Title: Essays in behavioral strategy
Description: The following essays explore ways in which the environment affects and is affected by organizations. The first essay, “Trust and the Division of Labor” considers that the trust environment of a firm helps determine its structure. Jointly with Stephan Meier and Patryk Perkowski, I show that exogenously imposed culture leads to variation in organizational form. An experiment primes trust using past performance from a pilot study and demonstrate that the level of trust within an organization affects division of labor and consequently organizational productivity. This evidence is consistent with a cross-country link between trust and the division of labor that we observe in data from the European Social Survey. A simple evolutionary game theoretic model is provided to illustrate the results. The second essay, Nobody Likes a Rat”, considers the impact of norms against certain types of behavior (in this case dishonesty) on behavior and organizational composition. Jointly with Ernesto Reuben, I investigate the intrinsic motivation of individuals to report, and thereby sanction, fellow group members who lie for personal gain.

We find that when groups can select their members, individuals who report lies are generally shunned, even by groups where lying is absent. This facilitates the formation of dishonest groups where lying is prevalent and reporting is nonexistent. Finally, "NFTs, Volume, and Social Influence" observes how organizations and individuals use environmental cues like rankings and volume for sensemaking in a market with high quality uncertainty. Using observational data scraped from the top 1000 NFT collections I find a significant positive relationship between volume and price. Then, using plausibly exogneous variation in blockchain-level transaction fees, I fit an instrumental variable model which helps validate the causal interpretation that changes in volume lead to changes in price. I further add an experiment on NFTs to tease out two plausible channels through which volume could affect prices: user attention and normative social influence. The experiment finds strong evidence that being told an NFT is higher volume leads subjects to pay more attention to that NFT, whereas this has no significant effect on a subject's reported preference for the NFT.

A second experimental treatment, in which subjects were told the NFTs were ordered by volume transaction costs, does observe a significant positive affect on reported preferences (as well as attention).