Publications by JILAEE’s researchers
Experimental Evidence on the Relationship between Perceived Ambiguity and Likelihood Insensitivity.
Henkel, Luca
Games and Economic Behavior, 145 (2024): 312-338.
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Observed individual behavior in the presence of ambiguity shows insufficient responsiveness to changes in subjective likelihoods. Despite being integral to theoretical models and relevant in many domains, evidence on the causes and determining factors of such likelihood insensitive behavior is scarce. This paper investigates the role of beliefs in the form of ambiguity perception – the extent to which a decision-maker has difficulties assigning a single probability to each possible event – as a potential determinant. Using an experiment, I elicit measures of ambiguity perception and likelihood insensitivity and exogenously vary the level of perceived ambiguity. The results provide strong support for a perception-based explanation of likelihood insensitivity. The two measures are highly correlated at the individual level, and exogenously increasing ambiguity perception increases insensitivity, suggesting a causal relationship. In contrast, ambiguity perception is unrelated to ambiguity aversion – the extent to which a decision-maker dislikes the presence of ambiguity.
The Economic Approach: Unpublished Writings of Gary S. Becker.
Becker, Gary S., Elias, Julio Jorge, Mulligan, Casey B., and Murphy, Kevin M., Eds.
University of Chicago Press, 2023.
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A revealing collection from the intellectual titan whose work shaped the modern world. As an economist and public intellectual, Gary S. Becker was a giant. The recipient of a Nobel Prize, a John Bates Clark Medal, and a Presidential Medal of Freedom, Becker is widely regarded as the greatest microeconomist in history. After forty years at the University of Chicago, Becker left a slew of unpublished writings that used an economic approach to human behavior, analyzing such topics as preference formation, rational indoctrination, income inequality, drugs and addiction, and the economics of family. These papers unveil the process and personality—direct, critical, curious—that made him a beloved figure in his field and beyond. The Economic Approach examines these extant works as a capstone to the Becker oeuvre—not because the works are perfect, but because they offer an illuminating, instructive glimpse into the machinations of an economist who wasn’t motivated by publications. Here, and throughout his works, an inquisitive spirit remains remarkable and forever resonant.
Historical Narratives about the COVID-19 Pandemic are Motivationally Biased
Henkel, Luca, Sprengholz, Philipp, Böhm, Robert, and Betsch, Cornelia.
Nature, 623 (2023): 588-593.
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How people recall the SARS-CoV-2 pandemic is likely to prove crucial in future societal debates on pandemic preparedness and appropriate political action. Beyond simple forgetting, previous research suggests that recall may be distorted by strong motivations and anchoring perceptions on the current situation1,2,3,4,5,6. Here, using 4 studies across 11 countries (total n = 10,776), we show that recall of perceived risk, trust in institutions and protective behaviours depended strongly on current evaluations. Although both vaccinated and unvaccinated individuals were affected by this bias, people who identified strongly with their vaccination status—whether vaccinated or unvaccinated—tended to exhibit greater and, notably, opposite distortions of recall. Biased recall was not reduced by providing information about common recall errors or small monetary incentives for accurate recall, but was partially reduced by high incentives. Thus, it seems that motivation and identity influence the direction in which the recall of the past is distorted. Biased recall was further related to the evaluation of past political action and future behavioural intent, including adhering to regulations during a future pandemic or punishing politicians and scientists. Together, the findings indicate that historical narratives about the COVID-19 pandemic are motivationally biased, sustain societal polarization and affect preparation for future pandemics. Consequently, future measures must look beyond immediate public-health implications to the longer-term consequences for societal cohesion and trust.
The Association Between Vaccination Status Identification and Societal Polarization
Henkel, Luca, Sprengholz, Philipp, Böhm, Robert, and Betsch, Cornelia.
Nature Human Behaviour, 7, no. 2 (2023): 231-239.
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Public discord between those vaccinated and those unvaccinated forCOVID-19 has intensified globally. Theories of intergroup relations propose that identifying with one’s social group plays a key role in the perceptions and behaviours that fuel intergroup conflict. We test whether identification with one’s vaccination status is associated with current societal polarization. The study draws on panel data from samples of vaccinated (n = 3,267) and unvaccinated (n = 2,038) respondents in Germany and Austria that were collected in December 2021 and February, March and July 2022.The findings confirm that vaccination status identification (VSI) explains substantial variance in a range of polarizing attitudes and behaviours. VSI was also related to higher psychological reactance toward mandatory vaccination policies among the unvaccinated. Higher levels of VSI reduced the gap between intended and actual counter behaviours over time by the unvaccinated. VSI appears to be an important measure for predicting behavioural responses to vaccination policies.
Privatization of Public Goods: Evidence from the Sanitation Sector in Senegal.
Deutschmann, Joshua W., Gars, Jared, Houde, Jean-François, Lipscomb, Molly, and Schechter, Laura.
Journal of Development Economics, 160 (2023): 102971.
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Privatization of a public good (the management of sewage treatment centers in Dakar, Senegal) leads to an increase in the productivity of downstream sewage dumping companies and a decrease in downstream prices of the services they provide to households. We use the universe of legal dumping of sanitation waste from May 2009 to May 2018 to show that legal dumping increased substantially following privatization—on average an increase of 74%, or an increase of about 1640 trips to treatment centers each month. This is due to increased productivity of all trucks, not just those associated with the company managing the privatized treatment centers. Household-level survey data shows that downstream prices of legal sanitary dumping decreased by 5% following privatization, and DHS data shows that diarrhea rates among children under five decreased in Dakar relative to secondary cities in Senegal following privatization with no similar effect on respiratory illness as a placebo.
The Shortage of Kidneys for Transplant: Altruism, Exchanges, Opt-in vs. Opt-out, and the Market for Kidneys.
Becker, Gary S., Elias, Julio Jorge, and Ye, Karen J.
Journal of Economic Behavior & Organization, 202 (2022): 211-226.
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In 2007 we published a paper on organ transplants that used data from 1990–2005. We proposed a radical solution of paying individuals to donate kidneys and claimed that this would clean out the waiting list for kidney transplants in a short period of time. In this paper, we revisit the topic, and examine 14 years of additional data to see if anything fundamental has changed. We show that the main altruistic based policies implemented, such as kidney exchanges or opt out systems for organ procurement, have been unable to solve the problem of shortages. Our analysis suggests that, because of the reaction of direct living donors to increases in other sources of donations, the supply curve of kidney transplants is highly inelastic to altruistic policies. In contrast, a market in organs would eliminate organ shortages and thereby eliminate thousands of needless deaths.