Experimental studies of context dependent behavior

Understanding how context shapes economic behavior has received considerable attention in recent years. This thesis contributes to the experimental literature on context dependency in economic decision making. Chapter 1 introduces the thesis providing an overview of the common themes and methods underlying this research. Chapter 2 reports a study that examines the relationship between (un)kind actions and subsequent deception. We study two types of deception: selfish lies that benefit the self and are costly for the counterpart, and spiteful lies that are costly for both players. We find that, in the domain of selfish lies, kind actions are rewarded by honesty, whereas there is no evidence of punishment of unkind actions. Further, we observe that individuals have a moral cost of lying regardless of the level of (un)kindness of the previous interaction. With spiteful lies, we find evidence for negative reciprocity, and no evidence of a moral cost of lying. Taken together, our results show that the moral cost of lying is not fixed, but is context dependent. Chapter 3 reports a series of experiments investigating whether using a foreign instead of one’s native language affects selfish deception in informational asymmetry situations, and tests three proposed mechanisms behind the effect. Our experimental manipulation is the language used to conduct the experiments. We find that deception is language dependent: Native Chinese speakers who speak English as a foreign language lie significantly more in their native language. We show that social norms cannot explain this effect, and are in fact at odds with subjects’ behavior. Using native German speakers who speak English as a foreign language, we find that individuals behave in accordance with the generally expected behavior in the culture associated with the language. Chapter 4 reports an extensive replication exercise inspired by a study conducted by Stewart et al. (2015) demonstrating that shapes of utility and probability weighting functions are context dependent; more specifically, the shape of the functions could be manipulated by adjusting the distributions of outcomes and probabilities on offer. Motivated by this challenge, we conducted a four-level replication inspired by the methodology of Levitt and List (2009), extended to incorporate a meta-analysis. We replicate the SRH effect across multiple experiments involving changes in many design features. Levels 3 and 4 of our replication, however, cast strong doubt on the explanation of the SRH effect proposed by Stewart et al. We consider alternative possible accounts of the SRH effect. Chapter 5 concludes by summarizing the results of chapters 2 to 4, pointing out their limitations and suggesting directions for further research

Deception aversion, norm violation and consumer responses to prosocial initiatives

Companies face increasing pressure to adopt social responsibility initiatives while simultaneously providing shareholder value. However, consumers may respond negatively to “win-win” initiatives that benefit society while bringing financial gain to the corporation, thus producing a backlash effect. Previous researchers have attributed this backlash effect to the violation of a communal relationship norm that companies trigger in consumers when communicating their win-win initiatives. We propose an alternative hypothesis, that the backlash derives from people’s deception aversion. We find evidence supporting deception aversion in three preregistered studies showing that companies are evaluated negatively when their actions differ from those implied by their stated prosocial policy and not, as predicted by the communal norm violation hypothesis, merely when they earn a profit. Our results suggest that companies should not fear that earning a profit from prosocial activities will carry reputational risk, so long as they are transparent

On the priming of risk preferences : the role of fear and general affect

Priming is an established tool in psychology for investigating aspects of cognitive processes underlying decision making and is increasingly applied in economics. We report a systematic attempt to test the reproducibility and generalisability of priming effects on risk attitudes in a more diverse population than professionals and students, when priming using either a positive or a negative experience. We further test fear as the causal mechanism underlying countercyclical risk aversion. Across a series of experiments with a total sample of over 1900 participants, we are unable to find any systematic effect of priming on risk preferences. Moreover, our results challenge the role of fear as the mechanism underlying countercyclical risk aversion; we find evidence of an impact of general affect such that the better our participants feel, the more risk they take

Experimental studies of context dependent behavior

Understanding how context shapes economic behavior has received considerable attention in recent years. This thesis contributes to the experimental literature on context dependency in economic decision making. Chapter 1 introduces the thesis providing an overview of the common themes and methods underlying this research. Chapter 2 reports a study that examines the relationship between (un)kind actions and subsequent deception. We study two types of deception: selfish lies that benefit the self and are costly for the counterpart, and spiteful lies that are costly for both players. We find that, in the domain of selfish lies, kind actions are rewarded by honesty, whereas there is no evidence of punishment of unkind actions. Further, we observe that individuals have a moral cost of lying regardless of the level of (un)kindness of the previous interaction. With spiteful lies, we find evidence for negative reciprocity, and no evidence of a moral cost of lying. Taken together, our results show that the moral cost of lying is not fixed, but is context dependent. Chapter 3 reports a series of experiments investigating whether using a foreign instead of one’s native language affects selfish deception in informational asymmetry situations, and tests three proposed mechanisms behind the effect. Our experimental manipulation is the language used to conduct the experiments. We find that deception is language dependent: Native Chinese speakers who speak English as a foreign language lie significantly more in their native language. We show that social norms cannot explain this effect, and are in fact at odds with subjects’ behavior. Using native German speakers who speak English as a foreign language, we find that individuals behave in accordance with the generally expected behavior in the culture associated with the language. Chapter 4 reports an extensive replication exercise inspired by a study conducted by Stewart et al. (2015) demonstrating that shapes of utility and probability weighting functions are context dependent; more specifically, the shape of the functions could be manipulated by adjusting the distributions of outcomes and probabilities on offer. Motivated by this challenge, we conducted a four-level replication inspired by the methodology of Levitt and List (2009), extended to incorporate a meta-analysis. We replicate the SRH effect across multiple experiments involving changes in many design features. Levels 3 and 4 of our replication, however, cast strong doubt on the explanation of the SRH effect proposed by Stewart et al. We consider alternative possible accounts of the SRH effect. Chapter 5 concludes by summarizing the results of chapters 2 to 4, pointing out their limitations and suggesting directions for further research

Lying in a foreign language?

We experimentally investigate whether using a foreign language affects social and personal norms on dishonesty, and whether language dependent norms explain lying behaviour. Participants can inflate their relative performance in a real effort task, and thereby increase their own payoff at a cost to another. As our main treatment manipulation, we vary the language of the experiment, that is conducted either in one?s native or a foreign language. We find that dishonesty is generally perceived as more socially inappropriate in one?s native language. However, we do not find a systematic foreign language effect on lying behaviour. ? 2020 Elsevier B.V. All rights reserved

Deception and reciprocity

We experimentally investigate the relationship between (un)kind actions and subsequent deception in a two-player, two-stage game. The first stage involves a dictator game. In the second-stage, the recipient in the dictator game has the opportunity to lie to her counterpart. We study how the fairness of dictator-game outcomes affects subsequent lying decisions where lying hurts one's counterpart. In doing so, we examine whether the moral cost of lying varies when retaliating against unkind actions is financially beneficial for the self (selfish lies), as opposed to being costly (spiteful lies). We find evidence that individuals engage in deception to reciprocate unkind behavior: The smaller the payoff received in the first stage, the higher the lying rate. Intention-based reciprocity largely drives behavior, as individuals use deception to punish unkind behavior and truth-telling to reward kind behavior. For selfish lies, individuals have a moral cost of lying. However, for spiteful lies, we find no evidence for such costs. Taken together, our data show a moral cost of lying that is not fixed but instead context-dependent

Sleep and Corruption

This project is concerned with the implications of sleep loss for decision-making processes. More specifically, it aims to explore the effects of one night of sleep deprivation on corruption

Investigating the failure to best respond in experimental games

We examine strategic sophistication using eight two-person 3 × 3 one-shot games. To facilitate strategic thinking, we design a ‘structured’ environment where subjects first assign subjective values to the payoff pairs and state their beliefs about their counterparts’ probable strategies, before selecting their own strategies in light of those deliberations. Our results show that a majority of strategy choices are inconsistent with the equilibrium prediction, and that only just over half of strategy choices constitute best responses to subjects’ stated beliefs. Allowing for other-regarding considerations increases best responding significantly, but the increase is rather small. We further compare patterns of strategies with those made in an ‘unstructured’ environment in which subjects are not specifically directed to think strategically. Our data suggest that structuring the pre-decision deliberation process does not affect strategic sophistication