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.

Two Distinct Moral Mechanisms for Ascribing and Denying Intentionality.

Philosophers and legal scholars have long theorized about how intentionality serves as a critical input for morality and culpability, but the emerging field of experimental philosophy has revealed a puzzling asymmetry. People judge actions leading to negative consequences as being more intentional than those leading to positive ones. The implications of this asymmetry remain unclear because there is no consensus regarding the underlying mechanism. Based on converging behavioral and neural evidence, we demonstrate that there is no single underlying mechanism. Instead, two distinct mechanisms together generate the asymmetry. Emotion drives ascriptions of intentionality for negative consequences, while the consideration of statistical norms leads to the denial of intentionality for positive consequences. We employ this novel two-mechanism model to illustrate that morality can paradoxically shape judgments of intentionality. This is consequential for mens rea in legal practice and arguments in moral philosophy pertaining to terror bombing, abortion, and euthanasia among others.

Survival of a Perverse Nation: Sexuality and Kinship in Post-Soviet Armenia

Survival of a Perverse Nation traces the ways in which contemporary Armenian anxieties are congealing into the figure of the “homosexual.” As in other post-Soviet republics, homosexuality has increasingly become defined as the crisis of the times, and is understood by many as a destructive force linked to European encroachment. In Armenia, a growing right-wing nationalist movement since 2012 has been targeting LGBT and feminist activists. I suggest that this movement has arisen out of Armenia’s concerns regarding proper social and biological reproduction in the face of high rates of emigration of especially men in search of work. Many in the country blame this emigration on a post-Soviet oligarchy, with close ties to the government. This oligarchy, having quickly and massively privatized and liquidated industry and land during the war over the region of Nagorno-Karabagh (1990-1994) with Azerbaijan, created widespread un(der)employment. A national narrative attributing the nation’s survival of the 1915 Genocide and dispersion of its populations to strong morality preserved by institutions such as the Church and the family has now, in the post-Soviet era, ruptured into one of moral “perversion.” This dissertation is based on 15 months of ethnographic research, during which I participated in the work of two local non-governmental organizations: Public Information and Need for Knowledge, an LGBT rights organization and Women’s Resource Center, a feminist organization. I also conducted interviews with 150 households across Yerevan, the capital city, and did in-depth interviews with other activists, right-wing nationalists and journalists. Through psychoanalytic frameworks, as well as studies of kinship, I show how sovereignty – the longed for dream for Armenians over the last century – is felt to have failed because of the moral corruption of the illegitimate figures that fill Armenian seats of authority. I, thus, examine the ways in which a missing father of the household is discursively linked to the lack of strong leadership by a corrupt government, producing a prevalent feeling of moral disintegration that nationalists displace onto the “homosexual.”