Trust, Information, and Society: An Experiment
Abstract: Trust is an essential ingredient for unlocking economic surplus. However, consider the prisoner’s dilemma---all parties gain from cooperation, yet each party has an incentive to deviate. How can we organize society to unlock the possible gains from trust in such situations? We’ve all had experiences that indicate it is possible. Many individuals exhibit pro-social preferences and we can take advantage of that fact. Consider when a selfish person has the opportunity to loan money to a pro-social individual. One can gain from loaning money, because the recipient will return the money plus some. In this case, it takes information, timing, and only one pro-social individual to unlock the surplus. To examine if this is true, I designed a laboratory experiment. Using survey instruments to identify pro-sociality, I placed together two individuals, only one of whom scores high on pro-sociality. When types are publicly labeled, I compared trust (and surplus) under four scenarios: sequential pro-social first, sequential selfish first, simultaneous moves pro-social first, and simultaneous selfish first. I find that individuals trust less when they learn their partner is not prosocial. When their partner is prosocial, they trust the same amount as the control group with no labels. Finally, I turn to a fundamental question: Will society organize itself so as to unlock surplus? I find that they do not self organize to unlock the gains of trust.
Presentations: Bay Area Experimental Economics Workshop (slides)
Lotteries and Savings In Mexico
(with Paul Gertler, Sean Higgins, and Enrique Seira)
Abstract: Are savings accounts experience goods, where consumers learn the value of saving in formal financial institutions only after opening and using an account? Across 110 bank branches throughout Mexico, we randomized a short-run incentive to save: prize-linked savings accounts with cash-prize lotteries, where lottery tickets are awarded as a function of savings balances. Both existing account holders and new account openers were eligible to win prizes, which were based on new savings accumulated over two months. After two months, the incentive was removed. We find that the savings lotteries served as a nudge to open accounts, causing a 43% increase in the number of bank accounts opened in treatment branches during the lottery months; in pre- and post-lottery months, there was no difference in the number of accounts opened in treatment and control branches. On the other hand, there was no intensive margin effect of the incentive on savings balances for existing accounts. While compliers who open accounts in treatment branches during lottery months initially save less than those who open accounts during the same months in control branches, we find that their savings balances catch up to the control group over time (after about 18 months). Furthermore, account openers in the treatment and control branches make transactions and keep their accounts active at similar rates in the five years after account opening.
Presentations: UC-Berkeley Economics Development Lunch Seminar (slides)
Works in Progress
(with Ron Berman, Christophe Van den Bulte, and Leo Pekelis)
I was a research assistant to Paul Gertler (UC Berkeley) from 2013 to 2015 on his interdisciplinary entrepreneurship training study in Uganda. I designed a labor market survey for Ugandan Youth. In 2015, I went to the field to pilot test the survey and help train enumerators to implement it. This study will measure the long term outcomes of an entrepreneurship training intervention. The intervention was specifically designed to tease out the importance of hard skills versus soft skills-- a classic debate in business schools among psychologists and economists.
In undergrad, I was a research assistant for Latika Chaduhary. I worked on a paper discovering the ROI to for-profit universities as well as collecting data on Indian Railroad stock prices.