Economic Decisions in the Presence of Others: Evaluating the Effects of Observability and Generosity on Economic Decisions.
Abstract
The presence of others influence individuals’ decision-making. People may adjust their behavior
to a more socially desirable way when they know others observe their behavior. In this
dissertation, I study how economic decisions change in the presence of others. More specifically, I focus on the role of observability and generosity on economic behavior.
The first chapter of this dissertation shows whether people change their behavior when they
become aware their eye movements are being recorded. Eye-tracking is becoming an increasingly popular tool for understanding the underlying behavior driving human decisions. However, an important unanswered methodological question is whether the use of an eye-tracking device itself induces changes in participants’ behavior. This chapter examine this question using eight popular games in experimental economics chosen for their varying levels of theorized susceptibility to social desirability bias. A simple between-subject design is implemented where participants are randomly assigned to either a control or an eye-tracking treatment. In seven of the eight games, eye-tracking did not produce different outcomes. In the Holt and Laury risk assessment (HL), subjects with multiple calibration attempts demonstrated more risk averse behavior in eye-tracking conditions. However, this effect only appeared during the first five (of ten) rounds. Because calibration difficulty is correlated with eye-tracking data quality, the standard practice of removing participants who had low eye-tracking data quality resulted in no difference between the treatment and control groups in HL.
In the second chapter, I explore how generosity y for others affects one’s food choices by
conducting a natural field experiment. I conduct a natural field experiment where I exogenously
manipulate a restaurant’s menu to include a charitable donation to a hunger-related charity for
selecting a smaller food portion. I find that generosity is an effective instrument for motivating
individuals to reduce their food portion size selection, particularly among overweight/obese individuals. Overweight/obese individuals are 35.0 percentage points more likely to choose a smaller portion when it carries a donation to a third party. When the donation is combined with a health information nudge, the proportion of smaller portion choices among overweight/obese individuals increases by 48.2 percentage points compared to the baseline.
Overall, individuals may change their behavior in the presence of others or to positively influence the welfare of others while potentially benefiting themselves. This dissertation presents conditions that test the internal validity of using eye-tracking in economic experiments and setting where the interaction among individuals can nudge people’s behavior to improve their own welfare.
Subject
economic gamesHawthorne effect
social desirability
charity
food choice
generosity
health
hunger
weight status
Citation
Kee, Jennifer Young (2022). Economic Decisions in the Presence of Others: Evaluating the Effects of Observability and Generosity on Economic Decisions.. Doctoral dissertation, Texas A&M University. Available electronically from https : / /hdl .handle .net /1969 .1 /197104.