Do households comprehend the nature of tail-risks inherent to real-time electricity pricing (RTP) plans? We develop a randomized and incentivized experiment calibrated to real-world price distributions and find that (a) probabilistic risk disclosure, beyond that offered in standard marketing materials, elicits greater demand for real-time pricing products relative to a low-risk fixed-price alternative, (b) products with tail-risk protection might not be highly sought, and (c) the experience of a RTP bill shock drives choice away from RTP. Personal experience receiving a tail price plays a greater role in risk comprehension and moving subsequent choices toward less risky plans than receipt of an additional ex-ante probabilistic risk disclosure. We discuss the implications these findings may have for regulators with a consumer protection mandate.

We investigate whether different criteria are used in evaluating male and female leaders when outcomes are determined by unobservable choices and luck. Evaluators form beliefs about leaders' choices (perceived intentions) and make discretionary payments. We find that while payments to male leaders are determined by both outcomes and perceived intentions, those to female leaders are determined by outcomes only. We label this new source of gender bias as the gender criteria gap. Our findings imply that high outcomes are necessary for women to get bonuses, but men can receive bonuses for low outcomes if evaluators hold them in high regard.

We examine how social information about competition choices influences individuals' willingness to compete. Participants perform a real-effort task under both piece-rate and tournament incentives, and subsequently make competition choices in two rounds. Between rounds, we exogenously vary the information provided about others' choices across three treatments. We find that social information about the proportion of participants who chose to compete in the first round significantly affects the willingness to compete in the second round. This effect is not driven by the salience of the incentive schemes. Observing a lower rate of competition among peers increases an individual's propensity to enter the tournament. This evidence is consistent with predictions from a rational model of Bayesian learning, in which individuals strategically choose to compete based on their treatment-induced belief about the average ability of other participants.

Together with private transfers, centralized redistribution policies form the backbone of social welfare systems worldwide. Examining their interplay is therefore crucial for understanding and addressing inequality. We investigate the relationship between private transfers and public redistribution policies using an experiment with nearly 4000 participants from Germany, India, Indonesia and the USA. The experiment creates large inequalities, then introduces one of four centralized redistribution regimes to address the inequality. Our findings reveal that redistribution policies do not change private pro-social or anti-social transfers, compared to an environment without centralized redistribution. Structural estimates show that egotistic, rather than social motives, drive private transfers, and that inequality aversion is unaffected by redistribution policies, thus explaining the lack of a private response.

Abstract Economists usually endorse the efficacy of price mechanisms, such as matching subsidies, to foster philanthropic contributions. Our experiments, however, show that the match only increases donations when avoiding the ask is not possible. Our data are consistent with a behavioural hypothesis of a “norm-signalling mechanism,” positing that a match increases the psychological cost of deviating from the norm of giving but only when the ask cannot be avoided. We show that indeed, giving zero, but not avoiding the ask, is perceived as less socially desirable under a match. Our findings highlight the possible limits and potential welfare losses of matching subsidies.

This study examines whether adherence to advice depends on an advisor’s identity and status beyond message content. Using a survey experiment with over 3000 farmers in India, we find that individuals are more likely to follow advice in a social dilemma game when it comes from high-status or in-group advisors, even when the advice diverges from prevailing norms. Admired role models can attenuate the influence of status and identity, though their beneficial effect is not universal. Our experimental findings align with evidence from an agricultural advisory program involving the same participant sample, highlighting the broader real-world relevance of these patterns.

We propose a deterrence mechanism that utilizes insider information acquired by criminals through customary practices. Under this mechanism, a suspect caught committing a criminal act can nominate a peer who has committed a similar offense, with only the more severe offender facing penalties. Theoretical analyses indicate that, under general conditions, our mechanism drives the best-response dynamic downwards compared to the commonly used regulatory practice of penalizing only the first suspect. Experimental data confirms the mechanism's deterrence effect, but unveils deviations from equilibrium predictions: the deterrence effect is weaker than anticipated and insensitive to network structures summarizing insider knowledge. To understand this, we analyze post-experiment questionnaire responses and find evidence that some participants employ level-k rather than Nash strategies. Structural estimation confirms that the level-k specification better fits the data than Nash. These findings inform policymakers of the potential usefulness and constraints of the peer-informed audit mechanism.

Beliefs, alongside preferences, are an important driver of behaviour. While preferences are often inferred by the choices made, measuring beliefs is not straightforward. We design a giving experiment to compare different methods of measuring beliefs, with and without monetary incentives. Consistent with a simple theoretical framework, we find that elicited beliefs about the giving decisions of others are biased and self-serving when no incentive is offered, with non-donors reporting that giving is rare. Offering a simple incentive does not reduce the bias in beliefs; however, this bias is not observed when using an incentivised method which makes the monetary outcome associated with accurately predicting beliefs more prominent. Our findings suggest that when self-interested motivations compete with accuracy incentives, beliefs are sensitive to how they are measured.