Consumers typically overstate their intentions to purchase products, compared to actual rates of purchases, a pattern called “hypothetical bias”. In laboratory choice experiments, we measure participants’ visual attention using mousetracking or eye-tracking, while they make hypothetical as well as real purchase decisions. We find that participants spent more time looking both at price and product image prior to making a real “buy” decision than making a real “don’t buy” decision. We demonstrate that including such information about visual attention improves prediction of real buy decisions. This improvement is evident, although small in magnitude, using mousetracking data, but is not evident using eye-tracking data.

The famous linguistic-savings hypothesis states that languages that grammatically separate the future from the present (like English) causally induce less future-oriented behavior than languages in which speakers can refer to the future using present tense (like German or Chinese). Chen et al., European Economic Review 120 (2019) experimentally investigate the effect of using future-oriented language on incentivized intertemporal choices and find no support for the hypothesis. We replicate Chen et al., European Economic Review 120 (2019)’s study in the German-speaking context. In our experiment with 332 subjects, we randomly refer to future payments using present or future tense and find no causal effect of language on intertemporal choice. Given the importance of replications for confidence in scientific findings, our results provide corroborating evidence that the linguistic-savings hypothesis is not empirically tenable. Eventually, the results provide a methodological contribution to the conduct of experiments.

Misreporting—a form of lying—is common in online labor and remote work settings. We execute an experiment on Amazon MTurk to determine how ex-ante honesty oaths and worker beliefs impact lying behavior across a range of plausible and implausible lies. Using a novel quantile-style exposition of the types of lies reported, we find that oaths elicit more truthful behavior, reducing both small, plausible lies and large, implausible ones. Shirking is reduced under oath. Worker expectations of group reporting are positively related to individual reporting of plausible lies.

We convey our experiences developing and implementing an online experiment to elicit subjective beliefs and economic preferences. The COVID-19 pandemic and associated closures of our laboratories required us to conduct an online experiment in order to collect beliefs and preferences associated with the pandemic in a timely manner. Since we had not previously conducted a similar multi-wave online experiment, we faced design and implementation considerations that are not present when running a typical laboratory experiment. By discussing these details more fully, we hope to contribute to the online experiment methodology literature at a time when many other researchers may be considering conducting an online experiment for the first time. We focus primarily on methodology; in a complementary study we focus on initial research findings.

This article surveys the rapidly growing literature that examined the influence of Covid-19 on preferences. Based on 33 studies, the article examines how the pandemic impacted altruism, cooperation, trust, inequity aversion, risk-taking, and patience/time discounting. Even though the survey suggests the effect of the pandemic on preferences is heterogeneous, some noticeable patterns can be observed in the literature. First, in the case of incentivized preference elicitation, there is weak evidence that the pandemic positively influenced altruism and had no significant impact on time preferences or patience. Second, many studies that used balanced panel data and incentivized preference elicitation mechanisms do not find a significant effect of the pandemic on preferences. Last, studies that used unincentivized methods to elicit preferences show relatively higher variability in results when compared to the studies that used incentivized methods for preference elicitation. The organized synthesis and several noticeable patterns can help future research focusing on preference stability during Covid-19 and other unfavorable events.

Loss framing and checklist formatting are two oft-cited tools for encouraging behavior change, but there is little causal evidence on their impact in field settings. We partnered with the City of Philadelphia to test the effectiveness of these tools to increase completion of the City’s wellness program. In our experiment, 5235 City employees and retirees were randomly assigned to receive one of four postcard versions (using a 2 × 2 design), whereby we varied both framing (gain or loss) and how instructions were provided (information only or information in checklist format). Our results suggest that neither loss framing nor the checklist formatting significantly influenced the likelihood that individuals would complete the wellness tasks, or how quickly they completed the tasks. We conclude that this specific form of employee behavior may be difficult to influence through the “passive” behavioral interventions we tested, and suggest that a more “active” approach may be required in such instances.

Spectator games have emerged as a tool for measuring equality preferences. To measure equality preferences, the spectators are matched with a pair of stakeholders who have been allocated unequal endowments. The spectators decide how much to redistribute from one stakeholder’s endowment to the other one. We conducted a spectator experiment in which we fixed the spectators’ redistribution choice set and varied context of the “no distribution” choice. We found a strong effect of the context variation. The spectators who chose not to redistribute the stakeholders’ endowments increased from 12.3 to 38.0% in the treatment, making “no redistribution” more salient.

While people are surprisingly cooperative in social dilemmas, cooperation is fragile to the emergence of defection. Punishment is a key mechanism through which people sustain cooperation, but when are people willing to pay the costs to punish? Using data from existing work on punishment in public goods games conducted in industrialized countries throughout the world (Herrmann et al. in Science, 319(5868):1362–1367, 2008. https://doi.org/10.1126/science.1144237), I find first that those who contribute more are consistently punished less. Second, in many study locations, there are insignificant differences in the propensity of those who contribute and defect to punish. Finally, those who contribute and defect both carry out punishment against defectors. Some defectors do punish cooperators, but less often than they punish other defectors. The determinants of punishment are largely consistent across cities.

We study the robustness of Krupka and Weber's method (2013) for eliciting social norms. In two online experiments with more than 1200 participants on Amazon Mechanical Turk, we find that participants’ response patterns are invariant to differences in the salience of the monetarily incentivized coordination aspect. We further demonstrate that asking participants for their personal first- and second-order beliefs without monetary incentives results in qualitatively identical responses in the case that beliefs and social norms are well aligned. Overall, Krupka and Weber's method produces remarkably robust response patterns.

Recent work has argued for a Hayekian behavioural economics, which combines Austrian economics with behavioural economics as developed by Kahneman, Thaler, Sunstein, and others. We suggest that this hybrid is misguided because it relies on individual cognitivism. This view of cognition is incompatible with the Hayekian view of cognition which treats rationality as an emergent phenomenon of social interaction in an institutional environment. This Hayekian view, which we call epistemic institutionalism, is compatible with an alternative prominent perspective in psychology, that of the extended mind, sometimes known as 4E cognition. We demonstrate how the Hayekian perspective on individualism, the price system, and the evolution of rules can be connected to the extended mind programme, through concepts such as the coupling of the individual and their environment, cognitive off-loading, and affordances. We suggest that this alternative combination of Austrian economics and psychology provides a more fruitful way forward, especially because it foregrounds the processes of learning, error-correction, and institutional orders, rather than choice, bias, and individual rationality. To explain why Austrian economists have been receptive to behavioural economics, we distinguish epistemic institutionalism from the (radical) subjectivist approach, which shares key assumptions of individual cognitivism.

It is now abundantly clear that social norms channel behaviour and impact economic development. This insight leads to the question: How do social norms evolve? In a companion paper (Voigt (2023). Journal of Institutional Economics, 20), I survey studies showing that geographical conditions can have direct and long-lasting effects on social norms. This paper goes one step further: It surveys studies that show how different geographical conditions affect both religious beliefs as well as traditions of family organization and how these, in turn, affect social norms.

We propose a methodology for normative evaluation when preferences are context-dependent. We offer a precise definition of context-dependence and formulate a normative criterion of self-determination, according to which one situation is better than another if individuals are aware of more potential contexts of a choice problem. We provide two interpretations of our normative approach: an extension of Sugden’s opportunity criterion and an application of Sen’s positional views in his theory of justice. Our proposition is consistent with Muldoon’s and Gaus’ approaches of public reason in social contract theory, which account for the diversity of perspectives in non-ideal worlds.

It is now abundantly clear that social norms channel behaviour and impact economic development. This insight leads to the question: How do social norms evolve? This survey examines research that relies on geography to explain the development of social norms. It turns out that many social norms are either directly or indirectly determined by geography broadly conceived and can, hence, be considered largely time invariant. Given that successful economic development presupposes the congruence between formal institutions and social norms, this insight is highly relevant for all policy interventions designed to foster economic development. In a companion paper, the role of religion and family organization as potential mediators between geography and social norms assumes centre stage.

We study a retirement savings plan with a default contribution rate of 12 percent of income, which is much higher than previously studied defaults. Twenty-five percent of employees had not opted out of this default 12 months after hire; a literature review finds that the corresponding fraction in plans with lower defaults is approximately one-half. Because only contributions above 12 percent were matched by the employer, 12 percent was likely to be a suboptimal contribution rate for employees. Employees who remained at the 12 percent default contribution rate had average income that was approximately one-third lower than would be predicted from the relationship between salaries and contribution rates among employees who were not at 12 percent. Defaults may influence low-income employees more strongly in part because these employees face higher psychological barriers to active decision making.

The current unsustainable growth of the world economy is largely a consequence of the crisis of social capital experienced by much of the world’s population. Declining social capital leads economies towards excessive growth, because people seek, in economic affluence, compensation for emotional distress and loss of resources caused by scarce social and affective relationships. To slow down economic growth requires an increase in social capital that is a fundamental contributor to happiness. From a wide range of possible approaches to increasing present happiness, this article suggests policies that would shift the economy to a more sustainable path. It focuses on a more politically sustainable set of proposals for a green ‘new deal’ than some of those currently under discussion.

We are now close to reaching what climate scientists advise is a ‘tipping point’ when the injuries we have visited on the planet will become self-reinforcing and produce an ecosystem that is alien to human life. The mal-distribution of consumption within and between nations is a major reason why there is little agreement on appropriate remedial action. Ensuring planetary survival while reducing inequity is made the more difficult, because the richest one-seventh of the world’s population has already reached consumption levels beyond the capacity of the planetary ecosystem to accommodate it.

The aim of this article is to better understand how judgements about nudge acceptability are formed and whether they can be manipulated. We conducted a randomized experiment with N = 171 participants to test whether acceptability judgements could be (1) more favourable when the decision to implement the nudges was made following a consultation with the targeted population and (2) influenced by the joint framing of the nudge's purpose and effectiveness (in terms of an increase in desirable behaviour versus decrease in undesirable behaviour). We tested these hypotheses on various nudge scenarios and obtained mixed results that do not clearly support our hypotheses for all nudge scenarios. A surprising result that calls for further work is that by mentioning that a nudge had been implemented through a consultation with the targeted population its acceptability could be lowered.

Recently several authors have proposed proxies of welfare that equate some (as opposed to all) choices with welfare. In this paper, I first distinguish between two prominent proxies: one based on context-independent choices and the other based on reason-based choices. I then propose an original proxy based on choices that individuals state they would want themselves to repeat at the time of the welfare/policy evaluation (confirmed choices). I articulate three complementary arguments that, I claim, support confirmed choices as a more reliable proxy of welfare than context-independent and reason-based choices. Finally, I discuss the implications of these arguments for nudges and boosts.

In a novel experimental design, we investigate the impact of exogenous variation in economic growth and inequality on trusting behaviour. In addition to a control with uniform endowment, three treatments were implemented where the initial endowment is exogenously changed to produce inequality and three growth scenarios where average endowments increase (boom), decrease (recession) or remain unaltered (steady state). We find that aggregate trust and trustworthiness both decrease due to the induced heterogeneity in endowments. Also, trust (but not trustworthiness) decreases (increases) due to recessions (booms). The impact of inequality on trust is greatest in a recession and absent in a boom. These aggregate effects are driven mainly by the reactions of those who, after treatment, end up at the bottom of the endowment distribution. These findings are close in sign and in the order of magnitude to those reported in observational studies on the relationship between growth, inequality and trust.

Social discounting conventions vary widely. Some differences reflect institutional constraints, but many reflect differing assumptions about how a social discount rate should be derived and applied. The divide between advocates of social opportunity cost and social time preference (STP) frameworks seems unbridgeable. There is no consensus among STP advocates on whether the social cost of funding $1 of public spending is barely more than $1 of consumption or perhaps more than $2; or on whether the covariance of public service benefits with income merits a discount rate premium that is trivial or a few percentage points. The practicalities of government fund raising are sometimes overlooked. The issues are here reviewed in the light of the literature and of experience with developing and applying social discounting regimes and extended debates within government.