Using Behavioral Insights For a Better Understanding of Economic Decisions (Regarding Savings, Inequality and Dishonesty)

This dissertation consists of three essays on behavioral economics, with a general aim of enriching our understanding of economic decisions using behavioral insights and experimental methodology. Each essay takes on one particular topic with this general aim.

The first chapter studies savings behavior of the poor. In this project, partnering with a savings product provider in Kenya, we tested the extent to which behavioral interventions and financial incentives can increase the saving rate of individuals with low and irregular income. Our experiment lasted for six months and included a total of twelve conditions. The control condition received weekly reminders and balance reporting via text messages. The treatment conditions received in addition one of the following interventions: (1) reminder text messages framed as if they came from the participant’s kid (2) a golden colored coin with numbers for each week of the trial, on which participants were asked to keep track of their weekly deposits (3) a match of weekly savings: The match was either 10% or 20% up to a certain amount per week. The match was either deposited at the end of each week or the highest possible match was deposited at the start of each week and was adjusted at the end. Among these interventions, by far the most effective was the coin: Those in the coin condition saved on average the highest amount and more than twice as those in the control condition. We hypothesize that being a tangible track-keeping object; the coin made subjects remember to save more often. Our results support the line of literature suggesting that saving decisions involve psychological aspects and that policy makers and product designers should take these influences into account.

The second chapter is related to views towards inequality. In this project, we investigate how the perceived fairness of income distributions depends on the beliefs about the process that generated the inequality. Specifically, we examine how two crucial features of this process affect fairness views: (1) Procedural justice - equal treatment of all, (2) Agency - one's ability to determine his/her income. We do this in a lab experiment by varying the equality of opportunity (procedural justice), and one's ability to make choices, which consequently influence subjects’ ability to influence their income (agency). We then elicit ex-post redistribution decisions of the earnings as a function of these two elements. Our results suggest both agency and procedural justice matter for fairness. Our main findings can be summarized as follows: (1) Highlighting the importance of agency, we find that inequality resulting from risk is considered to be fair only when risk is chosen freely; (2) Highlighting the importance of procedural justice, we find that introducing inequality of opportunity significantly increases redistribution, however the share of subjects redistributing none remain close to the share of subjects redistributing fully revealing an underlying heterogeneity in the population about how fairness views should account for inequality of opportunity.

The third chapter is on morality. In this project, we study whether religious rituals act as an internal reminder for basic moral principles and thus affect moral judgments. To this end, we conducted two survey experiments in Turkey and Israel to specifically test the effect of Ramadan and Yom Kippur. The results from the Turkish sample how that Ramadan has a significant effect on moral judgments to some extent for those who report to believe in God. Those who believe in God judged the moral acceptability of ten out of sixty one actions significantly differently in Ramadan, whereas those who reported not to believe in God significantly changed their judgments only for one action in Ramadan. Our results extends the hypothesis established by lab experiments that religious reminders have a significant effect on morality, by testing it in the field in the natural environment of religious rituals.

This thesis is part of a broader collaborative research agenda with both colleagues and advisors. The programming, analyses, and writing, as well as any errors in this work, are my own.

Integrating simultaneous prosocial and antisocial behavior into theories of collective action.

Trust and cooperation constitute cornerstones of common-pool resource theory, showing that "prosocial" strategies among resource users can overcome collective action problems and lead to sustainable resource governance. Yet, antisocial behavior and especially the coexistence of prosocial and antisocial behaviors have received less attention. We broaden the analysis to include the effects of both "prosocial" and "antisocial" interactions. We do so in the context of marine protected areas (MPAs), the most prominent form of biodiversity conservation intervention worldwide. Our multimethod approach relied on lab-in-the-field economic experiments (n = 127) in two MPA and two non-MPA communities in Baja California, Mexico. In addition, we deployed a standardized fishers' survey (n = 544) to verify the external validity of our findings and expert informant interviews (n = 77) to develop potential explanatory mechanisms. In MPA sites, prosocial and antisocial behavior is significantly higher, and the presence of antisocial behavior does not seem to have a negative effect on prosocial behavior. We suggest that market integration, economic diversification, and strengthened group identity in MPAs are the main potential mechanisms for the simultaneity of prosocial and antisocial behavior we observed. This study constitutes a first step in better understanding the interaction between prosociality and antisociality as related to natural resources governance and conservation science, integrating literatures from social psychology, evolutionary anthropology, behavioral economics, and ecology.

The Role of Social Cognition and Person Perception in Economic Social Decision-Making

Social decision-making is often complex, requiring the decision-maker to make social inferences about another person in addition to engaging traditional decision-making processes. However, until recently, much research in neuroeconomics and behavioral economics has examined social decision-making while failing to take into account the importance of the social context and social cognitive processes that are engaged when viewing another person. Using social psychological theory to guide our hypotheses, four research studies investigate the role of social cognition and person perception in guiding economic decisions made in social contexts. The first study (Chapter 2) demonstrates that only specific types of social information engage brain regions implicated in social cognition and hinder learning in social contexts. Study 2 (Chapter 3) extends these findings and examines contexts in which this social information is used to generalize across contexts to form predictions about another person’s behavior. Study 3 (Chapter 4) demonstrates that under certain contexts these social cognitive processes may be withheld in order to more effectively complete the task at hand. Last, Study 4 (Chapter 5) examines how this knowledge of social cognitive processing can be used to change behavior in a prosocial group context. Taken together, these studies add to the growing body of literature examining decision-making in social contexts and highlight the importance of social cognitive processing in guiding these decisions. Although social cognitive processing typically facilitates social interactions, these processes may alter economic decision-making in social contexts.

The implementation of a translational study involving a primary care based behavioral program to improve blood pressure control: The HTN-IMPROVE study protocol (01295).

BACKGROUND: Despite the impact of hypertension and widely accepted target values for blood pressure (BP), interventions to improve BP control have had limited success. OBJECTIVES: We describe the design of a 'translational' study that examines the implementation, impact, sustainability, and cost of an evidence-based nurse-delivered tailored behavioral self-management intervention to improve BP control as it moves from a research context to healthcare delivery. The study addresses four specific aims: assess the implementation of an evidence-based behavioral self-management intervention to improve BP levels; evaluate the clinical impact of the intervention as it is implemented; assess organizational factors associated with the sustainability of the intervention; and assess the cost of implementing and sustaining the intervention. METHODS: The project involves three geographically diverse VA intervention facilities and nine control sites. We first conduct an evaluation of barriers and facilitators for implementing the intervention at intervention sites. We examine the impact of the intervention by comparing 12-month pre/post changes in BP control between patients in intervention sites versus patients in the matched control sites. Next, we examine the sustainability of the intervention and organizational factors facilitating or hindering the sustained implementation. Finally, we examine the costs of intervention implementation. Key outcomes are acceptability and costs of the program, as well as changes in BP. Outcomes will be assessed using mixed methods (e.g., qualitative analyses--pattern matching; quantitative methods--linear mixed models). DISCUSSION: The study results will provide information about the challenges and costs to implement and sustain the intervention, and what clinical impact can be expected.

Economics of new oncology drug development.

PURPOSE: Review existing studies and provide new results on the development, regulatory, and market aspects of new oncology drug development. METHODS: We utilized data from the US Food and Drug Administration (FDA), company surveys, and publicly available commercial business intelligence databases on new oncology drugs approved in the United States and on investigational oncology drugs to estimate average development and regulatory approval times, clinical approval success rates, first-in-class status, and global market diffusion. RESULTS: We found that approved new oncology drugs to have a disproportionately high share of FDA priority review ratings, of orphan drug designations at approval, and of drugs that were granted inclusion in at least one of the FDA's expedited access programs. US regulatory approval times were shorter, on average, for oncology drugs (0.5 years), but US clinical development times were longer on average (1.5 years). Clinical approval success rates were similar for oncology and other drugs, but proportionately more of the oncology failures reached expensive late-stage clinical testing before being abandoned. In relation to other drugs, new oncology drug approvals were more often first-in-class and diffused more widely across important international markets. CONCLUSION: The market success of oncology drugs has induced a substantial amount of investment in oncology drug development in the last decade or so. However, given the great need for further progress, the extent to which efforts to develop new oncology drugs will grow depends on future public-sector investment in basic research, developments in translational medicine, and regulatory reforms that advance drug-development science.

Changes in midbrain pain receptor expression, gait and behavioral sensitivity in a rat model of radiculopathy.

Intervertebral disc herniation may contribute to inflammatory processes that associate with radicular pain and motor deficits. Molecular changes at the affected dorsal root ganglion (DRG), spinal cord, and even midbrain, have been documented in rat models of radiculopathy or nerve injury. The objective of this study was to evaluate gait and the expression of key pain receptors in the midbrain in a rodent model of radiculopathy. Radiculopathy was induced by harvesting tail nucleus pulposus (NP) and placing upon the right L5 DRG in rats (NP-treated, n=12). Tail NP was discarded in sham-operated animals (n=12). Mechanical allodynia, weight-bearing, and gait were evaluated in all animals over time. At 1 and 4 weeks after surgery, astrocyte and microglial activation was tested in DRG sections. Midbrain sections were similarly evaluated for immunoreactivity to serotonin (5HT(2B)), mu-opioid (µ-OR), and metabotropic glutamate (mGluR4 and 5) receptor antibodies. NP-treated animals placed less weight on the affected limb 1 week after surgery and experienced mechanical hypersensitivity over the duration of the study. Astroctye activation was observed at DRGs only at 4 weeks after surgery. Findings for pain receptors in the midbrain of NP-treated rats included an increased expression of 5HT(2B) at 1, but not 4 weeks; increased expression of µ-OR and mGluR5 at 1 and 4 weeks (periaqueductal gray region only); and no changes in expression of mGluR4 at any point in this study. These observations provide support for the hypothesis that the midbrain responds to DRG injury with a transient change in receptors regulating pain responses.

Rapid behavioral and genomic responses to social opportunity.

From primates to bees, social status regulates reproduction. In the cichlid fish Astatotilapia (Haplochromis) burtoni, subordinate males have reduced fertility and must become dominant to reproduce. This increase in sexual capacity is orchestrated by neurons in the preoptic area, which enlarge in response to dominance and increase expression of gonadotropin-releasing hormone 1 (GnRH1), a peptide critical for reproduction. Using a novel behavioral paradigm, we show for the first time that subordinate males can become dominant within minutes of an opportunity to do so, displaying dramatic changes in body coloration and behavior. We also found that social opportunity induced expression of the immediate-early gene egr-1 in the anterior preoptic area, peaking in regions with high densities of GnRH1 neurons, and not in brain regions that express the related peptides GnRH2 and GnRH3. This genomic response did not occur in stable subordinate or stable dominant males even though stable dominants, like ascending males, displayed dominance behaviors. Moreover, egr-1 in the optic tectum and the cerebellum was similarly induced in all experimental groups, showing that egr-1 induction in the anterior preoptic area of ascending males was specific to this brain region. Because egr-1 codes for a transcription factor important in neural plasticity, induction of egr-1 in the anterior preoptic area by social opportunity could be an early trigger in the molecular cascade that culminates in enhanced fertility and other long-term physiological changes associated with dominance.

Can Genetics Predict Response to Complex Behavioral Interventions? Evidence from a Genetic Analysis of the Fast Track Randomized Control Trial.

Early interventions are a preferred method for addressing behavioral problems in high-risk children, but often have only modest effects. Identifying sources of variation in intervention effects can suggest means to improve efficiency. One potential source of such variation is the genome. We conducted a genetic analysis of the Fast Track randomized control trial, a 10-year-long intervention to prevent high-risk kindergarteners from developing adult externalizing problems including substance abuse and antisocial behavior. We tested whether variants of the glucocorticoid receptor gene NR3C1 were associated with differences in response to the Fast Track intervention. We found that in European-American children, a variant of NR3C1 identified by the single-nucleotide polymorphism rs10482672 was associated with increased risk for externalizing psychopathology in control group children and decreased risk for externalizing psychopathology in intervention group children. Variation in NR3C1 measured in this study was not associated with differential intervention response in African-American children. We discuss implications for efforts to prevent externalizing problems in high-risk children and for public policy in the genomic era.

Computer vision tools for the non-invasive assessment of autism-related behavioral markers

The early detection of developmental disorders is key to child outcome, allowing interventions to be initiated that promote development and improve prognosis. Research on autism spectrum disorder (ASD) suggests behavioral markers can be observed late in the first year of life. Many of these studies involved extensive frame-by-frame video observation and analysis of a child's natural behavior. Although non-intrusive, these methods are extremely time-intensive and require a high level of observer training; thus, they are impractical for clinical and large population research purposes. Diagnostic measures for ASD are available for infants but are only accurate when used by specialists experienced in early diagnosis. This work is a first milestone in a long-term multidisciplinary project that aims at helping clinicians and general practitioners accomplish this early detection/measurement task automatically. We focus on providing computer vision tools to measure and identify ASD behavioral markers based on components of the Autism Observation Scale for Infants (AOSI). In particular, we develop algorithms to measure three critical AOSI activities that assess visual attention. We augment these AOSI activities with an additional test that analyzes asymmetrical patterns in unsupported gait. The first set of algorithms involves assessing head motion by tracking facial features, while the gait analysis relies on joint foreground segmentation and 2D body pose estimation in video. We show results that provide insightful knowledge to augment the clinician's behavioral observations obtained from real in-clinic assessments.

Nurse-led behavioral management of diabetes and hypertension in community practices: a randomized trial.

BACKGROUND: Several trials have demonstrated the efficacy of nurse telephone case management for diabetes (DM) and hypertension (HTN) in academic or vertically integrated systems. Little is known about the real-world potency of these interventions. OBJECTIVE: To assess the effectiveness of nurse behavioral management of DM and HTN in community practices among patients with both diseases. DESIGN: The study was designed as a patient-level randomized controlled trial. PARTICIPANTS: Participants included adult patients with both type 2 DM and HTN who were receiving care at one of nine community fee-for-service practices. Subjects were required to have inadequately controlled DM (hemoglobin A1c [A1c] ≥ 7.5%) but could have well-controlled HTN. INTERVENTIONS: All patients received a call from a nurse experienced in DM and HTN management once every two months over a period of two years, for a total of 12 calls. Intervention patients received tailored DM- and HTN- focused behavioral content; control patients received non-tailored, non-interactive information regarding health issues unrelated to DM and HTN (e.g., skin cancer prevention). MAIN OUTCOMES AND MEASURES: Systolic blood pressure (SBP) and A1c were co-primary outcomes, measured at 6, 12, and 24 months; 24 months was the primary time point. RESULTS: Three hundred seventy-seven subjects were enrolled; 193 were randomized to intervention, 184 to control. Subjects were 55% female and 50% white; the mean baseline A1c was 9.1% (SD = 1%) and mean SBP was 142 mmHg (SD = 20). Eighty-two percent of scheduled interviews were conducted; 69% of intervention patients and 70% of control patients reached the 24-month time point. Expressing model estimated differences as (intervention--control), at 24 months, intervention patients had similar A1c [diff = 0.1 %, 95 % CI (-0.3, 0.5), p = 0.51] and SBP [diff = -0.9 mmHg, 95% CI (-5.4, 3.5), p = 0.68] values compared to control patients. Likewise, DBP (diff = 0.4 mmHg, p = 0.76), weight (diff = 0.3 kg, p = 0.80), and physical activity levels (diff = 153 MET-min/week, p = 0.41) were similar between control and intervention patients. Results were also similar at the 6- and 12-month time points. CONCLUSIONS: In nine community fee-for-service practices, telephonic nurse case management did not lead to improvement in A1c or SBP. Gains seen in telephonic behavioral self-management interventions in optimal settings may not translate to the wider range of primary care settings.