Showing papers by "Lorenz Goette published in 2017"
TL;DR: This work conducts a real-effort experiment manipulating expectations and examining consequences on effort provision, documenting substantial nonmonotonicities in the effort response to changing expectations.
Abstract: Theories of expectations-based reference-dependent preferences have provided a critical modeling innovation, incorporating a structured theory of the formation of reference points. An important prediction of these models is a monotone response in behavior to changes in expectations. To test such models we conduct a real-effort experiment manipulating expectations and examining consequences on effort provision. In contrast to the theory, we document substantial nonmonotonicities in the effort response to changing expectations. Our results provide some evidence on the limitations of expectations-based reference dependence. (JEL: D81, D84, D12, D03)
58 citations
TL;DR: It is found that risk aversion shows a time‐dependent change across the first post‐stress hour, evolving from less risk aversion shortly after stress to more risk averse behaviour at the last testing time.
Abstract: Decision-making processes can be modulated by stress, and the time elapsed from stress induction seems to be a crucial factor in determining the direction of the effects. Although current approaches consider the first post-stress hour a uniform period, the dynamic pattern of activation of the physiological stress systems (i.e., the sympathetic nervous system and hypothalamic-pitui- tary-adrenal axis) suggests that its neurobehavioural impact might be heterogeneous. Here, we evaluate economic risk prefer- ences on the gain domain (i.e., risk aversion) at three time points following exposure to psychosocial stress (immediately after, and 20 and 45 min from onset). Using lottery games, we examine decisions at both the individual and social levels. We find that risk aversion shows a time-dependent change across the first post-stress hour, evolving from less risk aversion shortly after stress to more risk averse behaviour at the last testing time. When risk implied an antisocial outcome to a third party, stressed individuals showed less regard for this person in their decisions. Participants’ cortisol levels explained their behaviour in the risk, but not the antisocial, game. Our findings reveal differential stress effects in self- and other-regarding decision-making and high- light the multidimensional nature of the immediate aftermath of stress for cognition.
42 citations
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TL;DR: This paper found that more than half of the paid traffic is lost when we shut off paid-links search, while most of the traffic still ended up on the website of the company.
Abstract: Companies spend billions of dollars online for paid links to branded search terms. Measuring the effectiveness of this marketing spending is hard. Blake, Nosko and Tadelis (2015) ran an experiment with eBay, showing that when the company suspended paid search, most of the traffic still ended up on its website. Can findings from one of the largest companies in the world be generalized? We conducted a similar experiment with Edmunds.com, arguably a more representative company, and found starkly different results. More than half of the paid traffic is lost when we shut off paid-links search. These results suggest money spent on search-engine marketing may be more effective than previously documented.
6 citations