Internal Lunch Seminars

When people take decisions under risk, it is not only the expected utility that is important, but also the shape of the distribution of utility: clearly the dispersion is important, but also the skewness. For given mean and dispersion, decision-makers treat positively and negatively skewed prospects differently. This paper presents a new behaviourally-inspired model for decision making under risk, incorporating both dispersion and skewness. We run a horse-race of this new model against six other models of decision-making under risk and show that it outperforms many in terms of goodness of fit and shows a reasonable performance in predictive ability. It can incorporate the prominent anomalies of standard theory such as the Allais paradox, the valuation gap, and preference reversals, and also the behavioural patterns observed in experiments that cannot be explained by Rank Dependent Utility Theory.

MS Teams: https://muni.cz/go/290799

This paper is a meta-analysis of experimental studies dealing with the impact of incidental emotions on risky choices, so as to explain traditional heterogeneity of outcomes in the literature. After devising a standard search strategy and filtering out studies that do not comply with a list of eligibility criteria, we include 24 articles from which 109 observations are drawn at the treatment level. At this point, we code a set of moderator variables representing experimental protocols and adopt Hedges’s g as comparable metric. Subgroup analysis and meta-regressions find causal impact of both sadness and fear on risk aversion, albeit to a small extent, as well as highly contrasting patterns depending on the nature of incentives offered in the experiments. The use of monetary incentives turns out to reduce data variability and affects information processing by making subjects more susceptible to emotions. When studies provide real stakes, our results also show that emotions lead to take more risks in individualist countries than in collectivist societies. We discuss possible interpretations of our findings.

MS Teams: https://muni.cz/go/15793f

Using long panels of industry-specific offshoring information and subjectively reported well-being datasets from Germany, the UK, and Australia from 2000 to 2013, this paper aims to investigate the relationship between offshoring and workers’ well-being in the source country. We employ panel data fixed-effects models with time-variant personality measures and industry-specific measures to alleviate the bias stemming from the non-random sorting of individuals in industries. Our findings suggest that offshoring negatively affects workers’ well-being. The result is unexceptionally consistent across the countries with different labor markets, and the effect is larger in business services and among high-skilled workers. We extensively discuss how contextual “fear-factors” prevailing in the source countries interact with the angst generated by the negative framing of offshoring. To single out such angst, we first show that objective and subjective job security concerns, job characteristics, and labor market conditions only marginally relate to the well-being effect of offshoring. Then, we investigate how the effect of offshoring on well-being is amplified by a larger set of contextual factors pertaining to temporary economic shocks, negative narrative about offshoring during electoral cycles, partisan political preferences, and high immigration rates. Finally, we show that a recent skill upgrade significantly diminishes the negative effect of offshoring on well-being.

MS Teams: https://muni.cz/go/4db99d

We provide evidence from a public goods game with ostracism, i.e. the possibility to vote and consequently ostracize others from the game. We focus on how the decisions of individuals and teams differ in this setup. Participants either form groups of individuals or they form groups of two-member-teams to play the public goods game. Concerning contributions, we find a null-result. Concerning earnings, however, we find differences. The ostracism mechanism does not increase average earnings for individuals, but for teams. This is the consequence of a different use of the ostracism mechanism. Teams play a trigger strategy. The mere threat of being punished triggers cooperative behavior, i.e. higher contributions. The punishment as such, however, is seldom really executed. Individuals exclude more and earlier, yielding less earnings since ostracized members’ contributions are missing.

MS Teams: https://muni.cz/go/002610

Using a vignette experiment, the present study investigated implicit gender biases against female applicants and whether these biases affect females’ chances of being employed/dismissed and the pay they are offered. A total of 155 HR specialists participated in the study. In Task 1, they were randomly assigned to conditions and evaluated three candidates (all three either men or women) for the post of regional sales manager based on the applicant’s competences, hireability, likeability, and proposed salary. In Task 2, participants were showed a set of vignettes presenting six employees selected for potential dismissal. The paper contributes to the literature by pointing to differential treatment of men and women in the labour market context. While women are likely to be directly discriminated against by significantly lower pay offers, men may suffer from a strong backlash when they have lower educational attainment and display feminine working patterns.

MS Teams: https://muni.cz/go/f56933

Our aim is to examine behaviour and equilibrium selection in two similar, indefinitely repeated games, Stag Hunt and Prisoner’s Dilemma under anonymous random matching. We are interested in the role that historical precedents may play for equilibrium selection between these two repeated games. Duffy and Fehr (2018) find no significant spillover effects in this setting but they only vary the temptation parameter. We revise their experiment through the approach of Mengel (2018) and the theory of LiCalzi and Mühlenbernd (2019) and want to explore whether varying the efficiency parameter can alter their results.

Abstract: A sample of 155 HR managers participated in an experimental vignette study. In Task 1, they evaluated three CV resumes in terms of the candidates’ competence, hireability, likeability and wage proposal of three candidates applying for a regional manager post. Half of the sample received CVs presented as females’ and half as males’, otherwise the CVs were identical. Generally, male and female candidates were evaluated similarly in terms of competence and hireability. Average and worst male candidates were evaluated as less likeable than identical females. However, wages offered to female candidates were significantly lower than those offered to male candidates. We were unable to identify moderators of the phenomenon other than female HR managers driving the effect. In Task 2, participants were showed a set of vignettes presenting six employees (3 men and 3 women) preselected to be dismissed due to the economic crisis. Apart from basic demographics, the employees were described in terms of age, years in the company and frequency of absences. Again, we switched employees’ gender for half of the sample. We have found that HR managers are more likely to dismiss male employees and that they are particularly unforgiving to male workers with frequent absences.

MS Teams link: http://tiny.cc/mues2020

Big Data Analytics (BDA) has become a crucial source of competition and over the last several years been ranked among the top agenda items of business and IT executives. While some research has been conducted to explore the link between BDA and its potential business value, current knowledge on the link between BDA and innovation performance remains unclear. To fill this gap, based on the dynamic capabilities view, this research proposes a conceptual model to explore how and under what mechanisms, using BDA can influence innovation performance. This research conceptualizes firm agility, in terms of dynamic capability, and introduces three related constructs (i.e., sensing agility, decision-making agility, and acting agility). We also consider the moderating roles of data-driven culture and BDA team sophistication. Using the survey data, we uncover that dynamic capabilities mediate the link between BDA use and innovation performance. Besides, we find out that data-driven culture moderates the link between sensing agility and decision-making agility; however, such a moderating effect is not observed on the relationship between BDA use and sensing agility. This research also supports the moderating role of BDA team sophistication on the link between BDA use and sensing agility. We conclude the paper by providing contributions and future research directions.

Agents with extreme positions may take actions in order to trigger a conflict. In the degree of violence, these actions may range from violent riots to symbolic political acts and the creation of fake news. We develop experimental design that investigates whether a provocateur can trigger a conflict by making cheap-talk statements. The experiment consist of three treatments: control without provocateur, treatment with provocateur and treatment where provocateur's preferences are known.

We analyse commuting patterns in Bratislava's fast growing sub-urban region with sub-optimal developed infrastructure. Standardized discrete choice model is used to estimate demand for individual car transport as well as for public buses and trains and to obtain corresponding elasticities with respect to travel costs, times and income. We find low rate of substitution between available modes. Direct price elasticity for public modes is in accordance with often cited rule of thumb -0.3. Negative income elasticities of demand for buses and trains, together with low direct price elasticity for car transport can be hard to overcome when looking for solution of current traffic problems in the region. We use modelled demand to predict effects of two recently proposed policies - new parking system in Bratislava city and construction of highway D4R7. In case of first policy, we expect massive reduction in car usage due to increased costs for car commuters. On the other hand, new highway would have only limited impact on mode choice and could reduce number of train commuters.

The paper aims to determine whether the political conflict between Catalonia and Spain leads to higher foreign exports in the region. Empirical analysis, based on the gravity model approach, indicates that the trade and intrastate conflict in Catalonia are related. Both the Poisson model with country and time fixed effects, and the fixed-effects panel data model show that Catalan foreign exports are positively associated with the past values of conflict in the region. Testing for endogeneity fails to support the view of a reciprocal relationship between domestic conflict and foreign trade.

with Ondřej Krčál

Previous literature has explored how agents respond to a signal of perceived distrust and shows that it lowers the agent’s motivation to act in the trustor’s (or principal’s) best interests. Distrust, in these studies is conveyed through either limiting the agent’s choice set or increasing the extent to which the agent is monitored. The proposed study is based on the idea that distrust may also be conveyed when a principal deliberately reduces the power of an agent to influence a given outcome based on the agent’s past track-record of performance. This may occur in situations in which a superior should decide, based on the past performance of the workers reporting to her, how to allocate responsibility among them. In such situations, the level of responsibility allocated to a worker may reflect the superior’s expectations of that worker’s performance relative to others. In other words, it may convey a signal of the extent to which a superior (dis)trusts how well one worker would perform relative to others. While it may seem natural for superiors to place the most responsibility possible with the worker that performed the best in the past, this could backfire if there is a large drop in the performance of the employee who feels he has been made needlessly irrelevant. This is because this worker might perceive the allocation decision as a signal that he has been distrusted as a result of a superior having an (unreasonably) low expectation of his performance. In the real world, it could be that this feeling that one has been made (disproportionately) less relevant is actually independent of the level of responsibility one has. In order to measure the pure effect of being made to feel less relevant (or feeling distrusted), we propose a lab experiment that varies the deliberate nature of the allocation decision while keeping the level of responsibility constant. Based on the previous literature, our hypothesis is that workers who are deliberately made less relevant will perform worse than those for whom the decision was not deliberate, keeping the level of responsibility constant. Additionally, we predict that this effect will be stronger for males than females and so we plan to gender balance the experimental treatments.

The presentation introduces the issue of gender in economics. I will show why gender matters in economic research and how should it be investigated. I will discuss three working papers: one on the approaches to measure gender-related self and gender differences and two showing possible applications of the approach in the research practice. I will start with explaining what a good “gender measure” is and which conditions it should satisfy. Then, I will proceed with discussing pitfalls of the dominating simplistic “gender as a variable” paradigm contrasting it with a “gender as an influence” approach. The main aim of the presentation is to point out possible gains from abandoning the traditional perspective treating biological sex as an explanation of observed differences in favour of a more sensitive, gender-oriented approach.

(with Ondřej Krčál and Štěpán Mikula)

Theoretical models of social capital (David et al., 2010; Bräuninger and Tolciu, 2011) provide an explanation for the different outcomes of integration efforts documented by the recent empirical literature. The models show that communities may find themselves in two different equilibria, one with a high level of social capital and low outmigration or one with a low level of social capital and high outmigration. However, empirical tests of this explanation based on quasi-experiments typically suffer from the selection of immigrants which makes the identification challenging. In order to address this issue, we take the setup used in the theoretical models into the laboratory. We implement a treatment in which we change the initial level of social capital without affecting the equilibrium outcomes. In a finitely repeated game, most of the experimental communities end up in one of the two equilibria predicted by the theoretical models, with a higher proportion of the treatment communities attaining the equilibrium with a high level of social capital and low migration. This suggests that the initial levels of social capital might facilitate the effect of immigration on community levels of social capital.

(with Rostislav Staněk and Katarína Čellárová)

When lawmakers create laws, they must decide not only on the substance but also the form of the law. The choice of the legal form may be described as a choice between rules and discretion. Although the discretion may more efficient, recent studies suggest that individuals value institutions and procedures for their intrinsic value. i.e. beyond the expected utility associated with the achieved outcome. The aim of our experiment is to identify discretion aversion. Our design combines an effort provision experiment and a voting experiment. Despite the fact that discretion regime is more efficient than the strict rule regime in our experiment, subjects vote significantly more often for the strict rule regime. In order to distinguish whether the unpopularity of the discretionary regime is driven by the presence of the human factor, we ran additional treatment where the human officer is replaced by the computer. The discretionary regime remains unpopular even in the treatment with the computer officer.  

Calculation of retirement savings shows that vulnerable subgroup of the self-employed does not save enough to cover their pensions at an acceptable level. Their status in the Czech tax and savings system allows them, within limits, to choose their own level of savings. It might, therefore, be possible to provide a nudge to influence the decision making of the self-employed in order to increase their savings rate. An experiment to test the most promising route - to increase the information level - will utilize the life cycle experiment in ztree. Details of the experiment will be discussed in the presentation.

In spite of certain contradictory findings and missing details on the process itself, performance feedback literature can largely explain why and when the organization prefers change or rigidity. While understanding organizational behavior has enormous value, we are still unsure of its performance consequences. This research aims to contribute to answering the question of the relationship between responsiveness to performance feedback (intensity with which organization reacts to a given performance feedback message) and subsequent performance. Using data from U.S. manufacturing firms, the findings support the inverted U shape relationship between responsiveness and performance and the notion that less responsiveness is ceteris paribus preferred to equivalently more responsiveness.

The aim of my research is to investigate the relationship between financial literacy and behavior in the face of the growing challenge of FinTech. To do so, I personally set-up a financial education program for high-school students called “Futuro Sicuro” in order to understand if it could change financial habits among millennials. This program provides two types of randomized treatment at the class level, a theoretical rule-of-thumb based one with the presence of financial advisors, and a high digitized one based on the learn-by-playing rule through App and websites. The empirical research is carried out using personally collected data during the pilot of the program aforesaid involving 650 students.

Website

Food waste is a phenomenon associated with substantial economic (inefficient use and misallocation of resources) and social consequences (environmental impacts and consumption of limited resources). Food waste is caused neither by a single factor nor a single group, and (likely) is not resulting from intentional act such as “I like to waste food”. Certain percentage of food loss and even food waste is present in all stages of food chain. Yet there are significant differences in the food waste intensity along the food chain stages – with the final stages being major sources of food waste. The key culprit seem to be households’ behavior, despite the fact food waste is commonly viewed as undesirable. The research area of the project at hand is to design and empirically test procedures that would be applicable by subjects responsible for waste management (foremost municipalities), leading to a reduction of food waste through behavioral change. A field intervention experiment, targeting local population in Brno is the main method. The population is divided into three groups: control group, antecedent-intervention experimental group and feedback-intervention experimental group, with each group being represented by 4 different locations with presumed influential population characteristics.

In June of this year, an amendment to the Act on Employment Services came into force in Slovakia, to make the conditions for entitlement to a work-related allowance and a work mobility allowance more attractive. However, in addition to the costs of labor mobility also other determinants influence the decision-making of individuals on the allocation of time to the commuting to and from work. We quantify the average weekly time spent on commuting in the Slovak Republic at NUTS 2 level and identify the differences in the determinants affecting the labor mobility in the surveyed areas. From the source database, which is the result of a questionnaire survey conducted in April 2017, we use data on employed respondents aged 15-64 in a total of 1 537.

The support of the grant scheme VEGA 1/0621/17 “Decision-making Process of Slovak Households about Allocation of Time for Paid and Unpaid Work and Household Strategies’ Impact on Selected Areas of the Economic Practice”.

In Slovakia people traditionally devote lots of time to perform a variety of work in their households. However, a lot of goods and services, which households produce themselves, are offered by the market as well, so households can buy them, instead of doing them by themselves. On the basis of data obtained by a primary research done in Faculty of Economics Matej Bel University on the sample of 1,142 households, the types of housework which are mostly outsourced by Slovak household are identified. The main factors households perceive as important for making decisions about outsourcing housework and barriers to outsourcing them are also examined.

The support of the grant scheme VEGA 1/0621/17 “Decision-making Process of Slovak Households about Allocation of Time for Paid and Unpaid Work and Household Strategies’ Impact on Selected Areas of the Economic Practice”.

Waiters often pool their tips and in some restaurants, waiters do not get to keep their tips, but forfeit them to their employer. We use a variation of the dictator game to explore if and how these scenarios may affect tipping behavior if customers are aware of them. Lab experiment participants are divided into dictators and servers. Servers solve an effort intensive task and earn their dictator a lower or higher amount of money based on their performance (money earned is a proxy for service quality.) In the baseline treatment, dictators then decide if they want to tip their server and how much. In the pooling treatment, dictators decide if and how much to tip their server knowing that the tips will be pooled. In the third treatment, where waiters do not get to keep their tips, dictators choose if and how “big” and expensive a Thank you message to send to their server, knowing he will not receive any of the money it cost.

Tommaso Reggiani (Masaryk University) & Rainer Michael Rilke (WHU - Otto Beisheim School of Management

We investigate the influence of pro-social incentives on workers' labor supply in a natural field experiment. We recruited workers to take part in a survey for a fixed compensation. Having finished the survey, a bonus payment is offered in order to perform an additional optional task. In different treatments, the bonus payment generates (i) a standard private gain, (ii) an equivalent donation or (iii) different combinations of private gain and donation. We observe that high donations in combination with no or only small individual gains lead to negative or null effects on labor supply. Bonus combinations of small donations and generous private gains increase labor supply. Effort provision, as well as job satisfaction, are not systematically affected by the different incentive schemes. The experiment sheds lights on widely accepted claims that corporate philanthropy measures are effective tools to motivate employees. When firms consider the design of pro-social incentives schemes, they should be vigilant about employees' distributional concerns.

(joint work with Josef Montag)

This paper uses housing privatization in Brno as a quasi-experiment producing exogenous assignment of homeownership status. We do not find homeownership to be causing higher unemployment. In fact, our estimates are consistently negative and economically substantively, ranging from -3 to -8 percentage points. We find no evidence that homeownership lowers labor force participation.

Abstract: The lecture will focus on the concept of vigilantism in the strategies of far right groups in Slovakia as well as in the context of the response from the civil society initiatives. While in the case of far right groups we can see various examples of conventional vigilante strategies used as a tool of political struggle, the civil society is adopting especially diverse digital vigilante practices in order to actively challenge the presence of far right agenda in the public discourse. In both cases, the interaction of online and offline world will be explored, with special attention to the role of the government and state authorities in the equation. 

(Coffee and sandwiches will be available at the seminar)

Abstract: The ability to accurately estimate the duration of planned tasks is the cornerstone of successful time and project management. It is naturally appealing to expect that the accuracy of estimates increases with estimators' professional experience. However, contrary to the intuition, many companies keep estimating over-optimistically. Projects then run late and trigger budget extensions. We hypothesize that project time estimates can be influenced by anchors such as managerial suggestions or customer expectations. Suggestions driven by wishful thinking can cause the estimates to become too optimistic.  Moreover, in the absence of estimation feedback, the effect of anchor can persist over time and influence subsequent estimates of the same or similar task. Even when there is no anchor before the first estimate available, the first estimate itself can serve as an anchor for future estimates and cause systematic bias. We experimentally test the influence of numerical anchors on duration estimates of a simple real effort task. In addition, we test the interplay between anchor and task experience by repeating the task estimation and performance process in multiple rounds. We find strong anchoring effects which persist over time. We also find an evidence of a self-anchoring effect.