Utility from Anticipation and Delayed Consumption, 2024, [pdf], (accepted at four conferences including ESA-World)
Abstract: This paper examines anticipatory utility and its impact on delayed consumption. Conventional economic models typically assume that utility is experienced only at the moment of consumption, but certain experiences can evoke strong anticipatory feelings that shape utility well before the event occurs. Using a laboratory experiment, we investigate how exogenously imposed delays influence individuals’ valuation of a ‘utility event’ and whether utility derived from anticipation moderates this effect. Participants engage in a gold mining game, waiting for a gold nugget to be revealed, and are randomly assigned to either a delay or no-delay treatment. Anticipation is measured primarily through participants’ willingness to pay for early information, with additional measures—such as the frequency of checking the mining status and self-reported excitement levels—serving as robustness checks. The results show that delays generally reduce the valuation of the gold nugget, but this effect is concentrated among low-anticipation individuals. In contrast, high-anticipation participants exhibit little to no change in valuation, suggesting that anticipatory utility buffers against the negative effects of delays. Finally, the three measures of anticipation are strongly correlated and yield consistent findings.
Gender and Demand for Comparative Information, 2024, with Nisvan Erkal and Boon Han Koh, under review at Experimental Economics [pdf]
Abstract: Self-assessment is important for decision making in education and career choice. An important source of information in self-assessment is social comparison. While some individuals may use this type of information to learn about their comparative advantage and set goals for the future, others may choose to avoid any such information altogether to preserve their ego and self-esteem. In this paper, we evaluate whether men and women differ in their demand for social comparison information in two different environments where such information may either have or not have instrumental value. When comparative information is non-instrumental, we find that women, especially those who believe themselves to be average performers, avoid information on those better than them (i.e., upward comparative information). In contrast, when faced with the prospect of doing the task again, women are more likely to seek upward comparative information than men. This is driven by women who believe themselves to be average performers. Understanding these differences in individuals' demand for information is important for effective design of feedback systems.
Materialisam and Economic Progress, 2019, with Peter Earl and Prasada Rao, [pdf]
Utility from anticipation
The role of anticipatory utility in mitigating negative demand shock, work in progress (theory & hypothesis)
Abstract: This paper investigates how utility derived from anticipation may help mitigate the effects of negative demand shocks, such as price increases and unfavorable reviews. According to the ‘self-fulfilling expectation’ theory by Koszegi (2010), individuals with high levels of anticipation invest more time, attention, and mental energy in envisioning the realization of future consumption. Consequently, this anticipation process enhances demand and can buffer against negative demand shocks. In a laboratory setting, participants wait for a period of time to gain access to a lottery. During the waiting period, participants in the high anticipation treatment receive visual and audio stimuli to heighten their anticipation of the lottery, while those in the low anticipation treatment receive no such stimuli. Before the lottery becomes available, two negative demand shocks are introduced: 1) an increase in the price of the lottery and 2) negative signals regarding the potential winnings from the lottery. Participants are then asked about their beliefs concerning lottery winnings and can choose either to play the lottery or receive a cash payment instead. We hypothesize that participants in the high anticipation treatment will exhibit higher demand for the lottery, both in terms of estimated winnings and the proportion of participants who choose to play.
Decision under unvertainty/ambiguity; intertemproal choice
Uncertainty aversion and product delays, work in progress (experimental design)
Abstract: This paper examines how delays in product availability affect consumer demand, with a particular focus on how uncertainty surrounding the delay may moderate this effect. In a laboratory setting, participants wait for an opportunity to purchase a product but experience a delay during the waiting process. Participants’ valuations of the product are elicited at two points: 1) immediately following the delay announcement and 2) after the additional waiting period, just before the product becomes available. We aim to determine whether the initial impact of the delay announcement persists into participants’ final demand once the product is ready for purchase. To assess how uncertainty moderates the effect of delay, we devise two treatments that vary the reason for the delay. In the uncertainty treatment, the reason for the delay is unexplained, whereas in the no-uncertainty treatment, the delay is attributed to random noise. We hypothesize that the initial shock of the delay will have a negative impact on demand but that this effect will diminish by the end of the waiting period. Additionally, we expect the negative impact of the delay to be significantly greater when the reason for the delay is uncertain. The results from this study may help companies better understand consumer reactions to product delays and provide strategies to mitigate the impacts of such delays.
AI; LLMs; Decision-making with human-machine collaboration
Supervised humans: Can machine nudge human to make the right choice? (proposal available upon request)
Can human-machine decision-making reduce sunk cost fallacy? (proposal available upon request)
Creativity; innovation; real-effort experiment;
Fear, stress, anxiety and creative thinking, (proposal)
Abstract: Considering that many innovations have emerged during times of great urgency and desperation—such as the development of the RNA vaccine during the COVID-19 pandemic or various wartime advancements—it is intriguing to investigate whether, holding other conditions constant, a stressful and anxiety-inducing environment can foster creative thinking. In my proposed experimental study, participants in the baseline treatment perform an effort-intensive task with multiple hidden shortcuts that can reduce effort and increase payoffs. In the “stress_1” treatment, participants face an increasing probability of receiving a mild electric shock if they fail to find any shortcuts, while the probability decreases if they identify one or more. In the “stress_2” treatment, instead of the participants themselves, a randomly selected participant from the lab faces the electric shock. The measure of creative thinking is the number of shortcuts found, and comparing this number across the stress treatments and the baseline will address the research question.
Experiment coding: oTree (4 projects); z-tree (1 project); qualtrics (1 project)
Data Analysis: Python; Stata; R