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We study how consumer spending responds to digital payments, using the differential switch to digital payments across consumers induced by the sudden 2016 Indian Demonetization for identification. Digital payment use rose by 2.94 percentage points and monthly spending increased by 2.38% for an additional 10 percentage points in prior cash dependence. Spending remained elevated even when cash availability recovered. Robustness analyses show that the spending response is not driven by purchase substitution, income shocks, credit supply, or price changes. We provide causal evidence that digital payments increase consumer spending due to subdued endowment effects. [ABSTRACT FROM AUTHOR]

Using account-level credit card data from a large Turkish bank, we study the impact of a unique credit card policy that increases minimum payment on consumption and debt repayment. We show that the policy reduces credit card spending and debt, boosts existing debt repayment, and reduces credit card delinquency. The credit card debt of affected consumers falls on average by 50 |$\%$| two years into the policy's implementation. An increase in minimum payment has a stronger effect than does a decrease of a similar magnitude. We build a benchmark life cycle model with soft liquidity constraint to explain the reduction in credit card spending. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

AbstractCooking with relatively clean fuel has numerous benefits, including reducing pollution and improving health and socioeconomic outcomes. Hence, some developing countries have implemented policies to promote LPG use. However, risks of accidents and explosions may prevent risk-averse households from adopting LPG. This study examines the causal effect of risk aversion on the adoption and expenditure of LPG using the seventh round of the Ghana Living Standards Measurement Survey and a double hurdle approach. We find that risk-averse households are four per cent less likely to adopt LPG and, if adopted, spend significantly less on LPG. The result holds even after endogeneity has been addressed with diverse econometric strategies. However, the effect disappears in households where the primary decision-makers have no formal education, while it is systematically stronger when they are educated. The results imply measures that reduce the actual and perceived dangers of LPG usage could effectively increase adoption rates. [ABSTRACT FROM AUTHOR]

Robert Sugden (2018. The Community of Advantage: A Behavioural Economist’s Defence of the Market. Oxford University Press) offers an alternative account for normative economics grounded in the view that it is in each individual’s interest to have more opportunity rather than less, irrespective of whether their decisions reveal well-ordered preferences. Our paper characterizes Sugden’s proposal as a step in the right direction, but as insufficient. His opportunity criterion does not go far enough in taking insights from psychology seriously. Sugden defends an idea of agency understood as a person’s subjective sense of being in control of her actions. To realize this sense of being in control, we argue that a focus on opportunity-only is problematic; people also need agentic capabilities. We use self-determination theory (SDT) to develop a subjective account of agency that is grounded in psychological science. [ABSTRACT FROM AUTHOR]

Inducing behavior change is a missing factor in the face of viral threats. We provide evidence from a natural experiment in 2020 on the effects of containment, closure, and economic policy responses to COVID-19 on change in human mobility behavior in the Middle East and North Africa (MENA) region and worldwide. We also examine how social norms, namely risk taking and patience, and institutional trust, could explain the heterogenous effects of policy responses on behavior change. Our results show that the stringency of containment and closure policies decreased human mobility in MENA and worldwide. Risk-averse populations and populations with low-time preference were more likely to pre act and lower their mobility independent of containment and closure policies. The effectiveness of risk communication in promoting positive mobility change increased by the level of institutional trust. Specifically in MENA, populations were less responsive to the actual disease risk and the public perception of that risk. Familiarity with COVID-19 induced negative behavior change among impatient populations. Economic support policies promoted strong positive mobility change among low-risk and high-time preference populations. Income support seems to be the effective economic policy response in low-income countries and debt relief the effective one in higher-income countries. [ABSTRACT FROM AUTHOR]

This article characterizes optimal social security in economies with agents who exhibit loss aversion. Two forms of loss aversion are explored. In the first, workers have a fixed retirement age and are loss averse over private savings. This motivates a more generous social security program. In the second, workers do no private savings but can choose their retirement age, exhibiting loss aversion over the foregone leisure time from delayed retirement. Social security benefits consequently rise steeper with retirement age and an earlier normal retirement age is optimal. In both cases, optimal policy is highly sensitive to the introduction of loss averse preferences. [ABSTRACT FROM AUTHOR]

The judgments of human beings can be biased; they can also be noisy. Across a wide range of settings, use of algorithms is likely to improve accuracy, because algorithms will reduce both bias and noise. Indeed, algorithms can help identify the role of human biases; they might even identify biases that have not been named before. As compared to algorithms, for example, human judges, deciding whether to give bail to criminal defendants, show Current Offense Bias and Mugshot Bias; as compared to algorithms, human doctors, deciding whether to test people for heart attacks, show Current Symptom Bias and Demographic Bias. These are cases in which large data sets are able to associate certain inputs with specific outcomes. But in important cases, algorithms struggle to make accurate predictions, not because they are algorithms but because they do not have enough data to answer the question at hand. Those cases often, though not always, involve complex systems. (1) Algorithms might not be able to foresee the effects of social interactions, which can depend on a large number of random or serendipitous factors, and which can lead in unanticipated and unpredictable directions. (2) Algorithms might not be able to foresee the effects of context, timing, or mood. (3) Algorithms might not be able to identify people's preferences, which might be concealed or falsified, and which might be revealed at an unexpected time. (4) Algorithms might not be able to anticipate sudden or unprecedented leaps or shocks (a technological breakthrough, a successful terrorist attack, a pandemic, a black swan). (5) Algorithms might not have "local knowledge," or private information, which human beings might have. Predictions about romantic attraction, about the success of cultural products, and about coming revolutions are cases in point. The limitations of algorithms are analogous to the limitations of planners, emphasized by Hayek in his famous critique of central planning. It is an unresolved question whether and to what extent some of the limitations of algorithms might be reduced or overcome over time, with more data or various improvements; calculations are improving in extraordinary ways, but some of the relevant challenges cannot be solved with ex ante calculations. [ABSTRACT FROM AUTHOR]

In the paper, the role of a citizen, a public official, and an observer in the reproduction of bribery as a social norm are each analyzed. To make the analysis of this cellular-social form of corruption, three variables are incorporated: the agent's perception of how widespread the corruption is, the agent's available resources with which to act, and the role of moral values. Later, some scenarios of normalization and denormalization of corruption are explored, making different assumptions regarding the analysis and assignment of agents to different roles in the interactions. What was found is that power relations among corrupt and non-corrupt agents are key for understanding the social reproduction of bribery, where inequality might facilitate the social reproduction of corruption. The role of the observer of the interaction of bribe-givers, bribe-takers, and bribe-resisting agents was also found to potentially tip the balance in the direction of normalization or denormalization of bribery. Hence, giving the observer tools to intervene in these interactions becomes essential to combat corruption. [ABSTRACT FROM AUTHOR]

This paper exploits a recent natural experiment to analyze the effect of volcanic eruptions on tourism expenditure. Using a Difference-in-Differences methodology, we find that volcanic eruptions have a positive impact on tourism expenditure, both aggregate expenditure and expenditure by category, and both during the eruption and the post-eruption period. We investigate the mechanisms behind the increase in expenditure and obtain strong support for the empathy mechanism, prevailing over other mechanisms such as changes in prices, the profile of tourists, or simply curiosity. Our results suggest that tourist empathy with the affected community manifests through consumption, finding that prosocial consumption increases in the cultural identification of the tourist with the affected area. [ABSTRACT FROM AUTHOR]

In a novel contribution to the entrepreneurial, the Gender and Development (GAD) and the relational capital (RC) literatures, this study examines the possible role of spouses on the entrepreneurial gender gap through the family embeddedness model, which sees the family members as embedded in their social relationships and describes family systems through three interrelated characteristics (family transitions, family resources and family norms including attitudes, and values). Using a unique representative matched sample of 321 married couples, the results supports both the preselection and especially the socialization hypotheses by showing that married people have a significant association with their partners regarding their entrepreneurial tendency which also increases as marriage duration extends. Furthermore, while such similarity is associated with an increased probability for women to become an entrepreneur, it is also associated with men's decreased probability to become an entrepreneur. Finally, clear evidence was found that family income had a significant positive association with men's entrepreneurial tendency as well as with their probability to become entrepreneurs. However, it did not have any significant association with a woman's entrepreneurial tendency nor with their probability to become entrepreneurs. The results shed light on important possible drivers for the entrepreneurial gender gap that works inside the family premises. [ABSTRACT FROM AUTHOR]

Emotions are the effect but also the cause of eating behaviors, including the purchase and consumption of snacks. As snacks become an increasingly prevalent segment of the food industry, their consumption has been linked to rising rates of overweight, obesity, and diet-related diseases. Understanding how emotional valence influences consumer attitudes and behaviors toward snacks is therefore crucial. This study explores the relationship between emotional eating and the propensity to consume unhealthy snacks, both sweet and salty. A survey of 707 representative participants revealed distinct emotional patterns in snack consumption, with choices significantly influenced by consumers' emotional states and personal preferences. Furthermore, individuals who frequently opted for unhealthy snacks typically exhibited poorer health and financial profiles.

This study conducts a bibliometric analysis to explore the relationship between consumer emotions and purchase preferences within a Virtual Reality (VR) environment. Utilizing data from the Web of Science and Scopus databases, the research employs a structured literature review (SLR) approach to identify and analyze relevant academic literature. Custom queries were used to extract data on specific keywords, titles, and abstracts, which were then processed using VOSviewer software to generate bibliometric maps. The findings highlight significant but fragmented coverage of the intersection between VR and consumer emotions, underscoring a gap in integrated studies within this domain. The study identifies distinct research clusters in VR applications, including user experience and cognitive load, and emphasizes the need for further interdisciplinary research to enhance understanding and practical application of VR in influencing consumer behavior and emotions. This analysis provides valuable insights for academics and practitioners aiming to leverage VR for improved consumer engagement and decision-making.

The issue of similarity in the real estate market is a widely recognized aspect of analysis, yet it remains underexplored in scientific research. This study aims to address this gap by introducing the concept of a Property Cognitive Information System (PCIS), which offers an innovative approach to analyzing similarity in the real estate market. The PCIS introduces non-classical and alternative solutions, departing from the conventional data analysis practices commonly employed in the real estate market. Moreover, the study delves into the integration of artificial intelligence (AI) in the PCIS. The paper highlights the value added by the PCIS, specifically discussing the validity of using automatic ML-based solutions to objectify the results of synergistic data processing in the real estate market. Furthermore, the article establishes a set of essential assumptions and recommendations that contribute to a well-defined and interpretable notion of similarity in the context of human-machine analyses. By exploring the intricacies of similarity in the real estate market through the innovative PCIS and AI-based solutions, this research seeks to broaden the understanding and applicability of data analysis techniques in this domain.

This study investigates whether wording a promotional marketing message as originating from the US government vs. the US president impacts consumers' responsiveness to the message. Using a discrete choice experiment, it examines consumer responsiveness to President Biden's order promoting domestic production. Results indicate that consumers are willing to pay a premium for domestically produced tomatoes, with variations based on political affiliations and product attributes like organic labeling and farm employment practices. However, findings on the significance of information treatment effects are mixed, suggesting that consumer responsiveness is unaffected by wording the message as originating from a broad political body vs. a specific politician. [ABSTRACT FROM AUTHOR]

Aim: This paper investigates the effect of a religious holiday (Eid-ul-Fitr in Pakistan) on compliance behaviour instituted during the COVID-19 pandemic. Longstanding religion-based norms of behaviour during the Eid holidays (traveling to meet family members, praying in large gatherings, hugging) may counteract newly established (and weaker) norms of health-preserving behaviours. Method: We study the impact of Eid-ul-Fitr on compliance with COVID guidelines for a sample of university students. Our effects are identified by unprompted delays in fielding a survey measuring compliance with prescribed behaviours. Results: We find that compliance with guidelines declines immediately after the religious holiday in our sample of students, with no observable decline in other well documented predictors of compliance behaviour (risk perceptions, trust in the authorities). We find that this decline in compliance is largely attributable to male participants, with one important exception. We further confirm our results by conducting robustness checks incorporating matching techniques and a smaller follow-up study where we randomize invitations to the survey. Conclusion: We conclude that amid the pandemic, newly formed norms pertaining to healthcare guidelines (focusing on social-distancing) emerged, and were subsequently undercut by longstanding norms of behaviour following a religious celebration: Eid-ul-Fitr. This paper underscores the fragility of these newly emerged norms, especially when challenged by a more well-entrenched, traditional norm. [ABSTRACT FROM AUTHOR]

Conspiracy theories are everywhere, spreading like infectious diseases within and across countries. The rise of conspiracy-mongers is not just a nuisance, but a serious threat to political and economic stability. This paper provides an empirical analysis of cross-country differences in economic, institutional, and political factors attracting people to conspiracy theories, using nationally representative surveys conducted in 27 advanced and developing countries over the period 2018–2021. I find that conspiratorial thinking is more common in countries with lower level of income and higher levels of unemployment and income inequality. However, the most important socioeconomic factor in determining the popularity of conspiracy theories is educational attainments. Conspiratorial mentality is far more prevalent in countries with lower levels of tertiary education. I also find that institutions—as measured by bureaucratic quality and corruption—are important in drawing people away and to conspiracy theories. Finally, while internal conflict and tensions are not concomitant to conspiracy ideation, external conflict and the risk of terrorism are positively associated with the popularity of conspiratorial attitudes across countries. [ABSTRACT FROM AUTHOR]

How do people attribute responsibility when an outcome is not caused by an individual but results from a decision chain involving several people? We study this question in an experiment, in which five voters sequentially decide on how to distribute money between them and five recipients. The recipients can reward or punish each voter, which we use as measures of responsibility attribution. In the aggregate, we find that responsibility is attributed mostly according to the voters' choices and the pivotality of the decision, but not for being the initial voter. On the individual level, we find substantial heterogeneity with three overall patterns: Little to no responsibility attribution, pivotality-driven, and focus on choices. These patterns are similar when praising voters for good outcomes and blaming voters for bad outcomes. [ABSTRACT FROM AUTHOR]

Under a randomized setting, this article finds workers with entrepreneurial ambitions—intended entrepreneurs—are (1) far more common than workers with past entrepreneurial experience and (2) increase the rate of entrepreneurship among their peers. Peer effects are persistent, stronger for tighter networks, and extend to the decision to join a startup. As intended peers explain half of the variation in entrepreneurship rates in our sample, our results demonstrate that intended entrepreneurs, even those that never personally start a firm, represent a vital component of the entrepreneurial ecosystem. [ABSTRACT FROM AUTHOR]

A Bayesian agent experiences gain–loss utility each period over changes in belief about future consumption (news utility) with diminishing sensitivity over the magnitude of news. Diminishing sensitivity induces a preference over news skewness: gradual bad news, one‐shot good news is worse than one‐shot resolution, which is in turn worse than gradual good news, one‐shot bad news. So the agent's preference between gradual information and one‐shot resolution can depend on his consumption ranking of different states. In a dynamic cheap‐talk framework where a benevolent sender communicates the state over multiple periods, the babbling equilibrium is essentially unique when the receiver is not loss averse. Contrary to the commitment case, more loss‐averse receivers may enjoy higher news utility in equilibrium. We characterize the family of gradual good‐news equilibria when facing such receivers and find that the sender conveys progressively larger pieces of good news. [ABSTRACT FROM AUTHOR]

We study random joint choice rules, allowing for interdependence of choice across agents. These capture random choice by multiple agents, or a single agent across goods or time periods. Our interest is in separable choice rules, where each agent can be thought of as acting independently of the other. A random joint choice rule satisfies marginality if for every individual choice set, we can determine the individual's choice probabilities over alternatives independently of the other individual's choice set. We offer two characterizations of random joint choice rules satisfying marginality in terms of separable choice rules. While marginality is a necessary condition for separability, we show that it fails to be sufficient. We provide an additional condition on the marginal choice rules which, along with marginality, is sufficient for separability. [ABSTRACT FROM AUTHOR]

This paper examines the role of individuals’ emotions in determining their concerns about international migration. For the empirical analysis, we exploit little-explored information in the German Socio-Economic Panel (SOEP) data on individuals’ negative emotions, e.g., anger, fear, and sadness. We find that the frequency of experiencing negative emotions is positively associated with immigration concerns. Moreover, we show that the relationship varies across employment status, birth cohort, and social media usage. Our analysis also underscores the real-life consequence of emotions by demonstrating their positive association with support for far-right political parties among males, but not among females. Finally, we exploit the exogenous variation in negative emotions induced by the death of a parent to infer causality. Fixed effects regressions with instrumental variables exhibit a positive impact of negative emotions on immigration concerns among females, but no significant effects are found among males. Further investigation into channels driving these gender differences in results underscores gender differences in roles played by other concerns that often carry over to determine individuals’ immigration concerns, e.g., concerns about international terrorism. [ABSTRACT FROM AUTHOR]

In the NBA, predominantly Black players play in front of predominantly non-Black fans. Using the “NBA Bubble”, a natural experiment induced by COVID-19, we show that the performance of Black players improved significantly with the absence of fans vis-à-vis White players. This is consistent with Black athletes being negatively affected by racial pressure from mostly non-Black audiences. We control for player, team, and game fixed effects, and dispel alternative mechanisms. Beyond hurting individual players, racial pressure causes significant economic damage to NBA teams by lowering the performance of top athletes and the quality of the game. [ABSTRACT FROM AUTHOR]

Prior studies have found that an entrepreneur's level of narcissism may correspond with higher firm performance in some contexts, but existing research has yet to fully explore all of the critical contingencies that shape these nuanced relationships. In this study, we examine how narcissistic traits of a new venture founder enhance firm performance and we extend the literature by revealing workaholism as a crucial mediator of this relationship. We also examine family support (both emotional and instrumental) as an important boundary condition that moderates the link between workaholism and new venture performance. Using a sample of 1,518 student entrepreneurs from 43 countries, we demonstrate that narcissism can enhance new venture performance through workaholism of the founder. Furthermore, we found that family emotional support diminishes the positive relationship between workaholism and performance. Finally, we discuss the implications of our work for both theory and practice. Plain English Summary: Narcissistic workaholics achieve high business performance, unless their families become too involved. Founders wield outsized influence over new venture creation and early development. For example, past research suggests that personality traits of the founder, like narcissism, may boost new venture performance or destroy it. However, there are no consistent results regarding the impact of narcissism on performance. To understand the mechanisms shaping the relationship between narcissism and venture performance, we investigate founder's workaholism as a possible mediator. At the same time, familial ties and relationships play important roles in many spheres of life, and we argue that family support may be beneficial to firm founders (or not), depending on the type of support and/or personal characteristics of the founder. In our study, we analyzed responses from active business founders about themselves and their businesses. We find that narcissism increases venture performance through workaholism, while family emotional support decreases the positive effect of workaholism. Thus, the main implication of our study for both researchers and practitioners is that workaholism may be a missing link between narcissism and performance. Furthermore, family support may augment the degree to which founders' addictive desire to work positively impacts venture performance. [ABSTRACT FROM AUTHOR]

Studying the potential gap between firms’ and consumers’ sustainable attitudes and behaviors is important for aligning expectations and promoting strategies to reduce this gap and effectively implement sustainable business models. However, knowledge is lacking on this attitude–behavior gap, which has been rarely explored from either the macro or the micro perspectives. Hence, this study investigates sustainable consumer behavior at the macro and micro levels through two quantitative studies based on the theory of planned behavior. At the macro level, the study identifies a significant correlation between a country's GDP and sustainable behaviors, with the findings suggesting that higher economic development encourages behaviors that surpass attitudes. Despite widespread environmental concern and positive environmental attitudes, a notable attitude–behavior gap persists across European countries, underscoring the complexity of translating environmental awareness into consistent actions. At the micro level, the focus shifts to the hospitality sector in Portugal, revealing that the attitude–behavior gap is also evident within this industry. Factors such as environmental concern, subjective norms, and perceived behavioral control significantly influence consumers' intention to pay green hotel prices. However, actual behaviors often fall short of these positive intentions, highlighting the barriers that prevent the consistent adoption of sustainable practices. This dual-level analysis underscores the need for targeted strategies that address both the economic and the psychological factors influencing sustainable consumer behavior. The findings provide valuable insights for policymakers and businesses to bridge the attitude–behavior gap and promote sustainable practices. By understanding these dynamics, strategies can be better aligned to enhance consumer engagement with sustainability goals and drive long-term environmental stewardship.

This article investigates whether a micro-entrepreneur's personality influences their innovativeness. Using the Big Five theory and a broad definition of innovation from the 4th version of the Oslo Manual (two types and nine categories of innovations in total), the study analyses data from 1,848 Polish micro-entrepreneurs. Since innovativeness is a complex process with several interdependencies, and previous research shows that introducing one type of innovation is not independent of introducing other types, Multivariate Probit (MVP) regression was used to estimate the models. The results allow two conclusions to be drawn. Firstly, in the case of product innovations implemented by micro-entrepreneurs, three personality traits have a positive impact. These are Openness to experience, Conscientiousness and Extroversion. Secondly, in the case of business process innovations, all 7 types are positively influenced by two personality traits, namely Openness to experience and Extroversion.

We find evidence of selective exposure to confirmatory information among 400,000 users on the investor social network StockTwits. Self-described bulls are five times more likely to follow a user with a bullish view of the same stock than are self-described bears. Consequently, bulls see 62 more bullish messages and 24 fewer bearish messages than bears do over the same 50-day period. These "echo chambers" exist even among professional investors and are strongest for investors who trade on their beliefs. Finally, beliefs formed in echo chambers are associated with lower ex post returns, more siloing of information, and more trading volume. [ABSTRACT FROM AUTHOR]