Welcome to my website!

I am a Research Associate in the Department of Economics at the University of Pittsburgh.

Interests

Experimental Economics, Behavioral Economics, Econometrics, Decision Theory

Working Papers

Do Legal Standards Affect Ethical Concerns of Consumers?,
with Dirk Engelmann and Dorothea Kübler,
CRC TR 190 Discussion Paper 234, 2020. PDF
To address the impact of regulation on ethical concerns of consumers, we study the example of minimum wages. In our experimental market, consumers have monopsony power, firms set prices and wages, and workers are passive recipients of a wage payment. We find that the majority of consumers occasionally deviate from their self-interest and that markets with such consumers exhibit substantially higher wages. Consumers implement fair allocations using two distinct strategies: they split their demand equally between firms, or they buy all units from the firm with the higher price and higher wage. The two strategies can be captured by maximin preferences and indirect reciprocity in Charness and Rabin's (2002) reciprocal fairness model. Introducing a minimum wage in a market raises average wages despite its significant crowding out effects on consumers' fairness concerns. Abolishing a minimum wage crowds in consumer fairness concerns, but crowding in is not sufficient to avoid overall negative effects on workers' wages.
Belief Elicitation: Limiting Truth Telling with Information on Incentives,
with Lise Vesterlund and Alistair Wilson,
NBER Working Paper 27327, 2020. PDF
Belief elicitation is central to inference on economic decision making. The recently introduced Binarized Scoring Rule (BSR) is heralded for its robustness to individuals holding risk averse preferences and for its superior performance when eliciting beliefs. Consequently, the BSR has become the state-of-the-art mechanism. We study truth telling under the BSR and examine whether information on the offered incentives improves reports about a known objective prior. We find that transparent information on incentives gives rise to error rates in excess of 40 percent, and that only 15 percent of participants consistently report the truth. False reports are conservative and appear to result from a biased perception of the BSR incentives. While attempts to debias are somewhat successful, the highest degree of truth telling occurs when information on quantitative incentives is withheld. Consistent with incentives driving false reports, we find that slow release of information decreases truth telling. Perversely, our results suggest that information on the BSR incentives substantially distorts reported beliefs.
The Biases of Others: Projection Equilibrium in an Agency Setting,
with Kristóf Madarász and Stephanie W. Wang,
CEPR Discussion Paper DP12867, 2018. PDF
We study the structure of biased social cognition which involves not simply one's belief about the beliefs of others, but also one's belief about their beliefs of one's own belief. We find that while people naively project their information onto differentially-informed others, they also anticipate differentially-informed others' projection onto them. In a principal-agent setting, we directly test the tight one-to-one structural relationship between the partial extent to which the typical person projects her information onto others, ρ, and the extent to which she anticipates but partially underestimates the projection of others onto her, ρ2. The data is remarkably consistent with the parsimonious link implied by the model of projection equilibrium. Furthermore, the majority of subjects both think that others are partially biased, but they also partially underestimate the extent of their bias. The result lends support to the notion of biased social cognition arising as a combination of a biased, but coherent fully ego-centric belief anchor with a partial probabilistic adjustment to the truth.

Publications

Never Underestimate Your Opponent: Hindsight Bias Causes Overplacement and Overentry into Competition,
Games and Economic Behavior, 124, 588–603, 2020. PDF
This study investigates a source of comparative overconfidence, or overplacement, which occurs when people overestimate themselves relative to others. We present a simple application of information projection (Madarász, 2012) to show that hindsight bias can lead to overplacement and excessive willingness to compete. We run an experiment in which subjects choose between a competitive tournament and piece-rate compensation after observing some of their competitors' past performance. We exogenously manipulate whether subjects have ex post information about their competitors' past tasks (hindsight) or not (no hindsight). We find that hindsight bias generates overplacement and increases subjects' valuation of tournament participation by 19%. In line with theory, the additional tournament entry in the hindsight setting is driven by low-performing participants who should not have entered the tournament.
Public Statistics and Private Experience: Varying Feedback Information in a Take-or-Pass Game,
with Steffen Huck and Philippe Jehiel,
German Economic Review, 17(3), 359–377, 2016.
We study how subjects in an experiment use different forms of public information about their opponents' past behavior. In the absence of public information, subjects appear to use rather detailed statistics summarizing their private experiences. If they have additional public information, they make use of this information even if it is less precise than their own private statistics – except for very high stakes. Making public information more precise has two consequences: It is also used when the stakes are very high and it reduces the number of subjects who ignore any information – public and private. That is, precise public information crowds in the use of own information. Finally, our results shed some light on unraveling in centipede games.
On the Failure of Hindsight-Biased Principals to Delegate Optimally,
with Dorothea Kübler, Lydia Mechtenberg, and Julia Schmid,
Management Science, 61(8), 1938–1958, 2015.
With the help of a simple model, we show that the hindsight bias can lead to inefficient delegation decisions. This prediction is tested experimentally. In an online experiment that was conducted during the FIFA World Cup 2010, participants were asked to predict a number of outcomes of the ongoing World Cup and had to recall their assessments after the outcomes had been realized. Their answers were used to construct individual measures of the hindsight bias. The participants also had to make choices in a delegation game. Our data confirm that hindsight-biased subjects more frequently fail to delegate optimally than subjects whom we have classified as not hindsight biased.
Information and Beliefs in a Repeated Normal-Form Game,
with Dietmar Fehr and Dorothea Kübler,
Experimental Economics, 15(4), 622–640, 2012.
We study beliefs and actions in a repeated normal-form game. Using a level-k model of limited strategic reasoning and allowing for other-regarding preferences, we classify action and belief choices with regard to their strategic sophistication and study their development over time. In addition to a baseline treatment with common knowledge of the game structure, feedback about actions in the previous period and random matching, we run treatments (i) with fixed matching, (ii) without information about the other player’s payoffs, and (iii) without feedback about previous play. In all treatments with feedback, we observe more strategic play (increasing by 15 percent) and higher-level beliefs (increasing by 18 percent) over time. Without feedback, neither beliefs nor actions reach significantly higher levels of reasoning (with increases of 2 percentage points for actions and 6 percentage points for beliefs). The levels of reasoning reflected in actions and beliefs are highly consistent, but less so for types with lower levels of reasoning.

Work in Progress

A Hidden Cost of Agency,
with David Huffman and Tymofiy Mylovanov.
Binarized Scoring Rules: An Experimental Horse Race,
with Lise Vesterlund, Alistair Wilson, Prottoy Akbar, Mallory Avery, Conor Brown, Ying Kai Huang, Yuriy Podvysotskiy, Dmytro Ilin, and Tianyi Wang.
A remedy for the student loan crisis? An experiment on the sustainability of forward payment schemes,
with David Huffman, Rachel Landsman, Lise Vesterlund, Stephanie Wang, and Alistair Wilson.