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We conducted a field experiment in a Dutch retail chain of 122 stores to study the interaction between team incentives, team social cohesion, and team performance. Theory predicts that the effect of team incentives on team performance increases with the team’s social cohesion because social cohesion reduces free-riding behavior. In addition, team incentives may lead to more coworker support or to higher peer pressure and thereby, can affect the team’s social cohesion. We introduced short-term team incentives in a randomly selected subset of stores and measured for all stores, both before and after the intervention, the team’s sales performance and the team’s social cohesion as well as coworker support and peer pressure. The average treatment effect of the team incentive on sales is 1.5 percentage points, which does not differ significantly from zero. In line with theory, the estimated treatment effect increases with social cohesion as measured before the intervention. Social cohesion itself is not affected by the team incentives. This paper was accepted by Yan Chen, decision analysis.

This paper uses a natural field experiment to connect corporate social responsibility (CSR) to an important but often neglected behavior: employee misconduct and shirking. Through employing more than 1,500 workers, we find that our use of CSR increases employee misbehavior—24% more employees act detrimentally toward our firm by shirking on their primary job duties when we introduce CSR. Observed data patterns across the treatments are consonant with a model of “moral licensing,” whereby the “doing good” nature of CSR induces workers to misbehave on another dimension that is harmful to the firm. This paper was accepted by Yan Chen, decision analysis.

We present a natural field experiment designed to measure other-regarding preferences in the market for taxis. We employed testers of varying ethnicity to take a number of predetermined taxi journeys. In each case, we endowed them with only 80% of the expected fare. Testers revealed the amount they could afford to pay to the driver midjourney and asked for a portion of the journey for free. In a 2 × 2 between-subjects design, we vary the length of the journey and whether a business card is elicited. We find that (1) the majority of drivers give at least part of the journey for free, (2) giving is proportional to the length of the journey, and (3) 27% of drivers complete the journey. Evidence of outgroup negativity against black testers is also reported. In order to link our empirical analysis to behavioral theory, we estimate the parameters of a number of utility functions. The data and the structural analysis lend support to the quantitative predictions of experiments that measure other-regarding preferences, and they shed further light on how discrimination can manifest itself within our preferences. This paper was accepted by Yan Chen, behavioral economics.

We implement behavioral mechanisms in a natural field experiment to increase loan repayment rates on a peer-to-peer (P2P) lending website. The results show that text message reminders that convey lenders’ positive expectations considerably increase the likelihood that borrowers will repay their loans, whereas reminders emphasizing the adverse consequences of failure to repay loans do not have enduring effects. Our experiment results in an increase in loan repayments in the sample period. In addition, our reminders are cost-free to implement, showing the potential importance of such interventions in enhancing prosocial compliance in P2P lending. This paper was accepted by John List, behavioral economics.

This paper studies the effect of providing feedback to college students on their position in the grade distribution by using a natural field experiment. This information was updated every six months during a three-year period. We find that greater grades transparency decreases educational performance, as measured by the number of examinations passed and grade point average (GPA). However, self-reported satisfaction, as measured by surveys conducted after feedback is provided but before students take their examinations, increases. We provide a theoretical framework to understand these results, focusing on the role of prior beliefs and using out-of-trial surveys to test the model. In the absence of treatment, a majority of students underestimate their position in the grade distribution, suggesting that the updated information is “good news” for many students. Moreover, the negative effect on performance is driven by those students who underestimate their position in the absence of feedback. Students who overestimate initially their position, if anything, respond positively. The performance effects are short lived—by the time students graduate, they have similar accumulated GPA and graduation rates. This paper was accepted by John List, behavioral economics.

We investigate behavioral reactions toward exogenous changes of implicit norm-relevant information in a natural field setting where customers are free to choose if and how much to pay for a service. Customers’ voluntary payments are significantly affected by subtle information cues: cues that signal a high rather than a low payment norm increase payments by some 27%. Consistent with the conjecture that this effect is in large part driven by customers’ uncertainty about the actual norm, responses are mitigated when explicit norm-relevant information is provided. Additional treatments suggest that the reactions to the cues are not driven by mere saliency but by the information deduced from the cues in the presence of uncertainty. Data are available at https://doi.org/10.1287/mnsc.2017.2937 . This paper was accepted by Uri Gneezy, behavioral economics.

This paper investigates two channels of prosociality: indirect reciprocity and charitable giving. We conducted a natural field experiment in a hair salon in Hamburg, Germany, over the course of four months. In the baseline, we collected data on customers’ tips—a scenario absent indirect reciprocity and donations. In two treatments we had the hairdresser collect donations to a charity. In one treatment the hairdresser pointed out the opportunity to donate. Our data indicate that the voluntary activity of collecting donations in the salon led to greater tips for the hairdresser and significant donations. In the second treatment, the hairdresser unconditionally donated to the charity before the customers could. This donation did not increase tips further compared with the collection-only treatment. Our data indicate that indirect reciprocity works in the field. We find evidence that indirect reciprocity and charitable giving work as complements. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2016.2519 . This paper was accepted by Uri Gneezy, behavioral economics.

Socially responsible investment is increasingly prevalent in financial markets and is characterized by the integration of financial and nonfinancial objectives. This paper investigates the influence of wealth concerns and moral concerns on individual investors’ decisions to invest responsibly. We conduct a unique natural field experiment of investors in an online banking context, wherein we frame responsible investment with regard to either wealth or morality and study investors’ subsequent behavior. We find that wealth framing is more effective than moral framing for both information search and investment behavior. Our study contributes to the literature by providing real-life insight into how prosocial decision making in financial markets can be promoted. This paper was accepted by John List, behavioral economics.

One explanation advanced for the persistent gender pay differences in labor markets is that women avoid salary negotiations. By using a natural field experiment that randomizes nearly 2,500 job seekers into jobs that vary important details of the labor contract, we are able to observe both the extent of salary negotiations and the nature of sorting. We find that when there is no explicit statement that wages are negotiable, men are more likely to negotiate for a higher wage, whereas women are more likely to signal their willingness to work for a lower wage. However, when we explicitly mention the possibility that wages are negotiable, these differences disappear completely. In terms of sorting, we find that men, in contrast to women, prefer job environments where the “rules of wage determination” are ambiguous. This leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous. This paper was accepted by Gérard P. Cachon, behavioral economics.