Stephen Leider

Bio: Stephen Leider is an academic researcher from University of Michigan. The author has contributed to research in topics: Reciprocity (social psychology) & Economic surplus. The author has an hindex of 23, co-authored 52 publications receiving 1748 citations. Previous affiliations of Stephen Leider include Harvard University.

Directed Altruism and Enforced Reciprocity in Social Networks

Abstract: We conducted online field experiments in large real-world social networks in order to decompose prosocial giving into three components: (1) baseline altruism toward randomly selected strangers, (2) directed altruism that favors friends over random strangers, and (3) giving motivated by the prospect of future interaction. Directed altruism increases giving to friends by 52% relative to random strangers, whereas future interaction effects increase giving by an additional 24% when giving is socially efficient. This finding suggests that future interaction affects giving through a repeated game mechanism where agents can be rewarded for granting efficiency-enhancing favors. We also find that subjects with higher baseline altruism have friends with higher baseline altruism.

Contractual and Organizational Structure with Reciprocal Agents

Abstract: Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that reciprocal motivations and explicit performance-based pay are substitutes. A firm endogenously determines the mix of the two sources of incentives to best induce effort from the agent. Analyzing extended versions of the model allows us to examine how organizational structure impacts the effectiveness of reciprocity and to derive specific empirical predictions. We use the UK-WERS workplace compensation data set to confirm the predictions of our extended model.

Norms and Contracting

Abstract: We argue that contracts establish the norms of a relationship and that individuals incur disutility when deviating from these norms. In a laboratory experiment, we allow agents to make simple contracts before they play one of four games, and the most effective contract always includes an unenforceable “handshake” agreement to take the first-best action. In three games, a contract with only this handshake agreement is (at least weakly) optimal. The handshake is particularly effective in games with strategic complements. Our results highlight an explanation for contractual incompleteness: establishing a norm can effectively substitute for weak enforceable restrictions. This paper was accepted by Brad Barber, Teck Ho, and Terrance Odean, special issue editors.

Gift exchange in the lab : it is not (only) how much you give ...

Abstract: An important aspect in determining the effectiveness of gift exchange relations in labor markets is the ability of the worker to “repay the gift” to the employer To test this hypothesis, we conduct a real effort laboratory experiment where we vary the wage and the effect of the worker’s effort on the manager’s payoff Furthermore we collect additional information that allows us to control for the workers’ ability and whether they can be classified as reciprocal or not From our agency model of reciprocal motivation we derive non-trivial predictions about which is the marginal worker (in terms of ability) affected by our experimental variation and how different types of individuals, selfish and reciprocal, will react to it Our model does substantially better than other theories in organizing the data

Incentive Schemes, Sorting and Behavioral Biases of Employees: Experimental Evidence

Abstract: We investigate how the convexity of a firm’s incentives interacts with worker overconfidence to affect sorting decisions and performance. We demonstrate experimentally that overconfident employees are more likely to sort into a non-linear incentive scheme over a linear one, even though this reduces pay for many subjects and despite the presence of clear feedback. Additionally, the linear scheme attracts demotivated, underconfident workers who perform below their ability. Our findings suggest that firms may design incentive schemes that adapt to the behavioral biases of employees to “sort in” (“sort away”) attractive (unattractive) employees; such schemes may also reduce a firm’s wage bill.

The Economic Institutions of Capitalism

Abstract: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

Dictator games: a meta study

Abstract: Over the last 25 years, more than a hundred dictator game experiments have been published. This meta study summarises the evidence. Exploiting the fact that most experiments had to fix parameters they did not intend to test, in multiple regression the meta study is able to assess the effect of single manipulations, controlling for a host of alternative explanatory factors. The resulting rich dataset also provides a testbed for comparing alternative specifications of the statistical model for analysing dictator game data. It shows how Tobit models (assuming that dictators would even want to take money) and hurdle models (assuming that the decision to give a positive amount is separate from the choice of amount, conditional on giving) provide additional insights.

Specification and Estimation of Spatial Autoregressive Models with Autoregressive and Heteroskedastic Disturbances

Abstract: One important goal of this study is to develop a methodology of inference for a widely used Cliff-Ord type spatial model containing spatial lags in the dependent variable, exogenous variables, and the disturbance terms, while allowing for unknown heteroskedasticity in the innovations. We first generalize the generalized moments (GM) estimator suggested in Kelejian and Prucha (1998,1999) for the spatial autoregressive parameter in the disturbance process. We prove the consistency of our estimator; unlike in our earlier paper we also determine its asymptotic distribution, and discuss issues of efficiency. We then define instrumental variable (IV) estimators for the regression parameters of the model and give results concerning the joint asymptotic distribution of those estimators and the GM estimator under reasonable conditions. Much of the theory is kept general to cover a wide range of settings. We note the estimation theory developed by Kelejian and Prucha (1998, 1999) for GM and IV estimators and by Lee (2004) for the quasi-maximum likelihood estimator under the assumption of homoskedastic innovations does not carry over to the case of heteroskedastic innovations. The paper also provides a critical discussion of the usual specification of the parameter space.

Behavioral Game Theory: Experiments in Strategic Interaction

Abstract: หนงสอ Behavioral Game Theory: Experiments in Strategic Interaction เขยนโดย Colin F. Camerer มวตถประสงคเพอนำเสนอหลกฐานเชงประจกษจากผลการวจยจำนวนมากมายทยนยนอทธพลของปจจยทางจตวทยาทมผลตอการตดสนใจตามทฤษฎเกม หนงสอ เลมนไดนำเสนอแนวคดทฤษฎทเพมความสามารถในการอธบายพฤตกรรมการตดสนใจตามทฤษฎเกม (Game theory) ซง von Neumann; & Morgenstern ไดเสนอไวในป ค.ศ. 1944 โดยชใหเหนวา ปจจยทางจตวทยามอทธพลทำใหการตดสนใจทเกดขนจรงคลาดเคลอนจากการคาดการณของทฤษฎเกม

Identifying influential and susceptible members of social networks

Abstract: Methods, systems, and apparatuses, including computer programs encoded on computer readable media, for generating a message associated with a user, wherein the user is associated with a plurality of peers in a social network. A subset of peers is randomly chosen from the plurality of peers. The message is sent to the subset of peers. Data pertaining to one or more behaviors from one or more peers of the plurality of peers is collected. A time for a target behavior is evaluated as a function of who received the message and who did not receive the message. From the evaluation, particular members of the social network are identified.