Is social identity belief independent?

In this paper we aim to disentangle the effects on in-group favoritism driven by beliefs from those stemming from group identity, with the final goal of testing the relative power of three potential explanations of this bias: The Beliefs Driven Explanation (BDE), the Group Identity Explanation (GIE) and the Belief-mediated Group Identity Explanation (BGE). The BDE suggests that in-group favoritism is only driven by the desire not to let others’ expectations down. The GIE claims that people have a preference, per se, for members of their group. According to the BGE, people also have a preference for members of their group, but this is mediated by their second-order beliefs. To this aim, we built an experimental design able to produce exogenous variations in both group membership and expectations, hence providing a genuine test for the rationale of in-group bias. The results of our experiment suggest that beliefs per se are not a significant explanation of in-group favoritism and hence do not provide support to the BDE. Our experimental evidence does not provide support also to the BGE. We conclude that our experiment suggests to single out the GIE as the most powerful explanation of social identity

Shrewd Bargaining on the Moral Frontier: Toward a Theory of Morality in Pratice

From a traditional moral point of view, business practitioners often seem overly concerned about the behavior of their peers in deciding how they ought to act. We propose to account for this concern by introducing a mutual trust perspective, where moral obligations are grounded in a sense of trust that others will abide by the same rules. When grounds for trust are absent, the obligation is weakened. We illustrate this perspective by examining the widespread ambivalence with regard to deception about one's settlement preferences in negotiation. On an abstract level, such deception generally seems undesirable, though in many individual cases it is condoned, even admired as shrewd bargaining. Because of the difficulty in verifying someone's settlement preferences, it is hard to establish a basis for trusting the revelations of the other party, especially in competitive negotiations with relative strangers.Bargaining; Private Information; Business Ethics; Negotiations

Do Analysts Tell the Truth? Do Shareholders Listen? An Experimental Study of Analysts' Forecasts and Shareholder Reaction

This work experimentally examines forecasting and trading behavior. Subjects play the role of both analyst and shareholder over the course of experiments consisting of a series of repeated games with or absent con icts of interest. In a stylized trading setting, I test whether standard equilibrium, normative behavior, or limited strategic reasoning best predicts behavior. In the presence of con icts of interest a substantial proportion of subjects' behavior appears non-skeptical in the role of shareholder, though the same subject is deceptive in the role of analyst. Absent con icts of interest, subjects behavior in the role of shareholder is nearer a best response to the same subject's behavior as analyst. The results are consistent with limited strategic reasoning and suggest that simply disclosing con icts of interest does not evoke skepticism of forecasting, nor does the elimination of con icts of interest in itself induce honesty.Experimental finance, under-reaction, overreaction, behavior, price inertia, risk aversion

Price Discrimination and Fairness Concerns

We analyze the profitability of third degree price discrimination under consideration of consumers' fairness concerns within an experiment and explain the results within a theoretical framework. We find that with an increase in the price differential negative reciprocal reactions by disadvantaged consumers become stronger compared to positive reciprocal reactions by advantaged consumers. Consequently, the profit maximizing price differential lies below the one predicted to be optimal by standard theory. Further, profitability increases when consumers who are regarded as poorer are charged lower prices compared to when the wealth of the different consumer groups is unknown

You Owe Me

In many cultures and industries gifts are given in order to influence the recipient, often at the expense of a third party. Examples include business gifts of firms and lobbyists. In a series of experiments, we show that, even without incentive or informational effects, small gifts strongly influence the recipient’s behavior in favor of the gift giver, in particular when a third party bears the cost. Subjects are well aware that the gift is given to influence their behavior but reciprocate nevertheless. Withholding the gift triggers a strong negative response. These findings are inconsistent with the most prominent models of social preferences. We propose an extension of existing theories to capture the observed behavior by endogenizing the “reference group” to whom social preferences are applied. We also show that disclosure and size limits are not effective in reducing the effect of gifts, consistent with our model. Financial incentives ameliorate the effect of the gift but backfire when available but not provided

Essays on social media and democracy

The three essays of this dissertation apply game-theoretical, experimental and empirical methods to study the role of social media in the democratic process. The first essay develops a theory about the influence of political interest groups on voting behavior through communication on social media platforms. The model framework allows a theory-based discussion of two policy proposals aimed to counteract election manipulation by disinformation: a ban on microtargeting and the implementation of measures that raise source salience. The second essay studies the effects of these policy interventions in a large-scale laboratory experiment. The third essay employs panel data from a representative survey of Dutch households to examine the relationship between news consumption through social media and political polarization in a multi-party system

Big Data and Democracy

Recent technological developments have raised concerns about threats to democracy because of their potential to distort election outcomes: (a) data-driven voter research enabling political microtargeting, and (b) growing news consumption via social me- dia and news aggregators that obfuscate the origin of news items, leading to voters’ unawareness about a news sender’s identity. We provide a theoretical framework in which we can analyze the effects that microtargeting by political interest groups and unawareness have on election outcomes in comparison to “conventional” news report- ing. We show which voter groups suffer from which technological development, (a) or (b). While both microtargeting and unawareness have negative effects on voter welfare, we show that only unawareness can flip an election. Our model framework allows the theory-based discussion of policy proposals, such as to ban microtargeting or to require news platforms to signal the political orientation of a news item’s originator