2022 - Reprints: Managerial Economics
The Herfindahl-Hirschman Index and the distribution of social surplus, Journal of Industrial Economics, LXIX(3), 561-594, 2021
Y. Spiegel
(Reprint No. 390)
Research no.: 08620100
I show that in a broad range of oligopoly models, the Herfindahl-Hirschman index (HHI) reflects the ratio of producer surplus to consumer surplus and therefore the division of surplus between firms’ owners and consumers.
Turning on dimensional prominence in decision making: Experiments and a model, Management Science, 68(8), 6075-6099, 2022
A. Arad and A. Maltz
(Reprint No. 395)
Research no.: 00190100
Could introducing a tiny interest rate on positive balances of checking accounts affect investment decisions? We suggest, counterintuitively, that it might decrease allocations to checking accounts and increase riskless investments with higher returns. This violation of monotonicity is a potential outcome of a novel behavioral phenomenon that we formalize and investigate experimentally. It posits that even a small interest rate highlights or turns on the safe gains dimension, bumping up its decision weight while shrouding other considerations, such as liquidity. Consequently, choices may shift from the most liquid option, the checking account, to safe investments with superior returns. Our exploration of this phenomenon covers three different choice environments: investment decisions, social preferences, and choice under uncertainty.
Does communicating within a team influence individuals’ reasoning and decisions?, Experimental Economics, 2022
A. Arad, K. P. Grubiak & S. P. Penczynski
(Reprint No.: 399)
Research No.: 00120100
In recent years, experimental economics has seen a rise in the collection and analysis of choice-process data, such as team communication transcripts. The main purpose of this paper is to understand whether the collection of team communication data influences how individuals reason and behave as they enter the team deliberation process, i.e. before any communication exchange. Such an influence would imply that team setups have limited validity to speak to individual reasoning processes. Our treatment manipulations allow us to isolate the effects of (1) belonging to a team, (2) actively suggesting an action to the team partner, and (3) justifying the suggestion in a written text to the team partner. Across three different tasks, we find no systematic evidence of changed suggestions and altered individual sophistication due to changes in aspects (1)–(3) of our experimental design. We thus find no threat to said validity of team setups. In addition to investigating how the team setup affects individual behavior before communication, we also investigate the sophistication of decisions after the communication. We find that sophisticated strategies are more persuasive than unsophisticated strategies, especially when communication includes written justifications, thereby explaining why teams are more sophisticated and proving rich communication to be fruitful.
