Social preferences in the lab, in the field, and online

Nowadays many scholars agree that the self-interest hypothesis, which postulates that humans care only about their own utility, is not the most accurate assumption to explain decision-making. Countless empirical studies provide evidence that humans have social preferences, meaning that they care about the well-being of other, unrelated individuals. Furthermore, in contrast to the predictions of standard economic theory, concerns about fairness and reciprocity affect behavior in many situations (Fehr & Schmidt, 2003). These social preferences are the central theme of my thesis. For the functioning of modern societies, social preferences are crucial (see for example Ostrom, 1990; Bowles & Gintis, 2011). They facilitate for instance cooperation in groups of strangers, the provision of public goods or the maintenance of social order, to name just a few. Generally speaking, in many situations, the welfare of the group depends on the individual willingness to behave prosocial. In these situations, individuals have an incentive to free-ride on the others to increase their private benefit. However, if all individuals would act like this, everyone would be worse off. Let’s consider the classical example of a group work at the university. If one student free rides and the others behave prosocial and cooperate, the free rider has the highest payoff. He does something else, which increases his utility while the others work on the group project. In the end, however, he still benefits from a good grade thanks to the effort of the others. In contrast, if all group members would free ride the group work would not be done, and hence everyone would be worse off. Charitable giving or volunteering activities are other examples where prosocial behavior is necessary. Thus, for social scientists, it is important to understand the development and determinants of social preferences. This thesis contains three essays, in which I elaborate on social preferences from dis- tinct angles. Common, besides the topic, is the methodology of experiments, which I applied throughout the thesis. The different types of experiments which we or I con- ducted rely all on standard methodologies from experimental economics. As the title of the thesis suggests, we conducted one experiment online, one in the laboratory and one in the field. Experiments can be used to either measure preferences or to elaborate factors which causally affect preferences. In chapter one, the main purpose of the experiment was to measure social preferences and their relationship to other socially relevant variables. The results of such correlational studies can reveal patterns which serve as hypothesis for subsequent research. For example, to test whether the observed relationship is causal. Furthermore, based on these correlations one can make predictions. Lastly, such correla- tions can be evaluated across countries and cultures, to elaborate cross-cultural differences. In contrast, in chapter two and three the aim was to evaluate factors which affect social preferences causally. These designs allow to draw conclusions about the determinants of social preferences. Moreover, insights from such analyses can be very valuable for policy making. To be more precise, in chapter one, we study the link between moral values and vari- ous forms of prosocial behavior. Since decades, cross-cultural psychology examines moral values using data from standardized surveys, assuming that values guide human behavior. However, so far, the claim that moral values influence prosocial behavior has only been demonstrated for activities that respondents self-reported in surveys (Welzel & Deutsch, 2012) but never for directly observed behavior. Moreover, we are interested in a particular set of moral values; namely, emancipative and secular values. Emancipative values reflect the appreciation of equal freedoms and secular values the depreciation of sacred author- ity. They become more important as the living conditions of individuals improve (Welzel, 2013). To fill this gap, we conducted online behavioral experiments with participants from the sixth wave of the World Values Survey (WVS) in Germany. This allows us to link the respondents’ moral values, as measured by the WVS, to the same respondents’ prosocial behavior, as observed in the behavioral experiment. In the online behavioral experiment, participants conducted several incentivized decision tasks. Concretely, we elicited measures for cooperation in a public goods game, the ability to coordinate in a property rights game, and altruism using a donation decision. We test the hypotheses that, (a) emancipative val- ues show a strongly positive association with prosocial behaviors, (b) secular values show a modestly positive association, (c) at the same as they associate strongly negatively with protectionist behavior. The evidence boils down to three findings. Emancipative values relate to higher common pool contributions and larger donations to charitable organiza- tions. Secular values, on the other hand, are linked to more productive and less protective investments. As these results conform to key theories and reach empirical significance in a major postindustrial nation, we conclude that we have significant evidence at hand high- lighting the potential of combined survey-experiment methods to establish value-behavior links that are otherwise inexplorable. In the second chapter, we conducted a laboratory experiment to evaluate the effect of salience on the contributions in a public goods game. According to standard theory in economics, an individual should process all available information before making a decision. This does not mean that all choice attributes receive the same weight in the decision-making process, but they should at least be considered to determine their weight. However, for instance, when I go to Montreal, and I want to buy something, I constantly valuate the items to be cheaper than they actually are. I neglect the taxes because the price tag does not include them. In such cases, the tax is not salient, and salience guides my choice. If and how salience affects choices is the topic of the second chapter. In the first part of the chapter, we introduce a salience factor to the Fehr-Schmidt model (Fehr & Schmidt, 1999) to derive theoretical predictions. All bilateral comparisons that individuals make are weighted by how salient the behavior of other relevant group members is. Based on this extension, we hypothesize that the salience of the contributions of the other players should affect contributions in a standard public goods game systematically. We implement two treatments to test our predictions empirically. In the maximum treatment, the highest contribution is most salient. In contrast, in the minimum treatment, the lowest contribu- tion within a group is most salient. Our results are surprising: We find that people do not adjust their contributions according to our hypotheses. If the lowest contribution in a group is most salient, it does not lead to an immediate decline in the contribution. Vice versa, if the maximum contribution is salient, it does not result in higher contributions. Based on our results we hypothesize that focusing on the maximum provides an upper bound of the acceptable contribution level, while the minimum serves as lower bound. Lastly, in chapter three, I elaborate how the social environment of children affects their development in general and in particular the formation of their preferences. Children from low-income families often perform worse with respect to skills compared to children from more advantaged families. Research on early childhood development suggests that providing children with high-quality preschool education potentially closes this skill gap (Heckman, 2006). I elaborate on an intervention which aimed at improving the quality of care in community nurseries in Colombia. These community nurseries are part of a national program, which has been implemented about 40 years ago and targets families from the lowest stratum. Bernal, Fernández, Flórez, Gaviria, et al. (2009) evaluated the program and reported that many caregivers have insufficient knowledge about infant development. Therefore, a local NGO implemented an intervention with four components to improve the quality of care. First, community mothers received a formal vocational training as early childhood teacher. Second, they received support and coaching to integrate what they learned in their daily nursery routines. Third, they learned how to teach parents about issues related to appropriate child care and development. Fourth, the implement- ing NGO monitored and supported the children in school, once they left the community mother. While the existing research has focused on cognitive and socioemotional skills, I complement the analysis with an elaboration of the effect on individual preference mea- sures. For that, I conducted lab-in-the-field experiments with children who have visited a treated nursery and compare them to children who have been in an untreated nursery. I elicit measures for prosocial behavior, egalitarian preferences, trust, risk and time pref- erences. Moreover, I do evaluate not only the effect in the short run but also four years after the implementation. The intervention improved children’s cognitive, psychosocial, and psychomotor skills. More importantly, the effects persist up to four years after the intervention. We show that children from the treated group have better grades and are more likely to be in the right grade for their age. Interestingly, the intervention also af- fected social preferences of the children. Children who visited a treated nursery are more altruistic than children who attended a regular nursery. The evaluation set-up does not allow to fully rule out that unobserved factors drive the effects. Furthermore, we are not able to identify which part of the intervention is responsible for the observed effects. But the pattern of results makes me confident that what I see can be traced to the intervention. -- Aujourd’hui, de nombreux chercheurs s'accordent à dire que l'hypothèse de l'intérêt personnel, qui postule que les humains ne se soucient que de leur propre utilité, n'est pas l'hypothèse la plus pertinente pour expliquer la prise de décision. D'innombrables études empiriques montrent que les humains ont des préférences sociales, ce qui signifie qu'ils se soucient du bien-être d'autres personnes non apparentées. Ces soi-disant préférences sociales sont le thème central de ma thèse. Les préférences sociales sont cruciales pour le fonctionnement des sociétés modernes (voir par ex. Ostrom, 1990 ou Bowles, 2011). Ils facilitent, par exemple, la coopération dans des groupes de personnes non apparentée, la prestation de biens publics ou le maintien de l'ordre social, pour n'en nommer que quelques-uns. De manière générale, dans de nombreuses situations, le bien-être du groupe dépend de la volonté individuelle de se comporter de manière pro sociale. Dans beaucoup de ces situations, les individus sont incités à se comporter égoïstement et de profiter des autres. Cependant, si tous les individus agissaient ainsi, tout le monde serait dans une situation plus désavantageuse. Considérons l'exemple classique d'un travail de groupe à l'université. Si un étudiant ne contribue pas et que les autres travaillent pour le groupe. Cet étudiant aura le meilleur rendement. Il fera autre chose, ce qui augmentera son utilité tandis que les autres travailleront sur le projet du groupe. En somme, il bénéficiera toujours d'une bonne note grâce à l'effort des autres. En revanche, si tous les membres du groupe ne faisaient rien pour le projet, le travail ne serait pas fait et, par conséquent, tout le monde serait dans une mauvaise situation. Les dons de bienfaisance ou les activités de bénévolat sont autant d’exemples où il faut des comportements pro sociaux. Ainsi, pour les spécialistes en sciences sociales, il est important de comprendre les déterminants et le développement des préférences sociales. Ma thèse contient trois essais, dans lesquels j’étudie les préférences sociales sous des angles différents. Au-delà du même sujet général, j’ai menée dans tous les trois essais des expériences qui reposent toutes sur des méthodologies standards de l'économie expérimentale et comportementale. Dans le premier chapitre, l'objectif principal de l'expérience était de mesurer les préférences sociales et leurs relations avec les valeurs morales. Dans les deuxièmes et troisièmes chapitres, le but était d'évaluer les facteurs qui affectent causalement les préférences sociales. Dans le deuxième chapitre, nous avons mené une expérience au laboratoire pour évaluer l'effet de la saillance sur les contributions dans un jeu de biens publics. Enfin, dans le troisième chapitre, j'essaie d’expliquer comment l'environnement social des enfants affecte leur développement de manière générale, mais aussi plus particulièrement la formation de leurs préférences sociales

The Evolution of Facultative Conformity Based on Similarity

Conformist social learning can have a pronounced impact on the cultural evolution of human societies, and it can shape both the genetic and cultural evolution of human social behavior more broadly. Conformist social learning is beneficial when the social learner and the demonstrators from whom she learns are similar in the sense that the same behavior is optimal for both. Otherwise, the social learner's optimum is likely to be rare among demonstrators, and conformity is costly. The trade-off between these two situations has figured prominently in the longstanding debate about the evolution of conformity, but the importance of the trade-off can depend critically on the flexibility of one's social learning strategy. We developed a gene-culture coevolutionary model that allows cognition to encode and process information about the similarity between naive learners and experienced demonstrators. Facultative social learning strategies that condition on perceived similarity evolve under certain circumstances. When this happens, facultative adjustments are often asymmetric. Asymmetric adjustments mean that the tendency to follow the majority when learners perceive demonstrators as similar is stronger than the tendency to follow the minority when learners perceive demonstrators as different. In an associated incentivized experiment, we found that social learners adjusted how they used social information based on perceived similarity, but adjustments were symmetric. The symmetry of adjustments completely eliminated the commonly assumed trade-off between cases in which learners and demonstrators share an optimum versus cases in which they do not. In a second experiment that maximized the potential for social learners to follow their preferred strategies, a few social learners exhibited an inclination to follow the majority. Most, however, did not respond systematically to social information. Additionally, in the complete absence of information about their similarity to demonstrators, social learners were unwilling to make assumptions about whether they shared an optimum with demonstrators. Instead, social learners simply ignored social information even though this was the only information available. Our results suggest that social cognition equips people to use conformity in a discriminating fashion that moderates the evolutionary trade-offs that would occur if conformist social learning was rigidly applied

Environmental decision making in small companies : a behavioral economics perspective

Small and medium-sized enterprises (SMEs) are often considered the backbone of the economy. Indeed, in most economies around the world, SMEs are the largest group of companies, and they are responsible for a substantial share of economic output and resource use. Sustainability-related decisions and the environmental management in SMEs are thus key factors to consider in order to increase the environmental sustainability in an economy. However, SMEs often do not have the capabilities and the knowledge that would be required to implement best practices in environmental management. Moreover, because of their smaller size, behavioral motivations and “biases” in decision making may be more important in SMEs than in larger companies. Such factors might be relevant for the effectiveness of public policy measures directed at SMEs, and they make SMEs potential targets for policy instruments from the behavioral economics toolkit, such as “nudges” or other measures. This chapter focuses on three elements of behavioral motivations and decision making that are relevant for SMEs – social preferences, present bias, and loss aversion – and discusses how they can affect environmental management and sustainability-related decisions in SMEs. The chapter finally considers to what extent behavioral economics approaches could be helpful for fostering more sustainable management practices in SMEs by addressing these behavioral elements of decision making in SMEs

How sludge impairs the effectiveness of policy programs : a field experiment with SMEs

Small and Medium-sized Enterprises (SMEs) make up the largest share of companies in most economies. They are major users of resources and cause a large share of environmental pollution, which makes them relevant targets for public policy programs aiming to increase their sustainability. We study how “sludge” in the form of small frictions in the choice architecture can have an important impact on the uptake and the effectiveness of such public policy programs targeted at SMEs. To do so, we conducted a field experiment within an existing governmental program in Switzerland that aims to support SMEs in the implementation of cost-effective environmental management practices. We slightly manipulated the process of receiving initial benefits to implement such environmentally-friendly practices in a firm. We find that sludge in the form of minor additional effort required to receive benefits substantially undermined the effectiveness of the program by 50%. Our findings carry important implications for policymakers: even minor sludge in the choice architecture may seriously harm the effectiveness of public policy programs targeted at companies

The hidden benefits of corporate social responsibility

Environmental activities, for instance actions against climate change, are an important part of Corporate Social Responsibility (CSR). This paper studies how a employer’s environmental CSR activities affect the pro-environmental behavior of its employees. To do so, we conducted a large-scale field experiment on a crowd-working platform in which the employer’s environmental CSR level varied exogenously. We find that employer CSR positively influenced workers’ pro-environmental behavior outside the job. Workers who received information that their employer engaged in environmental CSR were more likely to contribute, and contributed higher amounts, to an environmental charity in a private donation decision. Our findings indicate that the impact of CSR may be farther reaching than directly observable by firm activities alone. By using CSR, employers have the potential to influence the behavior of their employees in nonwork domains. Our findings have important implications for managers of organizations engaging (or planning to engage) in environmental CSR

Not only for the money : nudging SMEs to promote environmental sustainability

Small and medium-sized enterprises (SMEs) often lack the knowledge and the resources necessary to implement best ractices in environmental management. This makes them a relevant target for public policy measures trying to enhance sustainable decision making in the economy. This paper reports the results of a field experiment in Switzerland investigating behavioral economic interventions for promoting an environmental consulting program to SMEs. The experiment tested the effectiveness of appealing to the environmental vs. financial benefits of environmental consulting to promote the program to SMEs, and of loss vs. gain framed nudges. The results indicate that loss frames are not more effective than gain frames. Unlike suggested by previous approaches, appealing to the environmental benefits of sustainability measures is just as effective as underlining the financial benefits for the SMEs. Evidence from two surveys with SME decision makers corroborates this latter result: SMEs indicate that personal motivations of owners or managers and long-term environmental impact - rather than potential financial benefits - are the most important factors determining whether they are willing to implement additional environmental sustainability measures

To eat or not to eat-international experiences with eating during hemodialysis treatment.

Providing food or nutrition supplements during hemodialysis (HD) may be associated with improved nutritional status and reduced mortality; however, despite these potential benefits, eating practices vary across countries, regions, and clinics. Understanding present clinic practices and clinician experiences with eating during HD may help outline best practices in this controversial area. Therefore, the objective of this study was to examine clinical practices and experiences related to eating during HD treatment. We surveyed clinicians about their clinic practices during the 2014 International Society of Renal Nutrition and Metabolism Conference. We received 73 responses from six continents. Respondents were primarily dietitians (71%) working at units housed in a hospital (63%). Sixty-one clinics (85%) allowed patients to eat during treatment, with 47 of these patients (65%) actively encouraging eating. Fifty-three clinics (73%) provided food during HD. None of the nine clinics from North America, however, provided food during treatment. The majority (47 clinics; 64%) provided supplements during treatment. Clinics in the hospital setting were more likely to provide food during treatment, whereas outpatient clinics were less likely to provide nutrition supplements (P≤ 0.05 for both). We also asked clinicians about their experience with six commonly cited reasons to restrict eating during treatment using a four-point scale. Clinicians responded they observed the following conditions "rarely" or "never": choking (98%), reduced Kt/V (98%), infection control issues (96%), spills or pests (83%), gastrointestinal issues (71%), and hypotension (62%). Our results indicate that while eating is common during treatment in some areas, disparities may exist in global practices, and most of the proposed negative sequelae of eating during HD are not frequently observed in clinical practice. Whether these disparities in practice can explain global differences in albumin warrants further research to help inform decisions regarding eating during HD

Disaggregated social learnings strategies in opaque treatments from experiment 2.

<p>We placed each social learner in one of four categories. A social learner who always followed the minority choice among demonstrators was a “Min” type. One who always followed the majority was a “Maj” type. One who always chose left or always chose right was a “U” type (Unconditional). For the social learners who did not fall into these three categories, we estimated the social learning function of each. Specifically, let <i>Y</i>_<i>jk</i> ∈ {0, 1} indicate if social learner <i>k</i> chose left in block <i>j</i>, and let <i>x</i>_<i>j</i> be the centered proportion of demonstrators choosing left. We estimated by fitting <i>P</i>(<i>Y</i>_<i>jk</i> = 1) = (exp{<i>β</i>_<i>k</i> <i>x</i>_<i>j</i>})/(1 + exp{<i>β</i>_<i>k</i> <i>x</i>_<i>j</i>}) via maximum likelihood. Panels <b>A</b> and <b>B</b> show the distributions over types for the two opaque treatments with data pooled over discordant and concordant blocks. Gray bars show estimates significant at the 5% level. Given multiple tests, we expect two to three significant values by chance in each panel. Social learners who followed the minority (Min) or majority (Maj) and social learners with extreme values of (e.g. ) clearly responded to social information. The rest did not.</p

Left choices by social learners in opaque treatments from experiment 2.

<p>The points show the rate at which social learners chose left as a function of the number of demonstrators choosing left in the final trials of blocks. The relevant number of observations is vertically aligned with each point. Panel <b>A</b> pools over discordant and concordant blocks when social learners knew the prior probabilities associated with discordance versus concordance. Panel <b>B</b> shows pooled data when social learners did not know these priors. Error bars are 95% bootstrapped confidence intervals clustered on social learner. Clustering accounts for correlations due to multiple observations per social learner [<a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0168551#pone.0168551.ref048" target="_blank">48</a>], and bootstrapping ensures that confidence intervals remain in [0, 1]. The gray region of the space is consistent with conformist cultural transmission [<a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0168551#pone.0168551.ref001" target="_blank">1</a>, <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0168551#pone.0168551.ref011" target="_blank">11</a>]. The diagonal in black is consistent with unbiased social learning, which does not generate cultural evolution, and dashed lines provide additional points of reference at 0, 0.5, and 1.</p

Evolved learning strategies when individual learning is relatively unreliable and the signal of similarity is informative.

<p>Solid lines summarize the properties of the learning system by showing the probability that learners choose their own optimum as a function of how common this same behavior is among demonstrators. Learning strategies potentially depend on whether a learner receives a signal of similarity indicating either different optima (Discordant signal, <b>A</b> and <b>C</b>) for learners and demonstrators or the same optimum (Concordant signal, <b>B</b> and <b>D</b>). This signal of similarity is informative (<i>ϕ</i> = 0.9, cf. <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0168551#pone.0168551.g001" target="_blank">Fig 1</a>). Rows vary according to whether a difference in optima is rare (<b>A</b> and <b>B</b>, <i>γ</i> = 0.01) or more common (<b>C</b> and <b>D</b>, <i>γ</i> = 0.1). The horizontal dashed lines show a learning system that ignores demonstrator behavior and relies only on individual learning. The diagonal dashed lines show an unbiased learning system that does not generate cultural evolution. See <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0168551#pone.0168551.s001" target="_blank">S1 Appendix</a> for model details.</p