Research

People face a fundamental trade-off between savouring consumption in the present and processing information. Both require attention, which is limited. As a result, directing attention to one necessarily comes at the expense of the other. We study this attentional opportunity cost, focusing on cases where information concerns potentially distressing future outcomes. Across four experiments, we find that higher present consumption reduces demand for such information and increases willingness to pay for risk mitigation. These findings have implications for models of anticipatory utility, self-regulation under limited attention and the political economy of distraction—helping to explain, for instance, why political actors might suppress demand for information by offering ‘bread and circuses’.

We present evidence that intrinsic demand for information about the future is increasing in expected future consumption utility. In the first experiment, subjects may resolve a lottery now or later. The information is useless for decision making, but the larger the reward, the more likely subjects are to pay to resolve the lottery early. In the second experiment, subjects may pay to avoid being tested for herpes simplex virus type 1 (HSV-1) and the more highly feared type 2 (HSV-2). Subjects are three times more likely to avoid testing for HSV-2, suggesting that more aversive outcomes lead to more information avoidance. In a third experiment, subjects make choices about when to get tested for a fictional disease. Some subjects behave in a way consistent with expected utility theory, and others exhibit greater delay of information for more severe diseases. We also find that information choice is correlated with positive affect, ambiguity aversion, and time preference, as some theories predict.

People face a fundamental trade-off between savouring consumption in the present and processing information. Both require attention, which is limited. As a result, directing attention to one necessarily comes at the expense of the other. We study this attentional opportunity cost, focusing on cases where information concerns potentially distressing future outcomes. Across four experiments, we find that higher present consumption reduces demand for such information and increases willingness to pay for risk mitigation. These findings have implications for models of anticipatory utility, self-regulation under limited attention and the political economy of distraction—helping to explain, for instance, why political actors might suppress demand for information by offering ‘bread and circuses’.

Meat consumption is associated with environmental and animal-welfare harms, and many people consume more than is healthy. Past research has shown that conflicted consumers manage their beliefs in a variety of domains. Based on two independent studies, we test whether eating meat affects people’s preferences for information about the environmental, animal-welfare, and health harms of meat, as well as the alleged environmental benefits of animal agriculture. Our findings are mixed. Eating beef causes information avoidance about the environmental effects of cattle, and eating pork causes people to avoid information about the health effects of pork. Other results were not significant. We interpret these mixed results as suggesting that eating meat causes information avoidance, but the effects are nuanced as they are meat-specific and topic-specific. This project combines the independent explorations of two teams regarding the same research question. The joint conclusion reached differs from the initial independent conclusions. Consequently, this paper also serves as a case study about the sensitivity of scientific interpretation to experimental design.

We present evidence that intrinsic demand for information about the future is increasing in expected future consumption utility. In the first experiment, subjects may resolve a lottery now or later. The information is useless for decision making, but the larger the reward, the more likely subjects are to pay to resolve the lottery early. In the second experiment, subjects may pay to avoid being tested for herpes simplex virus type 1 (HSV-1) and the more highly feared type 2 (HSV-2). Subjects are three times more likely to avoid testing for HSV-2, suggesting that more aversive outcomes lead to more information avoidance. In a third experiment, subjects make choices about when to get tested for a fictional disease. Some subjects behave in a way consistent with expected utility theory, and others exhibit greater delay of information for more severe diseases. We also find that information choice is correlated with positive affect, ambiguity aversion, and time preference, as some theories predict.

Meat consumption is associated with environmental and animal-welfare harms, and many people consume more than is healthy. Past research has shown that conflicted consumers manage their beliefs in a variety of domains. Based on two independent studies, we test whether eating meat affects people’s preferences for information about the environmental, animal-welfare, and health harms of meat, as well as the alleged environmental benefits of animal agriculture. Our findings are mixed. Eating beef causes information avoidance about the environmental effects of cattle, and eating pork causes people to avoid information about the health effects of pork. Other results were not significant. We interpret these mixed results as suggesting that eating meat causes information avoidance, but the effects are nuanced as they are meat-specific and topic-specific. This project combines the independent explorations of two teams regarding the same research question. The joint conclusion reached differs from the initial independent conclusions. Consequently, this paper also serves as a case study about the sensitivity of scientific interpretation to experimental design.

Evidence on the impact of information campaigns on meat consumption patterns is limited. Here, using a dataset of more than 100,000 meal selections over 3 years, we examine the long-term effects of an informational intervention designed to increase awareness about the role of meat consumption in climate change. Students randomized to the treatment group reduced their meat consumption by 5.6 percentage points with no signs of reversal over 3 years. Calculations indicate a high return on investment even under conservative assumptions (~US$14 per metric ton CO₂eq). Our findings show that informational interventions can be cost effective and generate long-lasting shifts towards more sustainable food options.

Social movements have driven large shifts in public attitudes and values, from anti-slavery to marriage equality. A central component of these movements is moral persuasion. We conduct a randomized-controlled trial of pro-vegan animal-welfare pamphlets at a college campus. We observe the effect on meat consumption using an individual-level panel data set of approximately 200,000 meals. Our baseline regression results, spanning two academic years, indicate that the pamphlet had no statistically significant long-term aggregate effects. However, as we disaggregate by gender and time, we find small statistically significant effects within the semester of the intervention: a 2.4 percentage-point reduction in poultry and fish for men and a 1.6 percentage-point reduction in beef for women. The effects disappear after 2 months. We merge food purchase data with survey responses to examine mechanisms. Those participants who (i) self-identified as vegetarian, (ii) reported thinking more about the treatment of animals or (iii) expressed a willingness to make big lifestyle changes reduced meat consumption during the semester of the intervention. Though we find significant effects on some subsamples in the short term, we can reject all but small treatment effects in the aggregate.

Meat consumption is a major driver of climate change. Interventions that reduce meat consumption may improve public health and promote environmental sustainability. We conducted a randomized controlled trial to examine the effects of an awareness-raising intervention on meat consumption. We randomized undergraduate classes into treatment and control groups. Treatment groups received a 50-minute lecture on how food choices affect climate change, along with information about the health benefits of reduced meat consumption. Control classrooms received a lecture on a placebo topic. We analyzed 49,301 students’ meal purchases in the college dining halls before and after the intervention. We merged food purchase data with survey data to study heterogenous treatment effects and disentangle mechanisms. Participants in the treatment group reduced their purchases of meat and increased their purchases of plant-based alternatives after the intervention. The probability of purchasing a meat-based meal fell by 4.6 percentage points (p < 0.01), whereas the probability of purchasing a plant-based meal increased by 4.2 percentage points (p = 0.04). While the effects were stronger during the semester of the intervention, dietary shifts persisted and remained statistically significant through the full academic year. Our study provides evidence that an intervention based on informing consumers and encouraging voluntary shifts can effectively reduce the demand for meat. Our findings help to inform the international food policy debate on how to counter rising global levels of meat consumption to achieve climate change goals. To our knowledge, our study is the first to assess the effectiveness of an educational intervention to reduce meat consumption using such high-quality data (i.e. individual-level food purchases) over a prolonged period.

Evidence on the impact of information campaigns on meat consumption patterns is limited. Here, using a dataset of more than 100,000 meal selections over 3 years, we examine the long-term effects of an informational intervention designed to increase awareness about the role of meat consumption in climate change. Students randomized to the treatment group reduced their meat consumption by 5.6 percentage points with no signs of reversal over 3 years. Calculations indicate a high return on investment even under conservative assumptions (~US$14 per metric ton CO₂eq). Our findings show that informational interventions can be cost effective and generate long-lasting shifts towards more sustainable food options.

Social movements have driven large shifts in public attitudes and values, from anti-slavery to marriage equality. A central component of these movements is moral persuasion. We conduct a randomized-controlled trial of pro-vegan animal-welfare pamphlets at a college campus. We observe the effect on meat consumption using an individual-level panel data set of approximately 200,000 meals. Our baseline regression results, spanning two academic years, indicate that the pamphlet had no statistically significant long-term aggregate effects. However, as we disaggregate by gender and time, we find small statistically significant effects within the semester of the intervention: a 2.4 percentage-point reduction in poultry and fish for men and a 1.6 percentage-point reduction in beef for women. The effects disappear after 2 months. We merge food purchase data with survey responses to examine mechanisms. Those participants who (i) self-identified as vegetarian, (ii) reported thinking more about the treatment of animals or (iii) expressed a willingness to make big lifestyle changes reduced meat consumption during the semester of the intervention. Though we find significant effects on some subsamples in the short term, we can reject all but small treatment effects in the aggregate.

Meat consumption is a major driver of climate change. Interventions that reduce meat consumption may improve public health and promote environmental sustainability. We conducted a randomized controlled trial to examine the effects of an awareness-raising intervention on meat consumption. We randomized undergraduate classes into treatment and control groups. Treatment groups received a 50-minute lecture on how food choices affect climate change, along with information about the health benefits of reduced meat consumption. Control classrooms received a lecture on a placebo topic. We analyzed 49,301 students’ meal purchases in the college dining halls before and after the intervention. We merged food purchase data with survey data to study heterogenous treatment effects and disentangle mechanisms. Participants in the treatment group reduced their purchases of meat and increased their purchases of plant-based alternatives after the intervention. The probability of purchasing a meat-based meal fell by 4.6 percentage points (p < 0.01), whereas the probability of purchasing a plant-based meal increased by 4.2 percentage points (p = 0.04). While the effects were stronger during the semester of the intervention, dietary shifts persisted and remained statistically significant through the full academic year. Our study provides evidence that an intervention based on informing consumers and encouraging voluntary shifts can effectively reduce the demand for meat. Our findings help to inform the international food policy debate on how to counter rising global levels of meat consumption to achieve climate change goals. To our knowledge, our study is the first to assess the effectiveness of an educational intervention to reduce meat consumption using such high-quality data (i.e. individual-level food purchases) over a prolonged period.

The canonical direct-elicitation approach for measuring individuals’ valuations for goods is the Becker-DeGroot-Marschak procedure, which generates willingness-to-pay (WTP) values that are imprecise and systematically biased. We show that enhancing elicited WTP values with supervised machine learning (SML) can improve estimates of peoples’ out-of-sample purchase behavior. Furthermore, swapping WTP data with choice data generated from a simple task leads to comparable performance. We quantify the benefit of using various SML methods in conjunction with using different types of data. Our results suggest that prices set by SML would increase revenue by 29 percent over using the stated WTP, with the same data.

Time preferences and risk preferences play an important role in a wide range of behavior, including financial decisions, entrepreneurship, and the proper incentivizing of agents. Numerous methods have been developed to measure these preferences hypothetically in surveys, but they have yielded inconsistent results. We analyze a panel data set in which subjects have collectively answered more than 400 surveys including 15 time-preference and 36 risk-preference elicitations. We evaluate the performance of these measures using the criteria of (1) ability to predict economically important behavior and (2) distinctness from other observables. We find substantial heterogeneity in the predictiveness of the measures. The best performing measure for time-preference is a titration method, in which a sequence of adaptive binary-choice questions narrows in on a subject’s indifference point, and for risk-preference it is a self-report measure of risk aversion. Using factor analysis, we find that time preferences are well explained by a single factor, but risk preferences load on multiple factors. However, the first factor loads almost entirely on self-reported risk-preference measures, and this factor explains much of the variation. The evidence can help inform researchers about which elicitation methods to include in their surveys.

We conduct a randomized controlled trial to understand how a web-based retirement saving calculator affects workers’ retirement-savings decisions. In both the treatment and active control conditions, the calculator projects workers’ retirement income goal. In the treatment condition only, it also projects retirement income based on defined-contribution savings, prominently displays the gap between projected goal and actual retirement income, and allows users to interactively explore how alternative, future contribution choices would affect the gap. The treatment increased average annual retirement contributions by $174 (2.3 percent). However, effects were larger for those with higher measures of financial knowledge, suggesting this type of tool complements, rather than substitutes for, underlying financial capability.

Defaults have been shown to have a powerful effect on retirement saving behavior yet there is limited research on who is most affected by defaults and whether this varies based on features of the choice environment. Using administrative data on employer-sponsored retirement accounts linked to survey data, we estimate the relationship between retirement saving choices and individual characteristics – long-term discounting, present bias, financial literacy, and exponential-growth bias – under two distinct choice environments: an opt-in regime and an auto-enrollment regime. Consistent with our conceptual model, we find that the determinants of following the default and contribution behavior are regime-specific. Under the opt-in regime, financial literacy plays an important role in predicting total contributions, active saving choices, and maxing out contributions in the tax-preferred account. In contrast, under the auto-enrollment regime, present bias is the most significant behavioral predictor of contribution behavior. A causal interpretation of the estimates suggests that auto-enrollment increases saving primarily among those with low financial literacy.

In a nationally representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present over the future, are highly significant and economically meaningful predictors of retirement savings. These relationships hold controlling for cognitive ability, financial literacy, and a rich set of demographic controls. We address measurement error as a potential confound and explore mechanisms through which these biases may operate. Back of the envelope calculations suggest that eliminating EGB and PB would increase retirement savings by approximately 12%. (JEL D91, D14)

Exponential-growth bias (EGB) is the tendency to neglect the power of compounding interest, which has been found to be widespread in the population. A person with EGB will misperceive the intertemporal budget constraint, overestimating lifetime wealth and underestimating the differences in the cost of consumption across periods. We test five comparative static predictions implied by EGB: (1) compound interest will increase consumption when the elasticity of intertemporal substitution is greater than 1; (2) higher interest rates lead to more compounding and hence increase consumption; (3) budget-neutral delays in income will increase consumption; (4) the person will exhibit a form of dynamic inconsistency that depends solely on the current account balance and is independent of time preferences; and (5) framing the frequency of interest in shorter units increases consumption. We test these predictions using an induced-value consumption–savings experiment in the laboratory, and find evidence in support of all predictions against the rational benchmark. We consider rules of thumb as alternative hypotheses and find that they cannot explain the results, although they contribute to some findings.

There is increasing evidence that people underestimate the magnitude of compounding interest. However, if people were aware of their inability to make such calculations they should demand services to ameliorate the consequences of such deficiencies. In a laboratory experiment, we find that people exhibit substantial exponential-growth bias but, more importantly, that they are overconfident in their ability to answer questions that involve exponential growth. They also exhibit overconfidence in their ability to use a spreadsheet to answer these questions. This evidence explains why a market solution to exponential-growth bias has not been forthcoming. Biased individuals have suboptimally low demand for tools and services that could improve their financial decisions.

Exponential-growth bias is the tendency to neglect the compounding of interest. The economics literature has used the fact that a biased agent in many circumstances will underestimate the value of assets that grow according to compound interest. We show that the opposite can also be true. It is always possible to make an agent who underestimates exponential growth to overestimate the value of an asset that grows exponentially. This paradoxical phenomenon arises when interest rates vary over time. This gives rise to the averaging effect of exponential-growth bias, which causes agents to perceive the mean return to exceed the true mean. Consequently, biased agents will strictly prefer assets with time-varying returns over equivalent constant-return assets. With sufficient variation in returns any biased agent will overestimate the true value of an asset for any time horizon.

Exponential-growth bias (EGB) is the tendency for individuals to partially neglect compounding of exponential growth. We develop a model wherein biased agents misperceive the intertemporal budget constraint, and derive conditions for overconsumption and dynamic inconsistency. We construct an incentivized measure of EGB in a US-representative population and find substantial bias, with approximately one-third of subjects estimated as the fully-biased type. The magnitude of the bias is negatively associated with asset accumulation, and does not respond to a simple graphical intervention. (JEL: D03, D11, D12, D14, D18, D91, E21)

We conduct a randomized controlled trial to understand how a web-based retirement saving calculator affects workers’ retirement-savings decisions. In both the treatment and active control conditions, the calculator projects workers’ retirement income goal. In the treatment condition only, it also projects retirement income based on defined-contribution savings, prominently displays the gap between projected goal and actual retirement income, and allows users to interactively explore how alternative, future contribution choices would affect the gap. The treatment increased average annual retirement contributions by $174 (2.3 percent). However, effects were larger for those with higher measures of financial knowledge, suggesting this type of tool complements, rather than substitutes for, underlying financial capability.

Defaults have been shown to have a powerful effect on retirement saving behavior yet there is limited research on who is most affected by defaults and whether this varies based on features of the choice environment. Using administrative data on employer-sponsored retirement accounts linked to survey data, we estimate the relationship between retirement saving choices and individual characteristics – long-term discounting, present bias, financial literacy, and exponential-growth bias – under two distinct choice environments: an opt-in regime and an auto-enrollment regime. Consistent with our conceptual model, we find that the determinants of following the default and contribution behavior are regime-specific. Under the opt-in regime, financial literacy plays an important role in predicting total contributions, active saving choices, and maxing out contributions in the tax-preferred account. In contrast, under the auto-enrollment regime, present bias is the most significant behavioral predictor of contribution behavior. A causal interpretation of the estimates suggests that auto-enrollment increases saving primarily among those with low financial literacy.

In a nationally representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present over the future, are highly significant and economically meaningful predictors of retirement savings. These relationships hold controlling for cognitive ability, financial literacy, and a rich set of demographic controls. We address measurement error as a potential confound and explore mechanisms through which these biases may operate. Back of the envelope calculations suggest that eliminating EGB and PB would increase retirement savings by approximately 12%. (JEL D91, D14)

We hypothesize that clothes can affect the behavior of the wearer by influencing the person’s identity. We test this hypothesis by recruiting trick-or-treaters during Halloween, a time of year when people wear salient and extreme clothing. Because the tradition of costume-wear for Halloween evolved, in part, to hide one’s identity during “tricks” (i.e. norm violations), we measure the effect of Halloween costumes on ethical behavior. We use the lying game of Fischbacher and Föllmi–Heusi as our experimental paradigm with 2 × 3 × 2 conditions. First, we vary the stakes to price lying behavior. Second, we run three conditions with different beneficiaries of the report (self, other, and both) to test whether lying for others is perceived to be normative. Third, we manipulate the salience of one’s costume to test the effect of costume and identity on ethical behavior. Surprisingly, we find that costume salience caused “good guys” to lie more and “bad guys” to lie less. We interpret this either as a moral licensing effect or as stemming from a perception of being monitored. Our design allows for the identification of contagion effects, and although there were no direct effects of gender, we found that children lie more when children of the same gender near them lie more. We also find that stakes had no effect, people lied more for themselves than for others, and lying has an inverted-U pattern over age, peaking at age 12.

A large fraction of microbial life on earth exists in complex communities where metabolic exchange is vital. Microbes trade essential resources to promote their own growth in an analogous way to countries that exchange goods in modern economic markets. Inspired by these similarities, we developed a framework based on general equilibrium theory (GET) from economics to predict the population dynamics of trading microbial communities. Our biotic GET (BGET) model provides an a priori theory of the growth benefits of microbial trade, yielding several novel insights relevant to understanding microbial ecology and engineering synthetic communities. We find that the economic concept of comparative advantage is a necessary condition for mutualistic trade. Our model suggests that microbial communities can grow faster when species are unable to produce essential resources that are obtained through trade, thereby promoting metabolic specialization and increased intercellular exchange. Furthermore, we find that species engaged in trade exhibit a fundamental tradeoff between growth rate and relative population abundance, and that different environments that put greater pressure on group selection versus individual selection will promote varying strategies along this growth-abundance spectrum. We experimentally tested this tradeoff using a synthetic consortium of Escherichia coli cells and found the results match the predictions of the model. This framework provides a foundation to study natural and engineered microbial communities through a new lens based on economic theories developed over the past century.

It has been observed that industries self-regulate to placate a regulator from taking action, and revolutionary vanguards sometimes provoke an apathetic populace into revolt. This paper presents a very simple model that captures this strategic maneuvering, and applies it to several other examples. Two players have preferences over the realization of a policy; the first player has a marginal cost to affect the policy and the second player has a fixed cost. The fixed cost provides strategic incentives for the first mover to placate or provoke the second player. In equilibrium, the second mover may benefit from having preferences that diverge more from the first mover, and may benefit by having higher fixed costs. As the number of first movers increases, placation and provocation both become more likely, and the second player’s incentives to occlude or reveal its fixed cost become stronger as well.

We investigate how the increased availability of a factor of production can make an overconfident agent worse off. In our model, two effects drive this result. First, when a production factor and ability are complements in the production function, the agent may overpay for the production factor. Second, the acquisition of this factor will distort the agent’s choice of what activities to pursue. In contrast, when the factor and ability are substitutes, the agent will undervalue the factor. In a laboratory experiment we find that subjects overpay for ability-complements, and underpay for ability-substitutes. Subjects provided with free ability-complements earn less due to how it distorts the subjects’ perceptions of what activity to pursue.

There is increasing evidence that people underestimate the magnitude of compounding interest. However, if people were aware of their inability to make such calculations they should demand services to ameliorate the consequences of such deficiencies. In a laboratory experiment, we find that people exhibit substantial exponential-growth bias but, more importantly, that they are overconfident in their ability to answer questions that involve exponential growth. They also exhibit overconfidence in their ability to use a spreadsheet to answer these questions. This evidence explains why a market solution to exponential-growth bias has not been forthcoming. Biased individuals have suboptimally low demand for tools and services that could improve their financial decisions.

We elicit subjects’ beliefs about the likelihood that they will redeem a mail-in form. Expected redemption rates exceed actual redemption rates by 49 percentage points, meaning that subjects are overoptimistic about their likelihood of redemption. We test the impact of three “nudges” on overoptimism: (1) informing subjects about a previous cohort’s redemption rates, (2) reminding subjects about the redemption deadline, and (3) reducing transaction costs. The first two treatments reduced overoptimism by 7 and 8 percentage points respectively, but these effects were not significant. Only the third nudge had a significant effect and it reduced overoptimism by 26 percentage points. All three nudges increased redemption but had no statistically significant effect on beliefs. Our results suggest that weak cost-salience is an important mechanism for overoptimism.

People face a fundamental trade-off between savouring consumption in the present and processing information. Both require attention, which is limited. As a result, directing attention to one necessarily comes at the expense of the other. We study this attentional opportunity cost, focusing on cases where information concerns potentially distressing future outcomes. Across four experiments, we find that higher present consumption reduces demand for such information and increases willingness to pay for risk mitigation. These findings have implications for models of anticipatory utility, self-regulation under limited attention and the political economy of distraction—helping to explain, for instance, why political actors might suppress demand for information by offering ‘bread and circuses’.

Meat consumption is associated with environmental and animal-welfare harms, and many people consume more than is healthy. Past research has shown that conflicted consumers manage their beliefs in a variety of domains. Based on two independent studies, we test whether eating meat affects people’s preferences for information about the environmental, animal-welfare, and health harms of meat, as well as the alleged environmental benefits of animal agriculture. Our findings are mixed. Eating beef causes information avoidance about the environmental effects of cattle, and eating pork causes people to avoid information about the health effects of pork. Other results were not significant. We interpret these mixed results as suggesting that eating meat causes information avoidance, but the effects are nuanced as they are meat-specific and topic-specific. This project combines the independent explorations of two teams regarding the same research question. The joint conclusion reached differs from the initial independent conclusions. Consequently, this paper also serves as a case study about the sensitivity of scientific interpretation to experimental design.

The canonical direct-elicitation approach for measuring individuals’ valuations for goods is the Becker-DeGroot-Marschak procedure, which generates willingness-to-pay (WTP) values that are imprecise and systematically biased. We show that enhancing elicited WTP values with supervised machine learning (SML) can improve estimates of peoples’ out-of-sample purchase behavior. Furthermore, swapping WTP data with choice data generated from a simple task leads to comparable performance. We quantify the benefit of using various SML methods in conjunction with using different types of data. Our results suggest that prices set by SML would increase revenue by 29 percent over using the stated WTP, with the same data.

We conduct a randomized controlled trial to understand how a web-based retirement saving calculator affects workers’ retirement-savings decisions. In both the treatment and active control conditions, the calculator projects workers’ retirement income goal. In the treatment condition only, it also projects retirement income based on defined-contribution savings, prominently displays the gap between projected goal and actual retirement income, and allows users to interactively explore how alternative, future contribution choices would affect the gap. The treatment increased average annual retirement contributions by $174 (2.3 percent). However, effects were larger for those with higher measures of financial knowledge, suggesting this type of tool complements, rather than substitutes for, underlying financial capability.

Evidence on the impact of information campaigns on meat consumption patterns is limited. Here, using a dataset of more than 100,000 meal selections over 3 years, we examine the long-term effects of an informational intervention designed to increase awareness about the role of meat consumption in climate change. Students randomized to the treatment group reduced their meat consumption by 5.6 percentage points with no signs of reversal over 3 years. Calculations indicate a high return on investment even under conservative assumptions (~US$14 per metric ton CO₂eq). Our findings show that informational interventions can be cost effective and generate long-lasting shifts towards more sustainable food options.

Time preferences and risk preferences play an important role in a wide range of behavior, including financial decisions, entrepreneurship, and the proper incentivizing of agents. Numerous methods have been developed to measure these preferences hypothetically in surveys, but they have yielded inconsistent results. We analyze a panel data set in which subjects have collectively answered more than 400 surveys including 15 time-preference and 36 risk-preference elicitations. We evaluate the performance of these measures using the criteria of (1) ability to predict economically important behavior and (2) distinctness from other observables. We find substantial heterogeneity in the predictiveness of the measures. The best performing measure for time-preference is a titration method, in which a sequence of adaptive binary-choice questions narrows in on a subject’s indifference point, and for risk-preference it is a self-report measure of risk aversion. Using factor analysis, we find that time preferences are well explained by a single factor, but risk preferences load on multiple factors. However, the first factor loads almost entirely on self-reported risk-preference measures, and this factor explains much of the variation. The evidence can help inform researchers about which elicitation methods to include in their surveys.

Social movements have driven large shifts in public attitudes and values, from anti-slavery to marriage equality. A central component of these movements is moral persuasion. We conduct a randomized-controlled trial of pro-vegan animal-welfare pamphlets at a college campus. We observe the effect on meat consumption using an individual-level panel data set of approximately 200,000 meals. Our baseline regression results, spanning two academic years, indicate that the pamphlet had no statistically significant long-term aggregate effects. However, as we disaggregate by gender and time, we find small statistically significant effects within the semester of the intervention: a 2.4 percentage-point reduction in poultry and fish for men and a 1.6 percentage-point reduction in beef for women. The effects disappear after 2 months. We merge food purchase data with survey responses to examine mechanisms. Those participants who (i) self-identified as vegetarian, (ii) reported thinking more about the treatment of animals or (iii) expressed a willingness to make big lifestyle changes reduced meat consumption during the semester of the intervention. Though we find significant effects on some subsamples in the short term, we can reject all but small treatment effects in the aggregate.

Meat consumption is a major driver of climate change. Interventions that reduce meat consumption may improve public health and promote environmental sustainability. We conducted a randomized controlled trial to examine the effects of an awareness-raising intervention on meat consumption. We randomized undergraduate classes into treatment and control groups. Treatment groups received a 50-minute lecture on how food choices affect climate change, along with information about the health benefits of reduced meat consumption. Control classrooms received a lecture on a placebo topic. We analyzed 49,301 students’ meal purchases in the college dining halls before and after the intervention. We merged food purchase data with survey data to study heterogenous treatment effects and disentangle mechanisms. Participants in the treatment group reduced their purchases of meat and increased their purchases of plant-based alternatives after the intervention. The probability of purchasing a meat-based meal fell by 4.6 percentage points (p < 0.01), whereas the probability of purchasing a plant-based meal increased by 4.2 percentage points (p = 0.04). While the effects were stronger during the semester of the intervention, dietary shifts persisted and remained statistically significant through the full academic year. Our study provides evidence that an intervention based on informing consumers and encouraging voluntary shifts can effectively reduce the demand for meat. Our findings help to inform the international food policy debate on how to counter rising global levels of meat consumption to achieve climate change goals. To our knowledge, our study is the first to assess the effectiveness of an educational intervention to reduce meat consumption using such high-quality data (i.e. individual-level food purchases) over a prolonged period.

We hypothesize that clothes can affect the behavior of the wearer by influencing the person’s identity. We test this hypothesis by recruiting trick-or-treaters during Halloween, a time of year when people wear salient and extreme clothing. Because the tradition of costume-wear for Halloween evolved, in part, to hide one’s identity during “tricks” (i.e. norm violations), we measure the effect of Halloween costumes on ethical behavior. We use the lying game of Fischbacher and Föllmi–Heusi as our experimental paradigm with 2 × 3 × 2 conditions. First, we vary the stakes to price lying behavior. Second, we run three conditions with different beneficiaries of the report (self, other, and both) to test whether lying for others is perceived to be normative. Third, we manipulate the salience of one’s costume to test the effect of costume and identity on ethical behavior. Surprisingly, we find that costume salience caused “good guys” to lie more and “bad guys” to lie less. We interpret this either as a moral licensing effect or as stemming from a perception of being monitored. Our design allows for the identification of contagion effects, and although there were no direct effects of gender, we found that children lie more when children of the same gender near them lie more. We also find that stakes had no effect, people lied more for themselves than for others, and lying has an inverted-U pattern over age, peaking at age 12.

Defaults have been shown to have a powerful effect on retirement saving behavior yet there is limited research on who is most affected by defaults and whether this varies based on features of the choice environment. Using administrative data on employer-sponsored retirement accounts linked to survey data, we estimate the relationship between retirement saving choices and individual characteristics – long-term discounting, present bias, financial literacy, and exponential-growth bias – under two distinct choice environments: an opt-in regime and an auto-enrollment regime. Consistent with our conceptual model, we find that the determinants of following the default and contribution behavior are regime-specific. Under the opt-in regime, financial literacy plays an important role in predicting total contributions, active saving choices, and maxing out contributions in the tax-preferred account. In contrast, under the auto-enrollment regime, present bias is the most significant behavioral predictor of contribution behavior. A causal interpretation of the estimates suggests that auto-enrollment increases saving primarily among those with low financial literacy.

Exponential-growth bias (EGB) is the tendency to neglect the power of compounding interest, which has been found to be widespread in the population. A person with EGB will misperceive the intertemporal budget constraint, overestimating lifetime wealth and underestimating the differences in the cost of consumption across periods. We test five comparative static predictions implied by EGB: (1) compound interest will increase consumption when the elasticity of intertemporal substitution is greater than 1; (2) higher interest rates lead to more compounding and hence increase consumption; (3) budget-neutral delays in income will increase consumption; (4) the person will exhibit a form of dynamic inconsistency that depends solely on the current account balance and is independent of time preferences; and (5) framing the frequency of interest in shorter units increases consumption. We test these predictions using an induced-value consumption–savings experiment in the laboratory, and find evidence in support of all predictions against the rational benchmark. We consider rules of thumb as alternative hypotheses and find that they cannot explain the results, although they contribute to some findings.

In a nationally representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present over the future, are highly significant and economically meaningful predictors of retirement savings. These relationships hold controlling for cognitive ability, financial literacy, and a rich set of demographic controls. We address measurement error as a potential confound and explore mechanisms through which these biases may operate. Back of the envelope calculations suggest that eliminating EGB and PB would increase retirement savings by approximately 12%. (JEL D91, D14)

We present evidence that intrinsic demand for information about the future is increasing in expected future consumption utility. In the first experiment, subjects may resolve a lottery now or later. The information is useless for decision making, but the larger the reward, the more likely subjects are to pay to resolve the lottery early. In the second experiment, subjects may pay to avoid being tested for herpes simplex virus type 1 (HSV-1) and the more highly feared type 2 (HSV-2). Subjects are three times more likely to avoid testing for HSV-2, suggesting that more aversive outcomes lead to more information avoidance. In a third experiment, subjects make choices about when to get tested for a fictional disease. Some subjects behave in a way consistent with expected utility theory, and others exhibit greater delay of information for more severe diseases. We also find that information choice is correlated with positive affect, ambiguity aversion, and time preference, as some theories predict.

We investigate how the increased availability of a factor of production can make an overconfident agent worse off. In our model, two effects drive this result. First, when a production factor and ability are complements in the production function, the agent may overpay for the production factor. Second, the acquisition of this factor will distort the agent’s choice of what activities to pursue. In contrast, when the factor and ability are substitutes, the agent will undervalue the factor. In a laboratory experiment we find that subjects overpay for ability-complements, and underpay for ability-substitutes. Subjects provided with free ability-complements earn less due to how it distorts the subjects’ perceptions of what activity to pursue.

There is increasing evidence that people underestimate the magnitude of compounding interest. However, if people were aware of their inability to make such calculations they should demand services to ameliorate the consequences of such deficiencies. In a laboratory experiment, we find that people exhibit substantial exponential-growth bias but, more importantly, that they are overconfident in their ability to answer questions that involve exponential growth. They also exhibit overconfidence in their ability to use a spreadsheet to answer these questions. This evidence explains why a market solution to exponential-growth bias has not been forthcoming. Biased individuals have suboptimally low demand for tools and services that could improve their financial decisions.

Exponential-growth bias is the tendency to neglect the compounding of interest. The economics literature has used the fact that a biased agent in many circumstances will underestimate the value of assets that grow according to compound interest. We show that the opposite can also be true. It is always possible to make an agent who underestimates exponential growth to overestimate the value of an asset that grows exponentially. This paradoxical phenomenon arises when interest rates vary over time. This gives rise to the averaging effect of exponential-growth bias, which causes agents to perceive the mean return to exceed the true mean. Consequently, biased agents will strictly prefer assets with time-varying returns over equivalent constant-return assets. With sufficient variation in returns any biased agent will overestimate the true value of an asset for any time horizon.

Exponential-growth bias (EGB) is the tendency for individuals to partially neglect compounding of exponential growth. We develop a model wherein biased agents misperceive the intertemporal budget constraint, and derive conditions for overconsumption and dynamic inconsistency. We construct an incentivized measure of EGB in a US-representative population and find substantial bias, with approximately one-third of subjects estimated as the fully-biased type. The magnitude of the bias is negatively associated with asset accumulation, and does not respond to a simple graphical intervention. (JEL: D03, D11, D12, D14, D18, D91, E21)

A large fraction of microbial life on earth exists in complex communities where metabolic exchange is vital. Microbes trade essential resources to promote their own growth in an analogous way to countries that exchange goods in modern economic markets. Inspired by these similarities, we developed a framework based on general equilibrium theory (GET) from economics to predict the population dynamics of trading microbial communities. Our biotic GET (BGET) model provides an a priori theory of the growth benefits of microbial trade, yielding several novel insights relevant to understanding microbial ecology and engineering synthetic communities. We find that the economic concept of comparative advantage is a necessary condition for mutualistic trade. Our model suggests that microbial communities can grow faster when species are unable to produce essential resources that are obtained through trade, thereby promoting metabolic specialization and increased intercellular exchange. Furthermore, we find that species engaged in trade exhibit a fundamental tradeoff between growth rate and relative population abundance, and that different environments that put greater pressure on group selection versus individual selection will promote varying strategies along this growth-abundance spectrum. We experimentally tested this tradeoff using a synthetic consortium of Escherichia coli cells and found the results match the predictions of the model. This framework provides a foundation to study natural and engineered microbial communities through a new lens based on economic theories developed over the past century.

We elicit subjects’ beliefs about the likelihood that they will redeem a mail-in form. Expected redemption rates exceed actual redemption rates by 49 percentage points, meaning that subjects are overoptimistic about their likelihood of redemption. We test the impact of three “nudges” on overoptimism: (1) informing subjects about a previous cohort’s redemption rates, (2) reminding subjects about the redemption deadline, and (3) reducing transaction costs. The first two treatments reduced overoptimism by 7 and 8 percentage points respectively, but these effects were not significant. Only the third nudge had a significant effect and it reduced overoptimism by 26 percentage points. All three nudges increased redemption but had no statistically significant effect on beliefs. Our results suggest that weak cost-salience is an important mechanism for overoptimism.

It has been observed that industries self-regulate to placate a regulator from taking action, and revolutionary vanguards sometimes provoke an apathetic populace into revolt. This paper presents a very simple model that captures this strategic maneuvering, and applies it to several other examples. Two players have preferences over the realization of a policy; the first player has a marginal cost to affect the policy and the second player has a fixed cost. The fixed cost provides strategic incentives for the first mover to placate or provoke the second player. In equilibrium, the second mover may benefit from having preferences that diverge more from the first mover, and may benefit by having higher fixed costs. As the number of first movers increases, placation and provocation both become more likely, and the second player’s incentives to occlude or reveal its fixed cost become stronger as well.