Experimental evidence on behavior in organizations and markets
Creators: name: Crede, Ann-Kathrin
Publisher: name: Universität Bern
Year: 2019
Subjects: 330 Economics
650 Management &amp; public relations

description: Today, running experiments to uncover causal relationships is a widely acknowledged tool in Managerial and Behavioral Economics. First with the help of laboratory experiments, and later with field and online experiments, the standard neoclassical model was increasingly challenged, and robust deviations from the assumption of a rational and selfish Homo oeconomicus were established. In addition, the experimental method is characterized by a broad field of application, and addresses not only economically highly relevant but also multidisciplinary questions. One common feature of all four essays of this thesis is that they share this multidisciplinarity. Essays 1 to 3 focus on the honesty and morality of individuals in organizations and markets, and thus, are closely related to the fields of Psychology and Philosophy. These projects address the fundamental question of the driving forces of being honest or dishonest, or of behaving according to one or another moral principle. Essay 4 is multidisciplinary in the sense that it focuses on the technical aspect of running interactive experiments online, and thus, is closely related to Computer Sciences. In essay 1, we investigate the influence of markets on morals. Following philosophy, the morality of an action can be evaluated based on the action or based on the consequences. In an online experiment, we expose participants to either a non-market or market environment, and elicit their subsequent decisions in a moral dilemma scenario. We hypothesize that the market environment induces cost-benefit analysis considerations, and thus, fosters consequentialist decisions. Compared to a baseline distribution of decisions in the moral dilemma, we find a substantial increase in consequentialist decisions in the market treatment. However, a similar increase can be observed in the non-market treatment, excluding a treatment effect of the market manipulation itself. In essay 2, I examine the underlying motives of lying aversion. I investigate the role of reputational concerns toward others in the decision not to lie in a die roll experiment. In a between-subject design, I exogenously vary whether the experimenter can observe the outcome of a die roll that determines the payoff. I find that partial lying and full lying disappear when the experimenter can track participants’ behavior. This result can be explained by reputational costs: Participants care about how they are viewed by the experimenter, and thus, abstain from lying when they are tracked. In essay 3, we adapt the experimental method to family business research. We investigate whether family managers are perceived as more religious by external stakeholders than non-family managers, and how this perception alters stakeholders’ decision to behave honestly toward a family manager in comparison to a non-family manager. By running a survey and an experiment, we show that family managers are perceived as more religious than non-family managers. In addition, we find that external stakeholders behave more honestly toward family managers than non-family managers, and that this positive effect is driven by the family managers’ attribute of being religious. In essay 4, we focus on a technical aspect of running interactive experiments online. We illustrate the implementation of websockets in oTree to allow for real-time interactions. As the first application, we run a continuous double auction market online to validate the functionality of our tool. We find that the number of trades and the market price converge toward the predicted equilibrium, as found in many laboratory experiments.