This paper empirically examines the behavioral precautionary saving hypothesis by Koszegi and Rabin (2009) stating that uncertainty about future income triggers saving because of loss aversion. We extend their theoretical analysis to also consider the internal margin, i.e., the strength, of loss...

This paper investigates the trade-off between conservation and equity considerations in the use of payments for environmental services (PES) that implicitly incorporate different distributive justice principles. Using a public good experiment with heterogeneous participants, we compare the...

This paper examines the hypothesis that cooperation depends on the aspirations that individuals hold for their community welfare and tests whether videos that depict either a successful example of collective action or living conditions in rural areas can shape community aspirations and increase...

We propose that community aspirations defined as the preferences for goals that increase communal well-being are an important determinant of cooperation in collective action problems. This paper conceptualizes community aspirations and investigates whether the proposed measure is associated with...

A growing literature in economics seeks to explain why people remain poor. Classical theories explained the persistence of poverty with constraints that are external to an individual such as market imperfections and coordination problems. Recently economists explored the role of aspiration...

Many intertemporal trade-offs are unbalanced: while the advantages of options are concentrated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for “concentration bias”, the tendency to overweight advantages that are concentrated...

Focusing theory hypothesizes a bias toward concentration according to which consumers prefer goods with one outstanding feature over those with several smaller sized upsides. In contrast to models of present-biased behavior, focusing theory prescribes also future-biased behavior if an option's...

Focusing theory hypothesizes a bias toward concentration according to which consumers prefer goods with one outstanding feature over those with several smaller sized upsides. In contrast to models of present-biased behavior, focusing theory prescribes also future-biased behavior if an option’s...

We explore in an experiment what leads to the breakdown of partnerships. Subjects are assigned a partner and participate in a repeated public good game with stochastic outcomes. They can choose each period between staying in the public project or working on their own. There is excessive exit as...