Going along with the default does not mean going on with it: attrition in a charitable giving experiment.
Gaudeul, Alexia; Kaczmarek, Magdalena C. (2019) In: Behavioural Public Policy, 1–32. https://doi.org/10.1017/bpp.2019.3.
Abstract: Defaults may not directly get people to behave as intended, such as saving more, eating healthy food or donating to charity. Rather, defaults often only put people on the ‘right’ path, such as joining a savings plan, buying healthy food or pledging money to charity. This an issue because getting more people to take those first steps does not necessarily motivate them to go on with further steps. Indeed, the default does little to help them understand the benefit of doing so. This can greatly reduce the impact of the default. We test this idea in a charitable giving experiment where people first can promise to give to charity (‘pledge’) and then can go on to donate. We find that participants pledge more often when that is the default, but those who pledge in that case are less likely to take further steps to donate than those who pledge when pledging is against the default. We interpret this in terms of motivation and transaction costs. Some people pledge only to avoid the psychological costs of going against the default. Those people are closest to indifference between donating or not and are therefore less motivated to go on to donate. We also show that the intrinsic motivation of pledgers is lower when pledging is the default and that making pledges the default does not change attitudes to charities.
The evolution of morals under indirect reciprocity.
Gaudeul, Alexia; Keser, Claudia; Müller, Stephan (2019) CEGE Discussion Papers, 370. https://ideas.repec.org/p/zbw/cegedp/370.html.
Abstract: We study the coexistence of strategies in the indirect reciprocity game where agents have access to second-order information. We fully characterize the evolutionary stable equilibria and analyze their comparative statics with respect to the cost-benefit ratio (CBR). There are indeed only two stable sets of equilibria enabling cooperation, one for low CBRs involving two strategies and one for higher CBR’s which involves two additional strategies. We thereby offer an explanation for the coexistence of different moral judgments among humans. Both equilibria require the presence of second-order discriminators which highlights the necessity for higher-order information to sustain cooperation through indirect reciprocity. In a laboratory experiment, we find that more than 75% of subjects play strategies that belong to the predicted equilibrium set. Furthermore, varying the CBR across treatments leads to changes in the distribution of strategies that are in line with theoretical predictions.
An experimental method for the elicitation of implicit attitudes to privacy risk.
Frik, Alisa; Gaudeul, Alexia (2018) MPRA Paper, 87845. https://ideas.repec.org/p/pra/mprapa/87845.html.
Abstract: We test an experimental method for the elicitation of implicit attitudes to privacy risk. We ask individuals to decide whether to incur the risk of revealing private information to other participants. This type of risk that involves a social component corresponds to privacy threats that individuals may face in the field. We derive a measure of individual attitudes to privacy risk with our method. We empirically test the validity of this measure by running a laboratory experiment with 148 participants. Our results confirm that the willingness to incur a privacy risk is driven by a complex array of factors including risk attitudes, self-reported value for private information, and general attitudes to privacy (derived from survey methods in our study). We also observe that attitudes to privacy risk depend on the order in which measures of risk attitude are elicited, but do not depend on whether there is a preexisting threat to privacy, over which participants have no control. We explain how our method can be simplified and extended for use in eliciting attitudes to a wide range of privacy risks and various types of private information.
Choosing not to compete: Can firms maintain high prices by confusing consumers?
Crosetto, Paolo; Gaudeul, Alexia (2017) Journal of Economics & Management Strategy 26 (4), 897–922. https://doi.org/10.1111/jems.12212.
Abstract: Firms with very similar products often present their products in different ways. This makes it difficult for consumers to find out which product fits their needs best, or which one is the cheapest. Why is there no convergence toward common ways to present products? Is it possible for firms to maintain high prices by confusing consumers? We run a market experiment to investigate those questions. In our market, firms choose how to present their products in addition to choosing their price. We find that firms maintain different ways to present their products and that this allows them to maintain high prices. This behavior is not consistent with competitive behavior, such as when firms adopt best responses to each other, imitate the most successful firm, or learn the best strategy over time. Rather, our results are only consistent with cooperation between firms. Firms cooperate by not imitating the way other firms present their products. Cooperation is maintained by the threat of tough competition if a firm makes its product easy to compare with others. Firms are all the more likely to maintain such cooperation if their products do not actually differ much. This is because in that case, maintaining differences in the presentation of their products is the only way to maintain profits.
Better stuck together or free to go? Of the stability of cooperation when individuals have outside options.
Gaudeul, Alexia; Crosetto, Paolo; Riener, Gerhard (2017) Journal of Economic Psychology 59, 99–112. https://doi.org/10.1016/j.joep.2017.01.005.
Abstract: How do outside options affect cooperation? We examine the stability of cooperation and the reasons for exit in public projects with stochastic outcomes, imperfect monitoring and an exit option. We find that treatments with high barriers to exit generate higher welfare overall as they foster stability and prevent inefficient separation of pairs. There is excessive exit in treatments with low barriers to exit, driven in part by an overestimate of the likelihood that the peer will leave and a desire not to be left alone in the public project. We contrast long-term “strategic” and short-term “egoistic” drivers of exit and find that short-term cost-benefit considerations play a more important role in treatments with lower barriers to exit.
The effect of privacy concerns on social network formation.
Gaudeul, Alexia; Giannetti, Caterina (2017) Journal of Economic Behavior & Organization 141, 233–253. https://doi.org/10.1016/j.jebo.2017.07.007.
Abstract: We study the impact of revealing personal information on the selection of partners when forming individual networks. In our experiment, a “contribution phase” is followed by a “network phase”: individuals first decide whether to contribute and then decide with whom to form a link. An exchange of contributions between individuals occurs only if a bilateral link is established. We identify the effect of revealing one’s name on the probability of link formation by letting individuals choose to signal – at the linking stage – their willingness to later reveal their name. Our results indicate that this decision significantly affects partner selection and the consequent structure of the network. Individuals who reveal their name build up smaller individual networks but attain higher profits. Incurring privacy costs by revealing personal information is compensated with a higher probability to establish mutual links with contributors.
The social preferences of democratically elected decision makers and the conflict between wealth generation and distribution.
Gaudeul, Alexia; Keser, Claudia (2017) CIRANO Working Papers, 2017s-25. https://ideas.repec.org/p/cir/cirwor/2017s-25.html.
Abstract: We run a laboratory experiment where some participants are selected to make investment decisions on behalf of others. We test whether a democratic context influences the social preferences of decision makers in terms of efficiency, altruism and concern for inequality. We find that decision makers who are selected democratically are generally more efficiency-oriented, but also more altruistic, than leaders who are selected at random or by ability. Because wealth generation and distribution sometime conflict, efficiency is no higher with democratic leaders, although payoffs are more equal. We interpret our results in terms of a democratic norm that mitigates how elections may otherwise lead to an enhanced feeling of entitlement to one’s role. We exclude a selection effect and discuss the drivers of our results in terms of belief in the legitimacy of the selection procedure and reduced social distance.
A monetary measure of the strength and robustness of the attraction effect.
Crosetto, Paolo; Gaudeul, Alexia (2016) Economics Letters 149, 38–43. https://doi.org/10.1016/j.econlet.2016.09.031
Abstract: The Attraction Effect has been studied in conditions of indifference among options and measured at the aggregate level. We introduce a new within-subjects design based on induced preferences and psychometrics. Our method yields two individual-level measures: the traditional, frequency measure and a new, monetary indicator. The monetary indicator measures the robustness of the effect to decreases in the relative utility of the target with respect to the competitor. We find choice frequencies consistent with the literature. Our monetary measure shows that subjects still prefer the target up to the point where it is 8% more expensive than the competitor.
Social preferences under risk: Minimizing collective risk vs. reducing ex-post inequality.
Gaudeul, Alexia (2016) CEGE Discussion Papers 283. http://econpapers.repec.org/paper/zbwcegedp/283.htm.
Abstract: We refine the understanding of individual preferences across social lotteries, whereby the payoffs of a pair of subjects are exposed to random shocks. We find that aggregate behavior is ex-post and ex-ante inequality averse, but also that there is a wide variety of individual preferences and that the majority of subjects are indifferent to social concerns under risk. Furthermore, we determine whether subjects are averse to collective risk – the variability in the sum of payoffs of the pair. We do so by varying the presentation of payoffs. They are shown side by side in one treatment and added-up in the other. The first presentation draws attention to inequality in payoffs, the second to collective risk. We find that subjects dislike lotteries that lead to ex-post unequal distributions of payoffs in both cases and that emphasizing collective risk changes choice only marginally and not significantly, though in the direction of collective risk reduction. We conclude that ex-post inequality aversion is the primary concern in the evaluation of social lotteries while collective risk is only of secondary interest.
Does the gender mix among employers influence who gets hired? A labor market experiment.
Gaudeul, Alexia; Okvitawanli, Ayu; Panganiban, Marian (2015) Jena Economic Research Papers 2015-007. https://ideas.repec.org/p/jrp/jrpwrp/2015-007.html.
Abstract: We consider in this paper whether the gender mix at the level of decision-makers in firms can influence gender representation at the employee level. We run a laboratory experiment whereby we present a pair of independent employers with applications from two potential employees. We consider whether the gender of the other employer will influence an employer’s hiring decision. We find that the gender mix among employers plays a role in the individual hiring decisions of female members. Female employers when paired with a male employer are more likely to choose a female applicant over an equally competent male applicant. Results of an Implicit Association Test (IAT) and answers to a post-experimental questionnaire show that explicit beliefs about relative gender performance are significantly associated with the observed hiring bias, while implicit attitudes do not appear to play a role.
The role of reciprocation in social network formation, with an application to LiveJournal.
Gaudeul, Alexia; Giannetti, Caterina (2013) Social Networks 35 (3), 317–330. https://doi.org/10.1016/j.socnet.2013.03.003.
Abstract: This paper deals with the role of reciprocation in the formation of individuals’ social networks. We follow the activity of a panel of bloggers over more than a year and investigate the extent to which initiating a relation brings about its reciprocation. We adapt a standard capital investment model to study how reciprocation affects the build-up of the individual social capital of bloggers, as measured by their links and interactions with others. This allows us to measure the role of content production and relationship building in the dynamics of online social networks and to distinguish between the social networking and media aspects of blogging.
Spurious Complexity and Common Standards in Markets for Consumer Goods.
Gaudeul, Alexia; Sugden, Robert (2012) Economica 79 (314), 209–225. https://doi.org/10.1111/j.1468-0335.2011.00895.x.
Abstract: It has been argued that cognitively constrained consumers respond suboptimally to complex decision problems, and that firms can exploit these limitations by introducing spurious complexity into tariff structures, weakening price competition. We model a countervailing force. Restricting one’s choices to the most easily comparable options is a psychologically well-attested heuristic. Consumers who use this heuristic favour firms that follow common conventions about tariff structures. Because a ‘common standard’ promotes price competition, a firm’s use of it signals that it offers value for money, validating the heuristic. This allows an equilibrium in which firms use common standards and set competitive prices.
Software marketing on the Internet: the use of samples and repositories.
Gaudeul, Alexia (2010) Economics of Innovation and New Technology 19 (3), 259–281. https://doi.org/10.1080/10438590802472572.
Abstract: This paper examines one of the most important marketing strategies by software producers on the Internet. That is whether to offer free samples and, if so, whether to list the samples on shareware repositories. I show that firms with higher value products have a greater incentive to offer free samples but are more reluctant to do so if they are well known, and even when they do are less likely to be listed on shareware repositories. I then proceed to use four types of Probit-based models to corroborate the findings from the theoretical model.
Reciprocal attention and norm of reciprocity in blogging networks.
Gaudeul, Alexia; Peroni, Chiara (2010) Economics Bulletin 30 (3), S. 2230–2248. http://econpapers.repec.org/article/eblecbull/eb-10-00198.htm.
Abstract: Bloggers devote significant time not only producing content for others to read, watch or listen to, but also paying attention to and engaging in interactions with other bloggers. We hope to throw light not only on the factors that gain bloggers significant readership and lively interactions with their audience, but also on the rules that govern their relations with others. We relate bloggers’ activity with the size and structure of their network of fellow bloggers. A blogger’s readership increases with his activity, while bloggers who read back proportionally fewer of their readers tend also to be more active. We find evidence that those bloggers who read back proportionally fewer of their readers have less readers than bloggers who reciprocate more, but tend to receive more comments per posts.
Consumer Welfare and Market Structure in a Model of Competition between Open Source and Proprietary Software.
Gaudeul, Alexia (2009) International Journal of Open Source Software and Processes (IJOSSP) 1 (2), 43–65. https://doi.org/10.4018/jossp.2009040104.
Abstract: I consider a Vickrey-Salop model of spatial product differentiation with quasi-linear utility functions and contrast two modes of production, the proprietary model where entrepreneurs sell software to the users, and the open source model where users participate in software development. I show that the OS model of production may be more efficient from the point of view of welfare than the proprietary model, but that an OS industry is vulnerable to entry by entrepreneurs while a proprietary industry can resist entry by OS projects. A mixed industry where OS and proprietary development methods coexist may exhibit large OS projects cohabiting with more specialized proprietary projects, and is more efficient than the proprietary model of production from the point of view of welfare.
Do Open Source Developers Respond to Competition? The LaTeX Case Study.
Gaudeul, Alexia (2007) Review of Network Economics 6 (2). https://doi.org/10.2202/1446-9022.1119.
Abstract: This paper traces the history of TeX, the open source typesetting program. TeX was an early and very successful open source project that imposed its standards in a particularly competitive environment and inspired many advances in the typesetting industry. Developed over three decades, TeX came into competition with a variety of open source and proprietary alternatives. I argue from this case study that open source developers derive direct and indirect network externalities from the use of their software by others and must therefore consider non-developers’ needs to make their software more attractive to a broader audience and more competitive with proprietary alternatives.