"Incentives affect the process of risky choice," with Xiaomeng Zhang, Shery Ball and Alec Smith (Available at SSRN 3943681; pre-print link)
For presenting this project, I received Best Poster Award at the 9th Annual Interdisciplinary Symposium on Decision Neuroscience (ISDN) in 2019 and the second place for Best Flash Talk Presentation at the 36th Virginia Tech Graduate Student Assembly Research Symposium.
Abstract: We investigated the effect of large changes in financial incentives on the process of decision-making by measuring autonomic arousal and visual attention during an incentivized lottery-choice task. High real stakes were accompanied by increased risk aversion and physiological arousal, and by shifts in attention toward safer alternatives. These effects were manifested both within and between individuals. We find no evidence that heightened risk aversion is a mistake. To capture the interactions of arousal and attention with subjective value during evidence accumulation, we developed and fit a new arousal-modulated Attentional Drift Diffusion model (aADDM). Our computational model demonstrates that arousal amplifies discounting of high-valued outcomes (multiplicative gaze bias) when participants attended to low-valued outcomes. Arousal and attention, and their interaction, are integral to the process of decision-making under risk.
"Myopia or future orientation? Comparing the time horizons of retrospective and prospective policy evaluations," with Markus Prior and Talbot Andrews (pre-print available on request)
Abstract: Just because people are myopic looking back doesn’t mean they are equally myopic looking forward. Both preference for temporally proximate benefits and end focus are consistent with retrospective “myopia.” If end focus explains overweighting of recent past, it’s not myopia. End focus predicts longer time horizons prospectively. Outside of political science, the term “myopia” refers to short time horizons backward and forward. This makes it potentially misleading to describe voters as “myopic” just because they give more weight to events in the recent (as opposed to distant) past. If this pattern is the result of preference for improvement, people are future-oriented—even when they evaluate the past. To test this hypothesis, we ask respondents to evaluate policy outcomes randomly described as past or future while holding constant the domain, information about conditions, and the elicitation method.
"Honesty sometimes decreases cooperation in Prisoner's Dilemma games with communication," with Eric Bahel, Sheryl Ball and Sudipta Sarangi (pre-print available on request) (poster link)
Abstract: An important role of communication is to coordinate action. Economic theory tells us, however, that communication is “cheap talk” in social interactions with compromised incentives to coordinate like the Prisoner’s Dilemma (PD) game. Yet, communication regularly increases cooperation in experiments. Recent work models a two stage PD game where players believe that their counterpart is lying averse (suffering a cost when telling a lie) and characterizes the conditions that facilitate cooperation (Bahel, Ball, and Sarangi, 2022 - BBS). Our objective was first to design an experimental setting of social interaction (with communication) that varies individuals’ cost of lying and, importantly, their perception of the underlying population’s honesty level. Second, we applied this setting to test the predictions and comparative statics of the PD model with lying aversion and pre-play communication. We modify the standard PD game by 1) exogenously assigning lying costs to participants, 2) manipulating the underlying prevalence of lying costs in the population, and 3) restricting communication to sending either a conditional cooperation message (promise to cooperate) or a non-cooperative message. Participants (N=100) completed 60 rounds divided into 8 blocks that varied lying costs and the PD incentives (potential gains/losses). In each round, participant’s counterpart lying cost (financial penalty incurred when not keeping one’s promise) was drawn from either a uniform urn of penalties or a skewed urn where high penalties were twice as likely. We find that the frequency of cooperation decreased with the monetary gain of lying or loss incurred when being deceived and with lower assigned penalties. Using elicited forecasts of a counterpart’s lying cost, we verify that the skewed urn significantly shifted participants beliefs about their counterpart’s penalty. Surprisingly, cooperation did not necessarily increase in a more honest population. The frequency of cooperation was instead driven by the interaction between the incentives to cooperate and the population’s honesty. Our results demonstrate that the nature of communication, beliefs about one’s opponent’s honesty, and an individual’s incentives operate in synergy in social interactions.
Selected Work in progress
"Incentives and emotional experiences modulate the contextual effects on valuation in risky choice ," with Alec Smith and Sheryl Ball (poster link)
Abstract: The brain must use limited computational resources to make decisions. The principle of efficient coding implies that value representations are context dependent. In particular, more frequently encountered payoffs are perceived more accurately. We hypothesized that these representations would be influenced by incentives (real vs. hypothetical) and by affective states (arousal and valence). Our objective was to test how incentives and emotions modulate value perception in risky choice. We recruited 70 participants (N=70) to complete a series of 600 decisions choosing between two options: 1) a lottery with a 50% chance of a positive payoff and a 50% of a zero payoff and 2) a sure payoff. The payoffs were sampled from a distribution with a narrow range (low volatility – LV– condition) in half of the trials and from a distribution with the same mean but a wider range (high volatility– HV– condition) in the other half of the trials, with the order of the conditions counterbalanced across participants. Crucially, participants were assigned to realize real payment, based on a randomly determined decision, from either the LV or HV conditions. Participants were informed that payoffs in the other volatility condition were instead hypothetical. During the session, participants were trained to classify emotions and regularly reported their emotional experience (arousal/valence). Our findings confirm the efficient coding hypothesis only for participants assigned to receive real payment from the LV condition, where perception was more sensitive to changes in payoffs under the LV condition compared to the HV one. On the other hand, participants assigned to receive real payment from the HV condition displayed comparable sensitivities to changes in payoffs across volatility conditions. Moreover, we find that self-reports of arousal, and not valence, were significantly higher during real payment condition. We then compute the mean difference in arousal for each participant across volatility conditions. We find that sensitivity to changes in the risky option’s payoffs did not decline for participants experiencing amplified arousal levels in the HV condition. In addition, we find that both reaction time and risk aversion were higher in the real payment condition and were strongly linked to individual differences in arousal. We find that stronger (real) incentives modulate the perception of value and increase self-reports of arousal. The efficient coding hypothesis seems to hold best under weak incentives and low levels of arousal. Our results demonstrate the importance of incentives and emotional experiences in the adaptation of perceptual processing of value.
“Betrayal aversion and emotion reappraisal: the case of vaccines,” with Esha Dwibedi, Jason Aimone and Sheryl Ball
Abstract: Betrayal aversion involves hesitancy in risking being betrayed in situations involving trust and has been linked to vaccine hesitancy in recent research. In this pre-registered vignette experiment, we inspect the impact of emotion reappraisal messaging on both vaccine hesitancy and betrayal aversion. We find that ambiguous and positive emotion reappraisal messaging leads to a significant decrease in vaccine-related betrayal aversion. The effect of these reappraisal messages specifically targeted the betrayal aversion channel of vaccine hesitancy and was effective only in scenarios that incorporate the element of betrayal. We conducted our experiment on 1189 United States residents through Amazon Mechanical Turk in September 2021. Our results demonstrate how emotion reappraisal messaging can be used as a targeted policy tool in communication to reduce vaccine-related betrayal aversion, thereby shaping individuals’ emotional response in the decision to vaccinate.
"When does cognitive load change economic preferences?"
"Impatience and discounting in politics: measurement and cognitive burden," with Markus Prior
"The value of communicating emotional experiences in social contexts," with Braxton Gately
"The impact of partisan (short) video clips on political attitudes: evidence using TikTok videos," with Michelangelo Landgrave
"Gender spotlighting and betrayal in political communication," with Jason Aimone and Sheryl Ball
"Risky choice and arousal in older adults," with Sheryl Ball and Alec Smith
"Pupil-linked arousal and static risk lottery choice," with Xiaomeng Zhang, Flora Li, Jason Aimone, Sheryl Ball and Alec Smith.
Chapters in edited volumes
Assaad, R., AlSharawy, A. & Salemi, C. (2021). Is the Egyptian Economy Creating Good Jobs? Job Creation and Economic Vulnerability from 1998 to 2018. In Krafft ,C. and Assaad ,R., (Eds.), The Egyptian Labor Market: A Focus on Gender and Vulnerability. Oxford: Oxford University Press (links: pre-print / book chapter)
Salehi-Isfahani, D., Sarangi, S., You, W., Alsharawy, A., AlKhuzam, S. & Alhumaid, B. (2018). "Peer Effects in Job Search for Saudi Youth." Evidence for Policy Design (EPoD) at Harvard Kennedy School
Salehi-Isfahani, D., Sarangi, S., You, W., Alsharawy, A., AlKhuzam, S., Alhumaid, B. & Alsultan, H. (2018). "Positive Peer Pressure: Leveraging Peer Effects to Motivate Job Search among Youth" Evidence for Policy Design (EPoD) at Harvard Kennedy School (link)
Many Saudi youth underestimate the time and effort required to find a private-sector job, and prefer government jobs.
Peer groups, in which members discuss job search challenges and receive application advice, can rectify inaccurate perceptions surrounding the labor market and the job search process.
When jobseekers have realistic expectations of the search process, it can motivate them to submit more job applications.