Why and How Identity Should Influence Utility

This paper provides an argument for the advantage of a preference for identity-consistent behaviour from an evolutionary point of view. Within a stylised model of social interaction, we show that the development of cooperative social norms is greatly facilitated if the agents of the society possess a preference for identity consistent behaviour. As cooperative norms have a positive impact on aggregate outcomes, we conclude that such preferences are evolutionarily advantageous. Furthermore, we discuss how such a preference can be integrated in the modelling of utility in order to account for the distinctive cooperative trait in human behaviour and show how this squares with the evidence

Why and How Identity Should Influence Utility

This paper provides an argument for the advantage of a preference for identity-consistent behaviour from an evolutionary point of view. Within a stylised model of social interaction, we show that the development of cooperative social norms is greatly facilitated if the agents of the society possess a preference for identity consistent behaviour. As cooperative norms have a positive impact on aggregate outcomes, we conclude that such preferences are evolutionarily advantageous. Furthermore, we discuss how such a preference can be integrated in the modelling of utility in order to account for the distinctive cooperative trait in human behaviour and show how this squares with the evidence.cognitive dissonance; fairness; identity; reciprocity; social Norms; social preferences; utility

Providing Public Goods Without Strong Sanctioning Institutions

This paper proposes a simple mechanism aimed to establish positive contributions to public goods in the absence of powerful institutions to sanction free-riders. The idea of the mechanism is to require players to commit to the public good by paying a deposit prior to the contribution stage. If all players commit in this way, those players who do not contribute their share to the public good forfeit their deposit. If there is no universal commitment, all deposits are refunded and the standard game is played. Given deposits are sufficiently high, prior commitment and full ex post contributions are part of a strict subgame perfect Nash equilibrium for the resulting game. As the mechanism obviates the need for any ex post prosecution of free-riders, it is particularly suited for situations where players do not submit to a common authority as in the case of international agreements

Providing Public Goods Without Strong Sanctioning Institutions

This paper proposes a simple mechanism aimed to establish positive contributions to public goods in the absence of powerful institutions to sanction free-riders. The idea of the mechanism is to require players to commit to the public good by paying a deposit prior to the contribution stage. If all players commit in this way, those players who do not contribute their share to the public good forfeit their deposit. If there is no universal commitment, all deposits are refunded and the standard game is played. Given deposits are sufficiently high, prior commitment and full ex post contributions are part of a strict subgame perfect Nash equilibrium for the resulting game. As the mechanism obviates the need for any ex post prosecution of free-riders, it is particularly suited for situations where players do not submit to a common authority as in the case of international agreements.public goods; cooperation; institutions; Climate-Change Treaties

Overconfidence Can Improve an Agent's Relative and Absolute Performance in Contests

This paper suggests a potential rationale for the recent empirical finding that overconfident agents tend to self-select into more competitive environments (e.g. Dohmen and Falk, forthcoming). In particular, it shows that moderate overconfidence in a contest can improve the agent's performance relative to an unbiased opponent and can even lead to an advantage for the overconfident agent in absolute terms

Overconfidence Can Improve an Agent's Relative and Absolute Performance in Contests

This paper suggests a potential rationale for the recent empirical finding that overconfident agents tend to self-select into more competitive environments (e.g. Dohmen and Falk, forthcoming). In particular, it shows that moderate overconfidence in a contest can improve the agent's performance relative to an unbiased opponent and can even lead to an advantage for the overconfident agent in absolute terms.Overconfidence; Contests

Conflicting identities: Cosmopolitan or anxious? Appreciating concerns of host country population improves attitudes towards immigrants

Cosmopolitan or anxious? In order to test the influence of conflicting aspects of identity, German respondents were asked about their attitude towards a Syrian refugee the description of whom was varied in various domains (N=662). Once the refugee is described as being aware of as well as open towards concerns in the German population - regarding cultural change, arising costs and increasing violence - reported levels of sympathy and trust increase substantially, especially for risk averse people. Additional data from a second questionnaire (N=118) show that a German person expressing such concerns is perceived as less cosmopolitan and more likely to vote for the emergent populist right-wing. Combining these findings, we argue that acknowledging concerns of the host population relieves the tension between the anxious and cosmopolitan part of peoples' identities and, therefore, allows them to respond more openly since an aspect of identity that is acknowledged by context (expressing anxieties) has less influence on actual behavior (expressing sympathy). Apart from that, we find that personal experience and the higher willingness to take risks are important for the individual willingness to interact. Our findings highlight the importance of context, identity and individual characteristics for host populations' attitudes towards of refugees

Openness to Concerns of Host Country Population Improves Attitudes Towards Immigrants

This paper reports results from a randomized questionnaire study among German citizens regarding their attitudes towards Syrian refugees. Being shown a picture of an alleged Syrian refugee the description of whom was varied, respondents were asked to indicate their attitude towards that person in various domains on a 6-point Likert-scale. Among other things, the data show that people who are more risk averse are also less sympathetic, empathic, trusting. However, once the refugee is described as being open towards concerns in the German population -- regarding cultural change, arising costs and increasing violence -- reported levels of liking and trust increase substantially, especially for risk averse people. Moreover, we find that having close non-German friends or relatives increases the willingness to interact with immigrants. Thus, the data emphasize two aspects: (1) the importance of being open for the concerns of the local population for them to be open minded, i.e.~sympathetic and trusting, and (2) the relevance of personal experience for the willingness to interact. Finally, we find that overall women are more empathic but less trusting and more hesitant regarding actual interaction

Measuring Individual Risk Attitudes in the Lab: Task or Ask?: An Empirical Comparison

This paper compares two prominent empirical measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen, Falk, Huffman, Schupp, Sunde and Wagner (forthcoming) - with respect to (a) their within-subject stability over time (one year) and (b) their correlation with actual risk-taking behaviour in the lab - here the amount sent in a trust game (Berg, Dickaut, McCabe, 1995). As it turns out, the measures themselves are uncorrelated (both times) and, most importantly, only the questionnaire measure exhibits test-re-test stability ( · =.78), while virtually no such stability is found in the lottery-choice task. In addition, only the questionnaire measure shows the expected correlations with a Big Five personality measure and is correlated with actual risk-taking behaviour. The results suggest that the questionnaire is the more adequate measure of individual risk attitudes for the analysis of behaviour in economic (lab) experiments. Moreover, with respect to trust, the high re-test stability of trust transfers ( ·= .70) further supports the conjecture that trusting behaviour indeed has a component which itself is a stable individual characteristic (Glaeser, Laibson, Scheinkman and Soutter, 2000).Risk attitudes, trust, personality, lab experiments

Measuring Individual Risk Attitudes in the Lab: Task or Ask? An Empirical Comparison

This paper compares two prominent empirical measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen, Falk, Huffman, Schupp, Sunde and Wagner (forthcoming) - with respect to (a) their within-subject stability over time (one year) and (b) their correlation with actual risk-taking behaviour in the lab - here the amount sent in a trust game (Berg, Dickaut, McCabe, 1995). As it turns out, the measures themselves are uncorrelated (both times) and, most importantly, only the questionnaire measure exhibits test-re-test stability (Ï = .78), while virtually no such stability is found in the lottery-choice task. In addition, only the questionnaire measure shows the expected correlations with a Big Five personality measure and is correlated with actual risk-taking behaviour. The results suggest that the questionnaire measure is a better measure of individual risk attitudes than the lottery-choice task. Moreover, with respect to trust, the high re-test stability of trust transfers (Ï = .70) further supports the conjecture that trusting behaviour indeed has a component which itself is a stable individual characteristic (Glaeser, Laibson, Scheinkman and Soutter, 2000).Risk Attitudes, Trust, Personality, Lab Experiments