Publications

Abstract:
Concern about threatened species and ecosystem disservices underpin public willingness to pay for ecological restoration.

© 2018 the Authors. Restoration Ecology published by Wiley Periodicals, Inc. on behalf of Society for Ecological Restoration. Public preferences for ecological restoration can be revealed through environmental valuation studies that aim to measure willingness to pay. However, respondents' environmental views will often influence the conclusions drawn from such studies. We conducted a national survey of perceptions of the benefits and perverse outcomes arising from ecological restoration using a dichotomous choice payment card. Using interval regression to estimate willingness to pay, we find that there are respondents who will perceive mostly biodiversity benefits from restoration, with a particular interest in threatened species recovery. We find that this eco-centric view of the benefits of restoration also increases the dollar amount that respondents are willing to pay to support restoration activities. A proportion of respondents also perceive restoration as having negative impacts, with concerns orientated towards increased fire, decreased farmland productivity, and groundwater availability. Perceptions of the potential effects of restoration on land productivity had a significant negative influence on the amount of money respondents were willing to pay. These findings are useful for targeting outreach in order to garner public support for ecological restoration. 

Abstract:
Eliciting public values for management of complex marine systems: an integrated choice experiment.

© 2018 MRE Foundation, Inc. All rights reserved. To accurately capture how the public values marine environmental management, we need valuation approaches that can accommodate the complexity of environmental systems and human interaction with them. Coherently representing this complexity in an evaluation means that we can inform the socially optimal allocation of marine resources among competing uses, such as fisheries, industry, and environmental protection. Integrated choice experiments (ICE) provide a systematic approach to valuing large numbers of attributes, and we use them to value eight marine ecological and recreational features at Moreton Bay, South-East Queensland. The ICE employed two sub-experiments: ecological and recreational, to reduce cognitive load for respondents. We compare the ICE approach with a full-profile discrete choice experiment (DCE), with all eight attributes. The ICE had greater face validity than the traditional format. We find large, positive willingness to pay (WTP) for the provision of recreational features and habitat protection, although with some diminishing marginal effects. 

Abstract:
Estimation of linear dynamic panel data models with time-invariant regressors.

We present a sequential approach to estimating a dynamic Hausman‐Taylor model. We first estimate the coefficients of the time‐varying regressors and subsequently regress the first‐stage residuals on the time‐invariant regressors. In comparison to estimating all coefficients simultaneously, this two‐stage procedure is more robust against model misspecification, allows for a flexible choice of the first‐stage estimator, and enables simple testing of the overidentifying restrictions. For correct inference, we derive analytical standard error adjustments. We evaluate the finite‐sample properties with Monte Carlo simulations and apply the approach to a dynamic gravity equation for U.S. outward foreign direct investment. 

Abstract:
Multiple‑Purchaser Payments for Ecosystem Services: an Exploration Using Spatial Simulation Modelling.

This paper focuses on the issue of payments for ecosystem services (PES) mechanism design when the activity incentivised through the scheme benefits multiple groups, each of whom might be prepared to contribute to payments made through the scheme. In particular, we examine spatial coordination on the demand side of the market; that is to say, the question of which beneficiary of the PES scheme buys land-management changes on which land parcels. We show through spatial simulation modelling that it is possible for negotiation to lead to Pareto improvements when compared to solutions reached through non-cooperative strategic solutions; however, we also show that this result is not universal and only holds under certain conditions. In particular, the spatial correlation and spatial interdependence of the ecosystem service benefits are key in determining whether negotiation between beneficiaries is optimal and therefore if policy makers and designers of PES schemes should be prioritising bringing together multiple beneficiaries of ecosystem services. 

Abstract:
Broken Promises and Hidden Partnerships: an Experiment.

Previous research indicates that cheap-talk promises promote cooperation. We extend the empirical study of promises to a three person environment. Doing this enabled us to study two features of promises in the naturally occurring world that have not been studied in the previous literature. For one, we are able to determine the impact of “contingent” promises, which refers to promises that need to be kept (or broken) only in the event that another event first occurs. Second, we were able to study “promise chains”, by which we mean a set of sequentially-made promises. In both cases, we are able to apply existing theories to these novel environments to predict promise keeping behavior. Consistent with theory predictions, we find that promises are not necessary, and do not change behavior, when incentives are aligned. When there is conflict of interest, and when a promise is definite (that is, not contingent), we find that people are indeed willing to forgo monetary payoff to keep their promises. However, when the promise is contingent, promises no longer promote cooperation: people are equally like to choose a selfish action regardless whether they made a promise. Finally, we find that promise chains do not promote trustworthiness, with people at the end of the chain no more likely to honor their promises than people at earlier positions, despite the additional indirect harm that people later in the chain cause by defecting. Our findings offer insights relevant for the behavioral economic theory of guilt aversion. 

Abstract:
High stakes: a little more cheating, a lot less charity.

© 2018 Elsevier B.V. We explore the downstream consequences of cheating–and resisting the temptation to cheat–at high stakes on pro-social behaviour and self-perceptions. In a large online sample, we replicate the seminal finding that cheating rates are largely insensitive to stake size, even at a 500-fold increase. We present two new findings. First, resisting the temptation to cheat at high stakes led to negative moral spill-over, triggering a moral license: participants who resisted cheating in the high stakes condition subsequently donated a smaller fraction of their earnings to charity. Second, participants who cheated maximally mispredicted their perceived morality: although such participants thought they were less prone to feeling immoral if they cheated, they ended up feeling more immoral a day after the cheating task than immediately afterwards. We discuss the theoretical implications of our findings on moral balancing and self-deception, and the practical relevance for organisational design. 

Abstract:
How feedback about leadership potential impacts ambition, organizational commitment, and performance.

© 2018 Elsevier Inc. In the present research we report results from two experimental studies that examine how feedback about leadership potential impacts leadership ambition, organizational commitment, and performance. Study 1 used an experimental vignette methodology that controls for prior performance. Results show that individuals who receive feedback that they have low potential to be a future leader have lower ambition and organizational commitment relative to those who receive feedback that they have high potential to be a future leader. Study 2 provides evidence of the causal behavioral effects of feedback about leadership potential using a real task effort environment. Results show that participants informed to be unlikely future leaders display lower performance in a subsequent task than participants informed to be likely future leaders. The findings from the two studies demonstrate that information about leadership potential affects subsequent ambition to become leaders as well as performance. We discuss the implications of these findings for the importance of followership, talent management, and leadership succession. 

Abstract:
The Economic Consequences of Political Donation Limits.

© 2017 the London School of Economics and Political Science the economic consequences of limits on political donations depend on the degree of political competition. Donors, who are ideologically aligned with candidates, decide how much to contribute to their own candidate. They may benefit from rent-seeking by their own candidate but dislike rent-seeking by the opposition. Increased rent-seeking by politicians thus generates campaign contributions for themselves but also mobilizes donations to the opposing candidate, potentially to a greater extent. This latter effect acts as a deterrent to rent-seeking when contributions finance electoral campaigns and positively affect election chances. When political competition is low, incumbent donors outnumber opposition donors, and limits reduce rent-seeking. When political competition is high, donors are equalized and laissez-faire reduces rent-seeking. Consistent with these hypotheses, data from the USA suggest that limits are associated with better policies and stronger growth performance at low levels of political competition, while laissez-faire is preferred when political competition is high. 

Abstract:
A theory of trade policy under dictatorship and democratization.

© 2017 This paper develops a new model of trade policy under dictatorship and democratization. The paper makes two contributions. One is to provide a deeper understanding of the relationship between political institutions and economic efficiency by studying the endogenous interaction between the form of government and trade policy. The paper's second contribution is to show how a dictatorship can manipulate trade policy to maintain its grip on power in the face of permanent world price shocks, thus opening the door to a re-examination of trade policy responses to technology shocks. The model is used to explain an interesting episode of trade policymaking between 1815 and 1846, during which time Britain substantially liberalized trade while Prussia, on the other side of the grain market, significantly increased protectionism. 

Abstract:
Promises and lies: can observers detect deception in written messages.

© 2016, the Author(s). We design a laboratory experiment to examine predictions of trustworthiness in a novel three-person trust game. We investigate whether and why observers of the game can predict the trustworthiness of hand-written communications. Observers report their perception of the trustworthiness of messages, and make predictions about the senders’ behavior. Using observers’ decisions, we are able to classify messages as “promises” or “empty talk.” Drawing from substantial previous research, we hypothesize that certain factors influence whether a sender is likely to honor a message and/or whether an observer perceives the message as likely to behonored: the mention of money; the use of encompassing words; and message length. We find that observers have more trust in longer messages and “promises”; promises that mention money are significantly more likely to be broken; and observers trust equally in promises that do and do not mention money. Overall, observers perform slightly better than chance at predicting whether a message will be honored. We attribute this result to observers’ ability to distinguish promises from empty talk, and to trust promises more than empty talk. However, within each of these two categories, observers are unable to discern between messages that senders will honor from those that they will not. 

Abstract:
Protection in Government Procurement Auctions.

Discrimination against foreign bidders in procurement auctions has typically been achieved by price preferences. We demonstrate that in the bidding game, each level of protection via a price preference can be achieved by an equivalent tariff. When government welfare depends only on net expenditures, this equivalence carries over to the government's decision. As such, this equivalence provides a justification that agreements to eliminate price preferences to be taken in tandem with agreements to lower tariffs; e.g. the Government Procurement Agreement (GPA) in the broader context of the WTO. 

Abstract:
Beware of popular kids bearing gifts: a framed field experiment.

© 2016 Elsevier B.V. The literature on pro-social behavior shows that older children are more generous than younger children; however, the level of individual generosity is heterogeneous even between children of the same age. This paper investigates whether a child's popularity affects his/her generosity. Our participants – 231 children, six to twelve years old – decide how many of their four colored wristbands they want to share with another anonymous child. We manipulate the visibility of this decision: in treatment Public, the decisions are revealed to the entire class at the end of the game, whereas in treatment Private children's decisions remain secret. In addition, we elicited each child's network of friends using an innovative “seating map” mechanism. Our results reveal that more popular children are more generous in Public than Private decision environments, while less popular children behave similarly in both cases. Moreover, older children in Public display greater generosity than (i) older children in Private and (ii) younger children in either Public or Private. Finally, in Public, older and more popular children share more than less popular older children, and more than younger children regardless of popularity; whereas, in Private there is no effect of popularity on children of any age. Our findings point to another reason to adopt transparent decision making in teams and organizations: it may promote the generosity of some (perhaps especially popular leaders) without detrimentally impacting the pro-sociality of others. 

Abstract:
Market design and the stability of general equilibrium.

© 2016 Elsevier Inc. We employ laboratory methods to study the stability of competitive equilibrium in Scarf's economy (Scarf, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at the competitive equilibrium they oscillate without converging. Anderson et al. (2004) report that in laboratory double auction markets, prices in the Scarf economy do indeed oscillate with no clear sign of convergence. We replicate their experiments and confirm that tatonnement theory predicts the direction of price changes remarkably well. Prices are globally unstable with adverse effects for the economy's efficiency and the equitable distribution of the gains from trade.We also introduce a novel market mechanism where participants submit demand schedules and prices are computed using Smale's global Newtonian dynamic (Smale, 1976b). If the submitted schedules are competitive - sets of quantities that maximize utility taking prices as given - the resulting outcome is the unique competitive equilibrium of Scarf's economy. In experiments using the schedule market, prices converge quickly to the competitive equilibrium. Besides stabilizing prices, the schedule market is more efficient and results in highly egalitarian outcomes. 

Abstract:
Quasi–maximum likelihood estimation of linear dynamic short-T panel-data models.

In this article, I describe the xtdpdqml command for the quasi–
maximum likelihood estimation of linear dynamic panel-data models when the
time horizon is short and the number of cross-sectional units is large. Based
on the theoretical groundwork by Bhargava and Sargan (1983, Econometrica 51:
1635–1659) and Hsiao, Pesaran, and Tahmiscioglu (2002, Journal of Econometrics
109: 107–150), the marginal distribution of the initial observations is modeled as
a function of the observed variables to circumvent a short-T dynamic panel-data
bias. Both random-effects and fixed-effects versions are available. Copyright 2016 by StataCorp LP. 

Abstract:
Religious fragmentation, social identity and cooperation: Evidence from an artefactual field experiment in India.

© 2016 Elsevier B.V. We study the role of village-level religious fragmentation on intra- and inter-group cooperation in India. We report on data on two-player prisoners׳ dilemma and stag hunt experiments played by 516 Hindu and Muslim participants in rural India. Our treatments are the identity of the two players and the degree of village-level religious heterogeneity. In religiously heterogeneous villages, cooperation rates in the prisoners׳ dilemma, and to a lesser extent the stag hunt game, are higher when subjects of either religion play with a fellow in-group member than when they play with an out-group member or with someone whose identity is unknown. Interestingly, cooperation rates among people of the same religion are significantly lower in homogeneous villages than in fragmented villages in both games. 

Abstract:
Voting and the economic cycle.

© 2014, Springer Science+Business Media New York. Sophisticated voters assess incumbent competence by filtering out economic cycles (which they do not like) from trend growth (which they do). Naive voters on the other hand respond only to raw economic growth. This implies that voting in the aggregate should respond asymmetrically to the economic cycle. Upswings are rewarded by the naive, but punished by the sophisticated. Downswings are punished by all voters. Using an established dataset of over 400 general elections we find that the incumbent vote share (a) responds differently to trend growth than to the cycle, (b) does not respond significantly to positive variation in the economic cycle, and (c) responds significantly and negatively to negative realizations in the economic cycle. In contrast to standard formulations of the ‘grievance asymmetry’ this asymmetric vote response is found to be independent of trend growth. 

Abstract:
A fine is a more effective financial deterrent when framed retributively and extracted publicly.

Introducing monetary fines to decrease an undesired behavior can sometimes have the counterintuitive effect of increasing the prevalence of the behavior being targeted. Such findings raise important social psychological questions in relation to both the way in which financial penalties are framed and the social contexts in which they are administered. In a field experiment (Study 1), we informed participants who had signed up for an experiment that they would be fined if they arrived late. This fine was presented as either compensatory or retributive in nature and as being administered either privately or publicly. We then observed participants’ subsequent arrival time. In accordance with our hypotheses, participants’ punctuality was only improved (relative to a no-fine control) in response to retributive rather than compensatory fines and when told that fines would be administered publicly rather than privately. In Study 2 we used a scenario method to demonstrate that the greater efficacy of retributively framed fines can be attributed to their presence being less likely to undermine the perceived immorality of transgression than is the case for compensatory fines. We propose a material promotion-moral prevention (MPMP) theory to account for our findings and consider its practical implications for the use of financial disincentives to encourage cooperative behavior through public policy in domains such as climate change. 

Abstract:
Optimism and pessimism in games.

This article considers the impact of ambiguity in strategic situations. It extends the existing literature on games with ambiguity-averse players by allowing for optimistic responses to ambiguity. We use the CEU model of ambiguity with a class of capacities introduced by Jaffrray and Philippe (Mathematics of Operations Research 22 (1997), 165-85), which allows us to distinguish ambiguity from ambiguity-attitude, and propose a new solution concept, equilibrium under ambiguity (EUA), for players who may be characterized by ambiguity-preference. Applying EUA, we study comparative statics of changes in ambiguity-attitude in games with strategic complements. This extends work in Eichberger and Kelsey (Journal of Economic Theory 106 (2002), 436-66) on the effects of increasing ambiguity if players are ambiguity averse. © (2014) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.