Bringing Social Behavior to Light: Essays on the Heterogeneous Effects from Social Status and Preferences

Abstract

“Rational,” individualistic agents populate theories in neoclassical economics, which are intended to represent how humans respond to incentives and stimuli. However, humans do not always behave in the way the agents in theories behave, as revealed through the study of social preferences. In fact, humans consider social environments when faced with decisions that have direct impacts on payoffs and outcomes. Social environments include the social status of where we stand relative to others or simply the surroundings under which we make decisions with others in mind. Understanding some of the processes behind these social decisions can help us better understand motivations as to why social environments matter in economic contexts. In the first essay of this dissertation, we conduct a field experiment to better understand the role of social status and monetary incentives as motivation to increase physical activity. We find that social status alone does not induce a change in physical activity. When social status is combined with monetary incentives, however, we find an effect in the number of daily steps. This effect is heterogeneous. Individuals with low physical activity increase their number of steps by 12%, while those with high physical activity decrease the number of steps by 25%. Our results call for a cautionary approach for analyzing the role of social status, in many cases unobserved, for physical activity intervention programs. In the second essay of this dissertation, we explore social signaling and how it influences economic behavior. We conduct a laboratory experiment to explore how benefit eligibility stigma drives decisions to competitiveness. We induce a stigma associated with a benefit for the low status group, and then introduce a treatment in which the stigma is reduced by expanding the eligibility to a middle-status group in a plausible deniability treatment. While we do not observe evidence of a stigma affecting benefit take-up, we do observe a difference in preferences for competitiveness in a subsequent and unrelated task; namely, when individuals in the middle group qualify for the benefit their rate of competition is reduced by 33% compared to the treatment in which they do not qualify. A potential interpretation of our results would suggest expansion of eligibility of certain government assistance programs may produce unintended consequences for the newly eligible. In the last essay of this dissertation, we explore the effect of light on social preferences. Based on previous literature, we know that light affects serotonin levels. We explore social behaviors first through a pilot study, followed by a laboratory-controlled setting where we alter the lighting of the room and incentivize several games that measure social preferences: ultimatum, trust, public goods, and gift exchange. We do not replicate previous results from the ultimatum game as seen in previous literature regarding serotonin and fairness, nor do we observe any differential behavior in the public goods game due to lighting condition. However, we find heterogeneous effects due to lighting in our subjects’ trust responses as well as their responses in the gift exchange, yet further analysis and measurement is needed to address whether we can isolate serotonin as a driver for these results.