Persuade or Price? Bayesian Persuasion vs. Pigouvian Taxation Under Congestion (JMP)
Previous title: Incentive or Information? Interventions to Address Externalities
Shared resources can become congested when individual choices impose costs on others. I use a laboratory experiment with 170 participants to compare a fixed user charge with private recommendations about using a shared resource. Participants choose between that resource and an outside option whose payoff is uncertain. The recommendation rule assigns different advice to different participants, and following it is voluntary. Recommendations strongly affect choices. When the outside option is poor, entry is approximately 81% among participants advised to enter and 29% among those advised to stay out, a difference of 52.2 percentage points. Compliance is incomplete, so these responses do not fully implement the allocation intended by the recommendation rule. Average total surplus is higher in the policy stage than at baseline under both recommendations and the charge. The study connects information design and incentive design by tracing how individual responses combine into group outcomes.
Social Dilemmas with Endogenous Resources with Eye Eoun Jung, Siru Liu, & Ben Mosier IV
This study investigates how the origin of shared resources in social dilemma games influences individual behavior. By distinguishing between endogenous resources, created through deliberate collective action, and exogenous resources, existing independently of participants' choices, we explore how these origins impact decisions involving trust and reciprocity. We construct a novel two-stage public goods game to investigate the role of subjective expectations in shaping cooperative behavior. In this framework, social dilemmas involve strategic risks, as individuals weigh the potential benefits of mutual cooperation against the risks of exploitation or negative reciprocity. By incorporating belief elicitation, we examine how participants’ expectations about others’ actions influence their willingness to cooperate. Drawing on theories of risk, we analyze the interplay between beliefs, trust, and reciprocity in decisions regarding public resources. Our findings reveal how the endogeneity of resource formation impacts behavior and beliefs about others’ actions, providing valuable insights for the management and policy development of public goods.
Private Information and Cheap Talk in Uncertain Environmental Public Goods with Sarah Jacobson & Justin Kakeu
This study explores strategic communication in global climate negotiations, where nations with private information about uncertain tipping points may exaggerate risks to influence collective action. Climate agreements like the Kyoto Protocol and Paris Agreement face challenges due to power asymmetries and informational advantages, leading to strategic misrepresentation through “cheap talk.” Using a threshold public goods game, this research examines how private information and economic disparities shape exaggeration and contribution behavior. The findings contribute to the literature on public goods under uncertainty and provide insights into mitigating free-riding and improving cooperation in international climate policy.
Effect of Use of E-cigarettes on Adolescence Obesity
This study employs standardized e-cigarette state tax as an instrumental variable to investigate the plausible causal link between e-cigarette usage and Body Mass Index (BMI) among adolescents using, utilizing data from the Youth Risk Behavior Surveillance System(YRBSS). The results suggest that the use of e-cigarettes caused lower BMI, subsequently leading to a reduction in adolescent weight.
Brocas, Isabelle. Lu, Wen. 2020. “Inequality in the US: the lost American dream.” Los Angeles Behavioral Economics Laboratory reports, July, 2020. Article Link.