My research is in behavioral and experimental economics, cultural economics, and political economy. Much of my current work focuses on complexity and cognitive uncertainty, as well as the political consequences and cultural origins of heterogeneity in moral values.
I received my Ph.D. in 2016 from the University of Bonn and subsequently joined Harvard’s Economics Department. Since 2018, I also serve as Associate Editor at the Journal of the European Economic Association. At Harvard, I teach a Ph.D. course on Experimental Economics and an undergraduate class on Economics and Morality; please see here for more information. Students can sign up for office hours here.
Confidence, Self-Selection and Bias in the Aggregate
(with Thomas Graeber and Ryan Oprea)
Forthcoming, American Economic Review
Abstract (click to expand): Economics experiments have produced widespread evidence that people suffer from a range of cognitive biases. However, unlike experiments, real-world institutions often allow decision makers to self-select out, potentially filtering (or amplifying) the impact of biases on economic aggregates. We study the economic impacts of such self-selection and how they depend on people's meta-cognitive awareness of their own errors. In a series of online experiments that cover a wide range of classical decision biases, we document large heterogeneity in how cognitive biases are related to the intensity of bets in speculative markets, bids for property rights in auctions and contributions to collective decisions. In some tasks, rational subjects are more confident than their biased counterparts and bet, bid and vote more aggressively. As a result, self-selection tends to filter the effect of irrationalities on aggregate quantities. However, in other tasks, confidence and performance are unrelated or even negatively correlated, so that experimental institutions do not filter errors and sometimes even magnify them. As a methodological blueprint, we show that a simple measure of the relative calibration of confidence strongly predicts the degree to which institutional self-selection filters the effect of irrationalities.
(with Thomas Graeber)
Forthcoming, Quarterly Journal of Economics
Abstract (click to expand): This paper documents the economic relevance of measuring cognitive uncertainty: people's subjective uncertainty over their ex-ante utility-maximizing decision. In a series of experiments on choice under risk, the formation of beliefs and forecasts of economic variables, we show that cognitive uncertainty predicts systematic biases in economic decisions and that it can be deployed to provide tests of formal theories. When people are cognitively uncertain -- either endogenously or because the problem is designed to be complex -- their decisions are heavily attenuated functions of objective probabilities, which gives rise to behavior that is regressive to an intermediate option. This insight ties together a wide range of empirical regularities in behavioral economics that are typically viewed as distinct phenomena or even as reflecting preferences, including the probability weighting function in choice under risk; base rate insensitivity, conservatism and sample size effects in belief updating; and predictable overoptimism and -pessimism in forecasts of economic variables. Our results offer a blueprint for how a simple measurement of cognitive uncertainty generates novel insights about what people find complex and how they respond to it.
[Column for UNDP Human Development Report 2022]
Moral Universalism and the Structure of Ideology
(with Ricardo Rodriguez-Padilla and Florian Zimmermann)
Forthcoming, Review of Economic Studies
Abstract (click to expand): Throughout the Western world, people's policy views are correlated across domains in a strikingly similar fashion. This paper proposes that what partly explains the structure of ideology is moral universalism: the extent to which people's altruism and trust remain constant as social distance increases. In new large-scale multinational surveys, heterogeneity in universalism descriptively explains why the left and right both simultaneously support and oppose different types of government spending. Moreover, the left-right divide on topics such as redistribution strongly depends on whether people evaluate more or less universalist policies. Large-scale donation data provide additional evidence for the political left's universalism.
Cognitive Biases: Mistakes or Missing Stakes?
(with Uri Gneezy, Brian Hall, David Martin, Vadim Nelidov, Theo Offerman, and Jeroen van de Ven)
Forthcoming, Review of Economics and Statistics
Abstract (click to expand): Despite decades of research on heuristics and biases, empirical evidence on the effect of large incentives -- as present in relevant economic decisions -- on cognitive biases is scant. This paper tests the effect of incentives on four widely documented biases: base rate neglect, anchoring, failure of contingent thinking, and intuitive reasoning in the Cognitive Reflection Test. In pre-registered laboratory experiments with 1,236 college students in Nairobi, we implement three incentive levels: no incentives, standard lab payments, and very high incentives that increase the stakes by a factor of 100 to more than a monthly income. We find that cognitive effort as measured by response times increases by 40% with very high stakes. Performance, on the other hand, improves very mildly or not at all as incentives increase, with the largest improvements due to a reduced reliance on intuitions. In none of the tasks are very high stakes sufficient to de-bias participants, or come even close to doing so. These results contrast with expert predictions that forecast larger performance improvements.
Market Exposure and Human Morality
Nature Human Behaviour, 2023, vol. 7 (1), pp. 134-141
Abstract (click to expand): According to evolutionary theories, markets may foster an internalized and universalist prosociality because it supports market-based cooperation. This paper uses the cultural folklore of 943 pre-industrial ethnolinguistic groups to show that a society's degree of market interactions, proxied by the presence of intercommunity trade and money, is associated with the cultural salience of (i) prosocial behavior; (ii) interpersonal trust; (iii) universalist moral values; and (iv) moral emotions of guilt, shame and anger. To provide tentative evidence that a part of this correlation reflects a causal effect of market interactions, the analysis leverages both fine-grained geographic variation across neighboring historical societies and plausibly exogenous variation in the presence of markets that arises through proximity to historical trade routes or the local degree of ecological diversity. The results suggest that the coevolutionary process involving markets and morality partly consists of economic markets shaping a moral system of a universalist and internalized prosociality.
Patience and Comparative Development
(with Uwe Sunde, Thomas Dohmen, Armin Falk, David Huffman, and Gerrit Meyerheim)
Review of Economic Studies, 2022, vol. 89(10), pp. 2806–2840
Abstract (click to expand): This paper studies the relationship between patience and comparative development through a combination of reduced-form analyses and model estimations. Based on a globally representative dataset on time preference in 76 countries, we document two sets of stylized facts. First, patience is strongly correlated with both per capita income and the accumulation of physical capital, human capital and productivity. These correlations hold across countries, subnational regions, and individuals. Second, the quantitative magnitude of the patience elasticity strongly increases in the level of aggregation. To provide an interpretive lens for these patterns, we analyze an OLG model in which savings and education decisions are endogenous to patience, and aggregate production is characterized by capital-skill complementarities. This model reconciles both the correlations between patience and macroeconomic variables as well as the substantial amplification of patience elasticities at higher levels of aggregation. The results of model estimations resemble the reduced-form patterns and suggest that cross-country variation in productivity plays an important role in generating the observed comparative development patterns and aggregation effects.
Moral Universalism: Measurement and Economic Relevance
(with Ricardo Rodriguez-Padilla and Florian Zimmermann)
Management Science, 2022, vol. 68(5), pp. 3590-3603
Abstract (click to expand): Many applied economic settings involve tradeoffs between in-group members and strangers. To better understand decision-making in these contexts, this paper measures and investigates the economic relevance of heterogeneity in moral universalism: the extent to which people exhibit the same level of altruism and trust towards strangers as towards in-group members. We first introduce a new experimentally-validated survey-based measure of moral universalism that is simple and easily scalable. We then deploy this tool in a large, representative sample of the U.S. population to study heterogeneity and economic relevance. We find that universalism is a relatively stable trait at the individual level. Heterogeneity in universalism is significantly related to observables: older people, men, the rich, the rural, and the religious exhibit less universalist preferences and beliefs. Linking variation in universalism to economic and social behaviors, we document that universalists donate less money locally but more globally, and are less likely to exhibit home bias in equity and educational investments. In terms of social networks, universalists have fewer friends, spend less time with them, and feel more lonely. These results provide a blueprint for measuring moral universalism in applied settings, and suggest that variation in universalism is relevant for understanding a myriad of economic behaviors.
[Qualtrics survey files to implement universalism games]
Confidence and Central Tendency in Perceptual Judgment
(with Yang Xiang, Thomas Graeber, and Samuel Gershman)
Attention, Perception & Psychophysics, 2021, 83, pp. 3024-3034.
Abstract (click to expand): This paper theoretically and empirically investigates the role of noisy cognition in perceptual judgment, focusing on the central tendency effect: the well-known empirical regularity that perceptual judgments are biased towards the center of the stimulus distribution. Based on a formal Bayesian framework, we generate predictions about the relationships between subjective confidence, central tendency, and response variability. Specifically, our model clarifies that lower subjective confidence as a measure of posterior uncertainty about a judgment should predict (i) a lower sensitivity of magnitude estimates to objective stimuli; (ii) a higher sensitivity to the mean of the stimulus distribution; (iii) a stronger central tendency effect at higher stimulus magnitudes; and (iv) higher response variability. To test these predictions, we collect a large-scale experimental data set and additionally re-analyze perceptual judgment data from several previous experiments. Across data sets, subjective confidence is strongly predictive of the central tendency effect and response variability, both correlationally and when we exogenously manipulate the magnitude of sensory noise. Our results are consistent with (but not necessarily uniquely explained by) Bayesian models of confidence and the central tendency.
Moral Values and Voting
Journal of Political Economy, 2020, vol. 128(10), pp. 3679-3729 (Lead Article).
Abstract (click to expand): This paper studies the supply of and demand for moral values in recent U.S. presidential elections. Using a combination of large-scale survey data and text analyses, I find support for the hypothesis that both voters and politicians exhibit heterogeneity in their emphasis on “universal” relative to “communal” moral values, and that politicians’ vote shares partly reflect the extent to which their moral appeal matches the values of the electorate. Over the last decade, Americans’ values have become increasingly communal – especially in rural areas – which generated increased moral polarization and is associated with changes in voting patterns across space.
[microeconomic insights column]
[county-level moral values data]
[data and code]
What You See Is All There Is
Quarterly Journal of Economics, 2020, vol. 135(3), pp. 1363-1398.
Abstract (click to expand): News reports and communication are inherently constrained by space, time, and attention. As a result, news sources often condition the decision of whether or not to share a piece of information on the similarity between the signal and the prior belief of the audience, so that the audience needs to draw inferences from a selected sample. This paper experimentally studies how people form beliefs in these contexts, in particular the mechanisms behind errors in statistical reasoning. I document that a substantial fraction of experimental participants updates beliefs by exclusively taking into account information that is right in front of them, hence neglecting selection effects. A series of treatments aimed at identifying mechanisms document that neglect is largely driven by subjects maintaining a misspecified mental model of the known information environment, according to which selection does not even come to mind. This mental model of “what you see is all there is” is not constant but predictably responds to perhaps seemingly innocuous variations in the environment, including (i) the computational complexity of the decision problem, and (ii) whether selection problems arise due to a deliberate choice between information sources or as a mechanical by-product of another decision. These results point to the context-dependence of mental models and the resulting errors in belief updating.
[data and code]
Ancient Origins of the Global Variation in Economic Preferences
(with Anke Becker and Armin Falk)
AEA Papers & Proceedings, 2020, vol. 110, pp. 319-323.
Abstract (click to expand): This paper shows that contemporary population-level heterogeneity in risk aversion, time preference, altruism, positive reciprocity, negative reciprocity, and trust partly traces back to the structure of the migration patterns of our very early ancestors. To document this pattern, we link differences in preferences between populations to the length of time elapsed since the ancestors of the respective groups broke apart from each other, as proxied by genetic and linguistic distance measures. Preference differences are significantly increasing in ancestral distance in both cross-country regressions and within-country analyses across groups of migrants.
Kinship, Cooperation, and the Evolution of Moral Systems
Quarterly Journal of Economics, 2019, vol. 134(2), pp. 953-1019.
Abstract (click to expand): Across the social sciences, a key question is how societies manage to enforce cooperative behavior in social dilemmas such as public goods provision or bilateral trade. According to an influential body of theories in psychology, anthropology, and evolutionary biology, the answer is that humans have evolved moral systems: packages of functional psychological and biological mechanisms that regulate economic behavior, including a belief in moralizing gods; moral values; negative reciprocity; and emotions of shame, guilt, and disgust. Based on a stylized model, this article empirically studies the structure and evolution of these moral traits as a function of historical heterogeneity in extended kinship relationships. The evidence shows that societies with a historically tightly knit kinship structure regulate behavior through communal moral values, revenge taking, emotions of external shame, and notions of purity and disgust. In loose kinship societies, on the other hand, cooperation appears to be enforced through universal moral values, internalized guilt, altruistic punishment, and an apparent rise and fall of moralizing religions. These patterns point to the presence of internally consistent but culturally variable functional moral systems. Consistent with the model, the relationship between kinship ties, economic development, and the structure of the mediating moral systems amplified over time.
[Distinguished CESifo Affiliate Award]
[data and code]
Correlation Neglect in Belief Formation
(with Florian Zimmermann)
Review of Economic Studies, 2019, vol. 86(1), pp. 313-332.
Abstract (click to expand): Many information structures generate correlated rather than mutually independent signals, the news media being a prime example. This article provides experimental evidence that many people neglect the resulting double-counting problem in the updating process. In consequence, beliefs are too sensitive to the ubiquitous “telling and re-telling of stories” and exhibit excessive swings. We identify substantial and systematic heterogeneity in the presence of the bias and investigate the underlying mechanisms. The evidence points to the paramount importance of complexity in combination with people’s problems in identifying and thinking through the correlation. Even though most participants in principle have the computational skills that are necessary to develop rational beliefs, many approach the problem in a wrong way when the environment is moderately complex. Thus, experimentally nudging people’s focus towards the correlation and the underlying independent signals has large effects on beliefs.
[data and code]
Global Evidence on Economic Preferences
(with Armin Falk, Anke Becker, Thomas Dohmen, David Huffman, and Uwe Sunde)
Quarterly Journal of Economics, 2018, vol. 133(4), pp. 1645-1692 (Lead Article).
Abstract (click to expand): This article studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey data set of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 people in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and biogeoraphic and cultural variables, such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors. Within countries and subnational regions, preferences are linked to individual savings decisions, labor market choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts.
[Global Preferences Survey website and data]
The Precision of Subjective Data and the Explanatory Power of Economic Models
(with Tilman Drerup and Hans-Martin von Gaudecker)
Journal of Econometrics, 2017, vol. 200(2), pp. 378-389.
Abstract (click to expand): Subjective expectations are important primitives in many economic models, yet their direct measurement often yields imprecise and inconsistent data. This has previously been treated as a pure measurement error problem. In contrast, this paper argues that the individual-level precision of such data may reflect the structure of the underlying decision process. We estimate a semiparametric double index model on data specifically collected for this purpose and show that stock market participation decisions exhibit little variation in economic model primitives when individuals provide error-ridden belief statements. In contrast, beliefs and risk preferences predict strong variation in stock market participation for individuals who report precise expectations measures.
Moral Universalism: Global Evidence
(with Alexander Cappelen and Bertil Tungodden)
Abstract (click to expand): This paper presents a new set of stylized facts about the global variation in universalism, leveraging hypothetical money allocation tasks deployed in representative samples of 64,000 people from 60 countries. Our data reveal large variation in universalism within and across countries, which almost entirely reflects heterogeneity in people's moral views regarding how to treat different types of relationships. These moral views vary systematically with age, gender and religiosity. Universalism is strongly predictive of relevant outcomes such as civic engagement and left-wing economic and social policy views, in particular in the rich West. Across countries, universalism varies with the economic, political and religious organization of societies. We provide tentative evidence that experience with democracy makes people more universalist. Overall, our results show that moral universalism shapes and is shaped by politico-economic outcomes across the globe.
Values as Luxury Goods and Political Behavior
(with Mattias Polborn and Alex Wu)
Abstract (click to expand): Motivated by novel survey evidence, this paper develops a theory of political behavior in which values are a luxury good: the relative weight voters place on values rather than material considerations increases in income. The model predicts (i) voters who are sufficiently rich to afford voting left; (ii) that more rich than poor people vote against their material interests; (iii) that Democrats are internally more fragmented than Republicans; (iv) that income and voting Republican are positively correlated across voters but negatively across states; and (v) the realignment of rich moral liberals and poor moral conservatives. We test our predictions empirically.
Universalism and Political Representation: Evidence from the Field
(with Raymond Fisman, Luis Mota Freitas and Steven Sun)
Abstract (click to expand): This paper provides field evidence on the link between morals and political behavior. We develop a theory-guided real-stakes measure of each U.S. district's values on the universalism-particularism continuum, which reflects the degree to which charitable giving decreases as a function of social distance. District universalism is strongly predictive of local Democratic vote shares, legislators' roll-call voting, and the moral content of Congressional speeches. These results hold in both across- and within-party analyses. Overall, spatial heterogeneity in universalism is a substantially stronger predictor of geographic variation in political outcomes than traditional economic variables such as income or education.
Associative Memory and Belief Formation
(with Frederik Schwerter and Florian Zimmermann)
Abstract (click to expand): This paper experimentally studies the role of associative recall for belief formation. Information is often embedded in memorable contexts, which may cue the asymmetric recall of similar past news through associative memory. We design a simple and tightly controlled theory-driven experiment, in which participants observe sequences of signals about hypothetical companies. Here, identical signal realizations are communicated with identical contexts: stories and images. Because participants predominantly remember those past signals that get cued by the current context, participants' expectations strongly overreact to recent news. Investigating various model comparative statics and limits of the role of associative memory, we find support for the model's predictions about how overreaction depends on exogenous variation in the signal history; the correlation between signals and contexts; and the experimentally-induced scope for forgetting and associative memory. We use our experimental data to structurally estimate the model parameters that govern the strength of imperfect and associative recall.
Complexity and Time
(with Thomas Graeber and Ryan Oprea)
Abstract (click to expand): We provide experimental evidence that core intertemporal choice anomalies -- including extreme short-run impatience, structural estimates of present bias, hyperbolicity and transitivity violations -- are driven by complexity rather than time or risk preferences. First, all anomalies also arise in structurally similar atemporal decision problems involving valuation of iteratively discounted (but immediately paid) rewards. These computational errors are strongly predictive of intertemporal decisions. Second, intertemporal choice anomalies are highly correlated with indices of complexity responses including cognitive uncertainty and choice inconsistency. We show that model misspecification resulting from ignoring behavioral responses to complexity severely inflates structural estimates of present bias.
Herding, Warfare and a Culture of Honor: Global Evidence
(with Yiming Cao, Armin Falk, Paola Giuliano and Nathan Nunn)
Abstract (click to expand): According to the widely known `culture of honor' hypothesis from social psychology, traditional herding practices have generated a value system conducive to revenge-taking and violence. We test the economic significance of this idea at a global scale using a combination of ethnographic and folklore data, global information on conflicts, and multinational surveys. We find that the descendants of herders have significantly more frequent and severe conflict today, and report being more willing to take revenge in global surveys. We conclude that herding practices generated a functional psychology that plays a role in shaping conflict across the globe.
In preparation for the Annual Review of Economics
Abstract (click to expand): This paper reviews and synthesizes the fast-growing economics literature on heterogeneity in moral values regarding in-group members and strangers. I outline different ways of formalizing and measuring these values, and then turn to discussing their politico-economic consequences. Heterogeneity in moral universalism has been shown to be helpful for understanding outcomes such as policy views, voting behavior, social cooperation, the internal organization of firms, friendship networks, donations, and the abolitionist movement. Looking at the origins of heterogeneity in morality, various contributions have shed light on the roles of kinship systems, market exposure, democracy, Christianity and ecology. A main takeaway that emerges from the literature is that heterogeneity in morality often reflects differences in economic incentives that emerge from the prevailing institutions and natural conditions, such that politico-economic outcomes both shape and are shaped by moral values. I discuss open questions and potential new applications.