Lying to appear honest

This paper studies individual truth-telling behavior in the presence of multiple lying opportunities with heterogeneous stake sizes. The results show that individuals lie downwards (i.e. forgo money due to their lie) in low-stakes situations in order to signal honesty, and thereby mitigate the image repercussions of upward lying in high-stakes contexts. This constitutes first evidence of systematic downward lying in an unobserved lying game. The observed behavior is consistent with the spirit, but not the letter, of the prominent models of lying behavior. It therefore presents a challenge for these models

Local conflict in Indonesia : Measuring incidence and identifying patterns

The widespread presence of local conflict characterizes many developing countries such as Indonesia. Outbreaks of violent conflict not only have direct costs for lives, livelihoods, and material property, but may also have the potential to escalate further. Recent studies on large-scale"headline"conflicts have tended to exclude the systematic consideration of local conflict, in large part due to the absence of representative data at low levels of geographic specification. This paper is a first attempt to correct for that. We evaluate a unique dataset compiled by the Indonesian government, the periodic Village Potential Statistics (PODES), which seeks to map conflict across all of Indonesia's 69,000 villages/neighborhoods. The data confirm that conflict is prevalent beyond well publicized"conflict regions,"and that it can be observed across the archipelago. The data report largely violent conflict in 7.1 percent of Indonesia's lowest administrative tier (rural desa and urban kelurahan). Integrating examples from qualitative fieldwork, we assess issues in the measurement of local conflict for quantitative analysis, and adopt an empirical framework to examine potential associations with poverty, inequality, shocks, ethnic and religious diversity/inequality, and community-level associational and security arrangements. The quantitative analysis shows positive correlations between local conflict and unemployment, inequality, natural disasters, changes in sources of incomes, and clustering of ethnic groups within villages. The institutional variables indicate that the presence of places of worship is associated with less conflict, while the presence of religious groups and traditional culture (adat) institutions are associated with conflict. We conclude by suggesting future areas of research, notably on the role of group inequality and inference, and suggest ways to improve the measurement of conflict in the village census.Services&Transfers to Poor,Post Conflict Reconstruction,Public Health Promotion,Education and Society,Peace&Peacekeeping,Post Conflict Reconstruction,Education and Society,Social Conflict and Violence,Rural Poverty Reduction,Services&Transfers to Poor

Motivated political reasoning: The formation of belief-value constellations

We study the causal relationship between moral values ("ought" statements) and factual beliefs ("is" statements) and show that, contrary to predictions of orthodox Bayesian models, values exert an influence on beliefs. This effect is mediated by prior political leanings and, thus, contributes to increasing polarization in beliefs about facts. We study this process of motivated political reasoning in a preregistered online experiment with a nationally representative sample of 1,500 individuals in the US. Additionally, we show that subjects do not distort their beliefs in response to financial incentives to do so, suggesting that deep values exert a stronger motivational force

Belief updating: Does the 'good-news, bad-news' asymmetry extend to purely financial domains?

Bayes’ statistical rule remains the status quo for modeling belief updating in both normative and descriptive models of behavior under uncertainty. Recent research has questioned the use of Bayes’ rule in descriptive models of behavior, presenting evidence that people overweight ‘good news’ relative to ‘bad news’ when updating ego-relevant beliefs. In this paper, we present experimental evidence testing whether this ‘good-news, bad-news’ effect extends to belief updating in the domain of financial decision making, i.e. the domain of most applied economic decision making. We find no evidence of asymmetric updating in this domain. In contrast, the average participant in our experiment is strikingly close to Bayesian in her belief updating. However, we show that this average behavior masks substantial heterogeneity in updating behavior, but we find no evidence in support of a sizeable subgroup of asymmetric updators

Behavioural response to a sudden health risk: Dengue and educational outcomes in Colombia

Epidemics tend to have a debilitating influence on the lives of directly afflicted families. However, the presence of an epidemic can also change the behaviour and outcomes of those not directly affected. This paper makes use of a short, sharp, unexpected epidemic to examine the behavioural response of the general public to a sudden shift in the perceived risk to an individual's health and mortality. Our analysis finds that unafflicted school students change their behaviour substantially, affecting important life outcomes. In particular, we find that close to 4 fewer students, out of a typical class of 47 pupils, sit their school leaving examination for every additional 10 cases of severe Dengue per 10 000 inhabitants in a municipality. We rule out several possible mechanisms, leaving an increase in the salience of the disease's risks as a plausible explanation for our findings

Explicit and Implicit Belief-Based Gender Discrimination: A Hiring Experiment

Understanding discrimination is key for designing policy interventions that promote equality in society. Economists have studied the topic intensively, typically taxonomizing discrimination as either taste-based or (accurate) statistical discrimination. To reveal the limitations of this taxonomy and enrich it psychologically, we design a hiring experiment that rules out (by design) both of these sources of discrimination with respect to gender. Yet, we still detect substantial discrimination against women. We provide evidence of two forms of discrimination, explicit and implicit belief-based discrimination. Both rely on statistically inaccurate beliefs but differ in how clearly they reveal that the choice was based on gender. Our analysis highlights the central role played by contextual features of the choice setting in determining whether and how discrimination will manifest. We conclude by discussing how policy makers may design effective regulation to address the specific forms of discrimination identified in our experiment

Explicit and implicit belief-based gender discrimination: a hiring experiment

Understanding discrimination is key for designing policy interventions that promote equality in society. Economists have studied the topic intensively, typically taxonomizing discrimination as either taste-based or (accurate) statistical discrimination. To enrich this taxonomy, we design a hiring experiment that rules out both of these sources of discrimination along the gender dimension. Yet, we still detect substantial discrimination against women. We provide evidence of two forms of discrimination, explicit and implicit belief-based discrimination. Both rely on statistically inaccurate beliefs but differ in how clearly they reveal the decision-maker's gender bias. Our analysis highlights the central role played by contextual features of the choice environment in determining whether and how discrimination will manifest. We conclude by discussing how policy makers may design effective regulation to address specific forms of discrimination

Confidence and Career Choices: An Experiment

Confidence is often seen as the key to success. Empirical evidence about whether such beliefs causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one’s own ability on two central choices made by workers in the labor market: choosing between jobs with different incentive schemes, and the subsequent choice of how much effort to exert within the job. Using a hard-easy task manipulation to shift beliefs, we find that beliefs can be shifted, which in turn shifts decisions. In our setting, the beliefs of low ability individuals are more malleable than those of high ability individuals. Therefore, the treatment induces an increase in confidence and detrimental decision making by low ability workers but does not affect the outcomes of high ability workers. Men and women react similarly to the treatment. However, men hold higher baseline beliefs, implying that women make better incentive choice decisions. Policy implications regarding pre-labor market confidence development by means of feedback and grade inflation are discussed.JEL: C91, D03,M50,J2

Beliefs and actions: How a shift in confidence affects choices

Confidence is often seen as the key to success. Empirical evidence about whether such beliefs causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one’s own ability on two central choices made by workers in the labor market: choosing between jobs with different incentive schemes, and the subsequent choice of how much effort to exert within the job. An increase in confidence leads to an increase in self-selection into uncertain ability-contingent payment schemes. This is detrimental for low ability workers. Policy implications are discussed