Male and overconfident groups overinvest due to inflated perceived ability to beat the odds

Organizational decisions are often made by groups rather than individuals. Depending on the group composition, each member's characteristics—like gender and motivated beliefs-can influence the final group investment decision. To capture this, we design two types of investment situations in a randomized controlled laboratory experiment-one with fixed chances of success and one with performance-dependent chances of success. This novel design entails the perceived ability to “beat the odds” of the investment and thus models real-life investment situations more accurately than standard lottery choice. Our results demonstrate the benefits of mixed group composition in terms of both gender and overconfidence: Groups with all men and/or all overconfident group members consistently overinvest when a possibility to “beat the odds” is present, but not in standard situations. We explore several channels for our results and find that (i) individual probability perception, (ii) leader responsibility allocation and (iii) spillover effects from priming show significant effects

Beliefs about others: A striking example of information neglect

In many games of imperfect information, players can make Bayesian inferences about other players’ types based on the information that is contained in their own type. Several behavioral theories of belief-updating even start from the assumption that players project their own type onto others also when it is not rational. We investigate such inferences in a simple environment that is a vital ingredient of numerous game-theoretic models and experiments, in which types are drawn from one out of two states of the world and participants have to guess the type of another participant. We find little evidence for irrational over-projection. Instead, between 50% and 70% of the participants in our experiment completely neglect the information contained in their own type and base their beliefs and choices only on the prior probabilities. Using several experimental interventions, we show that this striking neglect of information is very robust

Strategic incentives undermine gaze as a signal of prosocial motives

People often have to judge the social motives of others, for example, to distinguish truly prosocial people from those merely trying to appear prosocial. Gaze can reveal the motives underlying social decisions, as decision-makers dedicate more attention to motive-relevant information. We extend the use of eye-tracking and apply it as a communication device by providing (real-time) eye-tracking information of one participant to another. We find that untrained observers can judge the prosociality of decision-makers from their eye-tracked gaze alone, but only if there are no strategic incentives to be chosen for a future interaction. When there are such strategic incentives, the cues of prosociality are invalidated, as both individualistic and prosocial decision-makers put effort into appearing more prosocial. Overall, we find that gaze carries information about a person's prosociality, but also that gaze is malleable and affected by strategic considerations

Fostering Ethical Conduct Through Psychological Safety

In a world of increased scrutiny for corporations of all types, it is more essential than ever that when misconduct happens or difficult problems arise, there is a strong ethical climate for surfacing information so that leaders can respond quickly and appropriately. An environment in which employees feel comfortable reporting such issues is also vital to preventing future misconduct. Here, Ferrere et al analyze the perceptions of those who report misconduct against those of "silent bystanders"

Three Essays in Behavioral Economics : On Motives, Beliefs and Motivated Beliefs

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Violations of coalescing in parametric utility measurement

The majority consensus in the empirical literature is that probability weighting functions are typically inverse-S shaped, that is, people tend to overweight small and underweight large probabilities. A separate stream of literature has reported event-splitting effects (also called violations of coalescing) and shown that they can explain violations of expected utility. This leads to the questions whether (1) the observed shape of weighting functions is a mere consequence of the coalesced presentation and, more generally, whether (2) preference elicitation should rely on presenting lotteries in a canonical split form instead of the commonly used coalesced form. We analyze data from a binary choice experiment where all lottery pairs are presented in both split and coalesced forms. Our results show that the presentation in a split form leads to a better fit of expected utility theory and to probability weighting functions that are closer to linear. We thus provide some evidence that the extent of probability weighting is not an ingrained feature, but rather a result of processing difficulties

Strategic incentives undermine gaze as a signal of prosocial motives

People often have to judge the social motives of others, for example, to distinguish truly prosocial people from those merely trying to appear prosocial. Gaze can reveal the motives underlying social decisions, as decision-makers dedicate more attention to motive-relevant information. We extend the use of eye-tracking and apply it as a communication device by providing (real-time) eye-tracking information of one participant to another. We find that untrained observers can judge the prosociality of decision-makers from their eye-tracked gaze alone, but only if there are no strategic incentives to be chosen for a future interaction. When there are such strategic incentives, the cues of prosociality are invalidated, as both individualistic and prosocial decision-makers put effort into appearing more prosocial. Overall, we find that gaze carries information about a person's prosociality, but also that gaze is malleable and affected by strategic considerations.publishe

Eyes on the Prize: An (Interactive) Eye-Tracking Study of Motives in Economic Interactions

We investigate how untrained observers use decision makers’ gaze patterns to uncover motives behind their decisions. Gaze patterns can reveal motives, as decision makers dedicate more attention to items particularly relevant for these motives. We display either non-strategic or strategic gaze patterns of decision makers to observers and let the latter infer the former’s motives and actions. While the non-strategic gaze patterns provide strategically undisturbed information, the strategic gaze patterns require taking the future consequences of the interaction into account. When the gaze is non-strategic, observers can recognize the more prosocial and generous decision makers. In contrast, when the gaze is strategic, the eye-tracked decision makers successfully alter their gaze to appear more prosocial. Consequently, less prosocial decision makers are chosen for future interaction more often, leading to increased payoffs for them and decreased payoffs for the observers

Wearing a mask - For yourself or for others? : Behavioral correlates of mask wearing among COVID-19 frontline workers

Human behavior can have effects on oneself and externalities on others. Mask wearing is such a behavior in the current pandemic. What motivates people to wear face masks in public when mask wearing is voluntary or not enforced? Which benefits should the policy makers rather emphasize in information campaigns—the reduced chances of getting the SARS-CoV-2 virus (benefits for oneself) or the reduced chances of transmitting the virus (benefits for others in the society)? In this paper, we link measured risk preferences and other-regarding preferences to mask wearing habits among 840 surveyed employees of two large Swiss hospitals. We find that the leading mask-wearing motivations change with age: While for older people, mask wearing habits are best explained by their self-regarding risk preferences, younger people are also motivated by other-regarding concerns. Our results are robust to different specifications including linear probability models, probit models and Lasso covariate selection models. Our findings thus allow drawing policy implications for effectively communicating public-health recommendations to frontline workers during the COVID-19 pandemic.publishe