“Off the Charts: Massive Unexplained Heterogeneity in a Global Study of Ambiguity Attitudes” (with multiple coauthors)
Review of Economics and Statistics 2018, accepted
Ambiguity attitudes have been indicated as important determinants of economic outcomes in economic models, but we still know little about the demographic cor- relates of ambiguity attitudes, or indeed about the universality of patterns found in the West. We analyse the ambiguity attitudes of almost 3000 students across 30 countries. For gains we find ambiguity aversion everywhere, while ambiguity aversion is much weaker for losses. We also find ambiguity attitudes to systematically change with probabilities for both gains and losses, reflecting ambiguity-insensitivity to probabilities. Much of the between-country variation can be explained through a few macroeconomic characteristics. In contrast, we find massive unexplained variation at the individual level, suggesting that individual differences in ambiguity attitudes remain difficult to explain. We also find much unexplained heterogeneity in individual responses to different decision tasks. We conclude by discussing potential issues underlying this heterogeneity, and indicating potential solutions. (link to publisher’s version, link to WP)
“Collusion in Multi-Object Auctions: Experimental Evidence” (with Jindřich Matoušek)
Eastern European Economics 2018, 56(1): 28-56
This article experimentally examines two complex multi-unit auction mechanisms—a simultaneous multi-round auction and its extension with combinatorial bidding—that offer the opportunity to communicate and thus collude. The general setting and parametrization originated in the 2013 Czech Spectrum Auction. The results suggest that the package bidding format does not bring higher efficiency. Strikingly, allowing for communication increases efficiency in the examined auction formats. A cheap-talk collusive agreement resulted in better allocation, as compared to the treatments without communication. The authors hypothesize that combinatorial bidding makes the decision- making of bidders too complicated and causes inefficiency, especially in auctions with large numbers of goods. (link to publisher’s version, link to WP).
“Risk preferences under acute stress” (with Jana Cahlíková)
Experimental Economics 2017, 20(1): 209-239
Many important decisions are made under stress and they often involve risky alternatives. There has been ample evidence that stress influences decision making, but still very little is known about whether individual attitudes to risk change with exposure to acute stress. To directly evaluate the causal effect of psychosocial stress on risk attitudes, we adopt an experimental approach in which we randomly expose participants to a stressor in the form of a standard laboratory stress-induction procedure: the Trier Social Stress Test for Groups. Risk preferences are elicited using a multiple price list format that has been previously shown to predict risk-oriented behavior out of the laboratory. Using three different measures (salivary cortisol levels, heart rate and multidimensional mood questionnaire scores), we show that stress was successfully induced on the treatment group. Our main result is that for men, the exposure to a stressor (intention-to-treat effect, ITT) and the exogenously induced psychosocial stress (the average treatment effect on the treated, ATT) significantly increase risk aversion when controlling for their personal characteristics. The estimated treatment difference in certainty equivalents is equivalent to 69 % (ITT) and 89 % (ATT) of the gender-difference in the control group. The effect on women goes in the same direction, but is weaker and insignificant.
(link to publisher’s version, link to WP)
“Testing Theories of Secularization and Religious Belief in the Czech Republic and Slovakia” (with Aiyana Koka Willard)
Evolution and Human Behavior 2017, 38(5) p. 604-615
Several theoretical approaches have been proposed to explain variation in religiosity, including versions of secularization hypotheses, evolved cognitive biases, and cultural transmission. In this paper we test several theories that aim to explain variation in religiosity and compare them in a representative sample collected in the Czech Republic and Slovakia (N = 2022). These two countries represent a natural experiment in religiosity; despite their high level of historical, institutional and cultural similarity, their populations differ markedly in the rate of religious belief. We examine the predictive power of cognitive biases (anthropomorphism, dualism, teleology, mentalizing, and analytic thinking); institutional insecurity; and exposure to credibility displays of belief in childhood on various factors of religious belief. We find that individual differences in cognitive biases predicted 8% of the variance belief in God, but predicted 21% of the variance in paranormal beliefs and almost no variance in religious participation. Perceived institutional insecurity explains little variance in any of these variables, but cultural transmission, measured as exposure to credibility enhancing displays (CREDs) and church attendance in childhood, predicted 17% of the variance in belief in God and 30% of religious participation, and mediated 70% of the difference between these two countries in belief in God and 80% of the difference in religious practice. These findings suggest cognitive biases may explain the existence of belief in the supernatural generally, but cultural transmission through credible belief displays is a more plausible explanation for why people adopt and maintain a specific set of religious beliefs and practices.
“Does Herd Behaviour Arise Easier Under Time Pressure? Experimental Approach”
Prague Economic Papers: 22(4)
In this paper I explain individual propensity to herding behaviour and its relationship to time-pressure by conducting a laboratory experiment. I let subjects perform a simple cognitive task with the possibility to herd under different levels of time pressure. In the main treatments, subjects had a chance to revise their decision after seeing decisions of others, which I take as an indicator of herding behaviour. The main findings are that the propensity to herd was not significantly influenced by different levels of time pressure, although there could be an indirect effect through other variables, such as the time subjects spent revising the decision. Heart-rate significantly increased over the baseline during the performance of a task and its correlation to the subjectively stated level of stress was positive but very weak, which suggests that time pressure may not automatically induce stress but increase effort instead.