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EUI Interdisciplinary Experimental Working Group

Dates:
  • Thu 26 Apr 2018 17.00 - 19.15
  Add to Calendar 2018-04-26 17:00 2018-04-26 19:15 Europe/Paris EUI Interdisciplinary Experimental Working Group

Arnout van de Rijt (Utrecht University)

"The Self-Correcting Dynamics of Social Influence Bias"

Abstract: A prominent theory is that the influence of social information on choice can lead a qualitatively inferior product, artist or idea to dominate a superior alternative in popularity. We argue that this theory requires a very strong assumption about the inclination for individuals to take cues from others. If this assumption is not met, a self-correcting dynamic will lead the superior alternative to always regain dominance. We re-analyze past experimental studies with social information that initially favored inferior options and show that in each superior alternatives were in fact on a path of recovery from this early setback. We also report on a new experiment in which a larger number of subject choices allowed trials to be run to convergence and show that in each trial the superior alternative gained long-run dominance.

Liang Bai (School of Economics, University of Edinburgh)

"Self-Control and Demand for Preventive Health: Evidence from Hypertension in India"
The paper is jointly co-authored with Benjamin Handel, Edward Miguel, and Gautam Rao.

Abstract: Self-control problems constitute a potential explanation for the under-investment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically-motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. Despite achieving high take-up of such contracts in some arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment, but fail to follow through on the specified task, losing money without experiencing any health benefit. We develop and structurally estimate a pre-specified model of consumer behavior under present bias with varying levels of naivete. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment, but overly optimistic about whether a given level of commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about their role in health care.



Seminar Room 2, Badia Fiesolana DD/MM/YYYY
  Seminar Room 2, Badia Fiesolana

Arnout van de Rijt (Utrecht University)

"The Self-Correcting Dynamics of Social Influence Bias"

Abstract: A prominent theory is that the influence of social information on choice can lead a qualitatively inferior product, artist or idea to dominate a superior alternative in popularity. We argue that this theory requires a very strong assumption about the inclination for individuals to take cues from others. If this assumption is not met, a self-correcting dynamic will lead the superior alternative to always regain dominance. We re-analyze past experimental studies with social information that initially favored inferior options and show that in each superior alternatives were in fact on a path of recovery from this early setback. We also report on a new experiment in which a larger number of subject choices allowed trials to be run to convergence and show that in each trial the superior alternative gained long-run dominance.

Liang Bai (School of Economics, University of Edinburgh)

"Self-Control and Demand for Preventive Health: Evidence from Hypertension in India"
The paper is jointly co-authored with Benjamin Handel, Edward Miguel, and Gautam Rao.

Abstract: Self-control problems constitute a potential explanation for the under-investment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically-motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. Despite achieving high take-up of such contracts in some arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment, but fail to follow through on the specified task, losing money without experiencing any health benefit. We develop and structurally estimate a pre-specified model of consumer behavior under present bias with varying levels of naivete. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment, but overly optimistic about whether a given level of commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about their role in health care.




Location:
Seminar Room 2, Badia Fiesolana

Affiliation:
Department of Political and Social Sciences
Department of Economics

Type:
Working group

Contact:
Jennifer Rose Dari (EUI - Department of Political and Social Sciences) - Send a mail

Organiser:
Prof. Klarita Gërxhani (EUI - Department of Political and Social Sciences)
Prof. Michèle Belot ((EUI - Department of Economics))

Speaker:
Prof. Dr. Arnout van de Rijt (Utrecht University)
Dr Liang Bai (School of Economics, University of Edinburgh)
 
 

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