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Data Colada Seminar Series

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Berkeley Time:  9AM-10AM
Philadelphia Time:  12PM-1PM
Barcelona Time:  6PM-7PM 
Zoom link: https://datacolada.org/zoom 

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Schedule for Spring 2022 

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Date Speaker Title
Feb 4, 2022 Joowon Klusowski (htm) Does Choice Cause an Illusion of Control?
Abstract

Abstract.
Previous research suggests that choice causes an illusion of control—that it makes people feel more likely to achieve preferable outcomes, even when they are selecting among options that are functionally identical (e.g., lottery tickets with an identical chance of winning). This research has been widely accepted as evidence that choice can have significant welfare effects, even when it confers no actual control. In this article, we report the results of 17 experiments that examined whether choice truly causes an illusion of control (N = 10,825 online and laboratory participants). We found that choice rarely makes people feel more likely to achieve preferable outcomes—unless it makes the preferable outcomes actually more likely—and when it does, it is not because choice causes an illusion but because choice reflects some participants’ preexisting (illusory) beliefs that the functionally identical options are not identical. Overall, choice does not seem to cause an illusion of control.

 
Feb 11, 2022 NO SEMINAR – JDM Conference
Feb 18, 2022 Dante Donati (htm) The End of Tourist Traps: A Natural Experiment on the Impact of Tripadvisor on Quality Upgrading
Abstract

Abstract.
Asymmetric information can distort market outcomes. I study how the online disclosure of information affects consumers’ behavior and firms’ incentives to upgrade product quality in markets where information is traditionally limited. I first build a model of consumer search with firms’ endogenous quality decisions. In this model, lower search costs reallocate market shares toward higher-quality producers, raising firms’ incentives to upgrade quality, and more so for firms selling ex-ante lower-quality products. I then use the access to online reviews as a proxy for consumers’ information costs and estimate its impact on the restaurant industry in Rome, exploiting the abolition of mobile roaming charges in the EU in 2017 for identification. Based on a unique dataset combining monthly information from Tripadvisor with administrative social-security records, I find that, after the policy, consumers reallocate their demand toward higher-rated restaurants, whose revenues and total employment grow by 6%. Lower- rated restaurants, in turn, are three times more likely to exit the market than higher-rated establishments, and those that survive hire workers with higher wages and better curricula, eventually improving their Tripadvisor ratings. Overall, the share of lower-rated restaurants in the most tourist areas decreases by more than 3 pp. My findings have implications for the role of review platforms on the performance of offline industries under asymmetric information

Feb 25, 2022 Ziad Obermeyer (htm) Diagnosing Physician Error: A Machine Learning Approach to Low-Value Health Care
Abstract
Abstract.

We use machine learning as a tool to study decision making, focusing specifically on how physicians diagnose heart attack. An algorithmic model of a patient's probability of heart attack allows us to identify cases where physician testing decisions deviate from predicted risk. We then use actual health outcomes to evaluate whether those deviations represent mistakes or physicians' superior knowledge. This approach reveals two inefficiencies. Physicians over-test: predictably low-risk patients are tested, but do not benefit. At the same time, physicians under-test: predictably high-risk patients are left untested, and then go on to suffer adverse health events including death. A natural experiment using shift-to-shift testing variation confirms these findings. Simultaneous over- and under-testing cannot easily be explained by incentives alone, and instead point to systematic errors in judgment. We provide suggestive evidence on the psychology underlying these errors. First, physicians use too simple a model of risk. Second, they over-weight factors that are salient or representative of heart attack, such as chest pain. We argue health care models must incorporate physician error, and illustrate how policies focused solely on incentive problems can produce large inefficiencies.
 
Mar 4, 2022 Betsy Levy Paluck (htm) Prejudice Reduction: Progress and Challenges
Abstract
Abstract.

The past decade has seen rapid growth in research that evaluates methods for reducing prejudice. This essay reviews 418 experiments reported in 309 manuscripts from 2007 to 2019 to assess which approaches work best and why. Our quantitative assessment uses meta-analysis to estimate average effects. Our qualitative assessment calls attention to landmark studies that are noteworthy for sustained interventions, imaginative measurement, and transparency. However, 76% of all studies evaluate light touch interventions, the long-term impact of which remains unclear.The modal intervention uses mentalizing as a salve for prejudice. Although these studies report optimistic conclusions, we identify troubling indications of publication bias that may exaggerate effects. Furthermore, landmark studies often find limited effects, which suggests the need for further theoretical innovation or synergies with other kinds of psychological or structural interventions. We conclude that much research effort is theoretically and empirically ill-suited to provide actionable, evidence-based recommendations for reducing prejudice.

 

Mar 11, 2022 Ioannis Evangelidis (htm) How Much does Diminishing Sensitivity Impact Choice?
Abstract
Abstract.

Classic theories of perception, cognition, and judgment and decision-making assert that people exhibit diminishing sensitivity to magnitude changes. For instance, according to Prospect Theory’s value function, the pleasure of moving from 0 to $1000 is larger than the pleasure of moving from $1000 to $2000, while the pleasure of moving from $1000 to $2000 is larger than the pleasure of moving from $2000 to $3000. In this talk, I will present empirical evidence from a series of experiments that call into question how much diminishing sensitivity actually impacts choice, as well as the nature of the value function. I will discuss a special form of diminishing sensitivity, rapidly diminishing sensitivity, which postulates that people are sensitive to the presence versus absence of outcomes, but are rather insensitive to the scope of the outcomes when the latter differ from zero. Rapidly diminishing sensitivity yields a value function that flattens out rapidly as we move away from zero. In the special case where the value function flattens out immediately after zero, rapidly diminishing sensitivity assumes a discrete form that I coin discrete sensitivity. I will demonstrate that rapidly diminishing sensitivity and discrete sensitivity are typically observed in experimental studies that involve extensive manipulations of the size of the outcomes across decisions, while holding everything else constant. I will provide evidence for my hypothesis in a series of well-powered preregistered experiments across a wide range of domains, such as financial decisions, valuations of human lives, purchase decisions, judgments of goal-related performance, intertemporal choices, and moral decisions.

Mar 18, 2022 Marissa Sharif (htm) Work-to-Unlock Rewards: Leveraging Goals in Reward Systems to Increase Consumer Persistence
Abstract
Abstract.

Eight studies (N = 5,025) demonstrate that consumers persist more when they must complete a target number of goal-related actions before receiving continuous rewards (i.e., what we term work-to-unlock rewards) than when they receive continuous rewards for their effort right away (i.e., what we term work-to-receive rewards). We suggest that the motivating power of work-to-unlock rewards arises because these rewards (1) naturally encourage consumers to set an attainable goal to start earning rewards, motivating consumers initially through goal setting and (2) keep consumers engaged after reaching this goal due to low perceived progress in earning rewards. We reveal that a work-to-unlock reward structure increases persistence relative to standard continuous rewards across a variety of consumer relevant domains (e.g., exercising, flossing, evaluating products), and even when work-to-unlock rewards offer rewards of a lower magnitude. We further demonstrate that work-to-unlock rewards outperform other reward structures that encourage goal setting. Lastly, we identify a theoretically consistent boundary condition of this effect: the length of the unlocking period.

Mar 25, 2022 Sydney Scott (htm) In Goal Pursuit, Flexibility is the Best Choice For Me, but Not For You
Abstract
Abstract.

Consumers regularly attempt to improve themselves. Across 8 preregistered studies, we examine how consumers think about flexibility during goal pursuit, for themselves and for others. Flexibility involves leaving details of a plan, such as when to go to the gym or what to eat, open or easy to change. We find that people are more likely to think flexibility is the best choice for themselves than for someone else. We also find a reason why this occurs. Many people perceive flexible plans to be less effective, but also more appealing (that is, less unpleasant), than rigid ones. Choosing for oneself, as opposed to for someone else, increases the degree to which one follows one’s heart (i.e., relies on feelings and desires), which makes people more likely to choose the more appealing option, flexibility. Asking people to “follow their heads” instead (i.e., rely on logic and reason) causes people to choose similar (rigid) plans for themselves and others. Finally, we use this framework to increase preferences for rigid fitness plans in a field experiment. This research provides insight into the psychology of flexibility and how to nudge consumers to set themselves up for success.

Apr 1, 2022 George Loewenstein (htm) Narratives and Valuations
Abstract
Abstract.

While the significance of narrative thinking has become increasingly recognized by economists, very little empirical research has documented its consequences for economically significant outcomes. We address this gap in one important domain: valuations. In two online experiments, participants either told the story of an item they owned (mug in study 1, hat in 2) or listed its characteristics and were then offered the opportunity to sell it via an incentive-compatible procedure.  The narrative treatment led to substantially higher selling prices (33% increase on average) and unwillingness to sell rates (78% increase). The impact of different narrative types is also explored.

Paper available on SSRN

Apr 8, 2022 Joachim Vosgerau (htm) Big Data – Big Biases
Apr 15, 2022 Daniel Feiler (htm) The Worst-First Heuristic: How Decision-Makers Manage Conjunctive Risk
Apr 22, 2022 Nick Yeung (htm) Confidence, Trust and Adaptive Decision Making
Abstract
Abstract.

When we make decisions, we have a subjective sense of confidence about whether the choices we're making are good or bad. Confidence is usually predictive of objective accuracy, which enables us to use this subjective evaluation to regulate our decision making process in adaptive ways. In my talk, I'll focus in particular on the role of confidence in evaluating social information in decision making, and how we learn whether or not to trust others' advice.

April 29, 2022 Joint presenters:
Woojin Kim (htm) &
Elizabeth Linos (htm)

Bottlenecks for Evidence Adoption
Abstract
Abstract.

Governments increasingly use RCTs to test innovations before scale up. Yet, we know little about whether and how they incorporate the results of the experiments. We follow up with 67 US city departments which collectively ran 73 RCTs in collaboration with a national Nudge Unit to improve city communications using nudges. The city departments adopt the nudge treatment in follow-on communication in 27% of the 73 RCTs. As potential determinants of adoption we consider (i) the strength of the evidence, (ii) features of the organization, such as \state capacity" of the city and whether the staff member working on the RCT is still involved, and (iii) features of the treatment, such as whether it was implemented as part of pre-existing communication. We find (i) a limited impact of strength of the evidence and (ii) some impact of city features, especially the retention of the original staff member. By far, the largest predictor of adoption is (iii) whether the communication was pre-existing, as opposed to a new communication. We consider two main interpretations of this finding: organizational inertia, in that changes to pre-existing communications are more naturally folded into the year-to-year city communication, and costs, since new communications may require additional funding. We find the same pattern for electronic communications, with zero marginal costs, supporting the organizational inertia explanation. We compare the findings to the predictions of experts and practitioners. Forecasters over-estimate the extent of evidence-based adoption and, while they anticipate the importance of inertia, they do not foresee the channel through which it would operate. We thus stress the importance of creating a path to adoption as part of the RCT design when the goal is implementation into policy.

See past schedules with links to videos of the talks, or visit our YouTube channel.

 


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