausal status, this study contributes to a more precise understanding of how biological and demographic factors shape decision-making.
Cognitive biases are pervasive, even among policymakers whose decisions have wide welfare consequences. Yet little is known about whether scalable training can mitigate them. This paper reports evidence from a randomized controlled trial embedded in an online behavioral economics course for public officials in Latin America and the Caribbean. Participants were randomly assigned to complete a seven-item diagnostic test either before or after the course, measuring cognitive reflection, applied behavioral knowledge, and policy approach preference. Those tested afterward scored 0.87 standard deviations higher on average, with especially large gains in applied reasoning and problem-solving. These results, robust to within-subject comparisons, suggest that short, structured online training can enhance reasoning processes relevant to public decision-making. The findings highlight the potential of large-scale cognitive training to improve public sector performance and motivate further research on its policy impact.
This study investigates the phenomenon of panel conditioning and its impact on the reliability and stability of financial behavior and expectation measurements collected through a high-frequency longitudinal survey. Panel conditioning occurs when repeated participation in a survey influences respondents' behaviors and responses, potentially leading to biased data. Utilizing a quasi-experimental design and structural equation modelling, we analyze data from a monthly online survey to assess whether panel participation affects data quality, namely, reliability and stability. Our findings indicate that panel conditioning can lead to a slight increase in the reliability and stability over time. This research contributes to the broader understanding of panel conditioning effects, offering methodological guidance for future studies in this domain.
By adopting renewable energy technologies (RETs) such as renewable heating systems (RHSs) and electric vehicles (EVs), households can contribute to climate change mitigation while simultaneously potentially coping with rising carbon prices. However, the adoption rates for both types of RETs in Germany are still too low. Among other factors, these low rates can be attributed to a lack of awareness of the technologies' cost-competitiveness, which may prevent people from making the investments. A novel approach for raising this awareness lies in the use of interactive communication tools (ICTs), which offer information of the cost-competitiveness and thus the opportunity to promote investments in RETs. This study investigated whether the use of ICTs is associated with a raise of awareness of the cost-competitiveness of RETs. Forms of awareness we investigated were the perception of upfront costs associated with the investments, the perceived scope of action to make the investments, and the perceived financial response efficacy of the investments. Using a pre−/posttest quasi-experimental 2 × 3 design, participants (N = 859) were assigned to one of two ICTs, with a focus on either RHSs (n = 400) or EVs (n = 459). By implementing several hierarchical linear models, we found that using both ICTs was partly associated with a raise in participants' awareness of the cost-competitiveness of the RETs. Additional analyses showed that one of these effects was moderated by participants' income. Our results have practical implications, offering insights into how ICTs can be used to foster households' adoption of RHSs and EVs in Germany.
This study uses a field experiment to examine how a monetary incentive affects hypothetical intention, sign-ups, and show-ups in a litter cleanup, and how environmental concern moderates this effect. Participants were randomly assigned to either a paid or unpaid condition. Overall, we find a discrepancy between hypothetical intention, sign-ups, and show-ups across all treatments, highlighting the limitations of survey-based studies relying on hypothetical scenarios. Additionally, while the monetary incentive boosts initial sign-ups, it fails to increase show-up rates, raising concerns about its cost-effectiveness. Also, its effect is heterogeneous: it attracts individuals with low environmental concern but discourages those already concerned by environmental issues. These findings underscore two limitations of the monetary incentive: it drives sign-ups but fails to sustain participation, and it may deter those already concerned by environmental causes. Although the incentive is effective for certain groups, it does not universally promote behavioural change, contributing to the broader discussion on the role of monetary rewards in fostering pro-environmental behaviours.
Using a large-scale incentivized trust game experiment conducted across all 27 EU member states, we find that sexual minorities exhibit on average greater prosocial behaviour toward another vulnerable group but not toward an unknown counterpart, compared to heterosexual individuals. The observed differences are both relationship- and context-specific. Specifically, bisexual individuals and those identifying with a sexual orientation other than lesbian, gay, or heterosexual demonstrate higher average trusting behaviour toward counterparts who frequently experience loneliness. This result is not attributable to higher expectations of return, differences in risk preferences, or the individual’s own loneliness status. Furthermore, we find evidence that this relationship-specific prosocial behaviour among sexual minorities is more pronounced in countries with lower levels of LGBTIQ+ rights protection, suggesting that it is heightened in contexts where minorities face a greater risk of exclusion or discrimination. We do not find statistically significant differences in overall trustworthiness across sexual orientations. However, the results offer some evidence that bisexual individuals are more trustworthy than heterosexual trustees when they feel a strong connection to their counterpart.
Organizations implement competitive, tournament-style mechanisms to select and retain employees. Under "rank-and-yank" systems, management evaluates the productivity of a group of workers, ranks them relatively, and then terminates some fraction of the lowest-ranked employees. Using two experimental studies, we tested how rank-and-yank systems impact employees' future other-regarding behaviors. Study 1 employed a unique two-stage design where all participants first completed a real-effort work task under a competitive, tournament-based compensation scheme. In the second stage, participants completed a series of interactive decision tasks serving as proxies for different measures of other-regarding behavior. In a baseline condition, all participants were retained for stage 2. In the primary rank-and-yank condition, the lowest-ranked employees were yanked, while only the retained top-ranked employees competed in stage 2. We hypothesize that while rank-and-yank systems improve short-term task performance, they will generally lead to less other-regarding future behavior. Consistent with our hypothesis, in the rank-and-yank condition, relative to the baseline, we observed evidence of (i) increased productivity in the initial task, but decreased other-regarding behavior in the form of (ii) decreased altruism, (iii) decreased cooperation, (iv) decreased trust and trustworthiness, and (v) increased sabotage behaviors. In Study 2, we examined potential mechanisms and found strong evidence that survivors of rank-and-yank perceived others as less other-regarding, more entitled, and more likely to have cheated to earn their performance rank.
Self-efficacy, individuals' belief in their ability to perform behaviors and achieve outcomes, is a key cognitive determinant of pro-environmental behavior (PEB). While a causal link between a determinant and a behavior is necessary, it is insufficient for informing effective policy design. Evidence-based policy requires answers to two additional questions: first, which interventions can effectively target the chosen determinant in practice, and second, what is their potential impact on the target PEB. However, evidence on the effectiveness of targeting specific determinants like self-efficacy remains scarce. While randomized controlled trials provide the most rigorous evidence, it is rarely available in many policy-relevant contexts. Moreover, general meta-analyses also typically do not pool evidence by determinants. To address this gap, we demonstrate how standard meta-analytic methods can be applied in a novel way to answer the identified policy-relevant questions. Specifically, we deploy this method to assess the effectiveness of including self-efficacy targeting elements (self-efficacy boosts) into household recycling intervention strategies. We find that interventions incorporating self-efficacy boosts are, on average, three times more effective than those without them. In contrast, interventions lacking self-efficacy boosts exhibit minimal or statistically insignificant effects. These results hold across all intervention types, including the commonly used category of norm-based interventions. We also provide practical guidance for implementing self-efficacy boosts based on the analyzed evidence. While our analysis focuses on household recycling, the proposed meta-analytic approach can be applied to inform evidence-based policy across diverse determinants and PEB contexts.
We propose a novel methodology to identify managerial beliefs from earnings call transcripts, using lexicon-based and FinBERT sentiment analysis alongside machine-learning guided topic modeling. We provide a dual contribution to the literature. First, we find that managerial sentiment significantly predicts analyst forecast revisions, with presentation sentiment showing stronger associations than question and answer (Q&A) interactions. Second, we show that these sentiment-driven revisions lead to systematic forecast errors, suggesting that narrative content shapes analyst expectations beyond fundamental information. Our analysis offers a scalable alternative to traditional survey-based approaches for measuring economic beliefs, providing high-frequency and near-universal coverage across firms and time.
Catastrophic events, which are becoming increasingly frequent due to climate change, have significant negative impacts on housing. Yet, decision-makers remain puzzled by the low uptake rates for insurance coverage against these events. In this paper, we investigate whether this phenomenon is driven by individuals having miscalibrated beliefs about the likelihood of such events occurring. Additionally, we examine the impact of an information treatment designed to correct these perceived probabilities. Our experimental results show that participants in the treatment respond as expected, adjusting their beliefs accordingly. Moreover, these belief shifts influence participants’ demand for information on the topic and their interest in purchasing insurance. However, a follow-up survey conducted two months after the main experiment reveals that the effects of the treatment are short-lived, dissipating entirely within this period. Moreover, the information treatment shifts estimates about past mortality due to circulatory diseases, which are not closely related to the content of the information treatment, although more modestly. These two insights suggest ways of improving survey design in the field of information provision experiments. Our overall findings provide important insights for policymakers, highlighting the transient nature of the treatment-induced effects.
Insight into public attitudes toward climate change requires accurate and consistent survey tools. The Understanding Society study asks respondents to what extent they agree that “The effects of climate change are too far in the future to worry me.” The phrasing “worry me” may prompt respondents to put relatively much weight on personal costs of climate change as opposed to societal costs, which we illustrate with a simple framework. We design and implement a survey experiment in which respondents are randomly assigned either to the original “worry me” question or to a version that replaces “worry me” with “worry about”. We find that reported climate change worries are on average significantly higher among the latter. This effect is mainly driven by the oldest age group, which can be explained by their expected shorter exposure to future climate change impacts. Results suggest that environmental attitude measures are sensitive to formulation details. We discuss the implications for the interpretation of previously collected data and for future research design.
Trust is a fundamental element of economic exchange, shaping interactions not only between individuals but also among groups. Prior literature shows that the dynamics of trust can vary systematically depending on whether decisions are made individually or collectively. In light of the increasing deployment of Artificial Intelligence (AI), the question arises as to whether these patterns extend to interactions involving non-human agents. Our study addresses this question by comparing trust behavior towards AI (ChatGPT 4o) and human receivers across individual and group decision-making settings using a one-shot Trust Game. We do not find statistically significant differences in trust behavior either between individuals and groups or between AI and human receivers.
This study combines list experiments with vignette-based norm priming to examine how normative expectations shape social desirability bias in tax evasion reporting across three European countries. A total of 6,915 respondents in Latvia, Italy, and Denmark were randomly assigned to receive country-specific tax morale information via a vignette prior to competing a list experiment and direct question on undeclared work. While the list experiment did not yield conclusive evidence of social desirability bias, evidence of strategic respondent error emerged through systematic inconsistencies between undeclared work lists and placebo lists. Vignette exposure did not alter aggregate prevalence estimates but reduced the incidence of inconsistent response patterns, particularly cases in which respondents reported zero items in the sensitive list while admitting undeclared work in the direct question, suggesting that normative information affects how disclosure is calibrated across formats. The findings indicate that social desirability bias in tax evasion surveys is context-dependent, and highlight the limitations relying solely on indirect measurement techniques to assess sensitive behaviors.
We study the ability of survey-based measures to predict conditional cooperation in an incentivized Prisoner’s Dilemma (PD) game. We assess whether (i) hypothetical game play, (ii) unincentivized social norms, (iii) survey measures of economic preferences, and (iv) personality traits predict conditionally cooperative behavior when monetary stakes are introduced. Our findings reveal that hypothetical PD responses are the strongest predictors of incentivized behavior, with limited evidence of hypothetical bias. Notably, patience is negatively correlated with conditional cooperation, contrary to expectations. Surprisingly, other economic and social preference measures, including reciprocity and normative evaluations, exhibit weak or no predictive power. These results contribute to the debate on the feasibility of survey-based proxies in behavioral research. They suggest that well-designed hypothetical games can reliably substitute incentivized experiments, but that deviations from accurately mirroring the task may weaken the predictive power of survey measures.
Rank Reversal Aversion (RRA) represents a reluctance to distribute material resources between third parties in a way that inverts the recipients’ rankings. The social relevance of this phenomenon stems from its tendency to undermine support for redistribution and efforts to reduce inequality. To date, RRA has only been demonstrated using redistributive games, where a confounding variable arises because transfers that invert the ranking impose greater relative harm on the donating party than non-inverting transfers. We conducted two incentivized pre-registered experiments with Argentine participants who could express RRA in a distributive game that avoided the mentioned confounding variable. In addition, with the goal of assessing RRA in the broader context of other distributive motives, we assessed this preference when confronted against favoring equity or reducing inequality, the two most studied principles in the distributive justice literature. The results provide the first evidence of RRA in Argentina and in a distributive game. In general, RRA was weaker than the motivation to reduce inequality, which was in turn weaker than the preference for favoring merit. We also found that RRA correlated with subjective socio-economic status, as those who perceived themselves to be better off were more likely to avoid reverting recipients’ rankings. These findings help establish the robustness of RRA and define some of its boundary conditions. We conclude by discussing our results in the context of previous studies of RRA, the literature on distributive preferences, and people’s use of diverse fairness principles.
This paper investigates how group deliberation changes individual distributional preferences. We experimentally assess the relative contribution of persuasion, social identity, and social comparison to shifts in preferences following deliberation. In a controlled setting, participants engaged in ten minutes of non-binding written group deliberation about distributional choices. Post-deliberation preferences became significantly more egalitarian than pre-deliberation ones. This within-subject preference shift is supported by a between-subject comparison showing that group deliberation has a larger egalitarian effect than individual deliberation. What explains this egalitarian shift? Our findings suggest that social identity formation is the primary but not unique driver of the change in preferences. Social identity appears to largely explain the pronounced egalitarian shift among participants who lose from equality, while persuasion and social comparison seem to account for the preference changes among those whose material payoffs are unaffected by the distributive outcome. These findings have important implications for the elicitation of distributional preferences and for the design of communicative institutions that precede collective decision-making.
