Contract theory and incentives

Incentive contracts when agents distort probabilities (Submitted)

In short: I show that stochastic contracts with the distinctive feature that the principal adjusts the amount of risk faced by the agent are desirable under probability distortion.

Optimal incentives without expected utility with Geoffrey Castillo

In short: We show that incorporating deviations from expected utility due to probability distortion in a principal-agent setup leads to contract modalities that are observed in practice such as salaries, lump-sum bonuses, and option-like incentive schemes.

The dark side of bonuses with Charles Noussair and Patricio Dalton (Submitted)

In short: We demonstrate that incentive schemes paying incentive-compatible bonuses for the achievement of a goal set by the agent herself are counterproductive when the agent exhibits sufficiently strong loss aversion.

Self-chosen goals: incentives and gender differences with Charles Noussair and Patricio Dalton

In short: We find acute gender differences when individuals work under an incentive-compatible self-chosen goals incentive scheme. We attribute this difference to gender differences in loss aversion.

Decision theory

Who is more rational: groups or individuals? with Wieland Müller

In short: We compare rationality in decision making under risk between groups and and individuals. As a standard for rationality we use the Generalized Axiom of Revealed Preferences.

Echo chambers in the laboratory with Cole Williams

In short: We investigate whether individuals infer their type and preferences by observing other decision makers who are more similar.

Working paper coming soon!

Behavioral Poverty Traps

Social status and Motivated beliefs (Submitted)

In short: I show that social status affects economic performance by means of a psychological mechanism; one’s social standing influences beliefs about abilities, which are determinant to performance in productive tasks.

Exposure to poverty and productivity with Charles Noussair and Patricio Dalton, PLOS ONE (2017)

In short: We show that being exposed to images of extreme poverty decrease performance in a real-effort task. We use a face-reading software to show that negative emotions are mediating this effect.

Methodology of Experiments

Evaluating treatment effects and replicability with Karl Schlag

In short: We introduce a novel exact test to investigate the amount of false positives found in a sample of experimental papers published from during the last ten years in journals of the American Economic Association and in Camerer et al (2016).