We examine the impact of temperature shocks on the saving behaviour of rural households in Ethiopia. Two rounds of survey data and time-series temperature data from Climate Engine/Terra Climate are used for this analysis. We find that the probability of household saving falls following an increase in temperature anomalies, measured by standardized deviations, and this impact is channelled through time and risk preferences. More specifically, temperature shocks increase risk-taking and impatience, both of which are linked to a reduced probability of saving. As a result, preserving long-term welfare requires the promotion of commitment-based saving instruments, including saving mechanisms with automatic deductions at harvest time. Our heterogeneity analysis demonstrates that, compared to their counterparts, poor households’ saving behaviour and those without credit access are more affected by temperature shocks. Therefore, policies aimed at mitigating the adverse effects of climate change on household financial outcomes, such as saving, should prioritize these groups.

A zero price effect is a discontinuous change in demand when price is reduced to zero from a level arbitrarily close to it. It has been proposed that social norms play a role in zero price effects on consumption. We first conducted a norm-elicitation experiment to measure how people perceive the social appropriateness of consumption under zero versus minimal prices. We then ran a natural field experiment in the same contexts to observe actual taking behavior. Results show that the social appropriateness of consuming high quantities is significantly lower when goods are offered for free than when they are sold at 1 cent. Zero pricing increases the proportion of individuals who consume something, but reduces the average amount taken by those who consume positive amounts. Overall, the evidence suggests that high consumption of free goods is prevented by its social inappropriateness, potentially helping to explain the inconsistent evidence on the direction of zero price effects in previous studies.

Recent crises have increased price volatility, yet farmers’ adoption of forward contracts, futures, options, and price insurance remains low. Since this appears puzzling from a standard expected utility maximizing perspective, we systematically review the literature on the relation between behavioral factors and price hedging. We distinguish behavioral preferences, formally integrated into choice models, from psychological factors, lacking mathematical formalization. Most of the 101 reviewed studies focus on futures and rely on risk aversion assuming expected utility maximization, with limited evidence on behavioral economic drivers. Considering nonclassical preferences and psychological factors in choice models might better capture farmers’ risk management decisions.

In a $k$-replica Edgeworth box economy, we compare outcomes of laboratory markets in which human traders have different visualizations available on their screens. Novel visualizations include a heat map that shows at a glance the value of all feasible portfolios (i.e., final allocations); a geometric display of the order book; and order entry via point-and-click on the heat map. Efficiency metrics focus on allocations, prices and profitability. Compared to the traditional text-oriented trader screen for the continuous double auction, we find that the novel features generally increase all three efficiency metrics.

We experimentally investigate whether lying is more likely when the addressees are individuals or groups of individuals, and in the latter case how the probability of lying depends on the group size and the magnitude of the negative externality inflicted by the lie. We employ an observed cheating game, where an individual can reveal or misreport a privately observed number. A misreport can be monetarily beneficial for the liar but imposes a monetary loss on addressees. The privately observed number is also known to the experimenter, who, therefore, can study both whether there is truth or misreporting and, in the latter case, the extent of misreporting. Treatments vary the loss for group members compared to the loss for an individual addressee. We find that groups are never lied to more than individual addressees. When considering how much to deviate from the truth, liars are sensitive to a decreasing loss at the individual level but do not care for an increasing loss at the group level. Groups of different sizes are treated similarly. Social image concerns may explain the results.

This paper examines how choice architecture shapes retirement planning decisions in India’s National Pension System (NPS) — “All Citizens Model”. The study investigates whether enrolment decisions are driven by rational economic calculations or by the system’s behavioural design. Using a qualitative approach, in-depth interviews with 15 NPS subscribers were analysed through reflexive thematic analysis via MAXQDA software. Tax incentives emerged as the dominant enrolment factor, followed by government backing, peer influence, expert management, simplified registration, and protected returns. NPS structural features operating through financial utility and trust-building mechanisms exert the strongest influence on participation. The findings confirm the effectiveness of socially oriented, expertise-based, and risk-calibrated approaches grounded in prospect theory and bounded rationality. Policymakers should integrate behavioural insights alongside traditional economic incentives in pension scheme design. This study contributes to behavioural pension economics by empirically evaluating retirement choice architecture within a major emerging market context.

The prevalence of conspiracy theories is a concern in western countries, yet the phenomenon is rarely addressed in experimental economics. In two preregistered online studies (NStudy 1 = 97, NStudy 2 = 203) we examine the relationship between exposure to conspiracy modes of thinking, self-reported conspiracy mentality, self-reported manipulativeness, and behaviour in an economic game that measures strategic sophistication. Part of our design was based on Balafoutas et al. (2021), who found a positive relationship between exposure to conspiracy modes of thinking and strategic sophistication. Our results did not corroborate their findings in an online setting. Our measures of conspiracy mentality were modestly correlated with strategic sophistication in Study 2, but not in Study 1. Although we expected manipulativeness to be positively associated with both conspiracy mentality and strategic sophistication—thereby linking conspiracy mentality and strategic sophistication indirectly—it was only associated with conspiracy mentality.

The effectiveness of health recommendations and treatments depends on the extent to which individuals follow them. For each individual, medical adherence involves an inter-temporal trade-off between expected future health benefits and immediate effort costs. Therefore variation in time preferences may help us understand why and not least which people fail to follow health recommendations and treatments. We develop a novel, yet simple real-effort time-preference task implemented via text message among pregnant women in South Africa and show that behavior in the task predicts medical adherence. We find that planning to do the task with delay significantly lowers self-reported adherence to the recommendation of taking daily iron supplements during pregnancy. There is weaker indication that delaying the task longer than initially planned also negatively affects adherence. Together our results suggest that even simple measures of time preferences could help predict medication adherence and is a first step toward designing targeted policies to help improve medication adherence, healthcare outcomes, and welfare.

In various organizational settings, a team member is given the authority to make an investment decision that influences the value of the jointly produced surplus. We experimentally investigate the effect of asymmetric status, investment decisions, and the outcome of these decisions on bargaining behavior and outcomes. Agents’ initial contributions to the surplus are determined by their relative performances in a real-effort task. Three treatments vary in how the final surplus value is determined. We observe that when low-contributors take a risk, they are punished (rewarded) for failure (success), whereas high-contributors receive a fixed share independent of the outcome. Analysis of bargaining process variables, subjects’ communication during bargaining, and third parties’ normative judgments provides further insights into the possible mechanism behind this observation.

Large Language Models (LLMs) have the potential to profoundly transform and enrich experimental economic research. We propose a new software framework, “alter_ego”, which makes it easy to design experiments between LLMs and to integrate LLMs into oTree-based experiments with human subjects. Our toolkit is freely available at github.com/mrpg/ego. To illustrate, we run differently framed prisoner’s dilemmas with interacting machines as well as with human-machine interaction. Framing effects in machine-only treatments are strong and similar to those expected from previous human-only experiments, yet less pronounced and qualitatively different if machines interact with human participants.

Agents frequently engage with multiple principals simultaneously – for example, when borrowing from several banks or peers. In such settings, principals typically possess less information about the agent’s ability or intentions (e.g., to repay a loan) and must rely on trust. This paper presents experimental evidence from trust games framed in a credit market context to examine the role of reciprocity in interactions involving multiple principals (lenders) and a single agent (borrower). Agents were asked to decide whether to act trustworthily and repay, or to default and act selfishly, after receiving the same credit amount from either one or multiple principals. The results show that reciprocity declines when the number of trusting principals increases. A key mechanism appears to be the reduced marginal harm that an agent’s default imposes on each individual principal. Additionally, agents seem less sensitive to the negative consequences of their actions when multiple principals are affected. These findings suggest that interactions involving multiple principals are behaviorally riskier than bilateral ones. The results have implications for the design of incentive structures in multi-principal-agent environments, such as crowdlending platforms.

Recent studies showing that some outcome variables do not statistically significantly differ between real-stakes and hypothetical-stakes conditions have raised methodological challenges to experimental economics’ disciplinary norm that experimental choices should be incentivized with real stakes. I show that the hypothetical bias measures estimated in these studies do not econometrically identify the hypothetical biases that matter in most modern experiments. Specifically, traditional hypothetical bias measures are fully informative in ‘elicitation experiments’ where the researcher is uninterested in treatment effects (TEs). However, in ‘intervention experiments’ where TEs are of interest, traditional hypothetical bias measures are uninformative; real stakes matter if and only if TEs differ between stakes conditions. I demonstrate that traditional hypothetical bias measures are often misleading estimates of hypothetical bias for intervention experiments, both econometrically and through re-analyses of three recent hypothetical bias experiments. The fact that a given experimental outcome does not statistically significantly differ on average between stakes conditions does not imply that all TEs on that outcome are unaffected by hypothetical stakes. Therefore, the recent hypothetical bias literature does not justify abandoning real stakes in most modern experiments. Maintaining norms that favor completely or probabilistically providing real stakes for experimental choices is useful for ensuring externally valid TEs in experimental economics.

There is existing evidence that many individuals have preferences regarding selection of numbers in lottery games. Lottery data indicate that the percentage of players who choose their numbers, instead of having numbers randomly assigned, varies widely by lottery game. Differences in number selection mechanisms between games and an expected return maximization motive only present for parimutuel games are both reasons that can explain the variation. Differences in the payoff distributions between lottery games could also be contributing to the observed variation, a novel proposition. An experiment is designed to control for differences in number selection mechanisms and remove the expected return maximization motive, to test for the presence of distribution-dependent number preferences. Results indicate that 40% to 50% of subjects may display such preferences. It is therefore possible that distribution-dependent number preferences contribute to the empirical variation in number selection percentages in lottery games.

We experimentally study how individuals strategically disclose multidimensional information to a Naive Bayes algorithm trained to guess their characteristics. Subjects’ objective is to minimize the algorithm’s accuracy in guessing a target characteristic. We vary what participants know about the algorithm’s functioning and how obvious are the correlations between the target and other characteristics. Optimal disclosure strategies rely on subjects identifying whether the combination of their characteristics is common or not. Information about the algorithm functioning makes subjects identify correlations they otherwise do not see but also overthink. Overall, this information decreases the frequency of optimal disclosure strategies.

While almost all charities rely on a set of donor appreciation strategies, their effectiveness for the success of fundraising campaigns is underresearched. Through two preregistered field studies conducted in collaboration with a leading German opera house (N = 10,000), we explore the significance of expressing gratitude and examine two different approaches to doing so. Our first study investigates the impact of a ‘thank you in advance’ statement in fundraising letters, a common strategy among fundraisers. In the second study, we explore the effectiveness of handwritten thankyou postcards versus printed postcards, shedding light on the roles of personalization and handwriting in donor appeals. Our findings challenge conventional wisdom, revealing that neither ‘thank you in advance’ nor handwritten thank you notes significantly affect donor contributions.

Awards are widely used as incentives. This paper situates awards in the broader incentives landscape and shows how the motivational value of awards can be understood through a framework that considers three sources of value: the tangible component of an award, the social signals it emits, and its self-signaling function. We identify and discuss several major characteristics of awards through the lenses of these three dimensions: the audience, scarcity, the giver’s status, and the selection process. Based on our framework, we integrate the awards literature published across economics, psychology, management, and sociology journals to elucidate what has been learned and offer a roadmap for future experimental research on awards and incentives.

In recent years, there has been an increasing interest in motivated memory as a psychological determinant of economic outcomes. According to motivated memory, people tend to better recall pleasant information because it serves their psychological needs. Another phenomenon, however, predicts the same pattern: According to mood congruence, pleasant information is easier to recall for individuals in nonnegative mood, regardless of any psychological needs. Since most people tend to have some need for self-esteem and to experience more positive than negative feelings during the day, the two phenomena predict similar outcomes in most ordinary situations, but not all. To test the predictive power of these two phenomena, we collect data from a laboratory experiment and from a nationally representative survey. We study how individuals in a temporarily induced negative mood (via a video clip) or those who report a low baseline mood (relative to the population) recall negative feedback. Our results meet the predictions of motivated memory: Individuals better recall positive than negative feedback, even when they are in negative mood. Motivated memory is not just a matter of mood.

Amnon Rapoport made seminal contributions to research on investment decision-making and individual decision-making under risk. To build on his seminal work, this paper explores the impact of social influence on risk-taking. First, to build predictions for experimental testing, we modify a standard expected utility model by introducing a social norm variable. Using a standard 10-decision paired lottery choice task, we report the results from three experiments with different manipulations to test whether social influence information affects subjects’ own lottery choices. In Experiment 1, we find that participants are more likely to switch to choosing the risky option earlier if they are told that a large majority (>75%) of a large group (N = 100) of others have also chosen the risky option in the past. In Experiment 2, we find there is no effect if the social influence prompt is framed as a small group (N = 10) or the choice of one (N = 1) successful lottery participant, but there is an effect when participants are provided information about the consistently risky choices of one (N = 1) person in the past. In Experiment 3, using an in-person subject pool, we find some mixed effects on risk-taking when the social information is framed as a small group (N = 10) of peers (other students). Altogether, this paper demonstrates that social influence can impact risk-taking in line with a socially normed expected utility model.

Alternative disposable dinnerware treatments to per- and polyfluoroalkyl substances (PFAS) are under development. A discrete choice experiment of 1,304 U.S. consumers addressed the market’s response to bio-based alternatives. Information nudges were used to assess the impact of health and environmental information on behavior. Data were analyzed using mixed logit models. Bio-based treated plates generated premiums compared to the PFAS-treated plates. Participants exposed to either environmental or health information were willing to pay a price premium of $2.0-$2.12 for bio-based treatments. Both information nudges generated premiums for the USDA Certified Bio-based products relative to the control.

Many societies allocate wealth and status through competitions. These competitions may be seen as unfair if the playing field is uneven or if the competitors are of unequal strength. We run two experiments to document the extent to which people are willing to compete against others in situations with varying fairness concerns. In a between-subject experiment, we show that people’s willingness to compete is largely unaffected by the impact their choice has on the payoff of an opponent, no matter whether the opponent had a choice about whether to compete or not. In a within-subject experiment, we show that most people are willing to compete against opponents who have been exogenously disadvantaged or are known to be weaker. People who choose competition against weak or disadvantaged opponents are also more willing to give themselves an advantage by sabotaging the performance of their opponent.