Essays in Behavioral and Experimental Economics

Abstract

In Chapter 1 (joint with Markus Dertwinkel-Kalt, Holger Gerhardt, Gerhard Riener, and Frederik Schwerter), I examine asymmetries of intertemporal trade-offs and their implications for the patience of individuals. According to the “focusing model” by Kőszegi and Szeidl (2013), the concentration in time of utility outcomes is critical for intertemporal choices. In two laboratory experiments, we find substantial evidence in favor of such a concentration bias. Moreover, we provide additional conditions that investigate two potential channels of concentration bias. These are concentration in time, reflecting the fundamental assumption of the focusing model of time points being different attributes, and another interpretation of the model, that is accessibility. Accessibility takes into account how tangible and easy to grasp a consequence happens to be and, hence, the difficulty of processing information into utility outcomes. <br /> In Chapter 2 (joint with Sebastian Schaube), I investigate the importance of the interdependence of people’s success and payoffs for preferences for redistribution. Does it matter whether life is a zero-sum game or that everyone is the architect of her own fortune? Economically speaking, this translates to: Either high outcomes for a given individual directly result in low outcomes for others, or multiple persons can be successful and obtain high outcomes at once. We examine differences in fairness perceptions between these two opposing systems in a laboratory experiment. We let two subjects work on a real-effort task, where their performance maps into chances of winning a prize. Between treatments, we implement either a zero-sum setting where only one subject can win a prize, or both can potentially win a prize simultaneously. After the realization of outcomes, a third subject acts as a spectator and may redistribute earnings between the two former subjects. We compare these redistribution decisions across treatments for an identical level of inequality. If payoffs are not directly interdependent, the average amount redistributed decreases by 14-22%. <br /> In Chapter 3 (joint with Jana Hofmeier), I study the dynamic effect of observability and social image on prosocial behavior. We conjecture that social image not only has a direct effect on observed actions but also caries its (positive) impact beyond that to future moral decisions. We therefore hypothesize a twofold positive effect. First, people should act more prosocially when being observed. Second, this increased level of prosociality should motivate an ongoing elevated altruistic attitude. We test our predictions with two laboratory experiments in which subjects have to make two donation decisions. In the first donation decision, we exogenously vary whether subjects are observed when making their decision or are acting anonymously. Subsequently, all subjects face a second anonymous donation decision. In general, we observe high rates of altruistic behavior. However, this is true regardless of being observed or not, hence, we find only weak positive effects of observability on first stage prosocial behavior. Moreover, as this overall altruistic attitudes carry on to the second decision, we do not observe any positive effects of social image on second stage prosocial behavior.