Research

Research Interests

Behavioural Economics, Microeconomic Theory, Experimental Economics

Research Papers

Eliciting Present Bias Under Uncertainty (draft available upon request)
with Johannes Hoelzemann and Yoram Halevy

We experimentally investigate intertemporal preferences under uncertainty. Our novel design allows the direct comparison of intertemporal preferences for certain, risky, and ambiguous future monetary rewards using choice lists. The results of our experiments suggest a significant impact of risk and ambiguity on time preferences: there is a lower incidence of present bias and a higher incidence of stationarity for uncertain payments compared to certain payments. Further, present bias for certain payments is correlated with static ambiguity aversion. We also investigate possible contamination of the elicited time preferences for immediate certain payments from the choice lists. This robustness experiment consists of a single binary choice problem and shows that present bias might even be underestimated using choice lists.

Vulnerability as Strength: Trusting as a Credible Signal of Competence (draft available upon request)
with Yuval Deutsch and Sabrina Deutsch Salamon

Why people trust without sufficient information about the trustworthiness of the other is a major puzzle in trust research. Drawing on evolutionary psychology signaling logic, we develop a formal model that offers a novel explanation as to why leaders make this seemingly irrational decision. We demonstrate that leaders can signal superior competence by assuming the risk inherent to trusting. Credibly communicating competence, in turn, leads to improved outcomes for these leaders and their followers alike. We show that signaling is a viable strategy only for leaders with superior competence, who trust precisely because the risk they take renders that signal credible. The effectiveness of the signaling is determined by the leaders’ knowledge of their subordinates’ trustworthiness, the impact of subordinates’ felt trust, and managers’ overconfidence.

Work In Progress

Optimal Learning When Forgetting (Job Market Paper)

Memory plays a crucial role in decision-making, yet economic models typically treat memory imper- fections as exogenous rather than outcomes of individual choices. This study investigates whether individuals actively shape their memory retention through their choice of encoding effort. I develop a theoretical model where a decision-maker chooses costly effort to exert when revising information that has been previously learned for the purpose of remembering the information at a future date. Under reasonable assumptions about the shape of the probability of recall function, I show that when the decision-maker is certain about how much they forget, the model does not predict the well-documented spacingeffect–where spaced repetitions lead to a higher probability of recall than massed learning with short intervals. However, when the decision-maker is uncertain about their forgetting rate, successfully recalling previously learned information during effort exertion provides a more informative signal when a longer time has passed between initial learning and revision. This mechanism can explain the spacing effect. Using a novel experimental design, I examine how decision-makers choose learning effort and whether uncertainty about their memory influences their choices. Participants choose how long to revise a list of word pairs to succeed at a rewarded test when studying more is costly. I compare their effort choices across two reward levels and two study schedules. Additionally, I investigate whether participants are willing to purchase a costly signal of their current memory strength. This experiment provides empirical evidence on how individuals account for memory constraints when making decisions about their own memory.

Disentangling Pure Time Preferences \with Yoram Halevy

Making decisions about the future is fundamentally related to the evaluation of uncertainty; any out- come expected to occur in the future is inherently uncertain. We propose a new experimental method to separate the pure time preferences from the discounting that arises due to this inherent uncertainty of future. The experiment consists of two parts. In the first part, we find the present probability equivalents for both a certain future payment and a risky future payment. In the second part, we measure the probability weighting function for immediate payments. We use the subproportionality of the probability weighting function to elicit the perceived probability of survival for any future payment, assuming that it is evaluated within the same probability weighting function for any risky payment.