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Behavioral Economics

Paper Session

Sunday, Jan. 8, 2023 8:00 AM - 10:00 AM (CST)

Hilton Riverside, Trafalgar
Hosted By: Econometric Society
  • Chair: Michael Thaler, University College London

Narrative Premiums in Policy Persuasion

Keisuke Kawata
,
University of Tokyo
Kenneth Mori McElwain
,
University of Tokyo
Masaki Nakabayashi
,
University of Tokyo

Abstract

Survey experiments have shown mixed results about the effect of information provision on attitudes towards controversial policies. We argue that one reason is varied receptiveness to different modes of information. Prior research suggests that people selectively ignore factual, statistical information that contradicts prior beliefs, but are more attentive to narrative information that describes individual experiences. We test this in the context of Japanese attitudes towards poverty relief programs, which tend to be less popular than other welfare expenditures. Using a conjoint survey, we show that there is a "narrative premium": respondents who are shown a narrative story about the plight of a single mother are more likely to support higher expenditures on poverty relief than those who are shown statistical information about the share of single parents living in poverty. This premium is particularly effective in strengthening the convictions of those who are already aware of levels of societal poverty.

The Supply of Motivated Beliefs

Michael Thaler
,
University College London

Abstract

When people choose what messages to send to others, they often consider how others will interpret the messages. In many environments, particularly in politics, people are motivated to hold particular beliefs and distort how they process information in directions that favor their motivated beliefs. This paper uses two experiments to study how message senders are affected by receivers' motivated beliefs. Experiment 1, conducted using an online sample of social media users, analyzes the effect of incentivizing senders to be perceived as truthful. These incentives cause senders to send less truthful messages. When incentivized, senders send more false information when it aligns with receivers' politically-motivated beliefs, controlling for receivers' current beliefs. However, receivers do not anticipate the adverse effects of senders' incentives. Experiment 2 further isolates the role that information processing plays by analyzing an environment in which receivers assess the truthfulness of messages from a computer and senders choose one of the computer's messages to determine their earnings. Senders predict that receivers distort information processing in the direction of their politics, demand information about receivers' political preferences, and condition on the receivers' politics to strategically choose less truthful computer messages.

An Approach to Testing Reference Points

Alex Rees-Jones
,
University of Pennsylvania
Ao Wang
,
University of California-Berkeley

Abstract

We present a general approach to experimentally testing candidate reference points. This approach builds from Prospect Theory’s prediction that an increase in payoffs is perfectly offset by an equivalent increase in the reference point. Violation of this prediction can be tested with modifications to existing econometric techniques in experiments of a particular design. The resulting approach to testing theories of the reference point is minimally parametric, robust to broad classes of heterogeneity, yet still implementable in comparatively small sample sizes. We demonstrate the application of this approach in an experiment that tests the role of salience in setting reference points.
JEL Classifications
  • D1 - Household Behavior and Family Economics
  • D8 - Information, Knowledge, and Uncertainty