Working Papers and Work in Progress
This paper investigates whether the range of an attribute’s outcomes in the choice set alters its relative importance. I derive distinguishing predictions of two prominent theories of range-dependent attribute weighting: the focusing model of Koszegi and Szeidl (2013) and the relative thinking model of Bushong, Rabin, and Schwartzstein (2021). I test these predictions in a laboratory experiment in which I vary the prices of high- and low-quality variants of multiple products. The data provide clear evidence of choice-set dependence consistent with relative thinking: price increases that expand the range of prices in the choice set lead to more purchases. Structural estimates imply economically meaningful effect sizes: the average participant was willing to pay around17% more when a seemingly irrelevant option is added to their choice set.
A Reconsideration of the Common-Ratio Effect and Probability Weighting (with Christina McGranaghan, Kirby Nielsen, Ted O'Donoghue and Charles Sprenger)
We re-examine the common ratio effect (CRE) and its apparent inconsistency with expected utility theory (EUT). We show that if people have heterogeneity in both their preferences and susceptibility to choice noise, the range of possible CRE and reverse common ratio effect (RCRE) behaviors permissible under EUT is broad enough to accommodate much of the existing experimental literature. We develop a new experimental method that tests for the existence of CRE that is robust to choice noise and preference heterogeneity. We implement our proposed test and find no evidence of systematic CRE across a range of probabilities and common ratios. We validate our method by showing that the elicited valuations are correlated across methods, respond sensibly to changes in the expected value of the lottery, and significantly predict individual behavior in when the same participants are presented with standard common-ratio paired choice tasks. Our results call into question the existence of a stable probability-weighting function that can be applied to a broad set of choices.
Inequality of Opportunity and Demand for Redistribution (with Marcel Preuss, Germán Reyes and Joy Wu)
This paper investigates how the dynamics of luck and effort shape demand for redistribution. We vary the timing, importance, and transparency of luck in a two-stage experimental design. First, we recruit workers in an online marketplace to compete at a real-effort task. We generate IOp by experimentally varying the return to workers' effort. We then recruit a nationally representative sample of Americans (``spectators’’) to make redistributive decisions between pairs of workers facing different IOp. Spectators know the workers' return to effort but not who exerted more effort. We find that spectators’ redistribution decisions react strongly to IOp. A 10 percentage points increase in the probability that the winner exerted more effort increases the share of earnings redistributed by 2 percentage points. However, the effect of IOp on redistribution is lower than in a fully transparent environment in which we determine the winner by a coin-flip, raising the possibility that misperceptions about the role of luck might affect redistribution. We test this by providing spectators with information about the importance of luck in determining the outcome. Our information treatment decreases redistribution by 3 percentage points on average, implying that biased beliefs about IOp play an important role in explaining redistribution patterns.
Removing Barriers to Program Enrollment: Experimental Evidence from SNAP (with Tatiana Homonoff)
We study the impact of providing flexible, on-demand application interviews during enrollment for the Supplemental Nutrition Assistance Program. Using a field experiment involving over 63,000 applicants, we find that on-demand interviews increase program participation by 3.3 percentage points—an increase of 5.7 percent. Applicants with access to on-demand interviews had their cases processed 21% faster, suggesting large efficiency and welfare gains. We find no evidence that interview flexibility worsens targeting; our results are driven by an increase in take-up amongst likely-eligible cases. We document substantial heterogeneity by distinct office: lower-resource offices see the largest increases in participation while higher-resource offices see small or null effects. Our results have implications for the design of means-tested programs and highlight the distributional consequences of inefficient targeting.
Menu-Dependent Risk Attitudes: Theory and Evidence (with Zhuo Chen and Russell Golman)
We test for a novel pattern of menu-dependent risk attitudes that forms the basis of some recent theories of risky choice: does expanding the range of potential prizes from lotteries in a choice set lead people to overweight those prizes and make riskier choices? Contrary to our hypothesis, we find no evidence of such a menu effect. Varying the potential prize offered by an actuarially unfavorable, high-risk lottery does not affect the likelihood of choosing a different, moderate-risk gamble in favor of a safer alternative. Our well-powered null results cast doubt on prominent theories of menu-dependent risk preferences.