ABSTRACT. Financial well-being (FWB) has recently attracted a lot of attention from governments, employers, and financial institutions (e.g., Bank of America, 2021; CFPB, 2015; Sun Life Financial, 2020), due to its documented benefits for various indicators of positive functioning. Despite raising awareness among public authorities and the business community, FWB research still lags behind on a number of critical elements (Kaur & Singh, 2022). For instance, despite the recognition of the multidimensional nature of FWB (Sorgente & Lanz, 2019), no research has sought to identify the configurations, or profiles, of FWB most frequently observed among the adult population. Current knowledge of FWB still relies exclusively on a variable-centred approach, focusing on associations between specific FWB components and other variables (e.g., Netemeyer et al., 2018). This approach fails to address the combined impact of these components. Person-centered approaches address this limitation by identifying the most commonly occurring configurations, referred to as profiles among a given population (Morin et al., 2018). To address this gap, we rely on a person-centered approach to identify the different configurations, or profiles, of FWB observed among a large sample of adults, as well as the generalizability of these profiles across subsamples of adults who rely, or not, financial budgeting practices. We also assess how these profiles relate to a series of personal and financial predictors (sex, income, savings, perceived financial efficacy, neuroticism, and financial knowledge), as well as to outcomes related to psychological health (life satisfaction, perceived stress, psychological distress).

Method

French-Canadian participants (from the province of Québec) were recruited through social media advertising and snowballing and asked to complete an online questionnaire on FWB. A total of 2,235 participants (18 to 43 years old, Mage = 36.0; 63.9% women) voluntarily completed an online questionnaire. Most of them (69.7%) had completed university studies, but only a minority (24.3%) were still enrolled in some form of education program. FWB was assessed using Aubrey et al. (2022) optimized French version of Sorgente and Lanz’s (2019) Multidimensional Subjective Financial Well-Being Scale (MSFWBS-O).

Results

Our results revealed five primary FWB profiles (see figure 1), that were fully replicated across subsamples of participants relying, or not, on financial budgeting practices, although the relative frequency of occurrence of these profiles showed some variations across subsamples. This evidence of generalizability supports the idea that profiles capture central psychological mechanisms (Morin et al., 2016) that are primarily independent from budgetary practices, despite the fact that such practices remain strongly encouraged as potential drivers of FWB (e.g., ACFC, 2022). However, perceived financial efficacy, savings and emotional stability were all associated with greater likelihood of membership into the most favorable profile (Normative-Comfortable), suggesting the value of at least some financial variables as possible drivers of FWB. Finally, the identified profiles shared well differentiated associations with key indicators of psychological well-being, with the more favorable outcome levels associated with the Normative-Comfortable profile, whereas the least favorable ones were observed in the Very Low FWB with Concerns about the Future profile and the Very Low FWB with Confidence about Current and Future Money Availability profile. Interestingly, associations involving predictors and outcomes also fully generalized to participants relying, or not, on financial budgeting practices.

Discussion

Although research on psychological health and well-being (Morin et al., 2017) led us to expect a large normative profile of participants reporting comfortable levels of FWB, we left as an open research question whether optimal FWB would be a matter of comfort or of thriving (e.g., Csikszentmihaly, 1999). By revealing that over 75% of the sample displayed a Normative-Comfortable profile, which was also the one displaying the highest global levels of FWB, our results clearly support the first of those possibilities, thereby suggesting that more extreme states of thriving and flourishing may not be relevant to FWB.

The number, structure, and dispersion of these profiles, as well as their associations with predictors and outcomes, were perfectly replicated across subsamples of participants relying, or not, on financial budgeting practices. Beyond evidence of generalizability and robustness, this last observation is intriguing given the widespread popular belief in the value of these practices (e.g., ACFC, 2022). Our results point to promising avenues of future research and intervention, which could involve various players from educational, governmental or banking spheres, in order to increase individuals' FWB and overall functioning in life.

References

ACFC [Agence de la Consommation Financière du Canada]. (2022). Faire un budget. https://www.canada.ca/fr/agence-consommation-matiere-financiere/services/faire-budget.html

Aubrey, M., Morin, A.J.S., Fernet, C., & Carbonneau, N. (2022). Financial well-being: Capturing an elusive construct with an optimized measure. Frontiers in Psychology, 13, 935284. https://doi.org/10.3389/fpsyg.2022.935284

Bank of America. (2021). 2021 Workplace benefits report. https://fa.ml.com/south-carolina/mountpleasant/svgroup/mediahandler/media/media/407546/2021%20Workplace%20Benefits%20Report%20_%20ADA.pdf

Csikszentmihalyi, M. (1999). If we are so rich, why aren't we happy? American Psychologist, 54, 821–827. https://doi.org/10.1037/0003-066X.54.10.821

CFPB [Consumer Financial Protection Bureau]. (2015). Financial well-being: The goal of financial education. https://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf Kaur, G., & Singh, M. (2022). Pathways to individual financial well-being: Conceptual framework and future research agenda. FIIB Business Review, 13, 27-41. https://doi.org/10.1177/23197145221105947

Morin, A.J.S., Boudrias, J.-S., Marsh, H.W., McInerney, D.M., Dagenais-Desmarais, V., Madore, I., & Litalien, D. (2017). Complementary variable- and person-centered approaches to the dimensionality of psychometric constructs: Application to psychological wellbeing at work. Journal of Business and Psychology, 32, 395-419. https://doi.org/10.1007/s10869-016-9448-7

Morin, A.J.S., Bujacz, A., & Gagné, M. (2018). Person-centered methodologies in the organizational sciences. Organizational Research Methods, 21, 803-813. https://doi.org/10.1177/1094428118773856

Morin, A.J.S., Meyer, J.P., Creusier, J., & Biétry, F. (2016). Multiple-group analysis of similarity in latent profile solutions. Organizational Research Methods, 19, 231-254. https://doi.org/10.1177/1094428115621148

Netemeyer, R.G., Warmath, D.E.E., Fernandes, D., & Lynch Jr, J.G. (2018). How am I doing? Perceived financial well-being, its potential antecedents, and its relation to overall well-being. Journal of Consumer Research, 45, 68-89. https://doi.org/10.1093/jcr/ucx109

Sorgente, A., & Lanz, M. (2019). The multidimensional subjective financial well-being scale for emerging adults: Development and validation studies. International Journal of Behavioral Development, 43, 466-478. https://doi-org.biblioproxy.uqtr.ca/10.1177/0165025419851859

Sun Life Financial. (2020). Donner aux employés les moyens d’améliorer leur mieux-être financier. https://www.sunlife.ca/content/dam/sunlife/regional/canada/documents/grs/Bright_Paper_Donner_Aux_Employes_Les_Moyens_D_ameliorer_Leur_Mieux_Etre_Financier.pdf

ABSTRACT. Financial well-being (FWB) is a positive financial condition with both objective and subjective components. Objective FWB includes material resources such as income, savings, and assets, while subjective financial well-being (SFWB) reflects an individual’s emotional and cognitive evaluation of their financial situation (Sorgente & Lanz, 2017). Although both components are important, recent literature has increasingly focused on the subjective dimension. This emphasis is likely because SFWB provides “a more holistic view of financial well-being by capturing the perceived feelings of individuals about their financial situation” (Bashir & Qureshi, 2023, p. 41). Despite growing interest, measuring SFWB remains an open question. Early studies conceptualized (e.g., Shim et al., 2009) and assessed (e.g., Prawitz et al., 2006) SFWB as a unidimensional construct. However, contemporary definitions and measurement tools recognize its complexity, capturing various dimensions. A literature review by Aubrey et al. (2022) identified numerous proposed dimensions of SFWB across conceptualizations and highlighted the Multidimensional Subjective Financial Well-Being Scale (MSFWBS; Sorgente & Lanz, 2019) as the most comprehensive instrument. Similarly, a recent review of validated instruments for assessing FWB concluded that the MSFWB is "the most complete instrument" for assessing this construct (de Oliveira Cardoso et al., 2023, p. 2913). This scale, comprising 25 items, assesses five distinct dimensions of SFWB. The MSFWBS was initially developed in Italy to measure SFWB among emerging adults (18-29 years old) and address the limitations of existing scales, which were often unidimensional or U.S.-centric (e.g., Norvilitis et al., 2003). Since its development, the MSFWBS has gained international recognition and has been translated and validated in Austria, Canada, Finland, India, Portugal, Romania, Slovenia, and Turkey (Sorgente et al., 2024). Its five-factor structure has been confirmed in all these countries except India. Researchers speculated that India’s distinct cultural and economic context might explain this divergence. As Mahendru et al. (2022) emphasized, the concept of FWB in developing countries can be context-specific. For example, in developing countries, people may evaluate their FWB by considering how much their quality of life is improving because in these countries there are very large differences in quality of economic life among citizens. In contrast, in developed countries in which the quality of life among citizens is generally sufficient, it is harder to obtain differences in objective financial circumstances that strongly affect subjective evaluations of one’s quality of life. Supporting this perspective, Vieira et al. (2023) developed the Perceived Financial Well-Being Scale (PFWBS) specifically for developing countries “where a large part of the population has high levels of indebtedness such as in Brazil” (Vieira et al., 2023; p. 180). However, the hypothesis that the MSFWBS might be unsuitable for developing countries was recently challenged when its five-factor model was confirmed in Brazil (de Oliveira Cardoso et al., 2024). To determine whether the MSFWBS’s five-factor conceptualization is applicable across both developed and developing countries, further evidence is needed. Specifically, new data from India and other developing nations are crucial to evaluate the scale’s generalizability. To this end, Sorgente and colleagues are currently collecting data in various developing countries. This study focuses on testing the validity of the MSFWBS among Iranian emerging adults. In particular, we tested with Iranian data the same validity evidence that were collected in the original validation study of the MSFWBS: score structure, reliability, generalizability, convergent, and criterion evidence.

Method Data were collected from 365 Iranian emerging adults (68.5% female), aged 18 to 29 (M = 23.18, SD = 2.96). Participants completed an online survey including a Persian translation of the MSFWBS (Sorgente & Lanz, 2019) and other scales to assess convergent validity (Satisfaction With Life Scale; Diener et al., 1985) and criterion validity (personal income).

Results Score Structure Validity: A confirmatory factor analysis demonstrated that the five-factor model fit the Iranian data well [χ²(265) = 459.471, RMSEA = .045 (90% CI: 0.038–0.052), p(RMSEA ≤ .05) = .861; CFI = .950; TLI = .943; SRMR = .043]. Reliability Evidence: Internal consistency was sufficient (ω > .70) for all dimensions of the scale: General Financial Well-being (ω = .919), Money Management (ω = .820), Peer Comparison (ω = .789), Having Money (ω = .813), and Financial Future (ω = .848). Generalizability Evidence: The scale’s structure was invariant across gender (male vs. female), age (under 25 vs. 25 and older), occupational status (employed vs. unemployed), and living arrangements (living with vs. without parents). Convergent and Criterion Validity: Significant correlations were found between MSFWBS dimensions and personal income (convergent validity) as well as life satisfaction (criterion validity). The only exception was the “financial future” dimension, which did not significantly correlate with life satisfaction (β = 0.095, p = .276). This discrepancy likely arises from the different temporal perspectives of the two measures.

Discussion The findings suggest that the MSFWBS performs well in Iran, supporting its validity in another developing country. Combined with evidence from Brazil (de Oliveira Cardoso et al., 2024), these results reinforce the applicability of the MSFWBS in diverse cultural and economic contexts. The data imply that a universal model of SFWB may be feasible, which has significant implications for future research and policy development aimed at cross-national comparisons of SFWB. However, the lack of model fit in India (Sorgente et al., 2024) remains an open question. The hypothesis that this discrepancy stems from India’s status as a developing country is no longer tenable. Future studies should re-examine the MSFWBS in India to verify whether the misfit is replicable. If so, researchers must identify the underlying causes and develop alternative approaches to assessing SFWB in the Indian context. To address these issues, Sorgente and colleagues are currently collecting data in India and other developing countries (e.g., Bangladesh, Malaysia, Pakistan, and the Philippines). This project aims to administer both the MSFWBS and the PFWBS (Vieira et al., 2023) to determine whether a universal SFWB model is achievable or if distinct approaches are necessary for specific cultural and economic settings.

ABSTRACT. INTRODUCTION Financial resilience could be defined as individuals’ ability to successfully overcome financial shocks and navigate periods of financial adversity. However, to date, literature on the topic tends to adopt a simplistic and narrow view of the construct, as financial resilience is generally measured solely by the ease of accessing emergency funds (Salignac et al., 2022). This conceptualization is limited because it does not recognize financial resilience as a multidimensional phenomenon, which depends on factors that are either internal or external to the individual. Indeed, in addition to individuals’ own economic resources, financial resilience might also be influenced by contextual or social factors, which can also play a role in shaping how individuals deal with financial challenges. Furthermore, by focusing solely on financial aspects, this conceptualization gives no space to those psychological characteristics that may enhance individuals’ ability to cope with financial adversity. Building on the limitations of the literature, the present work aims to test a theoretical model of financial resilience, developed by integrating Salignac et al. (2022)’s multidimensional conceptualization of the construct with the Multi-System Model of Resilience (MSMR; Liu et al., 2017). According to MSMR, three dimensions of resilience dynamically interact to determine individuals’ coping strategies in the face of adversity. Specifically, the model suggests that different systems (i.e., individual, interpersonal, and contextual factors) would be interconnected, jointly influencing how people adapt to difficult situations. Therefore, we developed a multidimensional model of financial resilience, challenging the common view of the construct as merely an objective measure of access to emergency funds. Instead, we propose a systemic conceptualization of financial resilience.

THEORETICAL FRAMEWORK A conceptual model was developed by considering psychological, interpersonal and contextual factors. Specifically, within the individual domain, ego-resiliency, ego-depletion, worry tendencies, and financial literacy were considered. Ego-resiliency refers to a psychological trait reflecting individuals’ ability to adapt to challenging situations, while ego-depletion indicates the emotional exhaustion or fatigue that occurs after exerting significant effort to regulate emotions, such as during times of hardship. Worry tendencies describe a consistent pattern of recurring or excessive concern about potential future threats, difficulties, or negative outcomes. Finally, financial literacy refers to knowledge and skills related to financial matters. Concerning social factors, perceived social support and trust towards institutions were included in the model. The former refers to an individual’s belief that people in their life would be available to provide emotional or instrumental support when needed. The latter indicates instead the extent to which individuals trust different types of institutions. As for the contextual domain, we focused on individuals’ socio-economic situation. First, we measured financial resources access, which refers to the ease of accessing emergency funds in times of need. Then, we also considered whether individuals had difficulty making ends meet during the previous year. To examine how these three systems affect individuals’ adaptation to financial shocks or adversities, we investigated the role of these domains in preventing financial worry and enhancing psychological well-being. For research purposes, a Latent Profile Analysis (LPA) was performed to explore how dynamic interactions and configurations of the three systems can differently influence financial worries and psychological well-being.

MEASURES AND METHODS To identify individuals in a potentially fragile financial situation, the study included German households with a monthly net income below 3,000 €. A quota sample of 999 German households (48.5% females; Mage=48.22 years, SDage=10.50) was then obtained. Ego-resiliency (CR=.857), ego-depletion (CR=.911), worry tendencies (CR=.932), financial literacy, perceived social support (CR=.762), institutional trust (CR=.897), financial resources access, and difficulties making ends meet were included in the LPA as indicators. Subsequently, once the profiles (i.e., different configurations of the indicators) were identified, a multivariate general linear model (GLM) was run to identify which profile(s) reported higher financial worry (CR=.884) and psychological well-being (CR=.876). Socio-demographic characteristics (i.e., gender, age, education, and income) were also included in the GLM as control variables.

RESULTS Four clusters were identified through the LPA, representing four different configurations of the indicators considered in the analysis. Profile 1 (named “lacking financial resources”; 38.6%) was characterized by low levels of financial resources access and high levels of difficulties making ends meet. Profile 2 (named “no resources”; 21%) exhibited high worry tendencies and ego-depletion, combined with the greatest difficulties making ends meet and low levels of ego-resiliency, financial resources access, and perceived social support. Individuals in Profile 3 (named “resilient”; 25.9%) displayed strong ego-resiliency, access to financial resources, and perceived support by significant others, along with low levels of ego-depletion and worry tendencies. Finally, Profile 4 (“no personal strenght and high financial resources”; 14.5%) showed low ego-resiliency, higher worry tendencies and ego-depletion despite having high financial resources. The results from the GLM indicated significant differences among profiles for both financial worry [F(12, 986)=32.580; p<.001; partial η2=0.284] and psychological well-being [F(12, 986)=40.869; p<.001; partial η2=0.332]. The partial eta squared (η²) values indicated a large effect size for both outcomes. Furthermore, post-hoc analyses revealed that the four subgroups were significantly different from each other. Specifically, both Profile 1 and Profile 2 reported higher levels of financial worry, possibly due to their lower access to financial resources and greater difficulties making ends meet. However, Profile 2, which showed higher worry tendencies and ego-depletion, along with lower ego-resiliency and perceived social support, reported higher levels of financial worry compared to Profile 1. Regarding psychological well-being, the profiles (i.e., profile 2 and 4) that exhibited stronger worry tendencies and ego-depletion, combined with low ego-resiliency, had the lowest levels of psychological well-being, regardless of their levels of financial resources access and reported financial hardship (i.e., difficulties making ends meet). Our results suggest that financial resilience is not solely a matter of households’ financial situation. Other factors, such as psychological characteristics and perceived social support, also play a crucial role in shaping perceived financial worry and psychological well-being, despite one’s own financial resources or hardship. These findings underscore the importance of adopting a broader conceptualization of financial resilience, one that accounts for the dynamic interplay of different systems in shaping how individuals navigate financial adversities.

ABSTRACT. In recent years there has been a groundswell of research into financial well-being (FWB; or financial health), despite no common understanding of how to define, conceptualise, operationalise nor improve it (Riitsalu et al., 2023). To date, very little is known about the relationship between subjective FWB and objective financial data. There is one academic study that collected subjective FWB and objective financial data in a bank, but it focused on the scale development and validation (Comerton-Forde et al., 2022). There are studies using bank data to explore nuances of financial decision-making (e.g. Carvalho et al., 2024), and research that uses data from financial planners and other such apps (e.g. Olafsson & Pagel, 2018) for analysing particular financial behaviours.

We contribute to FWB literature by developing a three-dimensional human-centric conceptualisation and operationalisation of FWB and conducting the first in-depth analysis of the relationship between subjective FWB and objective financial behaviour and situation. Furthermore, we do it in longitudinal data that allows the assessment of change in FWB and analysis of the predictors of the elements of FWB and their changes over time.

In the previous stage, 630 semi-structured interviews were conducted in 7 Central and Eastern European Countries, and we used thematic analyses of transcripts which revealed that FWB is a triad of security, freedom and pleasure. Then, we developed a three-dimensional FWB scale, with three statements for each component, assessed its semantic validity in qualitative testing (n=26), and tested its reliability and validity in two online panels (n=562 and n=500). Based on these, the wording of the nine statements was refined. The final measure was used for data collection in a large sample (n=6,182) of customers of a major bank in Czechia in January – February 2024. We assessed the reliability of our 3 constructs, conducted confirmatory factor analysis and assessed construct validity using structural equation modelling with 3 latent constructs and observed variable stress. The results support the reliability of the three-dimensional measure and show satisfactory construct validity.

The bank shared pseudonymised data of those 6,182 respondents who had given informed consent to participate in the study, and the balances and transactional data from all of their accounts in that bank for 14 months. In September 2024, 1,704 respondents agreed to fill in the second survey, which, in addition to the FWB scale, asked for more details about their background. For the analysis, we used several methods, algorithms and models (random forest, LASSO, GAM), and we achieved the best results with LightGBM (a gradient-boosting framework that uses tree-based learning algorithms). For an easily readable model, we also conducted regression analysis.

The first key finding is that security is vital - one cannot have high freedom or higher pleasure without having average or higher security. The relationship between freedom and pleasure is more nuanced. The average assessment of freedom is lower than the average of security and pleasure in our sample - the respondents perceive the most significant shortages to be in their freedom to change course in life without having to worry about money.

The second important fact is that men rate their financial well-being to be higher than women when they hold the same amount of assets (money on accounts, savings and investments) or liabilities, except for pleasure in the small group of the very wealthy where women have the higher average response. The third discovery is that assets have a bigger role than liabilities in FWB assessment, even when mortgages are excluded from the latter. Those with more assets have higher FWB, although the effect is not linear. From a certain amount, every extra euro brings only a little improvement of FWB.

The fourth key finding is that the antecedents of the three elements of FWB differ. The main correlates of all three elements of FWB in our regression analysis are self-assessed changes in financial situation, age and gender. In addition, freedom is correlated with household income, current account balance, spending on clothing and footwear, donations and transport. In security, using digital financial planners has a positive correlation, also spending on food and drink, furniture and household equipment, and in gas stations has a significant role. For pleasure, spending on recreation and culture and in restaurants matters. Regional differences emerge in freedom and pleasure. However, these models describe around 27% of the scores, highlighting that the vast majority of factors affecting FWB remain outside the indicators we could use in the analysis. Sadly, the non-financial changes and a few psychological characteristics were excluded from the survey, which might have explained the assessment of FWB more.

Assessing the changes in FWB over 6 months shows a slight improvement of FWB in the group that participated in both survey waves. Also, stress caused by money matters has reduced for them. However, those who filled out the second survey assessed their FWB to be slightly higher than the rest in the first wave of data collection. Therefore, it may be that those who were doing well were more likely to respond than those whose FWB assessment had not improved.

The key factors correlated with changes in the FWB assessment are the self-assessed changes in financial situation, and spending on clothing and footwear. Most indicators explain one or two of the dimensions of FWB. For example, age correlates with changes in only freedom, region predicts changes in freedom and pleasure, household size is significantly related only with changes in pleasure. These models explain about 32% of the changes, emphasizing the role of factors outside our data.

To conclude, we confirm that FWB is multi-dimensional and multifaceted, and our three-dimensional conceptualisation and operationalisation of FWB is suitable for such analysis. Our study is the first to observe the gender difference in assessing the elements of subjective FWB while controlling for objective financial data.

ABSTRACT. Introduction Western consumers’ overconsumption of red meat contributes to negative health consequences and substantial demands on the environment due to demand for land, water, and the release of large amounts of methane and other greenhouse gas emissions during livestock production (Auclair & Burgos, 2021; Topcu et al., 2022; Veeramani et al., 2016, 2017). According to recent modelling and empirical studies, environmental sustainability and health could be improved with population dietary shifts towards lower red meat consumption in high meat consuming countries, including Canada (Jarmul et al., 2020). However, Canadians’ consumption of meat remains very high. Institutional food services are promising settings in which plant-based ingredients can be incorporated into a large number of dishes and served to many people. Given that relatively few Canadians are ready to completely give up meat consumption, serving “plant-forward” dishes by partially or fully substituting for meat in familiar mixed dishes in institutional food service contexts is a promising approach to promoting the use and consumption of pulses (Spencer et al., 2018). However, it remains unknown as to how much environmental impacts are mitigated when plant-forward dishes are offered in place of similar meat-based dishes in institutional food contexts. If the mitigation is not substantial, such substitution is a misguided effort. We aim to address this gap in this study research by collaborating with member operators of the Canadian College and University Food Service Association. Research Questions As the sustainability of food systems becomes increasingly critical in the face of climate change, campus food must not only prioritize health and nutrition but also incorporate sustainability into practices. As such, universities across Canada are implementing climate mitigation and sustainability goals within their mission, and reporting on progress. In this context, some campus food services have started to address sustainability by reducing meat in their menus or replacing it with substitutes, increasingly known as ‘plant-forward’ eating. However, there is limited information on the environmental and nutritional impacts of such transitions. Understanding these impacts is essential for developing strategies to promote sustainable food choices and for informing young adults who are in a transition period of forming new eating habits. This interdisciplinary research quantified the nutritional content and life cycle environmental impacts of plant-forward meals created for several university campuses across Canada, compared them to conventional meat-based counterparts, and explored the trade-offs between environmental sustainability and nutritional adequacy. Methods Life cycle assessment (LCA) was applied to quantify the farm-to-fork environmental impacts of 37 recipes provided by five partner universities across Canada. Two functional units were used: 1000 kcal for energy provision and the NRF 9.3 (Drewnowski, 2009) that assesses nutritional quality. The NRF (Nutrient-Rich Food) index was calculated using nutrient data generated by ESHA Genesis R&D Foods (ESHA Research, Beaverton, Oregon). The system boundaries included production, processing, distribution, retail, cooking, and accounted for food waste and loss throughout the food supply chain and during consumer preparation. Material and energy inputs for the life cycle inventory were obtained from recipes provided by partner universities. Environmental impacts were assessed using TRACI 2.1 for global warming potential (GWP) and Eutrophication (EU), and Boulay et al. (2011) for blue water scarcity. A Canadianized agriculture and food life cycle inventory (LCI) developed within the ecoinvent© database within openLCA was applied. This comprehensive approach integrated environmental sustainability and nutritional adequacy for a holistic assessment. Results and discussion This study analyzed nine recipe pairs (six complete meat-to-plant substitutions and three partial meat substitutions) and 19 single recipes to assess environmental and nutritional impacts. Plant-forward recipes consistently had lower GWP per 1000 kcal compared to meat-based counterparts. Complete substitutions achieved reductions ranging from 67.5% (fish tacos at 3.44 kg CO₂ eq reduced to 1.12 kg CO₂ eq for jackfruit tacos) to 94.2% (beef burger at 11.80 kg CO₂ eq reduced to 0.69 kg CO₂ eq for falafel/veggie burger). Partial substitutions achieved more modest reductions ranging from 12.4% (stir-fry beef meatballs at 8.81 kg CO₂ eq reduced to 7.72 kg CO₂ eq for kimchi beef and rice meatballs) to 31.0% (Swedish chicken meatballs at 2.90 kg CO₂ eq reduced to 2.00 kg CO₂ eq for chicken and lentil cutlet with mushroom sauce), highlighting the need for more reductions in meat to achieve significant benefits. EU followed similar trends, with complete substitutions reducing EU by up to 96.3% (beef burger at 0.176 kg N eq reduced to 0.007 kg CO₂ eq for falafel/veggie burger), compared to a maximum of 33.2% (Swedish chicken meatballs at 0.027 kg N eq reduced to 0.018 kg N eq for chicken and lentil cutlet with mushroom sauce) for partial substitutions. However, water scarcity impacts often showed higher values for plant-forward recipes due to water-intensive ingredients like vegetables. For example, the falafel/veggie burger had a higher water scarcity value (0.185 m³) than the beef burger (0.135 m³), emphasizing the need for strategic ingredient selection to balance trade-offs. While plant-forward recipes generally had lower GWP per Nutrient Rich Food 9.3 (NRF 9.3), certain substitutions, like jackfruit tacos, had higher GWP per NRF 9.3 due to lower protein and essential nutrient contents compared to fish tacos. These results underscore the importance of balancing nutritional adequacy and environmental sustainability in recipe design. This study provides a valuable quantitative analysis of the environmental and nutritional impacts of plant-forward versus animal-based recipes in Canadian campus food services, an underexplored area. By integrating nutritional adequacy metrics (NRF 9.3) into LCA, it bridges the gap between sustainability and nutrition, offering actionable insights for food service operators to design balanced, sustainable recipes that maintain nutritional adequacy. Conclusions Complete substitutions, especially replacing beef, offer the greatest climate benefits, but trade-offs can occur, such as reduced GWP but increased water scarcity and variations in GWP per NRF 9.3. Thus, it is critical to balance taste, nutrition, and sustainability. These findings guide the development of sustainable, nutritionally adequate menus for Canadian campus food services. Acknowledgements We acknowledge the funding from the Guelph Institute of Environmental Research as well as from the Social Science & Humanities Research Council’s Partnership Engagement Grant.

ABSTRACT. According to existing research, a plant-based diet would reduce CO2 in the atmosphere by 14.5 % (Gerber et al., 2013). Promoting meat substitutes could help to accelerate the decrease of CO2. Therefore, the current research addresses the question, what are the factors that could motivate consumers to change their food choices. Specifically, it asks which behavioral beliefs are related to food choices on meat vs. plant-based alternatives using the theory of planned behavior (Ajzen, 1985) as theoretical basis to explore this relation.

In the last decade several plant-based alternatives to meat were invented; they aim to foster a healthy and carbon-friendly lifestyle. These plant-based alternatives are designed to persuade consumers that they are eating a piece of natural meat, while in fact consuming a plant-based alternative. The design usually includes the taste, the texture, and the color of natural meat (Van Vliet et al., 2020) so that the plant-based alternative should not differ in these characteristics from the original product.

In principle a diet with a low portion of red meat is beneficial for consumers health; it reduces the probability of diseases like cancer (Larsson & Wolk, 2006; Ranabhat et al., 2020), and heart diseases (Al-Shaar et al., 2020). Substituting red meat with plant-based protein adds fiber to the diet and protects consumers from severe diseases (Al-Shaar et al., 2020). Although plant-based alternatives have their merits, they can also include more salt and lead to a deficiency of micronutrients such as iron and B12. Thus, substituting meat with plant-based alternatives fully might be harmful in the long-run.

Consumers also consider animal welfare when purchasing plant-based meat alternatives. Livestock farming, the slaughter of farm animals, and their transportation to slaughterhouses have been under critique for quite a long time, because they stress animals out (Grandin, 2014). Substituting meat with plant-based alternatives is therefore a genuine vehicle to promote animal welfare.

Consumers also consider that substituting meat with plant-based alternatives has positive effects on the natural environment. Abstaining from eating meat is reducing green house gases (Gerber et al., 2013) but also decreases the use of resources such as soil, energy and water, and reduces environmental pollution (Westhoek et al., 2014). Thus, consuming plant-based alternatives is also perceived as an act of environmental protection.

The theory of planned behavior (Ajzen, 1985) specifically proposes that different beliefs trigger specific attitudes, and these again lead to behavioral intention and in the end to a certain behavior. For instance, beliefs on health benefits through the consumption of plant-based alternatives support the formation of an attitude toward the choice of plant-based alternatives. Thus, consumers intend to select plant-based alternatives and in the end decide for plant-based alternatives. Besides the impact of attitudes, subjective norms and perceived behavioral control regarding the respective behavior have an impact on intention and behavior. For instance, subjective norms _ what significant others such as families and friends think about plant-based alternatives, have an impact on the intention to select the alternatives.

Additionally, consumers’ perceived behavioral control to choose plant-based alternatives in a nearby supermarket or having sufficient means to purchase the rather expensive alternatives is impacting not only the intention for the selection but also the actual selection behavior. As the theory of planned behavior offers a theoretical framework to study beliefs, the current research bases its research model on this theory focusing on beliefs regarding health, animal welfare, environmental protection, and sensory perception of plant-based alternatives.

After the preregistered study (https://doi.org/10.17605/OSF.IO/U6CWY) was approved by an university ethics committee, 276 meat-eating participants from German speaking countries (66% female, 33 male, 1% divers; Mage = 36.6 years, SD = 15.4) filled in an online questionnaire in Spring 2023. The questionnaire comprised the scales belief on environmental protection (8 items, alpha = .94), belief on animal welfare (8 items, alpha = .85), belief on health (9 items, alpha = .94), believe on sensory perception (4 items, alpha = .90), attitudes (14 items, alpha = .82), subjective norms (4 items, alpha = .90), perceived behavioral control (4 items, alpha = .81), intention (4 items, alpha = .97), choice behavior (selection of a prize of either a meat or plant-based food product), and sociodemographic variables (age, gender, nationality, income, experience with plant-based alternatives, etc.).

The collected data was analysed with a structural equation model. Unfortunately, probably due to the interrelation of all four different beliefs, the model cannot explain the data sufficiently (Chi2(21) = 13.28, p < .001, CFI = 0.92, FMSEA = .14). As the model is very complex in another analysis the main question how the beliefs are related to the attitudes towards plant-based alternatives is analysed solely (R = .73, p < .001). Results reveal that beliefs on environmental protection (beta = .23***), on animal welfare (beta = 17***), on health (beta = .28***), and on sensory perception (beta = .26***) are related to attitudes towards plant-based alternatives. Thus, suggesting that beliefs have an impact on attitudes when consumers decide whether to consume meat or plant-based alternatives.

These results show that beliefs such as on environmental protection, on animal welfare, on health, and on sensory perception regarding the choice of plant-based alternatives should have an impact on food choice. From a practical point of view, putting specific beliefs in the focus of the promotion of plant-based alternatives could not only support a diet change but also account for the reduction of CO2.

ABSTRACT. Introduction Post-secondary campus food services are one of the best contexts for trying new ideas for promoting plant-forward foods for health and sustainability as they have dual mandates of serving healthy food to a large number of customers while maintaining profit (. Two main approaches can be discerned in the literature: increasing offerings of meat-free plant-based dishes and either fully or partially substituting plant-based ingredients (e.g., legumes) for meat in existing meat-based dishes. Building on anecdotal reports, it is now timely to determine what proportion of menu offerings offered in post-secondary institutions across Canada are plant-forward dishes. Research Questions The main objective of the present study was to document the range and percentage of plant-forward dishes being offered, the types of plant-forward dishes being offered, and the timing of adoption of more plant-forward dishes to the menus across Canada. To guide future work on wider adoption, we assessed a set of facilitators and barriers to the adoption of plant-forward menu options as perceived by respondents using Damschroder et al.’s (2022) Consolidated Framework for Implementation Research (CFIR). We specifically focused on the inner setting domains (i.e., academic institution and food service unit), outer setting domain and implementation process domain. Exploratory subgroup analysis was also undertaken to examine associations between the degree of adoption of plant forward entrees and the facilitators and barriers derived from the CFIR model. Methods We used the 85 members of the Canadian College and University Food Service Association (CCUFSA) as the sampling frame. The online survey consisted of three sections. Section 1 had general questions about the characteristics of the academic institution and the campus food service unit. In Section 2, participants were asked to report the percentage of plant-forward main dishes in their menu offered in the 2018-2020 academic years (immediately prior to the Covid-19 pandemic) as well as the percentage of such dishes offered in the 2023-2024 academic year. We also asked whether the campus food service unit has started to actively implement more plant-forward dishes on the menu (yes, no), and if yes, when the implementation started. Lastly, participants were asked which of the 10 categories of typical plant-forward dishes (See Figure 1) they offered in the 2023-2024 academic year (yes, no). In Section 3, we assessed x elements of the inner setting domains (i.e., academic institution and food service unit), y outer setting domain items and z items from implementation process domains relevant to the innovation adoption on a 5-point scale (1= strongly disagree; 5= strongly agree). Results About 40% of the CCUFSA membership completed the survey (n=34). While 21.2% of the institutions (n=8) did not offer any meal plan for their students, the others reported a widely varying number of students with meal plans. Most of those not offering meal plans were two-year colleges located in urban locations that mainly offer lunch and mostly comprise commuting students. Responses relevant to plant-forward dish offerings Regarding the % of plant-forward dish offerings in the 2018-2020 academic years, the median was 17% . In comparison, % of plant-forward dish offerings in the menu offered in the 2023-2024 academic year doubled , with a median of 35%. Meat-free variants of plant-based dishes were available in 70-90% of food services in our sample, whereas relatively fewer food services reported currently serving partial meat substitution versions of the same dishes overall. 88.2% of respondents indicated that their food service unit has started to actively implement more plant-forward dishes on the menu. Given that the % of plant-forward dish offerings in the menu currently offered was aligned with whether meal plans were available to students or not and how recently food services started the implementation of adding plant-forward main dishes, we created three subgroups : the “no-meal-plan” group (n=8), late adopters that started the implementation 1-4 years ago (n=13) and early adopters that did so +5 years ago (n=12). One food service did not fit into this categorization. The appropriateness of using the grouping variable in our data analysis was checked by regressing the % of plant-forward entrees in the menu on the grouping variable. The regression coefficient of the grouping variable was significant (b= 15.5, t= 3.76, p= .001) with R-square being .30. No further significant improvement in R-square was observed by entering additional variables as predictors. Comparison of three groups derived from hybrid clustering The three groups were compared on the following variables using one-way ANOVA. First, % of plant-based meal offerings in the menu in the 2023-2024 academic year significantly differed across the three groups (F (2,28) = 7.08, p =.003). The percentage was 45.8%, 33.9% and 14.3% for early adopters, late adopters and the no-meal-plan group. We assessed how the three groups differed in offering each of the 10 plant-forward dish categories currently on offer. Findings from Chi-square tests are not reported here. As shown in Figure (A) versus (B), the majority of early adopters were offering the partial meat substitution dishes whereas relatively few late adopters and no-meal-plan group were doing so. The overall pattern of responses on the CFIR model, showed responses by late adopters lay between the no-meal-plan group and early adopters for most variables in the inner setting domain and outer setting domain, with 10 comparisons being significant. In contrast, the pattern was quite different for variables in the implementation process domain. Compared with early adopters, late adopters rated barriers to adding more plant-forward dishes on concerns about increased preparation time and increased ingredient and labour costs. Conclusion Our findings indicate that many campus food services have started to actively add more plant-forward dishes, with a great deal of heterogeneity not only in the % of plant-forward dishes in menu offerings but also in categories of which dishes are offered. The three groups we proposed, namely, the no-meal-plan group, late adopters and early adopters, offer a pragmatic tool for not only understanding how key groups currently differ in such offerings but also suggesting strategies for further promotion in groups at different stages of adoption. (We ask you to view pdf file)

ABSTRACT. Introduction: Hypothetical bias (HB) presents a challenge in stated preference research, where the gap between hypothetical and real willingness to pay (WTP) can influence findings. This study investigates two HB mitigation techniques—Inferred Valuation (IV) and Bayesian Truth Serum (BTS)—to examine their performance in eliciting consumer preferences for meat- and plant-based sausages. The study employs a discrete choice experiment with three experimental settings: Control (C), Indirect Questioning (IQ, representing IV), and BTS. We further the analysis by investigating the impact of information on meat consumption from an environmental and health point of view, as opposed to no information case, resulting in nine experimental conditions in total.

Methods and Treatments: A three-by-three experimental setup was used. There were three conditions regarding information on meat consumption (no information, info on health, info on environment) and three conditions regarding techniques for eliciting consumer preferences focusing on hypothetical bias (standard choice experiment, choice experiment with inferred valuation, choice experiment with Bayesian truth serum). Respondents were randomly assigned to one of these nine conditions. In control, respondents were presented with a choice task asking them to select between two sausage options or opt-out. In inferred valuation (IV), respondents answered the same choice question as in the control condition but were also required to predict how others similar to them (in terms of age and gender) would choose. In the Bayesian truth serum (BTS), similar to control and IV, respondents answered the choice questions, but this time, it introduced monetary incentives for accurate predictions. Respondents with predictions closest to the observed group average received a financial reward, which aimed to obtain truthful responses - i.e. responses that the participants would have given in a real-world situation rather than a survey environment.

Findings: Across all conditions, consumers showed a stronger preference for meat-based sausages over plant-based alternatives. Information on the environmental and health impact of meat consumption influenced consumer WTP but did not lead to the complete substitution of meat with plant-based products. Consumers were more willing to pay for chicken sausages than beef sausages when presented with environmental information, likely due to recognition of beef's higher carbon footprint. In terms of addressing hypothetical bias, BTS produced the highest WTP estimates for meat sausages, suggesting that monetary incentives led to greater stated willingness to pay. IV also led to increased WTP estimates compared to the control setting, though less dramatically than BTS.

Consumers receiving health information exhibited slightly lower WTP for meat-based sausages, with BTS still producing higher WTP estimates than IV and control conditions. The IV method appeared to slightly reduce WTP compared to the control, suggesting that considering others' preferences may introduce some level of bias correction.

Providing environmental impact information led to a noticeable decrease in WTP for beef sausages, particularly in BTS and IV settings. BTS caused the largest reduction in WTP across all meat-based sausage types, suggesting that monetary incentives amplified awareness of environmental concerns.

Conclusion: This study shows that hypothetical bias mitigation techniques influence consumer valuations differently. BTS, which employs financial incentives for truthful predictions, is more effective at mitigating HB than IV, which relies solely on self-reported social predictions. Both treatments highlight that consumers adjust their preferences when prompted to consider external factors such as social norms and incentives. The findings suggest that BTS performs better in obtaining truthful consumer preference data, followed by inferred valuation, for the context studied in this paper.

ABSTRACT. Bargaining over losses in groups is a common economic interaction with a set of unique characteristics and the subject of this paper. To shed light on such scenarios, we conducted an experimental game with 272 participants in which groups of four agents each start with either 5, 10, 15 or 20 Euros as initial endowment. The agents then have to bargain over how a loss of 10 Euros, that the group would have to bear, should be distributed. Any distribution needs to be accepted unanimously within a group. The initial endowments are assigned to the players either via a random mechanism (luck) or, in a different treatment, according to the individual success in a real-effort task (merit). Both treatments were run in two variants, one with a veil of ignorance and one without. In the luck treatment, participants are either not informed about their initial status before the bargaining process begins or they are. In the treatment with the real-effort task, the agents’ relative success either remains undisclosed or is made known to them. Among other things, we find that players with the highest endowment contribute significantly less under effort than under luck, while the opposite holds for agents with the lowest endowment. Without a veil, the latter is primarily driven by the choices of agents with the lowest endowment. We find virtually no differences between unanimously accepted distributions with and without a veil, indicating the normative appeal of the distributions.

ABSTRACT. Background. Cognitive scientists have developed simple logic and math puzzles that lure participants into accepting demonstrably faulty answers (for example, about a diagnosis), and philosophers have developed thought experiments (such as moral dilemmas) that lure many people into accepting intuitions that most philosophers reject. Moreover, scientists have developed various protocols designed to help people think more reflectively about such problems. However, these measures and manipulations are often low-stakes, impersonal, and solitary — very unlike many important real-world decisions.

Methods. After making an initial decision about a low- or high-stakes scenario, participants (N ≅ 2500) reflected on the best decision either with another participant who disagreed or else on their own. Some of these chat and essay environments also involved cash performance bonuses. After this reflection, participants repeated the decision task.

Results. Prior to reflection, most participants chose unorthodox responses. However, social reflection yielded at least three times more corrections (to the orthodox response) than solitary reflection. Cash bonuses did not reliably improve decisions. Pre-intervention confidence predicted lower odds of improving one's decision.

Conclusion. Altogether, these data suggest that ordinary decisions as well as high-stakes decisions may benefit more from social reflection than from solitary reflection, financial incentives, or confidence. For example, medical professionals’ decisions may be drastically improved by brief, automated micro-consultations with a peer who adds an alternative perspective or mindset to the decision. Our results are good news for institutions that capitalize on disagreement and discussion when making important decisions. We welcome your thoughts and experience about how dissent and dialogue impact your decisions (daily decisions, diagnoses, education, finances, forecasts, and more).

ABSTRACT. Standard random utility models can account for stochastic choice. However, a common implication is that the realized utilities are equal with probability zero. This knife-edge aspect implies that indifference is thin because arbitrarily small changes in utility will break indifference. Semiorders can represent preferences where indifference is thick, however, choice is not random. We design an incentivized binary line length judgment experiment to better understand how indifference can be both thick and random. In the 2-choice treatment, subjects select one of the lines. In the 3-choice treatment, subjects select one of the lines or can express indifference, which directs the computer to "flip a coin" to decide. In every trial, there is a longer line and subjects were told this fact. For each of our line pairs, subjects make 5 decisions in the 2-choice treatment and 5 decisions in the 3-choice treatment. In the line pair with the smallest length difference, 49.7% of 2-choice treatment trials are optimal. For this line pair in the 3-choice treatment, only 1 out of 113 subjects selected indifference on all 5 available trials. In the 3-choice treatment, we find that indifference choices have longer response times than suboptimal choices. We find that indifference choices are associated with risk aversion and a measure of the beliefs of the favorability of the coin flip. We hope that the results of our experiment can help inform models of choice where indifference is both thick and random.

ABSTRACT. Subjective well-being measures are increasingly used in economic research and policy evaluations as a proxy for utility. The foundation of this practice lies in the assumption that the maximization of one’s well-being is the guiding principle behind people’s decisions. To examine this underlying premise, Benjamin et al. (2012) studied whether people choose what they believe would maximize their subjective well-being in a U.S. sample. Later, Adler et al. (2017) examined the trade-off between happiness and other attributes in decision-making within a U.K. sample. Their findings, along with subsequent research using their measurement approach, reveal differences in the extent to which people prioritize happiness across demographics. Additionally, a negative correlation was observed between higher education and the prioritization of happiness.

Following this thread of research, this study examines how students at a top university in UK value well-being and how university identity shapes this tendency. Using a survey with two existing tasks from Benjamin et al. (2012) and Adler et al. (2017) — one asking students to trade off happiness against other objectives, and the other examining the alignment of individual choice, predicted happiness outcomes, and perceived norms — we compare the results from top university students with those from nationally representative samples (from the U.S. and U.K.), and explore the role of identity and the accuracy of perceived norms.

Our findings reveal that top university students value happiness less than the general public samples in the U.S. and U.K., and that stronger university identification is linked to a reduced emphasis on happiness. Additionally, students believe fewer of their peers value happiness, despite many doing so privately, suggesting pluralistic ignorance. This study contributes to understanding how social norms and group identity influence happiness valuation and underscores the impact of social contexts on well-being attitudes and behaviors.

ABSTRACT. Some theorists conceptualize poverty as a restriction on freedom, such as the freedom to choose a desired lifestyle or preferred products (e.g., Sen, 2000). However, the existing literature lacks studies that directly examine whether individuals living in poverty perceive their financial situation as a limitation on freedom and how this perception affects their well-being and economic decision-making. According to psychological reactance theory (Brehm & Brehm, 1981), when an individual's freedom is threatened, they experience psychological reactance—a motivational state aimed at restoring lost freedom. This state consists of cognitive beliefs about perceived restrictions on freedom and affective responses, primarily anger (Dillard & Shen, 2005). Applying this theory to financial constraints as a form of restricted freedom may help explain why individuals in poverty make specific economic decisions to regain their sense of autonomy. This research examines whether poverty constitutes a restriction on freedom, using reactance theory to explain psychological responses to perceived financial constraints. Additionally, we explore how perceiving one's financial situation as a restriction on freedom relates to spending-oriented economic decisions, a behavior often associated with individuals experiencing poverty (Shah et al., 2012; Yang, 2016), as well as its links to well-being and psychological resources. The aim of Study 1 is to explore how individuals living in poverty perceive the impact of their economic situation on their freedom and the feelings this elicits. In Study 1, we conducted in-depth interviews with 22 Poles living in poverty. Qualitative analysis revealed that most respondents perceived poverty as limiting their freedom. Several economic coping strategies were identified, such as increasing income through loans or seeking employment. We identified three main attitudes among individuals in extreme poverty: (1) feelings of anger, frustration, and injustice, particularly among those unable to work due to chronic health issues, who perceived their financial situation as a limitation on freedom; (2) apathy, where participants had become accustomed to their situation and did not perceive it as restricting their freedom; and (3) hope and rationalization, where individuals focused on positive aspects of their lives and did not see their financial situation as a constraint. The qualitative analysis also provided insight into which aspects of limited freedom of choice contribute to lower well-being among individuals in poverty. The aim of Study 2 was to examine the prevalence of perceiving poverty as a restriction on freedom and its relationship with income levels. In online Study 2 (n = 300), 85% of participants perceived poverty as a restriction on freedom, with many describing it as one of the most limiting life experiences. Findings showed that lower-income individuals were more likely to perceive their financial situation as constraining their freedom. In Study 3 (n = 365), also conducted via an online panel, we examined whether perceiving one's financial status as a restriction on freedom—and the subsequent experience of reactance—was associated with lower well-being and diminished psychological resources. A series of mediation models revealed that lower income was associated with higher reactance toward one's financial situation (i.e., perceiving it as a limitation on freedom and experiencing anger about it). This, in turn, was associated with several indicators of lower well-being, including higher levels of depression, more negative moods, and lower life satisfaction. Additionally, reactance was linked to lower psychological resources, such as reduced self-esteem, self-efficacy, and optimism. These findings suggest that limited psychological resources may hinder individuals from overcoming financial hardship, as diminished self-esteem, self-efficacy, and optimism can reduce motivation and perceived ability to improve one's economic situation. Study 4 explored the relationships between income, reactance to one's financial situation, various economic decisions, and consumer preferences linked to a desire to increase freedom of choice. It also examined personality predictors of reactance and moderators of these relationships. This study was conducted online on a representative sample of Poles (n = 1,069). The results identified personality traits associated with higher reactance toward one's financial situation, including greater trait reactance, materialism, autonomy, and an internal locus of control, as well as a lower emphasis on choice-making for identity. Lower income was linked to higher levels of reactance toward one's financial situation, which, in turn, was associated with a greater preference for taking out loans and installment purchases and a lower tendency to save. However, this relationship did not extend to preferences for luxury goods. The study also found that materialism moderated the relationship between income and reactance, while trait reactance and internal locus of control moderated the link between financial reactance and the preference for taking out loans. Study 5 aims to experimentally simulate a subjective state of poverty in a laboratory setting using the scarcity research paradigm to test causal relationships. Specifically, we aim to examine whether poverty increases financial reactance, leading to economic decisions intended to restore restricted freedom through borrowing. The results of this study will be discussed during the presentation. In sum, reactance theory provides a valuable framework for understanding the relationship between poverty, well-being, and economic decision-making. The discussion will address the implications of economic disadvantage as a restriction on freedom, suggesting that poverty not only diminishes well-being but may also motivate borrowing behaviors that could further exacerbate financial hardship. Additionally, we highlight that lower psychological resources, such as self-esteem, self-efficacy, and optimism, may create additional barriers to overcoming poverty. These findings have important theoretical and practical implications. Theoretically, they expand reactance theory by demonstrating its relevance to financial constraints and economic behavior. Practically, they suggest that interventions aimed at strengthening psychological resources may help individuals in poverty make more sustainable financial decisions. Furthermore, these results open new avenues for research on interventions based on reactance theory that focuses on changing perceptions of financial hardship as a restriction on freedom. Potential strategies include gratitude exercises or reducing materialistic values, which could mitigate the negative effects of financial constraints on decision-making and well-being. This research provides a novel perspective on how financial limitations shape perceptions of freedom and economic choices, offering insights for both policymakers and practitioners.

ABSTRACT. Self-control plays a crucial role in our achievements, health, and well-being. Traditional perspectives have primarily conceptualised self-control as effortful, requiring active resistance to temptations. However, contemporary perspectives suggest that effective self-control may also involve effortless strategies, as some individuals appear to achieve goals with ease (Duckworth et al., 2016; Gillebaart & de Ridder, 2015; Gillebaart & Schneider, 2024). Recently, self-control has been broadly defined as any voluntary action aimed at prioritising long-term, enduringly valued goals over momentarily tempting alternatives (Duckworth et al., 2016). The Process Model of Self-Control provides a comprehensive framework for understanding how self-control operates across four stages: situation (including selection and modification), attention, appraisal, and response (Duckworth et al., 2016; Napolitano et al., 2024). Effortless self-control strategies typically occur during the situation stage, where individuals pre-emptively select or modify situations to minimise exposure to temptation. In contrast, effortful self-control strategies are employed at later stages (attention, appraisal, and response) and involve actively resisting or managing impulses after encountering temptations. Classical models have primarily focused on resisting temptations once they are encountered, emphasising the effortful aspects of self-control. However, the Process Model highlights that delaying intervention until after exposure to temptations may increase the difficulty of self-control efforts. Simply experiencing temptations can deplete self-regulatory resources and lead to reduced self-control capacity (Milyavskaya & Inzlicht, 2017). Despite increasing interest in effortless self-control strategies, few studies have directly compared their effects on well-being to those of effortful strategies. While some research suggests that situation-focused strategies, such as selection and modification, are associated with greater subjective well-being, these findings have not been consistently replicated (Nielsen et al., 2019). Goal attainment, a known contributor to well-being(Wong et al., 2017), may moderate the relationship between self-control strategies and affective well-being. Factors such as goal commitment, goal difficulty, intrusive thoughts, self-concordance, individual differences, and cultural contexts influence the extent to which goal attainment enhances well-being (Becker & Bernecker, 2023; Brunstein, 1993; Klug & Maier, 2015; S. Wiese & M. Freund, 2005; Sheldon et al., 2015; Sheldon & Houser-Marko, 2001). Interestingly, some studies have found effortful self-control to be consistently unrelated to goal attainment (Milyavskaya & Inzlicht, 2017). This suggests that goal attainment may act as a moderator, shaping how both effortful and effortless self-control strategies influence well-being. When goal attainment is at a high level, both types of strategies may enhance affective well-being due to the reinforcement and satisfaction of goal achievement. However, when goal attainment is low, effortful strategies may lead to frustration and negative emotions, while effortless strategies may buffer against negative affect, as they involve less investment and depletion. Understanding the associations between goal attainment, self-control strategies, and well-being can offer valuable insights into how individuals regulate their emotions and maintain well-being under varying circumstances.

Hypotheses: 1. Effortless self-control strategies will be positively related to affective well-being, as they involve less strain and depletion, promoting a sense of ease and emotional stability. 2. Effortful self-control strategies will be negatively related to affective well-being, as they require significant effort and may lead to feelings of depletion, frustration, or emotional strain. 3. The relationship between self-control strategies (effortless and effortful) and affective well-being will be moderated by goal attainment: -When goal attainment is high, both effortless and effortful strategies will positively predict affective well-being, as achieving valued goals reinforces positive emotions. -When goal attainment is low, effortful self-control strategies will negatively predict affective well-being due to frustration from failed efforts, whereas effortless strategies will either positively or neutrally predict well-being, buffering against the negative impact of goal failure.

ABSTRACT. The study of solidarity has long been a topic of social psychological research, though primarily among adults, and indeed, a growing number of studies inform us about the factors influencing solidarity with the members of disadvantaged groups, including fairness perceptions about their situation and helping behavior toward them. Nevertheless, promoting social welfare by decreasing social inequality and establishing societies with less conflicts requires passing on solidarity principles to younger generations. Empirical studies of solidarity have also been conducted among children, although they typically examine children’s distribution decisions by focusing mainly on one specific aspect when identifying the principles children apply to achieve fair distributions. Such principles include elements of procedural justice, merit-based fairness, equality etc. For instance, by investigating children between the ages of 4 and 11, cross-cultural research (Huppert et al., 2019) has already reported that children tend to prefer equal resource distribution in preschool years and distributions reflecting fairness based on effort and merit in school-age years. However, to our knowledge, there is a lack of studies examining the emergence of compensatory attitudes in these decisions, i.e., attitudes that, beyond effort, also consider the pre-existing availability of resources that significantly influence performance as a target of judgement. Thus, we are explicitly interested in the examination of how children take both personal effort and resource availability into account when judging performance of actors shaped by their efforts and resource availability.

In two questionnaire studies, we aimed to better understand the reward decisions and justice perceptions of 8- to 12-year-olds in situations where both the level of effort exerted by an actor and the accessibility of resources the actor could mobilize were manipulated. In our first study, 11- to 12-year-old Hungarian children (N = 93) read a scenario in a 2 (low/high effort) × 2 (low/high resource accessibility) between-subjects design. The protagonist of the scenario, a child of the same age and gender as the participant, completed a school task with either little or great effort while using material resources that were either easy or difficult to access. The children were then asked whether the protagonist should receive a particular reward and how fair it would be to reward them. The results showed that reward allocation was not considerably influenced by the main effects of effort or resource accessibility, but it was significantly affected by their interaction effect: most children awarded the reward in the high-effort and high-accessibility condition, whereas willingness to reward dropped unexpectedly in the high-effort and low-accessibility condition. This willingness was the lowest in the two low-effort conditions. In terms of justice perception, only the level of effort made a difference: children considered the reward to be fairer when it was given after showing high effort.

Compensatory attitudes reflecting the different levels of resource accessibility could not be identified in the first study. Therefore, we designed a second study, currently in progress with data collection among 8- to 10-year-old children. While maintaining the examined aspects, the 2×2 design, and the main characteristics of the protagonist, we significantly revised the scenario by accentuating the protagonist’s access to resources more (i.e., highlighting that accessibility is determined by the financial situation of the protagonist’s family). Furthermore, we included age-specific measurements of meritocratic beliefs and empathy as moderating variables in the questionnaire. We expect that in cases where actions are characterized by high effort but low accessibility, decisions and fairness judgments about the reward will reflect compensatory attitudes, particularly when levels of empathy are higher and meritocratic views are less strongly endorsed. Regarding both reward decisions and fairness judgments of rewarding, preliminary results so far show only the main effect of effort.

Besides sharing the results of both studies, we will discuss the limitations of our research, explore the practical implications of our findings, and raise questions for future research.

Reference Huppert, E., Cowell, J. M., Cheng, Y., Contreras‐Ibáñez, C., Gomez‐Sicard, N., Gonzalez‐Gadea, M. L., Huepe, D., Ibanez, A., Lee, K., Mahasneh, R., Malcolm-Smith, S., Salas, N., Selcuk, B., Tungodden, B., Wong, A., Zhou, X., & Decety, J. (2019). The development of children's preferences for equality and equity across 13 individualistic and collectivist cultures. Developmental Science, 22(2), e12729. https://doi.org/10.1111/desc.12729

ABSTRACT. Beginning with Bikhchandani, Hirshleifer, and Welch (1992), theoretical economists have shown that herd behavior can be a rational response to the information contained in others’ choices. In the simplest model, a sequence of agents each in turn choose one of two options after having observed their predecessors’ choices. Agents have common preferences over the two options, but they do not know which is better. Rather, they receive independent and equally strong private binary signals about the correct option. In this setting, an information cascade eventually occurs in which agents ignore their signals and make the same choice. The benefit of information diversity is lost, leading agents to frequently herd on the wrong option despite the many signals that reveal the correct one. Similarly to herd instincts, rational learning from others’ choices predicts herds that are idiosyncratic, socially dysfunctional, and volatile. But rational herding has limits, and its social costs can be mitigated as the arrival of better-informed agents or the release of public news may reverse wrong herds into correct ones. Smith and Sørensen (2000) starkly illustrate the limits of rational herding and the possibility for all late movers to make the correct choice. They consider arbitrarily precise signals which implies that, even if one million agents choose the same option, there is always the possibility that the next agent’s signal influences her choice and leads her to go against the herd. The decision to go against the herd overturns the informational weight of the long sequence of past choices, which radically swings the beliefs of successors. Thus, abstracting from their own signal, successors follow the overturning choice rather than the one million herding choices, with the overturning choice being more likely to be correct than the herding choices. This is what Smith and Sørensen refer to as the overturning principle.

We report an experimental test of the overturning principle to investigate whether, as predicted by the principle, the benefit of information is recaptured once a herd is overturned. Our experimental evidence largely contradicts this prediction, which suggests that people form herds that resemble unreasoning herds and can evolve into frenzies with boundless social costs. Our experimental setting is made of three sequences of subjects. In the bottom sequence, subjects receive binary signals of low quality and they choose one of two options after having observed their predecessors’ choices. Once an imbalance of two choices for an option occurs, a laboratory cascade should emerge where subjects ignore their signals and choose the same option. In the middle sequence, subjects observe the choices made earlier in the bottom sequence and they receive binary signals of high quality. Thanks to their superior information, middle sequence subjects should always follow their signal so that any cascade in the bottom sequence should be overturned. Finally, in the top sequence, each subject observes the choice made in the previous period by the middle sequence subject as well as the choices made earlier in the bottom sequence. Subjects in the top sequence do not receive private signals. According to the overturning principle, a rational deviation from a herd, no matter how long the herd is, reveals a strong signal favoring the contrary action and successors should imitate the deviant. Thus, the overturning principle holds if subjects in the top sequence follow the overturning guesses made in the middle sequence.

Our results can be summarized as follows. In the bottom sequence, the emergence of herds is delayed as subjects tend to overweight their signal relative to the information contained in previous choices. Indeed, at odds with the standard predictions, a substantial proportion of choices fail to herd on few past choices which contradict the signal. Still, once enough past choices contradict their signal, subjects herd on these past choices meaning that herd behavior is qualitatively consistent with rational herding. The evidence in the bottom sequence matches perfectly the evidence of past information cascade experiments (as summarized in Weizsäcker, 2010). In the middle sequence, subjects often fail to overturn long strings of choices that contradict their signal. They fail to appreciate that strings of 2 or 3 choices that contradict their signal are as informative as strings of 5 or more such choices (given the evidence in the bottom sequence). Said differently, subjects in the middle sequence neglect the information redundancy in the choices made late in the bottom sequence as the latter are heavily influenced by early choices. The evidence in the middle sequence is in line with recent experimental evidence on social learning (Eyster, Rabin, and Weizsäcker, 2018; March and Ziegelmeyer, 2020). In the top sequence, subjects fail to imitate overturning choices in most cases, i.e., violations of the overturning principle are substantial. Indeed, once they observe many identical choices in the bottom sequence, subjects in the top sequence are reluctant to imitate a middle sequence choice that overturns the herd. Instead, they follow the majority. Our evidence suggests that subjects in the top sequence value the information contained in a long herd more than the information of the overturning guess, i.e. they tend to reason like most subjects in the middle sequence. What is remarkable is that subjects in the top sequence neglect the information redundancy of a herd even when they observe its disruption.

References

Bikhchandani, S., D. Hirshleifer, and I. Welch (1992): “A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades,” Journal of Political Economy, 100, 992–1026.

Eyster, E., M. Rabin, and G. Weizsäcker (2018): “An Experiment on Social Mislearning,” Unpublished.

March, C., and A. Ziegelmeyer (2020): “Altruistic Observational Learning,” Journal of Economic Theory, 190, 105–23.

Smith, L., and P. Sørensen (2000): “Pathological Outcomes of Observational Learning,” Econometrica, 68, 371–98.

Weizsäcker, G. (2010): “Do We Follow Others when We Should? A Simple Test of Rational Expectations,” American Economic Review, 100, 2340–60.

ABSTRACT. Driven by lessons from COVID-19, the RIVM Behaviour & Health Unit is enhancing the preparedness of social and behavioural sciences for future pandemics. Using the socio-ecological model and emergency management cycle, we propose a conceptual framework for a behavioural perspective on pandemic preparedness. The multilevel (individual, community, organisational, national, supra-national), time-dependent (cold, acute, recovery) structure helps clarify who must act when. To understand what different actors need before or during a pandemic, we propose an adapted COM-B model (Michie et al., 2011), including determinants related to motivation, capabilities, and opportunities. Based on these frameworks, various monitoring tools are developed. Here we present the first results of the Pandemic Preparedness and Behaviour (PPb) survey, which monitors coldphase behaviours (hygiene, social activity, preparedness) and their determinants at an individual level. Collecting data in four European countries, the survey provides baseline measurements ahead of a future pandemic and helps develop appropriate tools for the hot phase. Additionally, insights into cold-phase determinants can identify where communities, organisations, and governments can provide support to improve preparedness. This presentation will discuss the conceptual framework, initial PPb survey findings, and their relevance for strengthening social and behavioural science preparedness.

ABSTRACT. The use of behavioral insights (BI) in public policy has become a cornerstone of evidence-based governance, offering innovative approaches to complex challenges in consumer protection. The Danish Competition and Consumer Authority (DCCA) has been at the forefront of this movement, harnessing behavioral science and experimentation to improve consumer outcomes since 2013. This presentation provides an in-depth exploration of how BI can drive impactful policy and the complex road to implementation with a focus on practical experience in Denmark. In recent years, the DCCA has utilized a variety of BI tools including randomized experiments and survey methods to tackle pressing consumer issues. This session will focus on how BI is used in practice and include one-two cases of projects that exemplify the complex journey from behavioral insights to policy impact. The cases will include work on topics such as empowering young consumers using social media, and how BI tools can help leveling the playing field for consumers making complex financial decisions. Both cases underline the importance of translating behavioral insights into actionable, scalable, and evidence-based policy interventions. They also highlight the challenges and opportunities of embedding BI within the policymaking process, from stakeholder collaboration to ethical considerations. This presentation will provide attendees with a detailed understanding of the methodologies and frameworks used in these projects, as well as insights into how BI can be integrated into policy design to achieve real-world impact. We will also discuss the broader role of BI in Denmark’s consumer protection strategy and share lessons learned for policymakers, researchers, and practitioners working at the intersection of behavioral science and public policy.

ABSTRACT. Behavioural Insights (BI) have gained traction in policymaking, yet their application remains largely confined to individual-level interventions, often as ‘nudges’ that leave broader policy design untouched. This limited scope fails to harness BI’s full potential for shaping policies that align with human behaviour at a systemic level. This position paper sets the stage for unlocking the full potential of BI. It begins by debunking common misconceptions policymakers may have about BI. It then highlights the various policy scopes where BI can contribute, drawing primarily on examples from the Joint Research Centre. Finally, it explores how BI can achieve greater systemic impact, advocating for more interdisciplinary collaboration with systems analysts and others, as well as the early integration of BI into the policy cycle. Many misconceptions persist about the role and scope of BI in policymaking. One common misunderstanding is that BI can solely focus on influencing individual behaviour, when in reality, it can also contribute to systemic changes. Another misconception equates BI with behavioural interventions, particularly nudges, overlooking its capacity to inform traditional policies. Aligned with this, BI is often viewed as a mere ‘plug-in’ rather than a foundational element that should be embedded throughout the policy process, from anticipation to implementation. Additionally, BI is often mistakenly perceived as being limited to ‘soft’ interventions, despite its proven ability to enhance a broad spectrum of policy instruments, including coercive measures. Finally, the impact of BI is frequently underestimated, due to the assumption that its influence is marginal, largely based on studies of nudging. BI can inform a wide range of policies, as well as their interconnections within and across policy areas. Behavioural interventions, mostly targeted at individuals, can also trigger systemic changes through cascade effects, whereby small individual behavioural changes can lead to broader societal shifts. However, what those effects will be is uncertain. Early inclusion of BI can guide the choice and development of both behavioural interventions and traditional policy instruments, ensuring that they are grounded in a thorough understanding of human behaviour. Beyond individual policies, BI can enhance policy mixes, ensuring that different instruments work cohesively rather than in conflict. Many policies are designed in silos, leading to unintended behavioural consequences when multiple interventions send conflicting signals. BI can help identify synergies, streamline interventions, and avoid friction between measures aimed at the same policy goals. Policymakers should move from viewing BI as an ‘add-on’ to recognising it as a key tool in crafting well-aligned policy mixes. Another underexplored area is policy interconnection—the way policies across different domains interact and influence behaviour. Behavioural science has traditionally focused on individual policy areas, but in reality, citizens and businesses navigate multiple overlapping policies daily. BI can offer a framework for analysing these interdependencies, ensuring that policies do not produce counterproductive effects when viewed collectively. BI can finally help to address complex societal challenges, contributing to the system. It can do so by mapping stakeholder interactions, identifying leverage points, and designing policy tools that work within existing systems rather than independently. Systemic change is fundamentally rooted in human behaviour: while structural, political, economic, or technological factors may set the stage, it is the decisions and actions of individuals that ultimately drive change. Identifying and leveraging the right behavioural pathways can shift the trajectory of systemic challenges, paving the way for transformative outcomes. To achieve this, integrating BI with systems analysis (e.g. design for policy, strategic foresight) holds significant potential. If BI is to contribute meaningfully to policymaking, it must be embedded throughout the policy process—informing not only behavioural interventions but also traditional policy instruments, policy mixes, policy interconnections, and systemic change. For BI to realise its full potential, several challenges must be addressed. Interdisciplinary collaboration is crucial—BI cannot operate in isolation but must be integrated with other disciplines such as systems innovation (including foresight, design for policy and many others) and natural sciences when relevant. Early integration of BI into policymaking is also fundamental. This can be fostered by training policymakers on BI (raising awareness), building long-term and stable collaborations with them (building trust) and being able to quickly collect reliable experimental data (complying with policy process deadlines).

ABSTRACT. The EU’s Packaging and Packaging Waste Regulation (PPWR) entered into force in February 2025. It aims to reduce packaging waste, improve recycling rates, and support the circular economy. To this end, the European Commission mandates harmonised waste sorting labels (WSLs) on packaging and waste receptacles across all Member States. Currently, Member States employ diverse waste collection systems, colour codes, and labelling practices, with many lacking labels on product packaging. This project, led by the Joint Research Centre (JRC), seeks to design a harmonised WSL system that is salient, well-understood, and actionable for all EU citizens. Inspired by the Nordic pictogram system, the labels will be placed on both packaging and waste receptacles to guide proper waste disposal, aiming for consistent design on packaging to avoid internal market fragmentation. The project adopts an interdisciplinary approach, integrating behavioural insights with participatory design to create evidencebased, user-friendly WSLs. We combine a literature review, large-scale surveys of about 17,000 EU citizens in 21 different Member States, participatory workshops with diverse stakeholders—including packaging producers, waste managers, consumers, and people with visual impairments—, stakeholder consultations, online behavioural experiments including almost 10,000 EU citizens from 11 Member States, and graphical design. This comprehensive methodology investigates how label design elements (e.g., colours, pictograms, text) influence attention, understanding, appreciation, and sorting accuracy. Eventually, we empirically test the effectiveness of WSLs in improving sorting behaviour. Our research reveals tensions between industry preferences for flexible, space-efficient labels and consumers’ need for clarity and actionable information. Through iterative prototyping and behavioural testing, we develop a WSL system designed to enhance sorting behaviours while being feasible for industry implementation. This project will directly inform the implementing act related to the PPWR. Our findings highlight the critical role of behavioural science in addressing environmental challenges, offering insights into how design, capability, opportunity and motivation intersect to influence everyday waste-sorting decisions.

ABSTRACT. Consumption preferences differ depending on who we eat with (e.g. friends or family). We are very sensitive to social cues around food, such as the physique of others and their physical attractiveness. These differences in food preferences are not random, but are driven by certain motives, such as impression management. An important dimension of food choice related to impression management motives is the extent to which a food option signals masculinity or femininity. In other words, depending on the social environment, people may have different preferences for foods that are perceived as masculine or feminine, as the choice of such foods may serve as a self-presentation strategy to convey a positive image of oneself to others. Therefore, in this project, we examined consumers’ food preferences along the continuum of femininity and masculinity in different social contexts, such as when ordering food on a romantic date, dining with friends, or having a meal with family members. We also investigated whether this pattern depends on the gender of the consumer. Given that women prioritize status cues in men and tend to prefer food alternatives with an elegant presentation format, we expected men to be more inclined to signal status, not only by choosing more masculine foods, but also by preferring foods perceived to be more expensive. In contrast, we expected women to choose foods that signal femininity and an elegant presentation style. In Study 1, we presented American participants recruited from Prolific Academic (N = 163, 46.9% women, 53.1% men, age M = 41.7, SD = 14.5) with 15 pictures of dishes that differed in terms of femininity and masculinity and asked them about their preferences for these dishes in a dating or friendship context. These pictures of dishes were pretested to ensure that they differed markedly in perceived femininity and masculinity. We found that women (men) indicated a stronger preference for foods that were perceived as more feminine (masculine), confirming our initial hypotheses. We further predicted that these gender-typed food preferences should be reinforced when a mating motive (as opposed to a non-mating motive) is activated, such that these preference patterns should be more pronounced when dining out with an attractive date rather than meeting and eating with friends. This assumption was supported by the fact that women who were asked to imagine having a dinner with a date reported significantly stronger preferences for more feminine (less masculine) food alternatives, whereas this effect did not occur for women who were asked to think about having dinner with friends. However, contrary to our hypothesis that men should prefer more masculine foods when dining with an attractive date instead of friends, men reported a significantly stronger preference for masculine than feminine foods when dining with friends rather than with an attractive date. In Study 2, we collected actual data about the food ordered in one of the restaurants on the market square in Wroclaw, Poland. We cooperated with waiters and waitresses who recorded the orders of 111 groups of people (280 adult diners, 49% women, 51% men, estimated age M = 36.56, SD = 9.71) over 5 weekends. We also asked them to note whether the party was a date (n = 96 participants), a get-together with friends (n = 112 participants) or a meal with family members (n = 72). Finally, we asked them to photograph all the dishes on the restaurant menu (against a neutral background) and note the food prices. The dishes in the photographs were rated by 30 Prolific judges for their femininity, masculinity, price, and sophistication. Replicating the results from Study 1, we found that women selected more feminine and less masculine dishes than men, with the most significant difference being in the date context, followed by a meal with friends. There were no significant differences in the masculinity and femininity of the food ordered when women had a meal with their family members. With regard to the actual and perceived price of the food ordered, we found no differences between the eating contexts for women. However, men ordered the most expensive food when they had a date, followed by eating with friends and family members, respectively. Contrary to our expectations, we also found that the food ordered by men and women for a date and a meal with friends was similar in terms of 'sophistication,' although men ordered more 'mundane' food than women in the family eating situation. These findings are consistent with existing theories that sexual dimorphism and the embodiment of gender-typical traits are perceived as more attractive. Thus, women (men) appear to strategically attempt to increase their attractiveness to potential mates by choosing more feminine (masculine and expensive) foods, especially in mating contexts.

ABSTRACT. Boredom is a common phenomenon, inevitably connected with experiencing negative emotions, that can be studied from two different main perspectives. Some researchers focus on boredom proneness as a trait defined as a permanent individual predisposition to feeling bored. Others examine the problem of boredom as a situationally evoked state. Such a state of boredom can be described as a conflict between a tendency to continue and a tendency to drop out of a situation that has become unpleasant primarily due to an individual’s inadequate motivation, resulting in an inadequate psychological adjustment. A different definition of boredom, somehow integrating both the state and trait approach, describes it as a temporary feeling of lowered arousal and negative emotions caused by the environment or individual traits. The state of boredom can push people toward engaging in various behaviors. Generally speaking, those who experience negative affect triggered by being in an unpleasant situation want to soothe these emotions. Usually, they do it by engaging in simple strategies to change the situation they are in and to start a stimulating activity—like reading a book, watching TV, or undertaking sport activities. Boredom has also been associated with impulsive, mindless eating and overeating; with seeking novel experiences, even if they are hedonically negative; and with risk taking in various areas, including financial risk. Because a nonoptimal arousal level, inevitably related to the state of boredom, can foster different impulsive, stimulating activities,we expected that it can also trigger impulsive, mindless buying, because buying can be just another instance of stimulating activity. However, frequently, when being bored—instead of just engaging in activities that are not boring—people employ more complex compensatory behaviors. These compensatory behaviors are meant not only to deal with negative affect by making the situation more interesting, but also and perhaps mainly to raise the lowered sense of meaning. Therefore, a specific activity can serve as a compensatory behavior in the face of boredom when it is important for the person and it provides her with such a sense of meaning. From this point of view, excessive buying can also appear as a result of increased boredom. In the contemporary consumption-oriented society, overwhelmed with materialistic values, people tend to believe that happiness, success, and meaning in life arise (at least partly) from earning a good deal of money and spending it on products, services, and experiences offered in the marketplace. In this project, we assumed that (at least some) people might easily conclude that buying and consuming may provide them with a sense of meaning, which leads to the conclusion that purchasing itself can serve as an activity that compensates for the state of boredom because of the meaning it might provide. In this project, we wanted to explore people’s behaviors connected with buying and its relationship to the daily level of boredom. Because we were interested in measuring behavior rather than pure declarations, we used a daily diary method. We investigated the link between boredom and behaviors connected with excessive buying (such as purchasing unplanned excessive items or engaging in buying-related activities e.g. spending time browsing shops either in-store or online) in a real-life setting. We recruited 1006 participants (501 Poles, 505 Brits; 501 men, 494 women, 11 others; age M = 34.8, SD = 12.7) to participate in a T0 survey where we explained I detail the procedure of our diary study and measured some of their traits. Then, 491 Poles and 436 Brits filled in a short questionnaire at the end of the day at least once out of 14 days. In the daily surveys, the participants reported some buying behaviors undertaken during that past day (time and money spent shopping and the number of purchased items, which constituted a preregistered latent variable) and the reasons for the purchase. They were asked to indicate how strongly the following reasons influenced the purchase: “I bought it because it felt good”, “I bought it to stop feeling bad”, “I bought it because I remembered I needed it” and “Other”. They were also asked about their feelings of boredom, happiness, and sadness. In both countries, participants who declared that they had performed more buying-related actions during the day also declared lower levels of boredom in the evening. The reasons for the purchase played an important role in the analyzed relationship, which appeared to be country-dependent. In the UK, individuals whose primary reasons for purchase were buying “to stop feeling bad” or “to feel good” couldn’t lower their feeling of boredom with even lots of purchases. In Poland, we did not observe a similar effect. Although surprisingly, in Poland, the main reason for shopping being “to feel good” was connected directly to boredom, such as the people buying to feel good (with a positive emotional state while buying) were then reporting lower levels of boredom in the evening. This effect was absent in the UK. Our outcomes confirm the relationship between boredom and buying. That relationship, however, may look different depending on the individuals’ motivation for purchase and their cultural background (e.g., country). Our project is a testament to a colloquial belief that people tend to “buy out of boredom” and a warning for shoppers to be aware of being bored into reckless buying. It is also a first step in understanding this phenomenon and developing strategies for dealing with the need to chase our boredom away with buying.

ABSTRACT. The way consumers shop and manage their finances has changed dramatically over the last ten years, driven by the digitalization of payments services, rise of e-commerce, and growing popularity of financial schemes like Buy Now, Pay Later (BNPL), short-term financing options enabling consumers to make purchases and pay in interest-free instalments over time. While these developments have enhanced purchasing convenience, they have also lowered spending barriers and purchasing friction, potentially exacerbating compensatory and compulsive buying behaviours.

Compulsive buying (CB), a problem first described by Kraepelin as early as 1915, is outlined by a preoccupation with buying and shopping, an irresistible urge to buy, and frequent buying episodes that cannot be controlled. Often used to counterbalance negative life events, inner deficiencies, and negative feelings, CB episodes initially bring relief and pleasure but are soon followed by remorse and guilt due to the inappropriateness of the spending behaviour and its negative consequences on relationships, well-being, and finances. Academic interest in compulsive buying - or addictive buying, depending on the discipline - as a consumer behaviour and policy problem emerged around 1990, when several research groups in the US, Canada, and Germany began investigating its aetiology, mechanisms, consequences, and evolution over time. By focusing on extreme buying behaviours, researchers also sought to gain a deeper understanding of regular shopping behaviour within consumer societies.

Despite major digital shifts in consumer culture potentially exacerbating extreme consumption behaviours, representative research on CB behaviour in-store and online, as well as the influence of payment methods, remains limited. A meta-analysis estimated a pooled CB prevalence of 4.9% in adult representative samples (Maraz et al., 2016). However, large heterogeneity across subgroups, driven by differences in the conceptualisation of CB, measurement tools, and assessment timeframes, limits cross-study comparability and the reliable identification of prevalence rates. Preliminary survey data additionally suggests a close link between online and offline CB, with 3% of respondents being classified as “addicted”, though distinct patterns emerged based on age and education level (Augsburger et al., 2020). It thus remains unclear how CB has evolved in response to these digital transformations, making it difficult to assess the scope of the problem and develop targeted interventions and policies that prioritize consumer well-being.

This study examined the relationship between online and offline CB, as well as the influence of BNPL schemes, in Germany, the European Union’s largest consumer and e-commerce market. Participants were recruited via YouGov Germany and completed an online survey. After data cleaning, 913 participants (sex: 51.4% female, age: M = 52.73, SD = 16.68, range = 18 – 87 years) were included for analysis.

Compulsive buying propensity was assessed using the German Addictive Buying Scale (Neuner et al., 2005; Scherhorn et al., 1990), a 16-item measure widely used in German-speaking countries. An aggregate score ranging from 16 to 64 was used as an index of compulsive buying propensity, with individuals scoring 45 and above classified as compulsive buyers. Online CB was measured using four additional items focused on online shopping. Online shopping frequency over the past 30 days was assessed across eight product categories using a 5-point scale (1 = daily; 5 = never), with higher total scores indicating greater overall frequency. Chi-square tests of independence and regression models with robust standard errors were used to examine CB prevalence and its links to online CB behaviour and BNPL schemes.

Participants had a mean CB score of 29.75 (SD = 11.15), with 10.84% classified as compulsive buyers. CB propensity was significantly higher among younger participants (B = -3.55, SE = 0.019, t = -18.44, p < .001) and those with a higher household net income (B= 0.001, SE = 0.000, t = 11.26, p < .001), while rates did not significantly differ by sex (χ²(1, N = 913) = .156, p = .693). A higher propensity for CB was associated with both more frequent online shopping (B= 0.247, SE = 0.021, t = 11.59, p < .001, , η² = .130) and increased online CB behaviour (B = 0.191, SE = 0.008, t = 23.25, p < .001, η² = .376), controlling for age, sex, and net income. Moreover, individuals who reported shopping more frequently online also exhibited higher levels of online CB (B = 0.216, SE = 0.017, t = 12.38, p < .001, η² = .146).

Buy Now, Pay Later schemes were used by 35.60% (n = 325) of participants in the past 30 days. BNPL use was significantly associated with higher CB propensity (B = 7.489, SE = .766, t = 9.778, p < .001, η² = .098) and a greater likelihood of being classified as a compulsive buyer (B = 1.013, SE = 0.285, p < .001). More frequent BNPL use also predicted higher levels of online CB behaviour. Compulsive buyers were nearly twice as likely to report using BNPL for reasons related to affordability and financial necessity (B = 0.652, SE = 0.312, p = .036) and exhibited more riskprone financial behaviour (e.g., increased spending) when using BNPL (B = 4.276, SE = 0.693, t = 6.17, p < .001, η² = .110). Among individuals who used BNPL in the past 30 days, use for reasons related to affordability and financial necessity significantly mediated the relationship between CB propensity and the likelihood of reporting any debt.

These findings have important implications for behavioural policy and consumer decisionmaking. The connection between CB, online shopping, BNPL use, and financial vulnerability underscores how modern credit tools reshape consumer behaviour by increasing consumer credit and reducing purchasing friction, lowering barriers to consumption. Understanding the cognitive and behavioural drivers of CB can inform targeted interventions, such as frictionincreasing measures in transactions and educational campaigns on the risks of BNPL schemes, to mitigate the negative consequences of CB and protect consumers’ economic and psychological well-being.

ABSTRACT. Now than ever before, consumers have access to more variety since retailers offer larger and more varied assortments both online and offline. Offering a large assortment can both benefit and hinder choice. Large assortments offer consumers flexibility (Chernev, 2006) and increase the likelihood that they will find alternatives they prefer (Broniarczyk et al., 1998). However, large assortments may also lead to choice overload, an aversive state that results in choice deferral or dissatisfaction (Diehl and Poynor, 2010; Iyengar and Lepper, 2000; Mogilner et al., 2008). Despite the extensive research on choice overload, the implications for variety-seeking as a potential behavioral outcome in this context have not been examined. Variety-seeking has captured the interest of marketing researchers and practitioners, as it is a crucial element that many marketers must consider when developing strategies (van Trijp & Steenkamp, 1992; Murray et al., 2022). Understanding variety-seeking in relation to the breadth of offered choice is more relevant than ever, as brand switching and disloyalty are at an increase (Data & Marketing Association, 2023; Nielsen, 2019). The purpose of the current research is to investigate variety-seeking as a behavioral outcome of choice overload and explore consumers’ variety-seeking in the case of having to choose from large assortments. The research aims to contribute to both the choice overload and the variety-seeking literature in several ways. Firstly, it aims to add variety-seeking as an additional behavioral outcome of choice overload. Secondly, since existing research on variety-seeking has focused on smaller, manageable assortments, the research aims to examine variety-seeking in the context of large assortments. Thirdly, since most studies on choice overload focus on choice scenarios where decision-makers choose only one alternative out of either a small or a large assortment (Goodman and Malkoc, 2012; Iyengar and Lepper 2000; Chernev, 2003a; Misuraca et al., 2024) or choose either the small or the large assortment (Bown et al., 2003; Broniarczyk et al., 1998; Oppewal and Koelemeijer, 2005; Chernev, 2005), the current research aims to examine choice overload and variety-seeking in a simultaneous multi-item choice scenario. This is important, as simultaneous multi-item choice has become increasingly popular for consumers who try to reduce their visits to retailers and buy multiple items in each product category on a single occasion (KPMG, 2020). Research suggests that, when facing difficult decisions, consumers engage in variety-seeking to resolve decision conflict (Kahn and Ratner, 2005). Choices from large assortments are associated with greater decision difficulty (Iyengar and Lepper, 2000; Huffman and Kahn, 1998). As the number of alternatives increases, so do decision difficulty and the choice overload consumers experience (Iyengar and Lepper, 2000). In such cases, they may resort to variety-seeking and choose not one but two or more alternatives as a means to resolve decision conflict and deal with choice overload. All these culminate to the following hypotheses: H1: Consumers seek more variety when they choose from large assortments compared to when they choose from small, more manageable assortments. H2: The choice overload caused by large assortments mediates the effect of assortment size on variety-seeking behavior. An online experiment was conducted with a sample based in the United States (US) recruited through Prolific. Two hundred forty-one adult participants (61% female) provided usable data and received a small fee for their responses. Participants were exposed to one out of two assortment types: a small assortment with four alternatives and a large assortment comprising sixteen alternatives. The selection of the stimuli for the experiment was based on a pretest (n=30). The data collection process was based on Simonson’s (1990) paradigm. Participants were presented with an assortment of different bags of potato chips (of a best-selling brand). Each bag in the assortment was of a different variety. Participants were asked to select a bundle of three bags simultaneously. Variety-seeking was operationalized as the number of different items in a chosen bundle. Assortment size was found to have a significant main effect on variety-seeking [F(1,240)=41.78, p<0.001]. Specifically, the variety sought was significantly larger in the large assortment (M=2.88; SD=0.33) than in the small assortment (M=2.14; SD=0.56) providing support for H1. In order to test H2, a regression analysis was conducted using PROCESS (model 4, 5000 bootstrap samples; Hayes, 2013). Assortment size was shown to significantly predict choice overload (b =0.94, p < .001) and choice overload was shown to significantly predict variety seeking (b = 0.07, p < .001). A bootstrap confidence interval for the indirect effect (b=0.07) was entirely above zero (0.02-0.12), indicating a significant path: assortment size → choice overload → variety-seeking behavior (b = 0.07, SE = 0.03, 95% BCI = 0.02, 0.12). With mediator present, assortment size was still a significant predictor of variety-seeking (b = 0.41, p < .001), suggesting partial mediation and providing support for H2. The results of the study indicate that consumers tend to seek more variety when they choose from large assortments. These findings are different from relevant research that examines switching likelihood as a consequence of choice overload in sequential choice tasks (Chernev, 2003b). In these studies, switching likelihood refers to the strength of preference for the chosen alternative and not to variety-seeking. Moreover, this effect of assortment size on variety-seeking was found to be mediated by choice overload. This is also a novel finding indicating that large assortments may increase consumers’ variety-seeking through the ensuing choice overload, presumably as a response to it. The present research is limited in several ways, most importantly by the fact that it was based on a simulated decision task. Future research is necessary to examine and replicate the hypothesized effects in a more realistic setting. In addition, future studies should investigate the effect of variety-seeking on resolving choice overload and on outcomes such as confidence and satisfaction with the decision outcome. Notwithstanding these limitations, the findings can provide significant implications for marketing professionals and the management of product portfolio.

ABSTRACT. There is an extensive literature on the strategies people adopt to make multiattribute decisions, from Montgomery and Svenson’s (1976) and Svenson’s (1979) seminal analyses to the present (Walasek & Brown, 2024). The standard economic model, multattribute utility theory (Von Winterfeldt & Fischer, 1975), assumes that alternatives are compared on a common value scale (utility) arrived at by a compensatory mechanism whereby the weighted utility of each attribute value is summed within alternatives. Walasek and Brown present a convincing argument that compensatory evaluations, or trade-offs, across attributes have no logical basis because there is no common value scale for many attributes; they are incommensurable. Instead, they argue, multi-attribute decisions are generally carried out via noncompensatory strategies involving ordinal (rank) attribute evaluations. One such strategy is satisficing (Simon, 1955), whereby alternatives are considered sequentially, and the first is chosen that is judged to be satisfactory on all attributes. This avoids trade-offs across incommensurable attributes. Strong evidence against across-attribute decision strategies based on a common value scale is provided by studies demonstrating violations of transitive preferences, whereby in a series of binary choices, A is preferred to B, B to C but C is preferred to A. To account for intransitive preferences Tversky proposed two strategies involving within-attribute comparisons across alternatives: (1) the noncompensatory, lexicographic semiorder (LS) heuristic; and (2) the compensatory, additive difference (AD) model. In the former, if the difference between alternatives on the most important attribute is above a certain threshold, the better alternative on that attribute is chosen, otherwise the alternative that is better on the next most important attribute is chosen. This heuristic is noncompensatory, because an advantage on the second most important attribute is not traded off against an advantage on the most important one, however great that advantage might be. In contrast, the AD strategy is compensatory, since choice is made by weighing subjective attribute differences across alternatives against each other. This fully utilizes all the information available and allows an advantage on one attribute to compensate for a disadvantage on another. Although the AD strategy can account for violations of transitive preferences, it faces a similar commensurability problem to that faced by multiattribute utility theory; attribute differences cannot logically be compared across incommensurable attributes. Nevertheless, in our recent reanalysis of data from Tversky’s (1969) lottery choice paradigm, which supersedes previous analyses (Ranyard et al., 2024), we found that the a simplified AD (SAD) model received substantially more support that the LS model in accounting for violations of transitive preferences. The SAD model is not a process model; rather, it is an as-if model of decision outcomes that is compatible with compensatory, within-attribute evaluation processes. The aim of this talk is to review the evidence for such processes in Tversky’s lottery paradigm, which involves two incommensurable attributes, in the light of the incommensurability issue raised by Walasek and Brown (2024). We propose that the compensatory weighing of attribute differences across decision alternatives is a central component of reason-based decision making (Dietrich & List, 2016; Shafir, Simonson & Tversky, 1993).

Intransitive preferences and underlying processes in Tversky’s lottery paradigm Tversky’s (1969) lottery experiment involved binary choices between five simple monetary lotteries with the structure win s dollars with probability p, otherwise win zero (attributes or dimensions S and P): a = (7/24, $5.00), b = (8/24, $4.75), c = (9/24, $4.50), d = (10/24, $4.25) and e = (11/24, $4.00). An example of intransitive preferences would be: a ≻ b, b ≻ c , c ≻ d, d ≻ e and e ≻ a (where ≻ indicates ‘is preferred to’). In this case the better payoff, S, is preferred when the difference between S and P values is the smallest, but the better P is preferred when they are the largest. Montgomery (1977) replicated Tversky’s lottery study and extended it by eliciting think-aloud verbal protocols from his participants as they made their choices. In his original analysis, Montgomery did not assess the extent to which the choice data supported the AD or LS models. Here we cross-validate our Bayes factor analysis of the choice data (Ranyard et al., 2024) with the verbal protocols and find convergence of support for the SAD model for some participants. In Kalenscher et al.’s (2011) replication of Tversky’s lottery study, participants carried out the experiment in an MRI scanner which recorded neural correlates as they made their choices. On the basis of an initial analysis of the choice data, the authors split participants into a transitive (T) and non-transitive (NT) categories. One of their main findings was that as the objective dimension differences between lotteries increased, the aggregate choice proportions of NT participants switched from the better payoff to the higher probability of winning, and aggregate neural signals in the relevant areas were correspondingly related to objective dimension difference level. In this sense, neural value signals were intransitive. Our contribution here is to analyze the choice data more completely and assess the extent to which the choices of the NT participants were better accounted for by the compensatory SAD model or the noncompensatory LS model. We found that the Bayes factors of most NT participants strongly supported the SAD model rather than LS. This suggests that the aggregate neural responses reported by Kalenscher et al. reflect a compensatory dimension-based process rather than a noncompensatory one.

Conclusion Notwithstanding that differences in the attributes win probability and payoff amount are strictly incommensurable, we have presented choice evidence and both verbal and neural process evidence that people at least sometimes apply a compensatory decision process comparing such differences across attributes. We suggest that people may construct context-specific, ad hoc common differences scales for cross-attribute comparison processes to evaluate alternatives. These can provide good reasons for their decisions. Walasek and Brown’s (2024) excellent analysis of this issue could usefully be extended to account for the evidence presented here.

ABSTRACT. Several countries have incorporated the term “well-being” into their policy-making processes, since macro-economic statistics, such as GDP, do not give the best overview of actual quality of life. One of the best examples of this approach is the Gross National Happiness Index used in Bhutan that aims to analyse the happiness and well-being of the Bhutanese population by both objective and subjective (data collected by surveys) indicators and use these results in national policy-making processes. There are also other countries who have created well-being frameworks, such as New Zealand and Australia. However, the field of well-being is still emerging and there is no clear framework how to incorporate the concept of well-being into national policies and what are the best indicators for measuring well-being. For academics and policy-makers alike, it is important to understand the idea of well-being and its components. Financial well-being has been often described as one of these components of overall well-being and, therefore, should be taken into account when analysing well-being. The aim of this article is to better define the concepts of well-being and financial well-being and to propose an alternative relationship between these two, arguing that financial well-being should not be seen as a separate component of overall well-being but rather it is intricately linked to all other parts of well-being. In order to redefine the concepts of overall well-being and financial well-being and to reassess the relationship between these two, a qualitative analysis was carried out in seven countries: Austria, Croatia, Czech Republic, Hungary, Romania, Serbia, and Slovakia. There were 90 interviews per country and the interviewees were sampled by four criteria: 1) age 2) comparative income level 3) employment status 4) identity by gender and other characteristics. The qualitative nature of the analysis allowed the researchers to go into depth when discussing the subjective understandings of overall well-being and financial well-being. The data was analysed using the principles of thematic analysis. The code tree was built upon the Global Flourishing Study framework that consists of six domains: (1) happiness and life satisfaction (2) mental and physical health (3) meaning and purpose (4) character and virtue (5) close social relationships (6) financial and material stability. The authors of the study decided to add one additional domain about work because working was a topic that was often talked about in the interviews. The investigation into the relationship between financial well-being (FWB) and general well-being highlighted the interconnected influences that shape individual and collective experiences of life satisfaction. Drawing from a fresh look at the interview data, this analysis underscores the multifaceted ways in which FWB is intricately linked to various aspects of subjective well-being (SWB), as framed by the Global Flourishing Study's six domains: happiness and life satisfaction, mental and physical health, meaning and purpose, character and virtue, close social relationships, and financial and material stability. Central to the findings is the nuanced recognition that while financial resources alone do not equate to happiness, they are indispensable for facilitating the experiences and conditions—such as health, security, and leisure—that contribute significantly to life satisfaction. This perspective is reinforced by participants' reflections that underscore the essential role of financial means in enabling a life that is not only free from want but enriched with opportunities for personal growth and enjoyment. For instance, participants frequently highlighted the importance of financial security in affording them the freedom to engage in fulfilling activities and pursue meaningful goals, thus linking economic stability directly to the domain of meaning and purpose. This analysis articulates a complex picture of how financial well-being is fundamentally entwined with general well-being across all domains of life. Financial stability is not just a means to an end but a pivotal foundation that supports a wide array of well-being outcomes, from enhancing personal and community health to enabling the pursuit of fulfilling and meaningful lives. This comprehensive analysis highlights the need for policies and personal strategies that consider financial well-being as central to promoting overall life satisfaction and flourishing.

ABSTRACT. There has been a recent surge in academic interest in financial well-being, with a variety of studies seeking to define and measure the phenomenon, identify antecedents, and recommend interventions. This has been matched by a shift in policy focus from financial literacy to financial well-being in many countries and widespread concern about the impacts of high inflation and increased cost-of-living. This study examines data from 630 semi-structured interviews with people across 7 European countries: Austria, Czechia, Croatia, Hungary, Romania, Serbia, Slovakia. A combined purposeful sampling strategy was used to ensure heterogeneity (maximum variation sampling) and information richness (intensity sampling), whilst a predefined stratification allowed for replicability, if required. The sample was stratified by four criteria: (1) age, (2) comparative income level, (3) employment status and (4) identity by gender and other characteristics. Analysis of the data has uncovered nuanced perspectives on financial well-being and important variations by gender. Building on the perspective taken in Salignac et al. (2020), our findings support the notion that individual, familial and social factors are relevant when interpreting individual differences in financial well-being by gender and indicate that some people assess financial well-being at the unit of the household rather than the individual. Both men and women discussed their financial well-being in terms of security, freedom, and pleasure. However, there were some differences by gender in the way people assessed their own financial well-being and that of others, particularly in households with children. Some men spoke of their responsibility for making sure that their household had sufficient income to maintain financial security, particularly if they were fathers or planned to have children. This was not something that women spontaneously mentioned. Women, but not men, spoke about aspects of active money management that they felt were important to financial security. Furthermore, women, but not men, worried about whether they would have sufficient income in their retirement. Some older female participants also discussed how they were struggling to make ends meet on very small pensions. This scenario was not mentioned by, or in relation to, men, highlighting the consequence of unequal retirement incomes. Men and women spoke of work, work-life balance and property when discussing freedom in the context of financial well-being. Women also spoke about starting, or having, a family. Men did not discuss children in this context. For women, work and family were tightly interwoven with financial freedom. Women, but not men, felt that if they had children, they would need to build flexibility into their working lives. For women there was pleasure in paying for treats for the children in their family, and spending time with their partner and loved ones, whilst men described pleasure related to being in a position to take their partner out for dinner or take someone on a date. Some women’s financial well-being was also improved when they had a little money for ‘unnecessary’ expenses, as one participant put it. Some men and women felt that gender might be associated with financial well-being. In most cases, those who felt there was an association talked about challenges facing women that could lower their financial well-being; very few people felt that there was a difference in financial well-being favouring women. The most common reason given for a potential gender gap in financial wellbeing was disparities in income that disadvantaged women. These disparities were mentioned across genders, countries and age groups. Interestingly, whilst some men argued that they needed to work to provide for children, no man suggested that a woman could also contribute to the financial security of her children if she returned to work. This perhaps indicates the fine balance between financial security and other, more cultural, considerations in the minds of many adults. The longstanding pay and progression gap in favour of men emerged as a concern in the seven countries covered by this study, with many participants highlighting that men tended to be more successful and earn higher incomes than women in equivalent roles. This underscores the undervaluation experienced by women and the challenges they faced in achieving financial stability, as well as the entrenched societal expectation of men as the primary breadwinners in the family. There are areas where interventions could make a significant difference. Rules promoting pay transparency and reporting of employment by gender may be beneficial in monitoring and addressing specific challenges; and better paternity rights could support fathers in taking a more active role in the care of their children. Financial counselling for couples may also be beneficial; this could include discussion on the potential for women to be left significantly less well off in the event of breakup or widowhood and the potential benefits of prenuptial agreements. It may also provide an opportunity for an external, impartial assessment of the relative financial security of each partner. Furthermore, it is important to recognise that gender is not the only characteristic associated with financial well-being. Several people noted that discrimination exists on factors such as religion, disability, age, sexuality and health conditions, and that some people face multiple disadvantage due to a range of characteristics associated with vulnerability. It is likely that the most effective solution will involve multiple actors who are willing to address disparities. In conclusion, the persistent gender norms observed suggest that people who choose not to follow society’s expectations of having a baby, buying a home and living in a heterosexual couple are likely to face disadvantages and reduced financial wellbeing. However there are limitations in this study, and more data would be needed to test this assumption. Additionally, whilst the current study has made it possible to explore gender differences in financial well-being in modern society, limited sample sizes made it impossible to analyse financial well-being and gender beyond binary studies of people identifying as male or female. This reflects the relatively small proportions of people answering outside of cisgender categories in qualitative screeners and quantitative surveys targeted at the general population.

ABSTRACT. Financial well-being (FWB) is a multifaceted and subjective construct that extends beyond financial security to include the dimensions of freedom and pleasure. These three elements form an interdependent triad that is balanced rather than summed to reflect an individual’s financial well-being comprehensively. Despite the increasing recognition of this complexity, existing FWB assessment tools have predominantly focused on security, often using single-score outputs that fail to account for the broader and subjective dimensions of freedom and pleasure. This study responds to these limitations by designing and developing a novel Financial Well-being Self-assessment Tool through a Design Science Research (DSR) methodology (Peffers et al. 2007; Lapão, da Silva, and Gregório 2017). This methodology supports the creation of practical artefacts while advancing theoretical understanding, allowing for iterative development informed by user engagement and interdisciplinary collaboration. The design process began with a comprehensive review of 18 existing FWB assessment tools. This analysis revealed a predominant emphasis on budgeting, planning, saving, and borrowing—factors primarily associated with security. Other dimensions, such as freedom and pleasure, received minimal attention, highlighting a significant gap in the current landscape of self-assessment tools. Furthermore, many tools used static survey methods that failed to engage users or provide actionable insights. The few tools that attempted innovation, such as Halixia’s image-based prompts or NatWest’s hybrid survey and advisory model, lacked sufficient depth or applicability to diverse user experiences. This review underscored the need for a holistic, user-centred tool that integrates all three dimensions of FWB while fostering engagement and reflection. Guided by DSR principles (Iivari and Venable 2009; Reubens 2016) the development process comprised six iterative stages: problem identification, objective definition, artefact design, demonstration, evaluation, and communication. Qualitative research findings and workshops with interdisciplinary teams informed the early design phases, resulting in the conceptualisation of an interactive “wheel of topics.” This innovative mechanism organises 14 topics—such as health, education, social connections, and financial management—into four high-level categories: personal life, social life, daily life, and financial life. These topics reflect FWB's complex and interconnected nature, offering users a comprehensive framework for self-assessment. The tool employs a five-point Likert scale (ranging from -2 to +2) to encourage reflection on how these topics influence users’ financial well-being across the triad dimensions. The tool’s user journey was carefully designed to ensure accessibility, engagement, and educational value. Users progress through seven stages, beginning with an introduction to build trust and concluding with a personalised summary and goal-setting exercise. The assessment order was intentionally structured to address security first, followed by freedom and pleasure, based on user feedback indicating that security was the most intuitive entry point for reflection. Outputs include a descriptive summary of users’ perceptions across the triad, avoiding reductive single scores. This approach aligns with the findings of the initial review, which highlighted the risks of oversimplification in existing tools. Iterative prototyping and user testing played a central role in refining the tool. Early testing sessions, conducted with diverse participants, identified key areas for improvement, including interface navigation, clarity of communication, and the framing of pleasure-related questions. A formal user-testing session at the University of Tartu revealed that some users found the pleasure dimension less intuitive to assess, prompting adjustments to the assessment order and revisions to guiding texts. These refinements ensured that the tool remained both accessible and thought-provoking, encouraging users to engage with the more abstract dimensions of FWB. A practical intervention at the European Forum Alpbach further validated the tool’s effectiveness and provided additional insights for refinement. During the workshop, participants used the tool to assess their FWB and engaged in group activities to identify behavioural strategies for improvement. Guided by the Behavioural Insights Team’s EAST framework (Easy, Attractive, Social, Timely), participants proposed interventions to address challenges in pleasure, freedom, and security. These included strategies such as mindful spending, skill diversification, and structured savings habits, demonstrating the tool’s potential to inspire actionable change. The FWB Self-assessment Tool contributes to both academic research and practical applications in financial well-being. It advances the theoretical understanding of FWB by operationalising its triadic framework and addressing the interdependence of security, freedom, and pleasure. Simultaneously, it offers a user-centred, interactive solution that fosters reflection, education, and possibly behavioural change. The tool is designed to remain accessible for ongoing development and use, ensuring it can support further refinements, incorporate personalised recommendations, and achieve deeper integration with advisory services in the future. This research underscores the importance of a holistic, user-centred approach to assessing financial well-being. It moves beyond static, security-focused tools to create an engaging, reflective, and educational experience. By addressing the limitations of existing assessments and integrating insights from DSR and behavioural science, this study offers a novel contribution to the field of financial well-being. It lays the groundwork for further innovation in self-assessment methodologies.

ABSTRACT. Financial well-being, which focuses on the financial and material aspects of an individual or a group is tied to general well-being of a person. Therefore, finding ways to understand financial well-being better and link it to behaviours can set up future interventions to improve well-being. Here, we seek to improve financial well-being measurement model and link it to personality traits. Personality is a widely researched angle of psychology. It consists of relatively stable attributes of an individual’s identity that impact their behaviour, dispositions, attitudes, and other psychological aspects pertaining to one's life (Lazarus, 1963). One of the most prominent and commonly used conceptualisations of personality is The Big Five personality traits. It consists of five dimensions of personality: neuroticism, extraversion, conscientiousness, openness and agreeableness (John & Naumann, 2008). Previous research has indicated that financial well-being is linked to personality, such as neuroticism and conscientiousness (Donnelly et al., 2012; Ng et al., 2019). However, past studies have often examined subjective financial well-being as a monolithic construct. In this research, the framework was utilised to examine the connections between the different sub-sections of financial well-being (security, freedom, pleasure) and personality (Big Five personality traits). The security component aims to measure financial stability through assessing spending habits; freedom measures financial autonomy and flexibility and pleasure focuses on financial enjoyment. Based on previous research, the following hypotheses were proposed in the current study: neuroticism associates with all three components of financial well-being; conscientiousness has a positive association with security and a negative one with pleasure; agreeableness has negative ties with freedom; extraversion has a positive association with pleasure; openness influences freedom and pleasure. To test these hypotheses, in April 2024, the web-based survey was done in Estonia. The sample consists of 1007 Estonian adults aged 18-74. To represent adult population best, the sample was formed according to quotas for different socio-demographic indicators that were created in line with Estonian population statistics. The data was collected through an online questionnaire that was redistributed by the survey company Norstat in the form of a panel study. Questions related to personality are part of a more extensive 198-item personality questionnaire previously used in personality research, developed to research links between personality traits and genetics. A previously tested 20-item version was used in this study (Vaht 2024). In addition, nine items measuring the three dimensions of financial well-being were used. Structural Equation Modelling (SEM) was chosen as the primary method of statistical analysis to find answers to the hypotheses presented earlier. To perform the SEM analysis answers to individual questions pertaining to different aspects of financial wellbeing or personality were divided into respective subgroups creating 3 latent variables for financial well-being and 5 for personality traits. Based on our data, neuroticism influences all aspects of financial well-being we surveyed. That was rather expected when viewing prior research since neuroticism tends to have strong negative correlations with subjective well-being. However, there are slight differences in the level of surveyed sub-groups: there is no influence inside respondents with high-income level; in lowincome groups and inside women, freedom is not influenced by neuroticism. What differs between the findings of this research and several prior studies is the lack of influence of conscientiousness on any financial well-being components, except for some weak associations among low-income respondents. In the classic Big Five personality inventory, neuroticism and conscientiousness have a relatively high negative correlation, meaning that the connection between conscientiousness and financial well-being might be a by-product of the correlations between neuroticism and conscientiousness. Concerning negative influence of agreeableness on freedom, we did not find such an influence. In our SEM models, agreeableness did not have any connections with financial well-being components. There was also a meaning that extraversion positively influences pleasure. With very weak significance we can speak about such an influence inside the high-income respondents’ group. Generally, extraversion has no impact on the components of financial wellbeing except for the positive influence on all of them in the SEM models, where covariations between personality factors were not considered. According to these models, relationships with security are weaker than with other financial well-being components. Lastly, we argued that openness has ties to freedom and pleasure. In our analysis, openness slightly differentiated across the three components of financial well-being, with security and freedom having statistically more significantly influenced positively. However, pleasure is also tied to openness, but this relationship is relatively weak in the general model. In the 40-64 age group, the influence of openness to financial well-being components were completely statistically insignificant. Also in some other subgroups, like women, youngest and oldest respondents, and respondents with low or moderate income, the influence of openness to any of the financial well-being components is missing. To summarise the research shows, that the multi-dimensional measuring tool for financial well-being produces results that support the differentiation of the subgroups of financial well-being. The findings support previous research on how neuroticism negatively correlates with financial well-being. The results differ across different socio-economic groups and genders, but the results are somewhat ambiguous inthat aspect. The findings don’t align with previous research when it comes to finding a correlation between financial well-being and conscientiousness. Openness had some positive correlations with the dimensions of freedom and security. Contrary to assumptions, extraversion had no significant effect on financial well-being in our research. One of the main limitations of this study is the novelty of the tool used to measure financial well-being. Although thoroughly tested and applied in different countries and used to measure different populations, the measuring tool is still new, and further investigation is required to be able to compare the results and reach more concrete conclusions. Considering some interesting and novel findings hopefully this research can be used to create a stronger theoretical network for the topic at hand and help with future research.

ABSTRACT. Emerging evidence suggests that financial well-being (FWB) is significantly associated with mental health attributes. There is also some evidence that good things (health and finances) can come in pairs , but not yet of the effects of using mental health interventions for improving FWB. We contribute to that by conducting an online experiment using the Headspace app and related TED Talks and studying their effects on psychological and financial stress and well-being. Furthermore, we use the same design in a second online experiment that tests the effects of personal finance app and related TED Talks on FWB and financial self-efficacy. Both experiments have been pre-registered and approved by the University of Tartu Research Ethics Committee. We rely on the three-dimensional conceptualisation and operationalisation of FWB – security, freedom, and pleasure. Research has shown that practising mindfulness can have a positive effect on people’s well-being and that even short-term use of Headspace (a mindfulness-based mental health app), i.e. practising mindfulness-based stress reduction techniques, helps to reduce stress and symptoms of depression. Building on that, we designed a randomised controlled trial (RCT) where the participants were randomly assigned to test and control group. The sample consisted of working adults living in Estonia, recruited via Facebook. In total, 68 people (92.6% females) completed the experiment in the test group and 100 people (96.0% females) in the control group. Those in the test group were asked to download and use the Headspace app, while those in the control group listened to selected TED Talks on mental health topics. Participants were instructed to complete daily tasks over a consecutive 10-day period. All participants completed two questionnaires – perceived stress and FWB scales – three times: before the experiment (1st measure, baseline), right after the end of the 10-day period (2nd measure), and 30 days after that (3rd measure). The key finding is that there was a significant effect (p&lt;.05) of the Headspace intervention on the total FWB score and on each of its dimensions (security, freedom and pleasure). In the control group, there was also a significant change in FWB, but not across all of its dimensions. The second finding is that both treatments demonstrated significant immediate and longer-time effects on FWB, except for the security dimension, for which there was no significant effect in the control group, and for the pleasure dimension, which did not show a statistically significant longer-term effect in either group. The third finding is that perceived overall (psychological) stress and financial stress decreased in both groups by the end of the 10-day intervention. This suggests that the intervention had a positive effect on both mental health and FWB. However, financial stress had increased again in 30 days after the intervention, although the scores for the 3rd measure remained lower than those at baseline. Importantly, the positive effects observed in both groups suggest that mere exposure to mental health topics may help to improve psychological and financial stress. The second RCT applied the same experiment design to analyse the impact of acquiring financial planning techniques on FWB. People with better financial planning skills are more likely to be more satisfied with their lives and less financially vulnerable. Therefore, it could be that people who obtain better financial planning skills also show changes in their FWB scores, similar to the ability to self-regulate financial decisions. The design closely followed the design of the Headspace experiment, with two critical differences. First, instead of Headspace, the intervention group participants used MyFinancier, a financial planning application. Secondly, we measured financial self-efficacy (FSE) instead of perceived stress levels. The measurement intervals were similar to the Headspace experiment. The sample included 25–50-year-olds recruited via Facebook, with 423 participants (204 in the treatment and 218 in the control group). Randomisation checks were successful. Full-factorial repeated measures general linear models show that there were statistically significant changes within the sample. Specifically, in the FWB security (p=.06) and FWB freedom domains (p&lt;.01), but not in the FWB pleasure category (p=.96). Changes in financial stress or FSE were not statistically significant. There were no group differences between the control and the treatment group. However, comparing time effects from before the intervention to 30 days after the intervention, we detected significant differences between linear changes in the FWB security category (p=.04) and for FWB freedom (p=.01), but not for other variables. Therefore, engaging with one's finances through watching personal finance videos or using a financial planning app both contribute to an increase in FWB. We demonstrate that stress reduction techniques have a positive effect on both financial and psychological well-being by decreasing stress levels, confirming that good things can indeed come in pairs. Second, our findings from both RCT-s indicate that watching TED Talks has a similar effect to using the app-based intervention. This implies that apps may not be as influential as often assumed, as any kind of engaging, high-quality, and relevant intervention appears to have a positive effect. Third, the positive effects on stress levels compared to baseline remained significant even some time after the intervention (although a slight decline was observed), giving hints of possible long-term effects. Surprisingly, financial self-efficacy decreased in both treatment arms of the second experiment. It may be that the participants became more self-aware of their shortcomings in financial planning. The main limitations of our study are the relatively small sample sizes and non-representativeness of the sample. Ideally, both experiments would have spanned a longer time period and included an additional control group that did not receive any intervention or related content. Further research can contribute to that. However, evidence from our experiments provides valuable insights for the promoters of FWB and highlights that the tools for improving FWB can go far beyond finances. While so far the negative effects of (lower) FWB on mental health have been highlighted, especially in policy, we turned the approach around and showed how mental health intervention can be used for improving FWB, as well as financial planning applications.

ABSTRACT. The food sector is a primary contributor to climate and environmental change (Willet et al., 2019). In 2019, the global food system accounted for nearly half of the total emissions (FAO, 2023). To meet the Paris Agreement target of limiting global warming to below 2°C by 2100, food-related emissions must be significantly reduced (Willet et al., 2023). Therefore, comprehensive, multi-sectoral strategies are essential to mitigate emissions from food production.

Consumers play a crucial role in reducing the greenhouse gas emissions of the food system–a fact underscored by the European Union’s ‘Farm-to-Fork’ strategy (EC, 2020). This strategy proposes a framework for sustainable food labeling aimed at supporting consumer decision-making by increasing transparency regarding carbon footprints (CF). Research indicates that sustainability labels can guide consumers toward food products with lower carbon footprints, reflecting a preference for eco-friendly choices (e.g. Aprile & Punzo, 2022). However, in daily life consumers are often overwhelmed by a myriad of factors influencing their purchasing decisions, ranging from price and convenience to taste and availability, often leaving little room for prioritizing sustainability. Food swap recommendations offer a promising solution by simplifying the decision-making process: by proactively suggesting more sustainable alternatives at the point of purchase, food swaps can help bridge the gap between consumers' environmental intentions and their actual shopping behaviors, making it easier to integrate sustainable choices into everyday routines. Food swaps provide consumers with the opportunity to replace their initially chosen food items with more sustainable alternatives while receiving additional product information. Although previous research has shown that food swap recommendations effectively encourage healthier food choices (e.g. Schruff-Lim et al., 2024), their potential in promoting eco-friendly food purchasing decisions remains to be explored.

This study examines the effect of food swap recommendations on the CF of food items selected in an online grocery shopping experiment. Specifically, this research aims to address the following key questions: (1) How effective are food swap recommendations in reducing the CF of food choices, and how do the relative price levels of the recommended products and consumers’ environmental attitudes influence this effectiveness? (2) How do price levels of food swap recommendations impact consumer acceptance–both directly and through perceived usefulness of the food swap–and what role does price consciousness play in shaping acceptance?

To address these research questions, we conducted an experimental online study within a simulated supermarket environment. The online supermarket was built using the Gorilla Shop Builder (Gorilla, n.d.) and included various product categories such as cereals, dairy, spreads and meats. Products were displayed with images, prices, and Climate-Score labels–a categorical five-level scale (A-E) with a traffic-light color gradient indicating the CF of a product.

This study employed a two-armed between-subjects design, comparing low-price and high-price food swap recommendations. Ethical approval was obtained, and the study was pre-registered on AsPredicted. The online supermarket contained 92 food and beverage products across seven categories. Food swap recommendations appeared as pop-up messages when participants added a food product with a higher CF (level C, D, or E) to their cart. The recommended alternative came from the same product category and had a lower CF. For categories containing both animal-based and plant-based products, plant-based alternatives were suggested as greener options. Recommendations maintained consistency in production methods (organic vs. conventional) and were manipulated to be either cheaper or more expensive based on brand type (manufacturer vs. retailer brand).

The sample size was determined a priori using a power analysis (G*Power). Oversampling served to account for potential dropouts and ineligible participants, resulting in a target sample size of 562 datasets. Recruitment was conducted by a market research agency that invited German-speaking food shoppers from their panel. A pilot test with 50 participants preceded the main data collection, which took place between October 29, 2024, and November 4, 2024. Exclusion criteria included failing attention checks, unrealistic response behavior, and selecting improbable shopping baskets. Participants who did not receive a food swap recommendation were excluded from the analysis concerning swap acceptance rates.

Preliminary analyses were conducted to examine the impact of food swaps on CF reduction and food swap acceptance rates. Results showed that, on average, participants purchased products resulting in 3.63 kg of CO2eqs per shopping trip with food swap recommendations not significantly reducing the CF of the online shopping basket. Furthermore, environmental attitudes did not moderate the relationship between food swaps and CF reduction. Regarding swap acceptance, both perceived usefulness and price consciousness played significant roles. Participants were more likely to accept food swaps when they found the recommendations valuable and if the food swap aligned with their price sensitivity. Additionally, the high ratings for the online supermarket’s realism and ease of use suggest that the experimental setup effectively simulated an authentic shopping experience. Our preliminary findings indicate that while food swap recommendations may not significantly reduce the CF of food purchases, consumer attitudes toward price and perceived usefulness of the recommendations influence swap acceptance. A more in-depth analyses will be conducted in the coming weeks, which the detailed results to be presented upon acceptance.

References: Aprile, M. C., & Punzo, G. (2022). How environmental sustainability labels affect food choices: Assessing consumer preferences in southern Italy. Journal of Cleaner Production, 332, Article 130046. https://doi.org/10.1016/J.JCLEPRO.2021.130046

Food and Agriculture Organization of the United Nations. (2023). Land statistics and indicators 2000-2021. Global, regional and country trends. FAOSTAT Analytical Brief 71. https://www.fao.org/3/cc6907en/cc6907en.pdf

Schruff-Lim, E.-M., Van Loo, E. J., van der Lans, I. A., & van Trijp, H. C. M. (2024). Impact of food swap recommendations on dietary choices in an online supermarket: A randomized controlled trial. Appetite, 194, Article 107158. https://doi.org/10.1016/j.appet.2023.107158

Willett, W., Rockström, J., Loken, B., Springmann, M., Lang, T., Vermeulen, S., Garnett, T., Tilman, D., DeClerck, F., Wood, A., Jonell, M., Clark, M., Gordon, L. J., Fanzo, J., Hawkes, C., Zurayk, R., Rivera, J. A., De Vries, W., Majele Sibanda, L., … Murray, C. J. L. (2019). Food in the Anthropocene: the EAT–Lancet Commission on healthy diets from sustainable food systems. The Lancet, 393, 447–492. https://doi.org/10.1016/S0140-6736(18)31788-4

ABSTRACT. Voluntary carbon offsets offered in business-to-consumer (B2C) markets are an increasingly popular complementary strategy to combat climate change. In consumer carbon offset markets, the offset level increases with the product’s carbon footprint, implying an inverse relationship between the pro-climate effects of the principal products on the one hand, and of the carbon offset on the other. Such an inverse relationship poses uncertainty in estimating comprehensive climate effects from consuming the product with an associated carbon offset level. The presence of this uncertainty implies that the inference of consumers’ motives behind purchasing offsets can be doubted, and it makes the signalling of one’s pro-environment image cumbersome. We establish this conflict in a theoretical consumer offset choice model where the consumer is concerned about the social- and self-image inferred from his action. The model indicates that the status quo ladder pricing structure of carbon offsets, which reflects the inverse relationship, is inefficient in promoting climate benefits. Instead, we propose a Flat pricing structure, wherein a uniform price for carbon offsets is applied across all products. This structure facilitates image inference and thereby increases the incentives for purchasing pro-climate products. We test the theory in a menu choice field experiment and deploy it at a lunch restaurant chain. Our findings confirm that the Flat pricing structure maximizes the demand for the most climate-friendly product without adversely affecting the aggregate carbon offset amount. We also observe a nudging effect from menu order variation, where consumers are more inclined to opt for products bundled with carbon offsets when these options are listed prior alternatives without carbon offsets.

ABSTRACT. Trust is seen as the key to both communal and market interactions. It is defined as the acceptance of vulnerability based on positive expectations regarding the intentions and behavior of others and reliance on their actions despite uncertainty and lack of control over the situation (Rousseau et al., 1998). There is no doubt that trust is an essential component of social and economic life. It shapes all human interactions and determines how people will or will not interact with others. Therefore, understanding the factors that influence the decision to trust or not to trust others is crucial to the entire spectrum of social interaction. Without trust, no one would reveal personal secrets or ask for help in times of need, and people would not form long-term, close communal relationships (Rempel et al., 1985). Similarly, without trust, no one would accept worthless pieces of metal or paper in exchange for goods and services, or show up for work in exchange for the promise of deferred compensation — in short, market transactions would not function effectively (Alós-Ferrer & Farolfi, 2019). In this project, we investigated how control, an instrument for coping with uncertainty in relationships, influences trust in different relationship contexts. We draw on Fiske's (1992) theory of relational modes, focusing on the relationship between communal sharing and market prices. In communal sharing relationships (CS), people trust that their partners or friends will not cheat them and will not take advantage of their vulnerability, either now or in the distant future. With market pricing relationships (MP), on the other hand, people trust that others will do their jobs competently and on time, receive fair compensation for their work, or simply trust that the other party will honor the terms of the contract and the formalities involved. We assume that trust plays a different role in communal sharing (CS) and market prices (MP): In MP relationships, trust is extremely useful but not indispensable, while there is no CS relationship without trust. Therefore, the lack of trust in MP relationships can be compensated by formal control instances without harming the relationship itself. In CS relationships, trust is indispensable and cannot be replaced by a formal contract or other forms of control. To investigate this, we conducted five preregistered experiments using three pre-tested pairs of scenario (CS vs. MP). Given the nested design (scenarios within participants), we used multilevel analyses to examine the results. n Experiment 1 with N = 211 individuals (105 women, 107 men, Mage = 37.33, SD = 11.80), we manipulated the type of relationships and found that participants considered control more appropriate in MP situations than in CS situations. In Experiment 2a (N = 562; 274 women, 282 men, 6 other/no response, Mage = 40.01, SD = 17.79), we manipulated whether or not the instances of control were introduced in the MP and CS relationship and tested how participants perceived a particular relationship. We found that the introduction of the instances of control (vs. not) changed the perception of communal situations as less communal and more market-like. However, introducing control had no effect on perceptions of MP situations. In Experiment 2b (N = 566 individuals (271 females, 286 males, 9 other/no response, Mage = 40.12, SD = 13.24), we wanted to test the same concern from the perspective of the second party, i.e., from the perspective of a person who is controlled. We replicated the results of our previous study concerning the CS scenarios. Moreover, as in Experiment 2a, the control instances had no significant influence on the market-like perception in the MP scenarios, but they reduced the communal perception of such scenarios. In Experiment 3, we manipulated mindset (communal vs. market), instance of control (present vs. not), and perspective (actor vs. agent of actor) and measured trust. As we had suggested, with the sample of N = 1171 individuals (599 women, 564 men, 8 other/no response, Mage = 46.11, SD = 15.46), we were able to show that the introduction of control (as opposed to no control) impairs trust more in CS relationships than in MP relationships, and that these detrimental effects were particularly pronounced from the second party's perspective. In other words, participants who took the actor's perspective declared lower levels of trust than those who took an actor's perspective. In Experiment 4 (N = 826 individuals; 399 women, 424 men, 3 other/no response, Mage = 29.91, SD = 13.43), we sought to conceptually replicate the results of Experiment 1 in a more collectivist country, namely South Africa, and compare it to the WEIRD samples used in previous studies. Another change in this experiment is that we explicitly manipulated the level of pre-existing trust in CS and MP relations and again measured whether people would accept and be willing to accept the introduction of control in three different situations, just as in the previous experiments. We also wanted to show that when initial trust levels are low, people are more willing to introduce control in MP relationships than in CS relationships, whereas this willingness to introduce control decreases when initial trust is high. We found that the introduction of control is viewed more positively in low-trust situations and is more favored in MP relationships. However, such means of control were also less accepted in MP situations when initial trust was high vs when it was low. In our final study, we intend to corroborate these assumptions with a real-life behavioral experiment, an adapted version of the "Cheap Talk" game. All in all, we conclude that people do not accept the introduction of control in CS relationships and that when it is imposed, it decreases rather than increases trust. In MP relationships, on the other hand, people are more willing to replace vulnerability with the introduction of various control mechanisms.

ABSTRACT. Slavery, as an exploitative institution, continues to influence modern development. Nunn and Wantchekon (2011) have shown that mistrust in modern Africa can be attributed to the historical slave trade. Their findings are based on the history that “The fact that slaves often were taken or tricked into slavery by individuals close to them suggests that the slave trade may have eroded trust even in the most intimate social relationships.” Meanwhile, modern slavery, including forced labor and forced sexual exploitation, seriously violates human rights. Human trafficking, often regarded as a contemporary form of the slave trade, imposes substantial social costs as well. However, the impact of modern slavery on human behavior remains underexplored, although it is also facilitated by deception and coercion. While past research on human trafficking has primarily focused on its driving factors, this study examines the effect of modern slavery on interpersonal trust, revealing the unnoticed consequences of human rights violation crime. This study combines the regional human trafficking data and the individual-level structured survey of Romania and India, two countries that have severe human trafficking issues. The dependent variable is interpersonal trust on different group of people, such as family, friends or neighbors. The interested independent variable is the average human trafficking victims per thousand inhabitants by each region before the time of structured survey. Our identification strategy controls the previous regional trust, and other confounders such as property and violent crime rates and institutional quality, to reflect the causal impact. Demographic variables are also included in our regression to increase the precision of our estimation. We show that human trafficking has a robust and significant negative impact on interpersonal trust in Romania and India. In Romania, where we have better data availability, human trafficking negatively influences the trust in acquaintances and trust in outgroup people. The finding in Romania is also robust to each respondent’s new consumption habits. In addition, limited by the data quality in India, we could only show such negative impact on general trust. We demonstrate immediate behavioral adjustment among individuals exposed to modern slavery. Similar to the slave trade history mentioned in Nunn & Wantchekon (2011), modern slave trade is also facilitated by deception and coercion, but more on deception or fraud. According to The Counter Trafficking Data Collaborative, only 12% of the role of perpetrators in modern slavery were labeled as Control Abuse Kidnap. In modern slavery, a high proportion of perpetrators are also individuals that are close to victims, for instance, in our Romania case, 50% of perpetrators are friends or acquaintances of the victims. Therefore, we argue that human trafficking or modern slavery could shift people’s trust in others and causes further social cost. Meanwhile, the possible underlying mechanism does not rely on culture or culture evolution. Human rights crime like human trafficking does not need to exists for centuries like slave trade for eroding interpersonal trust. We also provide empirical support for arguments regarding the social costs of crime in criminology theories. Our findings address the complex interactions between human trafficking and interpersonal trust. Low trust in society might cause more human trafficking, and the human rights violations inherent in modern slavery rapidly alter social norms, resulting in widespread social costs that demand urgent attention from policymakers.

ABSTRACT. The objective of this study is to examine whether the implementation of transparency laws enacted in Colombia in 2016, Mexico in 2014, and Chile in 2016 has impacted the perception of corruption within institutions and increased public trust in them. The analysis is based on the Latinobarómetro 2020 & 2023 survey, which involved approximately 19,205 face-to-face interviews across 18 Latin American countries, representing over 600 million inhabitants. Conducted between February and April 2023, this survey utilized a representative sample of individuals aged 18 and older, with a margin of error of 3.0% for national samples.

The survey includes questions related to corruption, such as whether respondents believe that corruption has increased in the past year and if they have personally encountered bribery when accessing public services. In the latest findings, 62% of respondents indicated that corruption had risen, and 29% reported having to pay a bribe for public services. This data reveals significant distrust in governmental institutions, with many citizens feeling that their governments are failing to effectively address corruption.

To analyze the data, a multiple regression model was employed to determine if the implementation of transparency laws, along with other indicators such as city size, impacts levels of institutional corruption. Comparisons among Mexico, Colombia, and Chile—each with established transparency laws—are based not only on corruption indicators but also on the differing levels of trust in their institutions. In contrast, countries like Venezuela and Bolivia, which lack clear transparency laws directed at combating corruption, exhibit some of the lowest Corruption Perceptions Index (CPI) scores in the region—Venezuela at 13 and Bolivia at 36—reflecting severe issues of impunity and lack of institutional trust. Mexico has the lowest CPI score among the three studied countries at 26, despite its legal framework. Colombia has a CPI of 39, indicating notable dissatisfaction with democracy and governance. Chile stands out with a CPI of 63 but still faces challenges in maintaining public trust. Overall, the Latinobarómetro underscores the urgent need for stronger institutions and accountability mechanisms to restore confidence in democracy and effectively combat corruption across Latin America.

ABSTRACT. Cheap talk and signaling are well-studied, canonical communication types in Economics. We posit there is a third category of communication relevant to games: small talk. Small talk is costless, non-binding communication that takes place between agents who do not know they will play a game. Since they do not know they will play a game, they cannot deliberately discuss issues of payoff relevance. Small talk is ubiquitous in and around contracting in the real world, but has received little scholarly attention. Does talking outside the context of a game affect play even when it happens before learning that a game will be played? We show experimentally that a very brief face-to-face talk with a potential trading partner even before knowing a game will be played has a contracting function. We posit that building shared context during small talk enables better handling of unforeseen contingencies, enhancing trust and strengthening cooperation.

Cheap talk is costless, non-binding, and unverifiable communication like banter over a poker game, and signaling is the burning of resources for the purpose of sending a message, such as showing success in business to a potential partner by wearing a remarkably expensive watch. Cheap talk is in practice nearly always conceived of as part of a game, and signaling is by definition so. Small talk is like cheap talk, but outside the context of a game: a face-to-face meeting in which no issues of payoff relevance can be deliberately discussed, since the parties do not know they will have an economic interaction. In our experimental paradigm small talk is operationalized as an unconstrained three-minute video chat with the other party. Participants are randomized to this three-minute video chat or no chat before they learn they will be playing a game with each other.

In this work, we examine two games: The first experiment is based on a simultaneous move “Hold Up” game: One player, the “Investor”, decides whether to invest and if he does, another player, the “Operator”, chooses between theft and cooperation. The Operator’s choice reflects the power of cooperative norms, whereas the Investor’s decision is an indicator of his trust that the Operator will adhere to these norms. While the efficient outcome is not an equilibrium in the standard sense, our hypothesis here is that Investor-Operator pairs are more likely to reach Invest/Operate if they have a chance to engage in small talk before the game. Among 1,090 CloudResearch participants in the Investor-Operator game, we see that those who engage in the no-knowledge video chat prior to playing display notably increased trust, cooperation, and efficiency. Most importantly, 38% of Small Talk pairs reached the Invest/Operate state vs. 27% in the No Contact condition (chi sq.=7.52, p = 0.006). There was also more investment and less stealing, with 60% of Investors in the Small Talk condition choosing to invest, vs. 50% in the No Contact condition (chi sq.=5.15, p = 0.023), and 61% of Operators in the Small Talk condition choosing to operate vs. 53% in No Contact (chi sq.=2.78, p = 0.09).

In the second experiment, we look at a twice-repeated Stag Hunt game where participants do not know the second game will occur when playing the first game. Before learning a second game will occur, participants are randomized to three minutes of small talk or no contact between rounds. We show that pairs who engage in small talk between rounds are much more likely to play the efficient (but risk dominated) equilibrium in the second game. Among 290 CloudResearch participants in these twice-repeated Stag Hunt games, participants much more frequently ended up in the efficient equilibrium in the second game (STAG,STAG) when engaging in small talk between the games--even though they were unaware another game was coming (41% of pairs reach STAG, STAG with small talk vs. 18% without, chi sq.=7.59, p = 0.006).

This evidence is consistent with agents developing shared context with each other via small talk by default, in our case before even learning they will play a(nother) game. In particular, it seems they learn enough about each other to more accurately predict the other's actions in future, unforeseen scenarios. This suggests that small talk can alleviate contractual incompleteness, but also points towards a broader set of phenomena that can be explained by the general utility of developing shared context with an interlocutor--such as efficiency gains in communication and more effective virtual bargaining.

ABSTRACT. The application of behavioral sciences in public administration has been gaining traction globally, particularly in Latin America, where several countries have established behavioral insights units to enhance public policies. This study analyzes the institutionalization process of behavioral approaches in Latin American public management, with a focus on the Brazilian case. Interest in public policies based on behavioral sciences in Latin America has been driven by both national initiatives and international organizations. For instance, the Behavioural Insights Team (BIT) established a regional office in Mexico to influence policy formulation across the region, and the Inter-American Development Bank (IDB) has funded various projects in the region. Countries such as Argentina, Chile, and Uruguay have been experimenting with the application of behavioral insights in different areas of public administration. In Chile, in 2019, the Behavioral Studies Unit was created within the National Consumer Protection Service (SERNAC) to enhance consumer protection through behavioral evidence. In Argentina, in 2020, the Ministry of Economy established a Behavioral Sciences and Public Policy Unit to incorporate experiments and behavioral analyses into economic policies. In Uruguay, in 2019, the Behavioral Sciences Laboratory of the Educational Innovation Center with Digital Technologies (Ceibal) was created by the Uruguayan government and has been using behavioral approaches to develop interventions applied to education and technology. Despite the growth of these initiatives, the institutionalization of behavioral sciences in Latin America is still in its early stages, especially compared to other regions such as the United States and the United Kingdom. The recent creation of these units reflects the need to adapt to the institutional and regulatory contexts of Latin American countries, where state capacities and the degrees of autonomy of public administrations vary significantly. In Brazil, several government units specializing in behavioral sciences have been established, such as the first Behavioral Unit in the Federal Government, CINCO, and the Center for Behavioral Economics (CECOM) at the Brazilian Federal Revenue Service. Other state and municipal initiatives include 011 Lab, from the São Paulo City Hall, and NudgeRio, from the government of the state of Rio de Janeiro. These initiatives apply behavioral science knowledge to improve the effectiveness of public policies in areas such as tax compliance, entrepreneurship, health, and social protection. The Brazilian case highlights both the opportunities and challenges of incorporating behavioral sciences into public administration. The increasing adoption of these approaches reflects a global movement toward evidence-based policymaking. However, institutional barriers, legal constraints, and coordination difficulties among governmental actors often influence the reach and effectiveness of these initiatives. As behavioral sciences continue to shape public policies in Latin America, this study provides a critical analysis of the mechanisms, institutional dynamics, and practical challenges involved in their institutionalization. By comparing the Brazilian experience with regional trends, this research contributes to the debate on the role of behavioral sciences in governance, policy innovation, and administrative efficiency in Latin America, given that, to date, no comprehensive studies have systematically mapped and analyzed the applications of behavioral sciences in the region.

ABSTRACT. Tax delinquency is a challenge faced by many countries, as taxes are one of the pillars of maintaining the modern state. In Brazil, this issue is particularly significant among Individual Microentrepreneurs (MEI), a simplified tax regime designed to encourage the formalization of informal entrepreneurs. Despite the benefits of formalization, including access to social security benefits and special credit lines, in 2023, approximately 45.7% of MEI failed to pay their monthly contributions, compromising both their tax compliance status and social security rights, according to data from the Brazilian Federal Revenue Service. Given this issue, behavioral science-based interventions were developed through a partnership between the University of Campinas (Unicamp), the Brazilian Micro and Small Business Support Service (Sebrae), and the Brazilian Federal Revenue Service, aiming to increase voluntary tax compliance. The interventions were structured as a randomized controlled trial (RCT), using WhatsApp messages to test different behavioral insights-based approaches. Initially, the experimental design planned to segment participants based on specific delinquency profiles and other demographic characteristics. However, legal restrictions from the Federal Revenue Service prevented direct segmentation, requiring a redesign of the experiment to ensure that groups were composed representatively and probabilistically, including both compliant and non-compliant taxpayers, as well as variations in age, gender, and geographic location. As a result, ten experimental groups were formed—nine treatment groups and one control group that did not receive messages—covering a total of over 1.8 million MEI. The messages sent to the experimental groups were designed based on different behavioral insights, including the reminder effect, loss aversion, social norms, process simplification, and present bias. A key aspect of the implementation was the need for operational adjustments to ensure the feasibility of the experiment. Since the messages were sent by Sebrae, careful alignment among the involved institutions was necessary to ensure that the content was approved and validated within institutional parameters. This initiative represents a significant advancement in the application of behavioral sciences in Brazilian public administration, both due to the scale of the intervention and the institutional and methodological challenges faced. In addition to testing the impact of messages on MEI’s tax payment behavior, the project generated valuable insights into the feasibility of implementing largescale behavioral strategies. The involvement of multiple institutional actors, such as the Federal Revenue Service and Sebrae, highlighted the complexity of the coordination required to implement such interventions, emphasizing the need for continuous alignment between different agencies to ensure the project's execution and operationalization. At the event, the results of the interventions—currently underway—are expected to be presented, providing a detailed analysis of the impact of different behavioral approaches on MEI’s tax compliance. The findings are anticipated to contribute to improving public policies aimed at strengthening tax collection and reducing delinquency, offering concrete evidence on the effectiveness of the tested strategies. The implemented model could serve as a reference for future interventions, both in Brazil and in other countries seeking to encourage voluntary tax compliance. Additionally, the challenges and lessons learned throughout the experiment's implementation will underscore the importance of adapting behavioral strategies to institutional and regulatory contexts, ensuring that solutions are both effective and legally viable. Thus, the presentation of the results will not only contribute to the debate on the impact of behavioral messages on tax compliance but will also provide insights for the institutionalization of behavioral sciences in the formulation and implementation of public policies in Brazil.

ABSTRACT. Excessive judicialization of conflicts is one of the structural challenges faced by public judicial administration in several countries, including Brazil. The exponential growth in litigation, the culture of litigiousness, and the scarcity of resources to meet this demand have driven the search for alternatives that promote more efficient and accessible dispute resolution. Among these alternatives, alternative dispute resolution (ADR) methods—such as mediation, conciliation, arbitration, and direct negotiation—have been incorporated by different states as strategies to reduce the judicial system's overload and ensure access to justice. In the context of Micro and Small Enterprises (MSEs), judicialization represents an obstacle to economic development and business sustainability, particularly because many of these enterprises lack the knowledge and resources to handle conflicts effectively. Given this scenario, this research aimed to develop and test behavioral science-based interventions to encourage the adoption of extrajudicial conflict resolution methods by MSEs, focusing on direct negotiation as the preferred alternative. The project began with a literature review to map the main barriers and facilitators of dejudicialization in the MSE context. Subsequently, a survey was conducted to collect primary data on MSEs' conflict management behavior in Brazil. The study covered businesses from different regions of Brazil and utilized the BASIC framework (OECD, 2019) to structure questions and categorize the behavioral factors influencing dispute resolution. Preliminary results indicated that 27.38% of MSEs had already faced or were involved in some type of conflict, with the most common disputes occurring with customers and employees. Additionally, direct negotiation emerged as the most well-known and widely used strategy for resolving disputes, particularly in the Southeast and South regions. Based on these findings, the interventions were designed to test the impact of persuasive messages and educational materials in encouraging extrajudicial conflict resolution. The experiment involved sending messages via WhatsApp and email to a group of participating businesses, as well as providing a practical guide on dejudicialization and an Excel template for MSEs to document their experiences and solutions to conflicts. The methodology followed an A-B design, comparing data collected before and after the intervention to assess its effectiveness. Participating businesses were invited through the state units of Sebrae—Brazil has 27 such units, covering 8.5 million square kilometers. Initially, five states expressed interest, but for operational reasons, the implementation was concentrated in the Federal District (Central-West region) and Rondônia (Northern region). The challenges faced during implementation provided valuable insights into the feasibility and limitations of applying behavioral interventions in this context. One of the main obstacles was the low participation rate of MSEs in both the survey and the intervention, particularly in the Federal District, where only 12 out of 37 initially interested businesses completed the preintervention form. In Rondônia, participation was higher, with 26 out of 27 registered businesses progressing to the next phases. Resistance to participation may be related to entrepreneurs' lack of time, disinterest in the topic, or difficulty perceiving the practical benefits of the initiative. Additionally, the complexity of the intervention—requiring the use of multiple tools (spreadsheets, messages, guides)—may have created an additional barrier to engagement. During the event, the results of the intervention's implementation will be presented, analyzing the impact of the adopted strategies on MSEs' willingness to use extrajudicial methods to resolve disputes. The research aims not only to assess the effectiveness of the messages and educational materials sent but also to understand entrepreneurs' perceptions of the topic and identify structural challenges that hinder the adoption of dejudicialization practices. The collected data will contribute to the formulation of public policies aimed at promoting a culture of conflict resolution among MSEs. Additionally, the findings may provide insights to improve future interventions, refining strategies to increase engagement and ensure a more significant impact.

ABSTRACT. The implementation of public policies involving multiple institutional actors and innovative approaches, such as behavioral sciences, presents considerable challenges in terms of governance, coordination, and operationalization. This study analyzes the implementation dynamics of a project developed through a partnership between the University of Campinas (Unicamp), the Brazilian Micro and Small Business Support Service (Sebrae), and the Brazilian Federal Revenue Service, which applied behavioral insights to encourage tax compliance among Individual Microentrepreneurs (MEI) and promote extrajudicial conflict resolution among Micro and Small Enterprises (MSEs). The project involved designing experimental interventions and structuring institutional mechanisms for execution, offering a case study on the challenges and lessons learned in implementing cross-sector policies in Brazil. The policy implementation literature highlights that multi-actor arrangements require a high degree of coordination and cooperation to ensure that planned actions are effectively translated into outcomes. In this project’s context, the need for coordination among three institutions with different organizational structures and decision-making processes posed challenges that directly influenced the timeline and operational feasibility of the intervention. The project’s governance was structured through formal agreements between Unicamp and the other institutions involved, with Unicamp playing a central role in mediating information flows and decision-making. However, the implementation revealed that formal agreements alone do not eliminate the operational and institutional barriers that arise in cross-sector projects. One of the main challenges was the need to synchronize communication and operational flows among the institutions involved. In critical phases of implementation, such as database structuring and the dissemination of experimental messages, the internal decision-making processes of each organization significantly impacted the execution timeline. In the case of the Federal Revenue Service, hierarchical rigidity and internal validation requirements extended the time needed for data release and methodological adjustments. At Sebrae, the federative structure and the relative autonomy of regional units introduced additional complexities in prioritizing the project’s objectives within the organization. The frequent turnover of project leaders at Sebrae also caused discontinuities that required additional efforts in re-coordination and timeline adjustments. The experience demonstrated that implementing innovative policies requires flexibility and continuous adaptation mechanisms. Throughout various phases of the project, it was necessary to revise originally planned strategies to accommodate institutional constraints, such as the restrictions imposed by Brazil’s Fiscal Secrecy Law, which prevented the segmentation of experimental groups based on MEI delinquency status. The solution involved redesigning the experimental framework to ensure probabilistically representative groups without compromising data security. This adaptation process illustrates the need for a governance model that allows for strategic adjustments without compromising methodological integrity and the intervention’s core objectives. Another critical aspect of cross-sector policy implementation is aligning the interests of the actors involved. While the project was guided by a common goal—applying behavioral sciences to improve public policies—each institution’s internal priorities shaped how the project was conducted. While Unicamp focused on scientific knowledge production and experimental validation of interventions, the Federal Revenue Service was interested in the practical feasibility of applying behavioral insights to tax collection, and Sebrae aimed to strengthen its support for MSEs through innovative approaches. These differences did not prevent project execution but required ongoing negotiations to ensure that deliverables aligned with each organization’s expectations and demands. The challenges faced also highlight the importance of leadership in sustaining cross-sector initiatives. The literature on network governance and policy implementation emphasizes that leadership continuity and managerial commitment are key factors for the success of inter-institutional programs. In this project, the turnover of Sebrae’s leadership required continuous re-coordination efforts to prevent disruptions. The ability to maintain stakeholder engagement despite these changes was essential to ensuring intervention execution and minimizing delays. The implementation evaluation also underscores the importance of building a shared sense of ownership among institutional partners. Studies on inter-organizational collaboration indicate that joint ownership of a project is a determining factor for engagement and sustainability. Throughout the project, the need for adjustments and the creation of alternative solutions were addressed collaboratively, ensuring that decisions were made by consensus among the three institutions. This process strengthened project governance and created a conducive environment for policy experimentation and innovation. At the event, a comprehensive analysis of the challenges faced and the lessons learned in implementing this initiative will be presented. The accumulated experience demonstrates that implementing cross-sector policies based on behavioral sciences cannot rely solely on formal governance mechanisms but requires flexibility, effective coordination, and trust-building among stakeholders. Additionally, it reinforces the need for institutional structures that facilitate cross-sector collaboration and the experimentation of new approaches in the public sector. By sharing these insights, the presentation will contribute to the debate on how to strengthen the institutionalization of behavioral sciences in public policy formulation and execution, highlighting the challenges and opportunities that emerge at the intersection of innovation, governance, and implementation.

ABSTRACT. Trust facilitates nearly all interactions between people, especially financial interactions. Betrayals of financial trust, such as the embezzlement perpetrated in Bernie Madoff’s massively costly and long-lasting Ponzi scheme, naturally create public outrage and do lasting damage to the reputations of the firms and industries involved. Misconduct and unreliability impose both direct costs on customers and indirect costs on the financial system by weakening the trust that supports investment, eases market dynamics, encourages stock market participation, promotes information sharing, and enables the overall efficient functioning of markets. While past studies of the relation between trust and financial decisions have provided valuable insights, most have relied on observational data and focused on generally trusting dispositions or cultures. Here we extend findings from earlier studies in two ways. First, we focus on the trust- worthiness of specific organizations ( such as asset management fi rms) that individuals may readily encounter while making financial decisions. Second, we experimentally manipulate trust in a controlled setting to clearly identify its effects. By sharpening the focus from general concepts of trust to trust in a particular organization, we can better understand how trust affects investment decisions. In particular, we explore how individual investors choose among, and form expectations of, funds where some are offered by asset management organizations that vary by their perceived trust- worthiness. Organizational trust is the perception that a firm i s dependable: that it demonstrates not only competence, but also benevolence (a genuine concern for stakeholders), and integrity (adherence to moral and ethical standards). Trust that a firm is dependable and reliable shapes expectations of the firm’s future behavior. To shed light on this question, we conducted an incentivized survey experiment administered through the Understanding America Study (UAS), testing whether portfolio allocations and expectations are affected by trust in organizations. Survey respondents performed two experimental tasks related to an account in a hypothetical retirement plan. First, the respondents allocated their retirement savings among mutual funds offered by the hypothetical plan, then the respondents used a distribution builder to represent their expectations of investment payoffs for a subset of the funds. Organizational trust enters the experiment through variation in the names of the funds. Respondents were randomly assigned to one of four experimental conditions that systematically varied mutual fund names. To help us measure respondents’ organizational trust, every condition offered them the chance to allocate savings to a benchmark in the form of "white label" mutual funds. White label funds are generically-named investment options that are not associated with a particular asset management firm (e.g., "U.S. Large Cap Equity fund") and are sometimes labeled with the name of the employer sponsoring the retirement plan. In Condition 1, respondents chose between white label funds and identical funds carrying a highly-trusted asset manager’s name; in Condition 2, they chose between white label funds and identical funds carrying a less-trusted asset manager’s name. Condition 3 was a control condition where respondents chose only among white label funds; respondents in Condition 4 chose between white label funds that included the name of their employer and other white label funds with no associated organization name. In Conditions 1 and 2, respondents selected between financially identical pairs of funds within the same asset class, differing only by their labeling as either white label or organization-labeled (i.e., the choice is between "Asset Manager #1 U.S. Large Cap Equity fund" and "U.S. Large Cap Equity fund"). Importantly, the hypothetical mutual funds in this experiment are index funds, where the fees are waived, and the funds follow the same index within each asset class. Rational respondents in the experiment should be indifferent between funds within any asset class that differ only by label. Therefore, observing statistically significant differences between allocations or expected payoffs to otherwise identical white label funds and those associated with either the high- trust or low-trust asset manager indicates that organizational trust affects decision-making We find that organizational trust has a significant impact on portfolio allocations. Respondents whose choice sets contained the high-trust organization’s funds allocated a substantially higher pro- portion of their savings to the high-trust organization options than to the white label options – 64% in the high-trust organization’s funds versus 36% in the white label options. Conversely, respondents in the low-trust condition eschewed the low-trust organization and allocated an average of 58% of their savings to the white label investment options. This pattern is consistent across all five of the asset classes offered in respondents’ choice sets. The experiment also sheds light on why respondents in different conditions make different al- locations. We find that respondents’ expected payoffs to investments in index funds offered by the high-trust organization are significantly different from expected payoffs to index funds offered by low-trust organization. Respondents judge the low-trust organization’s index funds to be riskier and to simultaneously offer a lower return than the high-trust organization’s index funds. On average, the respondents who predicted payoffs to the low-trust organization’s index funds place a 5 to 7 per- centage point higher probability on the funds losing money compared with respondents who predicted payoffs to the high-trust organization’s comparable funds. Simultaneously, expected returns are 2 to 3 percentage points higher for the index funds offered by the high-trust than the low-trust organization. We show that expected payoffs are significant determinants of portfolio allocations. The differences in expected payoffs to high and low trust organizations’ funds are generally larger for respondents with lower financial literacy. We support past findings that people with lower financial literacy are likely to rely more on trust (delegate choice) when making investment decisions, which raises concerns about their susceptibility to misguided trust leading to financial mistakes. Allocations to funds offered by the high-trust organization are significantly higher than to funds offered by the low-trust organization even after conditioning on expected payoffs. In other words, we find that organizational trust affects portfolio allocations indirectly (via expectations) and directly. Our findings add variation in organizational trust to factors such as differences in familiarity and changes in risk perception affecting financial decision-making.

ABSTRACT. With the advent of social media, information transmission in financial markets nowadays happens quickly, making them highly susceptible to the propagation of rumours. This is mainly because there is a strongly connected communication network among investors. Secondly, time constraints or the “fear of missing out” on a potentially lucrative trading opportunity could prevent investors from verifying the accuracy of the information transmitted by some other investor. The last decade has also seen the rise of “finfluencers”, who use social media to provide financial advice, amassing many followers. As noted by the North American Securities Administrators Association (NASAA), these financial influencers do not operate under the same regulations as licensed financial professionals. Several investors provide stock tips on social trading platforms like eToro and other websites like Reddit, which operate under pseudonyms, thereby masking their true identity. This is concerning because, with massive followers and mostly young investors who are more likely to engage in riskier investment behaviours, these influencers have incentives to manipulate them to trade in a certain direction, which may not necessarily be aligned with the fundamental value of the underlying stock. What types of investors are more likely to engage in rumourmongering and spreading fake news? In the absence of reputation concerns, recent theoretical advancements propose a channel for the credibility of messages from an investor based on the interplay between her investment horizon and subsequent information arrivals. In our research, we design an experiment to analyse to what extent the investment horizon of the sender of a cheap talk message predicts credible information sharing. Subsequently, when does communication among investors move asset prices? The markets in our experiments comprise a “leader” who is privately informed about a stock's fundamental value and can communicate to a set of “followers”. The communication takes the form of a binary “cheap talk” message. The message is meant to mimic the financial advice from certain investors in the form of stock tips on social media, like “Buy”or “Sell”or simply comments. These messages have the ability to move prices. For example, research studies have found that the tone of comments on SeekingAlpha.com has the ability to predict future stock returns and earnings surprises and that aggregate opinion from individual tweets on Twitter successfully predicts a firm's forthcoming quarterly earnings and announcement returns. Often, these messages cannot be verified at the time of the communication. Therefore, the recipients must either act upon the message if they believe it is informative or ignore the communication. Before trading, some followers also obtain information about the fundamental value from additional sources, so that information gradually becomes available over time. Other uninformed traders also exist in the market. This setup closely follows the theoretical model, which shows that information transmission is strategic, where the sender has an incentive to misreport, depending on her investment horizon. If the leader is short-term, she must liquidate her position before the stock dividend is realised. In this case, sending a truthful message is dominant because subsequent information arrivals confirm her message, maximising the short-term price impact. On the other hand, a long-term leader has an incentive to lie because she can successfully manipulate the market price to induce a price reversal when the true dividend is revealed at the end, although the ability to manipulate the price is limited by the fraction of followers who also get information prior to trading. She can trade on and profit from this predictable reversal as her investment horizon is long, i.e., she can liquidate her position at the end of the period. Confirming recent theoretical predictions, we find that a short investment horizon facilitates information sharing among investors. As a result, followers respond to short term leaders' communication even though it is unverifiable: they exhibit selling (buying) propensity if a short-term leader's message is bearish (bullish). On the other hand, followers ignore messages originating from long-term leaders. Consequently, with a large fraction of followers trading in the direction of the short-term leader's message, communication in the form of cheap talk from such senders generates a significant price impact. However, long-term leaders fail to move prices. The difference in truth-telling rates between short and long investment horizons is increasing in the transparency of the market institution. The followers' response to a short-term leader's communication is stronger, and the subsequent price impact is larger when the markets are organised as a continuous double auction with an open order book than when trading occurs through a call market. Credible information sharing is more likely under a more transparent trading mechanism (e.g., the continuous double auction) because uninformed followers can obtain additional information from the market activity of other investors. Even though short-term leaders have a higher propensity to disclose truthful information, resulting in a more significant influence over prices in the market, we find no effect of investment horizon on the informational efficiency of prices. In contrast to theoretical arguments, short-term leaders do not always tell the truth. As followers strongly rely on these short-term leaders, the latter's advice can result in significant price deviations in instances of false messages. This is enough to counterbalance the enhanced price efficiency originating from truth-telling.

ABSTRACT. Classical asset allocation theory suggests that it is recommended for individuals or households to invest at least some proportion of their money in equities because of positive equity premium. However, many household investors do not hold equities or hold relatively small proportions of their wealth in the stock market. Recently, joint decision making has been considered as a factor in household financial investment behaviors of married couples. This study investigates the effect of women’s bargaining power on household stock investment. The collective model of household behavior posits that the demand of the household depends on the preferences of both spouses and the distribution of bargaining power between them. We use education differences between the spouses to measure women’s bargaining power. On one hand, a higher relative education level brings women better job opportunities and higher wage income. On the other hand, the ability of women to understand complex information related to important family affairs and to weigh benefits and costs when making complex financial decisions increases with their higher education level. We use data from 6,965 households included in the 2019 wave of the China Household Finance Survey. About 9% of these households invested in stock. The average stock asset proportion of household total financial assets was about 1%. We find that women’s bargaining power within the household was positively related to household stock investment. Specifically, we explored the mediating effects of financial information attention and the moderating effects of risk preference and financial literacy on the relationship between women’s bargaining power and household stock investment. The results show that women’s bargaining power improved household stock investment indirectly by increasing the spouses’ attention to economic and financial information, explaining 13%, resp. 25% of the total effects on stock investment and the proportion of risky assets. We also find that wives’ risk preference and financial literacy moderated the positive effect of women’s bargaining power on household stock investment. The positive relationship between women’s bargaining power and household stock investment was stronger for below-median wealth households. In addition, the effect of women’s bargaining power on household stock investment intensified with the increasing age of the wives. A discussion of the results and implications for policy making are included.

ABSTRACT. The well-known consumption-based asset pricing models are not able to replicate many salient features of asset prices and returns in data, yielding so called `equity premium puzzle' and others such as the high volatility of stock returns and the counter-cyclical variation in the equity premium. (Mehra and Prescott 1985; Kandel and Stambaugh 1990.) The asset pricing models in standard world assume a representative agent with time separable expected utility in a complete market. Thus, if we assume standard CRRA utility, the magnitude of the disparity between the riskless bond and risky stock returns (and thus the equity premium) is so great that it implies an unreasonably high level of risk-aversion parameter value. In other words, under the standard parameter range, the model cannot generate enough premium as in the data because consumption is too smooth.

Remedies proposed to correct the problem are to modify each element of the assumption in the standard model. Since the work by Campbell and Cochrane (1999), who occupy external habit to explain a number of stylized facts for the US stock market, habit formation has gained popularity, both in financial economics and macroeconomics. This is due to its power of generating non-smooth consumption profile, as well as intuitive plausibility, to match the premium data, but with still high-risk aversion. However, the external habit models generate volatile interest rates as well. More specifically, in habit models, utility depends on consumption relative to a reference level of consumption. And many times, it should be backward looking because of the choice of reference consumption level, as the term habit implies. However, reference dependence preference assumes that utility depends on gain or loss feeling (utility) relative to a reference level of utility and the reference should be formed by expectation and consistency.

Reference dependence of utility helps understand why standard economic theory cannot explain such findings as the failure of the independence axiom in expected utility. The reference dependence preference (RDP, hereafter)- with loss aversion has gained its popularity due to its explanatory power in many applications in economics. Specifically, the RDP model extended for consumption utility by Koszegi and Rabin (2009) is now widely used in financial and monetary economics. Yet, few of the works convey the essential idea of rational expectation in forming the reference points in Koszegi and Rabin, i.e. the reference point in their model is obtained through forward looking mechanism. Most works so far look to deal with models of RDP with habit formation, which can be described as backward looking, a common practice in macro or monetary economics.

Moreover, as is true that the Prospect theory provides nothing but descriptive models, so is the model by Koszegi and Rabin, implying that a model with RDP should have the element of descriptive, something researchers should handle for a model to be formulated and analyzed. In this sense, the existing works do not look to have this key element of the RDP because they lack formulation to construct a comparison for a gain or a loss.

In two-period intertemporal choice of consumption, in which the consumer may have an intended plan of over-consumption at the first period, the agent feels a contemporaneous gain utility if he consumes more now than the suggested ex-ante optimal solution. As a result, his consumption is lowered next period and this yields a prospective loss utility relative to the reference utility. If the contemporaneous gain utility is greater than the prospective loss utility, then he chooses not to follow the ex-ante optimal rule but to deviate for more consumption now. Likewise, if the prospective loss utility is greater than the contemporaneous gain utility, then he sticks to the standard consumption rule. The consumer's greater concern for the loss (high loss aversion) deters him from over-consuming at the first period. For the case of initial under-consumption (save) followed by higher consumption in the second period, it is possible to reason that if the consumer's prospective gain utility is more than the contemporaneous loss utility, then he is willing to reduce his consumption and save more now. In this case, the high loss aversion of the consumer deters him from under-consuming. By both schemes, it is clear that when the consumer's loss aversion is high, the agent does not deviate from the ex-ante optimal solution. But if the decision maker cares more about the gain due to low loss aversion, then he deviates from standard rules for his personal well-being. The deviation is possible in either direction of more or less than the ex-ante optimal consumption.

Based on the above notion of intertemporal gain-loss utility, in this paper, I construct a lifecycle asset pricing model where agents compare gain and loss utilities with respect to reference consumption utility following Koszegi and Rabin (2009). To clarify the difference between external habit and reference dependence of utility, I first develop theoretic asset pricing models to demonstrate the similarity and distinctions of the two approaches. Next is the reference points. Distinct from prior works using RDP in which the formation of the reference point is not different from traditional habit formation models, this paper proposes a model of RDP where the reference point is determined via forward looking expectations.

By doing this paper can see whether the RDP with forward looking reference points improves the prediction relative to old RDPs. Specifically, this paper wants to compare with the model of external habit by Campbell and Cochrane (1999). Compared with the habit approach using surplus consumption ratio by them, in this paper the surplus utility ratio is the key factor that can generate cyclical behavior for asset prices. I use this framework to determine if the forward-looking RDP model provides a better fit to features of the asset price data relative to other RDP models. Finally, related to the forward-looking expectations of the reference consumption utility, this paper revisits the permanent income hypothesis and explore its implication under the forward-looking version of RDP.

ABSTRACT. Stock market participation puzzle refers to the phenomenon where a significant portion of households choose not to invest in the stock market, despite the potential benefits of investing in stocks for long-term financial growth. This effect is even stronger for women. Generally, women are significantly less likely to participate in the stock market than men (Niessen-Ruenzi & Mueden, 2023). Stock market participation helps women empowerment and reduces economic gender inequality, which corresponds with the United Nations 2030 Agenda for Sustainable Development [UN]. The financial products are becoming more and more complex, which provides challenges for financial inclusion of citizens of developing countries. Cultural shocks can reduce financial inclusion: thus, living under communism and its anticapitalist doctrine reduces propensity to participate in the stock market (Laudenbach et al., 2020). I am conducting a field experimental research to examine the biases that hinder and the nudges that encourage women's participation in the stock market. I take the sample from Armenia, a post-communist country in the Caucasus region of West Asia. This paper contributes to the research on the stock market participation puzzle. Kaustia et al. (2023) derive three groups of factors: institutional (country) fixed effects, individual-level variables, and behavioral variables. Institutional effects can have such influence that European asset owners tend to invest smaller real amounts in stocks and larger amounts in the primary residence than U.S (Christelis et al., 2013). Institutional effects are significant even for migrants: immigrants from countries with institutions that more effectively protect private property are more likely to own stock in the United States (Osili & Paulson, 2008). As for the cognitive abilities, numeracy, verbal fluency, and memory are positively associated with propensity to invest in stocks (Christelis et al., 2010). Poor health is associated with a smaller share of financial wealth held in risky assets and a larger share in safe assets (Rosen & Wu, 2004). The experience of macroeconomic shocks can also reduce willingness to take financial risks (Malmendier & Nagel, 2011). Beliefs about high need in specific knowledge and large amounts of time also prevent stock market participation (Duraj et al., 2024). My work contributes to the literature about gender inequality in financial inclusion. Various factors may influence gender differences in financial behavior. Thus, legal and cultural norms may restrict women’s access to property, so they lack the collateral needed to obtain loans from formal financial institutions (Johnson 2004; Johnson & Nino-Zarazua, 2011). Gender differences in loan performance are higher among investors with low income or education levels (Chen et al., 2018). Current gender inequalities also influence financial literacy scores: only 29% of women answer all Big Three questions correctly, versus 48% of men (Lusardi, Mitchell, 2023). There is a strong gender gap in financial technologies: while 29% of men use fintech products, only 21% of women do (Chen et al., 2023). Women are, on average, more risk averse than men (Croson and Gneezy, 2009). Women are more likely to suffer from gaps in financial knowledge (Klapper & Lusardi 2020). Women experience lack of confidence in financial literacy (Bucher-Koenen et al., 2024) Also, women receive worse financial advice (Bhattacharya et al., 2024) The third strand of literature this paper contributes to is about the effectiveness of gamification. It became especially successful in the healthcare industry, but in financial services it has proven its successfulness in financial services as well (van der Heide & Želinský, 2021). Chapkovski et al (2024) found that hedonic gamification, such as confetti and achievement badges, increases trading volume. Raza et al. (2024) found that immediate rewards more strongly influence user experiences, customer engagement, and purchase intentions of mobile banking consumers, instead of delayed rewards. Armenia is a lower middle-income country which became independent in 1991 and is in the process of transition to a fully democratic market economy. Its GDP per capita rate is $8,053. [World Bank, 2024] It has a very high level of women literacy (99,7%), that is significantly higher than in neighbouring countries: Turkey (94,4%), Iran (84,9%) and even some countries in Europe: Serbia (97,2%), Bulgaria (98,2%). [World Bank, 2019] At the same time, financial literacy in Armenia has room for improvement: only 27% of adults achieved the minimum target score of at least 5 out of 7 on financial knowledge in Armenia compared with around 60% in South East Europe and close to 70% in OECD countries. Women in Armenia face a strong financial inclusion gender gap. Thus, only about 40% of females had a bank account compared with about 60% of male in 2017. Only 24% of women reached the minimum target score of financial literacy, while for men it equals to 31% [OECD, 2018] Being female increases the “risk” of having a job in the informal sector of the economy especially for those who are unmarried. Women prefer public sector jobs: around 37% of working young women have public sector jobs compared to 24% of working young men [IMF, 2021]. The data from IMF show that people in Armenia tend to obtain a present bias: they are unlikely to save for their future and instead prioritize short-term needs [IMF, 2021]. In order to promote stock market participation, I use BASIC methodology, proposed by OECD. This acronym stands for the stages of implementation of applied behavioral insights: identify Behaviors - Analyse biases - design Strategies - test Interventions - scale for Change (OECD, 2019). The biases that prevent Armenian women from stock market participation will be identified in April-May 2024.

ABSTRACT. Polarization within societies is recently recognized as one main challenge faced by democracies, not only in the United States (Törnberg, 2022; Schwalbe, Cohen, & Ross, 2020), but around the globe (Susanszky, Kittel, & Kopper, 2023). Especially affective polarization, i.e., the extent to which people feel more negatively toward a different group than toward their own, is discussed to be at a multi-decade high and a risk to democracies (Boxell et al., 2020; Iyengar et al. 2019). A common assumption in the discourse on (affective) polarization is that it can be mitigated through deliberative communication processes, i.e., when different groups engage in dialogue and exchange viewpoints on a certain topic (Caluwaerts et al., 2023; Dryzek et al. 2019). Formats to enable citizens’ participation like citizens’ assemblies have gained popularity as a democratic tool (Dryzek et al., 2019; Knobloch & Gastil, 2022) and are discussed as possibilities to overcome affective polarization and to increase trust in society. This paper examines whether participation in a citizens’ assembly affects polarization between supporters and opponents of COVID-19 measures and trust in relevant actors (media, research institutions, politics, people). We draw on extensive field experiment data from a real citizens’ assembly on the reappraisal of the COVID-19 crisis in Austria, conducted in autumn 2023. A representative cross-section of the Austrian population was selected out of which 319 people took part in the citizens’ assembly (participants) and 310 people (control group) were selected for a waiting list, which served as a control group in the current study. Both groups were stratified concerning age, gender and education. Affective polarization and trust were measured using questionnaires. The participant group filled in questionnaires at three times: In the morning before (T1) and in the evening after the assembly (T2), and approximately two weeks after the assembly (T3). The control group was measured at two time points (T1 and T3). During the citizen assembly, diverse groups of citizens were actively involved by moderators in reflecting on the COVID-19 crises and learning for the future. The process focused on how certain actors (media, research institutions, politics, people) should address future crises based on the lessons learned during the pandemic. Through a comprehensive analysis of this data, we examine whether this deliberative democratic process can effectively reduce affective polarization and foster trust in relevant actors. Results show that affective polarization was lower among participants compared to a control group, but no main effect of time was found for polarization. This suggests that affective polarization was already lower among participants before the assembly began. This finding could be explained by the fact that the first survey for the participants was conducted on-site on the day of the citizens’ assembly, allowing them to form initial impressions and expectations about the upcoming event. In contrast, the control group was at home, knowing that no future face-to-face interaction with other citizens in an assembly will happen. The effect of anticipated interaction is a well-documented phenomenon (e.g. Miller & Marks, 1982; Van Lange, Klapwijk, & Van Munster, 2011). Expectations about intergroup interaction can impact outgroup attitudes as it alters the nature of intergroup contact (Deegan et al., 2015). Contrary to initial assumptions, participants only reported higher levels of trust in people compared to the control group, but not in policy makers, media or research institutions. The assembly was focused on how these actors can better handle future crises, which naturally required reflections on past mistakes and potential shortcomings. This focus may partly explain the mixed results on trust. Overall, the findings do not support the assumption that deliberative processes alone can reduce affective polarization and increase trust. Instead, the study highlights the importance of participants’ expectations of real face-to-face intergroup interactions. Results also allow practical conclusions on how to overcome affective polarization and low trust in a community. Real interactions can reduce polarization and increase trust. Based on the expected interaction with fellow citizens holding potentially different views and having different socio-economic backgrounds people are motivated to change their opinions and feelings. Thus, creating opportunities to engage and interact with others enhances perceived similarities and trust and thus, reduces polarization.

References: Boxell, L., Conway, J., Druckman, J. N., & Gentzkow, M. (2020). Affective polarization did not increase during the coronavirus pandemic (No. w28036). National Bureau of Economic Research.

Caluwaerts, D., Bernaerts, K., Kesberg, R., Smets, L., & Spruyt, B. (2023). Deliberation and polarization: a multi-disciplinary review. Frontiers in Political Science, 5, 1127372.

Deegan, M. P., Hehman, E., Gaertner, S. L., & Dovidio, J. F. (2015). Positive expectations encourage generalization from a positive intergroup interaction to outgroup attitudes. Personality and Social Psychology Bulletin, 41(1), 52-65.

Dryzek, J. S., Bächtiger, A., Chambers, S., Cohen, J., Druckman, J. N., Felicetti, A., ... & Warren, M. E. (2019). The crisis of democracy and the science of deliberation. Science, 363(6432), 1144-1146.

Iyengar, S., Lelkes, Y., Levendusky, M., Malhotra, N., & Westwood, S. J. (2019). The origins and consequences of affective polarization in the United States. Annual review of political science, 22(1), 129-146. Miller, N., & Marks, G. (1982). Assumed similarity between self and other: Effect of expectation of future interaction with that other. Social Psychology Quarterly, 100-105.

Knobloch, K., Gastil, J., & Knobloch, K. R. (2022). How Deliberative Experiences Shape Subjective Outcomes: A Study of Fifteen Minipublics from 2010-2018. Journal of Deliberative Democracy, 18(1).

Schwalbe, M. C., Cohen, G. L., & Ross, L. D. (2020). The objectivity illusion and voter polarization in the 2016 presidential election. Proceedings of the National Academy of Sciences of the United States of America, 117(35), 21218–21229. https://doi.org/10.1073/pnas.1912301117

ABSTRACT. The political science literature on polarization is large. In fact, political polarization has become one of the most discussed challenges for modern democracies. There is no agreement on the causes of political polarization. There is, however, agreement that political polarization has been rising across the globe, in some countries sharply.

Political polarization has two components: (i) intragroup homogeneity and (ii) intergroup heterogeneity. Rising intragroup (or within group) homogeneity manifests as rising agreement and rising ideological alignment within that group. Rising intergroup heterogeneity increases hostility between groups. This hostility is also called partisan animus or affective polarization.

What are the macroeconomic consequences of political polarization? So far, the economics literature has focused on its effects on public policy, mainly fiscal policy, where polarization leads to larger swings in policy from one administration to the next. These swings in policy directly affect economic activity but the volatility in policy also increases uncertainty in the economy which decreases domestic and foreign investment.

We focus on consumers. In this context, polarization affects economic activity because it impacts consumers' beliefs. Consumers with access to the same economic information but with differing political views may hold very different beliefs. Existing literature demonstrates that partisan affiliation is the main driver of support for or opposition to various economic policies, such as progressive income taxation or social security. In the expectations literature, a series of papers has demonstrated the presence of a partisan bias in consumers expectations. Consumers are persistently more optimistic if they are supporters of the government than if they are supporters of the opposition.

We demonstrate that polarization can affect the efficacy of fiscal policy. We also demonstrate that each aspect of political polarization has a distinct impact on consumer beliefs. Both are new results for economics (and political science).

We measure both aspects of polarization using monthly data since 1995 from an Australian population level survey where respondents can be separated by political partisanship. This unique dataset also includes a question on the effect of the latest government budget on family finances as well as a range of questions on economic expectations. We use an existing measure of intragroup polarization and propose a novel measure of intergroup polarization that can be easily applied to other economies. This new measure is the difference between estimated densities of responses of opposing voters. We apply ordered logit to the effects of the latest government budget on family finances and include the two polarization measures as well as macroeconomic and respondent specific controls in the estimations.

We find that the effects of intergroup polarization are significant and uniform across voters of different political parties. A rise in intergroup polarization negatively impacts all voters' perceived effects of fiscal policy. Put simply, rising intergroup polarization makes consumers more pessimistic about the impact of fiscal policy on their family finances irrespective of their partisan affiliation. The uniformly negative impact of intergroup polarization is in contrast to the impact of intragroup polarization. Consumers partisan with the government are more optimistic about the impact of fiscal policy while consumers partisan with the opposition are more pessimistic.

We repeat the empirical analysis on a range of economic expectations: economic conditions, family finances, unemployment and inflation as well as spending intentions for durable goods (readiness to spend). During periods of high intergroup polarization, consumers are universally pessimistic but are universally optimistic during periods of low intergroup polarization. In contrast, supporters of the government are optimistic but supporters of the opposition are pessimistic.

We use unit record data of 348 waves of the Australian Consumer Attitudes, Sentiment and Expectations survey (CASiE) leading to 426,200 observations. CASiE is the Australian equivalent of the University of Michigan Survey of Consumers (MSC). Both surveys contain information on respondents' partisanship and have been used to demonstrate intragroup polarization. We employ CASiE because the survey has been collecting consistent monthly information on political partisanship since January 1995, giving a consistent monthly time series of almost 30 years. The MSC survey collected information on partisanship sporadically between 1980 and 1985 and between 2006 and 2016 and consistently since February 2017.

Our paper makes several contributions to economics (and political science). First, we demonstrate two distinct economic effects of intergroup political polarization and of intragroup polarization. Intergroup polarization has a universally negative impact on consumer beliefs of all voters. Intragroup polarization has a positive impact on the beliefs of government partisans but a negative impact on the beliefs of opposition partisans. Second, political polarization can affect the efficacy of economic policy. Intergroup polarization leads all voters to expect less improvements in family finances following fiscal policy changes. This is an important result, as it demonstrates that political polarization can alter the effectiveness of economic policy. Third, political polarization affects consumer spending and saving decisions. In a high polarization regime, intergroup polarization puts downward pressure on consumer expectations and buying intentions of all voters, pointing to potentially important business cycle implications of our results. Fourth, when intragroup polarization is high, so is intergroup polarization. As people align more ideologically with their party, hostility towards supporters of the other party rises. Fifth, our results show that political polarization is low in times of crisis, confirming evidence from the political science literature. People look to their governments and political leadership, at least temporarily, in periods of crisis leading to a rise in trust and a decline in polarization. Finally, existing research finds rising intragroup polarization in the US but finds no impact on household spending. The opposite effects of intergroup and intragroup polarization demonstrated here is likely a factor explaining these finding. If Republican voters' intragroup optimism is large enough, it can offset the universally negative impact (i.e., not only for Republican voters but all voters) of intergroup polarization.

ABSTRACT. Laws prescribe formal sanctions in order to deter rule violations. Early economic analyses of the law assumed that the expected cost of such formal sanctions needed to outweigh the benefits of breaking the law to be deterrent (Becker, 1968). However, laws also have an ‘expressive’ function, signalling or establishing social norms about what is considered appropriate and what is not (Bénabou & Tirole, 2011, Sunstein, 1996). Consequently, even laws prescribing weak or infrequent formal sanctions may reduce noncompliance by signalling social norms (Lane et al., 2023). Conversely, sanctioning institutions may fail to signal, or even undermine, social norms if they are perceived as biased (Nosenzo et al., 2024). We specifically focus on the effects of institutional bias in how rule violations are monitored. Such cases are common: for example, a widely-noted study of the US Internal Revenue Service (IRS) finds that Black taxpayers are substantially more likely to be audited than non-Black taxpayers (Elzayn et al., 2025). This case is notable because it involves accusations of bias in monitoring whether a rule violation had taken place rather than unequal penalties for the same rule violation. However, despite the evident significance of this form of bias, we know of few systematic studies of its effects on rule compliance.

In this study we examine the causal effects of institutional rules and biased rule enforcement on compliance and cooperation in heterogeneous groups. Our experimental design is based on the standard public goods game. We introduce heterogeneity by establishing minimal group identities, that is, we randomly assign players to either ‘red’ or ‘blue’ subgroups. We then vary the presence of a contribution rule and its enforcement, and observe the effects on costly contributions to the public good, rule compliance, and both personal and social norms. First, we introduce a non-binding rule prescribing public good contributions of at least 50% of each player's endowment. Comparing treatments with and without this rule allows us to estimate the expressive function of non-binding rules. Second, we introduce non-deterrent sanctions for rule violations. In the fair audit treatment, all players are audited with the same probability and fined if found in violation of the rule. This allows us to distinguish the effect of sanctions from the expressive effect of the rule itself. Finally, in the biased audit treatment, ‘red’ players are three times more likely to be audited than ‘blue’ players, though all players face the same fine if found in violation of the rule. Comparing treatments with fair and biased audits then allows us to estimate the effect of biases in rule enforcement on rule compliance and contributions to the public good.

Our main contribution is to the literature on institutional bias in rule enforcement. Corrupt institutions – which apply rules arbitrarily or not at all – are associated with decreased rule compliance and trust (Gächter & Schultz, 2016; Spadaro et al., 2023). The evidence from laboratory experiments on biased rule enforcement is less clear. Riedel and Schildberg-Hörisch (2013) study a public goods game with unequal minimum contribution rules and find that players comply with the given rule, even if it is unequal. In contrast, Kogler et al. (2023) find that different penalty rates for high- and low-endowment players reduce the richer players' compliance when they were aware that poorer players faced a lower penalty rate and van Prooijen et al. (2008) show that when some players are immune from punishment, cooperation declines significantly. Our study adds to the existing literature in that we vary the audit rate between subgroups, but assess the same fine if rule violations are detected, which allows us to capture the pure effect of biased audits when the same rules apply to all members of the group.

We conduct a large, incentivised online experiment (N = 1,254). We find that the presence of a minimum contribution rule is associated with a substantial increase in contributions to the public good. Moreover, the presence of a rule has a strong and positive effect on personal and social norms – consistent with the expressive function of rules – sustaining contributions over time. Introducing sanctions for rule violations further increases compliance, but does not carry over into an increase in average contribution levels. Instead, the positive effect of rule enforcement on the compliance of free-riders is almost perfectly offset by a reduction in contributions above the level stipulated by the rule. Finally, biased audits initially decrease compliance relative to fair audits, but this difference diminishes over time. Thus, our results suggest that the expressive function of rules is remarkably robust to biases in how rules are enforced.

References Becker, G.S., 1968. Crime and punishment: An economic approach. Journal of Political Economy 76, 169–217. Benabou, R., Tirole, J., 2011. Laws and norms. NBER Working Paper, No. 17579. Elzayn, H., Smith, E., Hertz, T., Ramesh, A., Fisher, R., Ho, D.E., Goldin, J., 2025. Measuring and mitigating racial disparities in tax audits. The Quarterly Journal of Economics 140, 113–163. Gächter, S., Schulz, J.F., 2016. Intrinsic honesty and the prevalence of rule violations across societies. Nature 531, 496–499. Kogler, C., Olsen, J., Osman, M., Zeelenberg, M., 2023. The effect of transparent unequal penalty rates on safety compliance for different-sized businesses. Behavioural Public Policy [online first]. Lane, T., Nosenzo, D., Sonderegger, S., 2023. Law and norms: Empirical evidence. American Economic Review 113, 1255–1293. Nosenzo, D., Xiao, E., & Xue, N. (2024). The motive matters: Experimental evidence on the expressive function of punishment. Games and Economic Behavior 148, 44-67. Riedel, N., Schildberg-Hörisch, H., 2013. Asymmetric obligations. Journal of Economic Psychology 35, 67–80. Spadaro, G., Molho, C., Van Prooijen, J.W., Romano, A., Mosso, C.O., Van Lange, P.A. M, 2023. Corrupt third parties undermine trust and prosocial behaviour between people. Nature Human Behaviour 7, 46–54. Sunstein, C.R., 1996. On the expressive function of law. University of Pennsylvania Law Review 144, 2021–2053. van Prooijen, J.W., Gallucci, M., Toeset, G., 2008. Procedural justice in punishment systems: Inconsistent punishment procedures have detrimental effects on cooperation. British Journal of Social Psychology 47, 311–324.

ABSTRACT. Introduction and aim Over the last two decades, conspiracy theories, fueled by the unprecedented global challenges ranging from pandemics to conflicts to climate change, have garnered mainstream attention and sparked concern among journalists, politicians and academics. Conspiracy theories are commonly defined as attempts to explain the ultimate cause of significant events as the result of secret plots by powerful groups (Douglas & Sutton, 2008). Understanding the psychological mechanisms behind conspiracy beliefs is crucial for mitigating their societal impact, which ranges from fueling skepticism towards institutions to acts of violence (e.g., QAnon-inspired assault on Capitol Hill) and non-compliance with preventive health measures. Among the different drivers of conspiracism, several scholars focused on cognitive biases, which are systematic deviations from normative accounts of rationality. Several studies show that susceptibility to such reasoning errors positively predicts endorsement of conspiracy theories (Gagliardi, 2023). For the purpose of this study, we will focus on two cognitive biases—intentionality and proportionality biases—proposed to be central in fostering conspiracy beliefs (e.g., Leman & Cinnirella, 2007; Douglas et al., 2016). Intentionality bias refers to the tendency to attribute agency and intentionality to events which as well be random (e.g., natural disasters, virus spillovers), while proportionality bias is described as the tendency to believe that big events must have equally big causes (e.g., a large conspiracy is considered as a more likely explanation for the assassination of a president compared to an individual killer). Susceptibility to both of these biases has been associated with conspiratorial ideation, but mostly by the means of correlational designs and self-reported measures. This study aims to test these biases experimentally using a novel communication game that is designed to mimic the real-world dynamics of information asymmetry and trust.

Methods: The experiment consists of a communication game (e.g., Gneezy, 2005), involving 959 participants (504 Receivers, 455 Senders) recruited via Amazon Mechanical Turk. In this experiment, participants were assigned to different roles: Receivers (N = 504) and Senders (N = 455). The Receivers would receive a couple of messages—either identical or mixed—claiming to describe the content of an urn. Messages were presented as originating from either human Senders or a randomizing computer. Based on the messages they received, Receivers had to (1) guess the urn's contents and (2) attribute the messages to human or computer sources. The study manipulated stakes (high vs. low) to assess the role of proportionality bias in fostering conspiracy ideation: the higher the stakes, the more we expected participants to detect a conspiracy. This design allowed us to investigate participants’ tendency to detect agency behind possibly random events and to infer supposedly evil intentions of other human players, which are the two main ingredients of conspiracy beliefs. Senders, in contrast, had to decide whether to send honest or deceitful messages, knowing that their incentives were misaligned with Receivers'. They also reported their expectations of deception among other Senders and trust from Receivers. Self-reported measures of conspiracy beliefs (Generic Conspiracy Beliefs Scale, Conspiracy Mentality Questionnaire) and cognitive styles (Cognitive Reflection Test, CRT-2) were collected from both groups. Trust was further measured using a subset of the SOEP trust scale.

Results: Contrary to expectations, there was no significant over-detection of agency in the Receiver group. Approximately 52% of Receivers attributed equal messages to human Senders, and among them, 44% did not trust them. Agency detection was not significantly associated with higher stakes, intuitive thinking styles, or trust levels. However, surprisingly, Receivers with higher scores on conspiracy beliefs scale were more likely to attribute the messages to the computer, and not to human Senders, indicating a potential bias toward distrusting the computerized system or the experiment. Manipulating stakes did not significantly influence agency detection or trust. While Receivers in the high-stakes condition trusted identical messages slightly more often (57% vs. 48% in the low-stakes condition), the difference was not statistically significant. This suggests that higher stakes alone do not robustly trigger proportionality bias in this experimental context. Regarding Sender’s behavior, approximately 61% of participants opted to send honest messages, while 39% chose to deceive. A strong false consensus effect was observed: Senders who lied were significantly more likely to expect deception from other Senders. Moreover, interestingly, Senders with higher levels of self-reported conspiracy beliefs were expecting higher trust from receivers. Self-reported measures of conspiracy beliefs were significantly higher in the high-stakes condition, suggesting a potential spillover effect from the experimental manipulation. However, these measures were not consistent predictors of behavior in the communication game, calling into question their robustness as indicators of conspiracism.

Conclusions: This study provides mixed evidence for the role of intentionality and proportionality biases in conspiracy beliefs. While we did not find experimental evidence of these biases, we still uncovered intriguing insights into participant’s behavior. Notably, Receivers with higher conspiracy beliefs displayed unexpected tendencies, such as attributing messages to the computer rather than agents, contrary to previous literature which highlighted the role of intentionality bias in conspiracy ideation (e.g., Douglas et al., 2016). Sender’s behavior also revealed important social dynamics, including the false consensus effect (i.e., over-generalizing their deceiving behavior to others), and a link between trust expectations and conspiracy beliefs. Higher self-reported conspiracy beliefs were in fact associated with expectations of gullibility in others, potentially reflecting the need for conspiracists to distinguish themselves from "sheeple." The study also underscores the limitations of self-reported measures of conspiracism, as they were influenced by experimental conditions and did not reliably predict behavior. Future research should focus on refining implicit measures, perhaps by increasing the complexity of message patterns or stakes to better mimic real-world scenarios. Additionally, methodological refinements are needed to address potential experimenter demand effects and ensure that participants' beliefs about the study context do not confound results. Despite its limitations, this research represents a novel approach to studying conspiracy beliefs through behavior rather than self-reports. It paves the way for more robust experimental paradigms that capture the nuanced interplay of cognitive biases, trust, and belief formation in the context of conspiracy ideation.

ABSTRACT. The rise of self-employment and gig work has redefined the labor market, offering new flexibility and altering traditional employment norms. While self-employment has numerous advantages, it also poses a critical challenge: income volatility, which undermines financial stability and complicates decision-making. Research shows that income volatility often drives short-term spending and heightened stress. This work primarily relies on project-based assignments, interspersed with gaps that create financial uncertainty. To navigate these uncertainties, workers must regularly assess their financial circumstances. The timing of financial evaluations—during periods of uncertainty or relative stability—becomes a critical factor in how workers manage their finances and stress.

This study addresses the question, “How does income volatility influence temporal discounting and financial stress over time?” Additionally, we explore the potential role of financial self-efficacy and consideration of future consequences as moderators of these effects.

Participants engage in an online incentivized simulation designed to mirror the experiences of freelancers, spanning a 12-round (representing 12-month) period during which they receive either stable or highly variable hypothetical monthly incomes. After each income, participants address expenses such as rent and groceries and interact with a financial advisor, a mechanism to assess both financial stress and temporal discounting. Assessments occur at both mid-task and at the end of the 12 rounds to track changes in financial stress and decision-making over time.

The current study tests the following hypotheses: High income volatility correlates with greater financial stress (H1) and higher temporal discounting (H2). Participants have lower financial stress mid-task than at the end of the task (H3), primarily due to uncertainty about future work opportunities at the end of the project and the cumulative effects of financial instability. Likewise, participants have lower temporal discounting mid-task than at the end (H4), suggesting that prolonged exposure to income fluctuations reinforces present-biased decision-making. The effect of income volatility on financial stress is weaker mid-task than at the end (H5), indicating that financial instability becomes more psychologically taxing as individuals approach the conclusion of their earnings period. Similarly, the effect of income volatility on temporal discounting is weaker mid-task than at the end (H6), suggesting that financial uncertainty increasingly drives short-term decision-making over time.

The findings offer valuable insights into the experience of self-employed individuals navigating income volatility. This research aims to contribute to the development of strategies and policies that foster greater financial resilience and stability in an increasingly volatile labor market.

ABSTRACT. In recent decades, a multitude of transformations have placed individuals in a challenging position with regard to financial decision-making. This is partly due to the dynamic development of a wide range of financial products (Lusardi et al., 2020). Furthermore, the responsibility that individuals bear for their own finances has increased considerably. This is mainly due to major changes in the pension landscape, which is demanding more personal responsibility from consumers by shifting financial decisions such as saving or investing to employees and pensioners. The situation has been further escalated by the emergence of international crises, including the global pandemic of the novel coronavirus (Covid-19) and the energy crisis, which has been exacerbated by the war in Ukraine. The associated high inflation rates, rising energy prices and growing unemployment make it all the more important to demonstrate responsible and conscious financial behavior (Bucher-Koenen et al., 2024, Chhatwani and Mishra, 2021).

Responsible financial behavior is characterized by various skills that contribute to effective financial management. This includes the ability to control spending, pay bills promptly and plan for the future while saving money to ensure the well-being of oneself and one’s family (Perry and Morris, 2005). However, many people lack professionally sound and responsible financial behavior, which can lead to serious consequences, including health problems as well as reduced academic success and life satisfaction (Lin et al., 2022, Richardson et al., 2013, Xiao et al., 2009). This emphasizes the necessity for the long-term enhancement of financial behavior. In order to achieve this objective, it is essential to develop a comprehensive understanding of the factors that influence financial behavior. There is a general consensus that financial literacy is an important determinant of financial behavior. In recent years, studies have shown that psychological factors and personality traits, in addition to socio-demographic factors such as gender and ethnicity, influence financial decision-making as well (Goyal et al., 2021). Nevertheless, there is still a huge lack of knowledge with regard to psychological factors influencing financial behavior.

Therefore, the purpose of this analysis is to review the current state of research on the influence of psychological characteristics on financial behavior, to determine which characteristics have a significant influence on financial behavior and to examine whether there are differences in the effects on different types of financial behavior. More precisely, the influence on the variables planning behavior, saving behavior, investment behavior, credit behavior, spending behavior and general financial behavior was analyzed. Therefore a systematic literature review was con-ducted in accordance with the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines (Moher et al., 2009). We searched the Web of Science Database with specific search terms and identified 79 eligible studies in 70 papers published between 1994 and 2024.

The results of our literature analysis show that there are many different psychological characteristics that influence general financial behavior or specific types of financial behavior. A total of 49 different psychological factors were found to exert a significant influence on at least one type of financial behavior. Self-beliefs and self-control were found to have a positive significant influence with high frequency, while impulsivity and neuroticism were most often found to have a negative influence. Nonetheless, the findings of numerous studies are ambiguous and to some extent contradictory.

With regard to the various categories of financial behavior, it was investigated how often the individual psychological factors were examined and into which frequency a significant influence could be demonstrated. It was found that planning behavior is primarily influenced by goal clarity and self-beliefs, while saving behavior and general financial behavior are influenced in particular by a high degree of self-control. Nevertheless, the impact of individual factors is demonstrated to vary not only in terms of frequency, but also in the nature of the effect itself. To illustrate, our analysis has demonstrated that while a high risk tolerance exerts a positive influence on planning and investment behavior, it concomitantly exerts a negative effect on credit behavior.

Our findings can be used to specifically address the variety of psychological influencing factors in financial education programs and advisory services. Programs to promote financial behavior could specifically strengthen some characteristics such as self-control, future orientation or financial self-beliefs. At the same time, other factors such as impulsiveness or neuroticism should be addressed in prevention measures. However, further research is necessary to refine the classification of results and to examine in particular the relationships and interactions between various influencing factors.

BUCHER-KOENEN, T., JANSSEN, B., KNEBEL, C. & TZAMOURANI, P. 2024. Financial literacy, stock market participation, and financial wellbeing in Germany. Journal of Financial Literacy and Wellbeing, 1, 486-513. CHHATWANI, M. & MISHRA, S. K. 2021. Financial fragility and financial optimism linkage during COVID-19: Does financial literacy matter? Journal of Behavioral and Experimental Economics, 94, 1-7. GOYAL, K., KUMAR, S. & XIAO, J. J. 2021. Antecedents and consequences of Personal Financial Management Behavior: a systematic literature review and future research agenda. International Journal of Bank Marketing, 39, 1166-1207. LIN, J. T., BUMCROT, C., MOTTOLA, G., VALDES, O., GANEM, R., KIEFFER, C., LUSARDI, A. & WALSH, G. 2022. Financial Capability in the United States: Highlights From the FINRA Foundation National Financial Capability Study. 5th Edition ed.: FINRA Investor Education Foundation. LUSARDI, A., MITCHELL, O. S. & OGGERO, N. 2020. Debt and Financial Vulnerability on the Verge of Retirement. Journal of Money, Credit and Banking, 52, 1005-1034. MOHER, D., LIBERATI, A., TETZLAFF, J., ALTMAN, D. G. & GROUP, P. 2009. Preferred reporting items for systematic reviews and meta-analyses: the PRISMA statement. PLoS Med, 6, e1000097. PERRY, V. G. & MORRIS, M. D. 2005. Who Is in Control? The Role of Self-Perception, Knowledge, and Income in Explaining Consumer Financial Behavior. Journal of Consumer Affairs, 39, 299-313. RICHARDSON, T., ELLIOTT, P. & ROBERTS, R. 2013. The relationship between personal unsecured debt and mental and physical health: a systematic review and meta-analysis. Clinical Psychology Review, 33, 1148-62. XIAO, J. J., TANG, C. & SHIM, S. 2009. Acting for Happiness: Financial Behavior and Life Satisfaction of College Students. Social Indicators Research, 92, 53-68.

ABSTRACT. Time preference, a fundamental concept in behavioral economics, describes how individuals balance immediate rewards against future benefits. Present bias, or the tendency to prioritize short-term gratification over long-term security, has significant financial implications, influencing behaviors such as lower savings, higher debt, and increased financial uncertainty. Understanding generational differences in future-oriented spending is critical for assessing economic mobility and long-term financial well-being. Some research suggests younger generations are more present-oriented due to economic instability, digital distractions, and shifting social norms. If younger cohorts systematically allocate less to future-oriented expenditures, they may face slower wealth accumulation, greater financial insecurity, and increased reliance on social support systems. However, other studies indicate that these differences may be driven by life cycle effects rather than fundamental generational shifts, with individuals naturally becoming more future-focused over time.

This study examines cohort differences in future-oriented spending using 20 years of Consumer Expenditure Survey (CEX) data from 2004 to 2023. It analyzes expenditures in four categories associated with future orientation: reading, education, insurance, and retirement savings. The CEX provides detailed, nationally representative expenditure data in the United States, allowing for an assessment of cohort trends while controlling for age, period effects, and socioeconomic factors. Our final sample includes 76,151 Consumer Units, spanning six generational cohorts from the Silent Generation to Gen Z. Given the high number of zero expenditures in these categories, logistic regression models the probability of spending, while Tobit models analyze budget shares. Key controls include total expenditure, race/ethnicity, education, gender, marital status, family size, presence of children, homeownership, region, and population size of residence. Baby Boomers serve as the reference group due to their large sample size and broad age range.

Findings indicate a steady decline in reading expenditures across cohorts, with younger cohorts allocating less, likely due to the rise of digital media as a primary source of information and entertainment. Education expenditures also decrease across cohorts, with Gen X spending the most, followed by Millennials, Baby Boomers, and Gen Z. After controlling for socioeconomic factors, the Silent Generation and Baby Boomers show no significant difference in education spending, while younger cohorts allocate less. This may reflect shifting educational priorities, increased access to alternative skill-building methods, and rising tuition costs leading to greater reliance on student loans rather than direct expenditures.

Insurance spending remains relatively stable across generations, with Baby Boomers investing the most, followed by Gen X and the Silent Generation. Gen Z is the least likely to allocate funds toward insurance, but after adjusting for socioeconomic controls, most generational differences disappear. This suggests that life stage and economic conditions, rather than generational attitudes, primarily influence insurance spending patterns.

Retirement savings patterns reveal a more nuanced picture. While later generations appear more likely to save for retirement, with Gen Z showing the highest odds of contributing, the budget share allocated to retirement savings is highest among Gen X, Millennials, and Gen Z. However, after adjusting for controls, Gen Z and Baby Boomers show no significant difference, while the Silent Generation, Gen X, and Millennials are less likely to contribute. These findings suggest that the youngest generation, Gen Z, may prioritize retirement savings despite economic challenges, possibly in response to declining employer-sponsored pensions and greater awareness of financial uncertainty.

Overall, the results do not support a simple narrative that younger generations are becoming more present-oriented in their spending. While younger cohorts allocate less to reading and education, they appear to prioritize retirement savings, potentially reflecting broader economic shifts rather than a decline in future orientation. The rise of digital media and online learning may have reduced expenditures on traditional reading materials and formal education, while economic instability may have heightened awareness of the need for long-term financial planning. Millennials and Gen Z, having experienced economic recessions and uncertain job markets, may emphasize financial security in different ways compared to previous generations.

These findings highlight the complexity of generational financial behavior, emphasizing that spending patterns are shaped by a combination of economic conditions, cultural shifts, and evolving financial priorities rather than inherent generational traits. Further research is needed to disentangle cohort effects from broader structural changes and to assess how these trends influence long-term financial outcomes.

ABSTRACT. In this study, we run a learning-to-forecast exercise in laboratory conditions among 150 young consumers from Poland. The study aims to identify (1) to which theory consumer expectation formation aligns and (2) if psychological traits and economic literacy moderate the expectation formation pattern.

We are motivated to conduct this study as consumers are non-specialists with limited economic literacy and poor skills in processing economic information. From a macroeconomic point of view, their economic choices, dictated by expectations, translate very clearly into the economy's performance. Thus, recognising expectation formation patterns is essential from the central bank perspective as it enables the conduct of expectation-oriented monetary policy. Such a policy, implemented within an inflation-targeting framework, should ensure price stability, which is the primary mandate of modern central banks. Even though the recognition of consumer expectations models is essential, the empirical literature does not provide many explanations linking expectations with economic literacy and psychological traits. The existing works are rare and mostly survey-based. The novelty of the study is the new knowledge it creates and the data collection procedure based on the quasi-experiment.

The data collection for the study was designed as a quasi-experiment held in the laboratory. Subjects were first solving economic literacy and psychological traits tests using the Big Five model (extraversion, agreeableness, conscientiousness, neuroticism, openness to experience) tested with a Mini-IPIP scale (International Personality Item Pool). Then, subjects were informed in a general way about the model that describes the functioning of the economy. The model reflected a standard, simplified, three-equations new-Keynesian framework with a forward-looking specification of inflation equation, (2) an IS curve explaining the output evolution in the economy and (3) the forward-looking Taylor rule. The central bank reaction reflected in the Taylor rule parameters was set as quite restrictive due to the special times when the study was held (decreasing but still elevated inflation). The modelled economy was also affected by random shocks. Subjects were informed about the current state of the artificial economy and divided into teams representing consumers in a given economy. The distribution across teams (economies) was performed according to the economic literacy test results. The forecasting exercise was run using the web application designed for this study.

The exercise was incentivized, and the reward depended on the accuracy of the overall forecast. The forecasting exercise consisted of 50 rounds. In each round, subjects forecasted inflation for one year ahead. After each round, they observe the inflation rate in the economy (the effect of mean expectations of the team and its interaction with the model and shocks), the last forecast (individual) and points attributed to the forecast accuracy. To replicate the actual economic condition, the outcome of the economy depended on the mean expectations of each economic agent operating in this economy (here – team members). The duration of the exercise was scaled to fit within 90 minutes. Subjects were recruited through university announcements in four Polish universities (two localizations). The exercise was held between May and October 2024.

The first step of the data analysis covered the test of the best fit to the expectation formation models – on the micro level – to one of the theoretical foundations of expectation formation: AR process, sticky information, adaptive expectations, the general model, and trend exploration. The models were estimated using the OLS. The best model was the most accurate (RMSE). Then, the application of logit regression enabled the search for the interdependencies between expectation formation, economic literacy and psychological characteristics.

The results indicate that about 25% of subjects' behaviour was explained by the general model, 20% used trend extrapolation, and about 15% used adaptive expectations and the same percentage of them – sticky information model. The choice of the model depended on the level of economic literacy. However, the interplay between psychological traits (tested with logit regression) and the model selection was negligible. We found some relationships between the choice of the model and agreeableness and openness to experience.

These results are significant from the point of view of monetary policy, especially in terms of central banks' ability to achieve inflation target. The lack of strong dependencies between the psychological traits and expectation formation models is good news as the policy-maker cannot shape behavioural and psychological aspects. The economic literacy that affected the model choice could be more easily affected by the education or educational system of the country. Finally, we noted that a large portion of subjects did not choose the simplest replication of past inflation as the benchmark for the future. This result confirms the engagement of economic agents in processing the information on inflation and expectations.

ABSTRACT. Financial discrimination represents a significant barrier to achieving equitable access to financial services and wealth-building opportunities (Bartlett et al., 2022), with potentially far-reaching consequences for individual financial well-being and broader economic inequality. While traditional economic theory assumes rational decision-making in financial services, behavioral economics, and economic psychology suggest that experiences of discrimination can create complex and sometimes counterintuitive patterns in consumer behavior. Drawing on these behavioral insights, our research examined the associations between experiencing financial discrimination and consumer trust in financial institutions, the relationship between discriminatory experiences and the likelihood of seeking financial advice, and the connection between racial identity and experiences of financial discrimination.

The findings reveal complex relationships between discrimination, trust, and financial decision-making. First, we found a significant negative association between experiencing financial discrimination and consumer trust in financial institutions, suggesting important connections between discriminatory experiences and consumers' relationships with the financial sector. This correlation with reduced trust may have important implications for long-term financial engagement and wealth-building opportunities, as reduced trust could lead to withdrawal from mainstream financial services.

Interestingly, our second finding revealed that individuals who reported experiencing financial discrimination were also more likely to report seeking financial advice. This unexpected relationship suggests a possible pattern where consumers who face discrimination may be more likely to seek professional guidance. This finding challenges conventional assumptions about discrimination and withdrawal from financial services and suggests a more nuanced relationship between these experiences and financial behaviors. However, these findings align with research that shows that Black consumers, who have historically experienced discrimination at a disproportionate level, are more likely to seek financial advice (Reiter & Qing, 2023).

The study's third key finding revealed significant racial disparities in experiences of financial discrimination, with White and Asian consumers reporting a lower likelihood of bias or racism when working with financial institutions compared to Black consumers. This result aligns with existing literature on racial disparities in financial services and adds to the growing body of evidence documenting persistent inequities in the financial sector (Craemer et al, 2020; Weller, 2009). These disparate experiences suggest that significant barriers to equitable treatment remain despite broader industry efforts to promote inclusion.

These findings have important implications for multiple stakeholders in the financial services sector. For financial institutions, the results highlight the critical importance of addressing discriminatory practices and their relationship with consumer trust. The correlation between discriminatory experiences and reduced trust suggests that institutions need to not only prevent discrimination but also actively work to rebuild trust with affected communities. The association between discrimination and increased advice-seeking behavior presents an opportunity for financial institutions to better serve and support consumers who have faced discrimination, potentially through targeted outreach and specialized support services.

For policymakers and regulators, our findings underscore the need for continued attention to discriminatory practices in financial services and the development of more effective enforcement mechanisms. The persistent racial disparities in experiences of discrimination suggest that current regulatory frameworks may be insufficient to ensure equitable treatment. Additionally, the complex relationship between discrimination and advice-seeking behavior indicates that policy interventions should consider both protective measures against discrimination and support for consumers navigating financial services after experiencing discrimination.

The study also has implications for consumer advocacy organizations and financial education providers. The increased likelihood of seeking financial advice among those who have experienced discrimination suggests an important role for these organizations in providing trusted guidance and support. These organizations might consider developing specialized programs or resources specifically designed to help consumers who have faced discrimination navigate financial services effectively. These findings contribute to our understanding of how discriminatory practices relate to consumer financial behavior and underscore the need for targeted interventions to rebuild trust and ensure equitable access to financial services. Future research could further explore the mechanisms through which discrimination and trust interact and the temporal sequence of these relationships and evaluate the effectiveness of various interventions aimed at addressing these issues.

The results emphasize that addressing financial discrimination requires a multi-faceted approach that combines stronger consumer protections, institutional reforms, and targeted support for affected communities. As the financial services sector continues to evolve, ensuring equitable access and fair treatment remains a critical challenge that requires ongoing attention from researchers, practitioners, and policymakers alike.

References Bartlett, R., Morse, A., Stanton, R., & Wallace, N. (2022). Consumer-lending discrimination in the FinTech era. Journal of Financial Economics, 143(1), 30-56. Craemer, T., Smith, T., Harrison, B., Logan, T., Bellamy, W., & Darity, W. (2020). Wealth Implications of Slavery and Racial Discrimination for African American Descendants of the Enslaved. The Review of Black Political Economy, 47(3), 218-254. https://doi.org/10.1177/0034644620926516 Reiter, M., & Qing, D. (2024). Racial and gender differences in financial advice seeking: Evidence from the National Financial Capability Study. Financial Planning Review, 7(1), e1169. Weller, C. E. (2009). Credit Access, the Costs of Credit and Credit Market Discrimination. The Review of Black Political Economy, 36(1), 7-28. https://doi.org/10.1007/s12114-009-9034-6

ABSTRACT. Reducing electricity consumption has become a key strategy in national and international climate policy as the climate crisis intensifies (Shukla et al., 2022; International Energy Agency, 2021). Despite widespread aspirations to adopt environmentally conscious behaviors, a significant gap persists between intentions and actual consumption patterns (Allcott, 2011; Zhang et al., 2021). One explanation for this discrepancy lies in psychological barriers, particularly salience bias. Research has shown that electricity is a low-salience product for many households; they are often unaware of when and by which appliances electricity is consumed or whether their consumption is relatively high or low (Alcocer and Torres, 2024; Tiefenbeck et al., 2018; Singhal, 2024; Jessoe et al., 2014). While the benefits of energy services, such as heating or lighting, are immediate and tangible, the economic and environmental costs of electricity consumption are abstract and less perceptible. This disparity reinforces a bias toward immediate benefits (Kahneman et al., 1982), leading to suboptimal consumption decisions.´

A critical challenge for utilities and policymakers is to identify cost-effective strategies to promote residential electricity efficiency. Traditional feedback tools, such as Home Energy Reports (HER), typically provide periodic feedback to households. However, their effectiveness is often limited due to small sample sizes, lack of control groups, and delayed feedback (Faruqui et al., 2010; Fischer, 2008; Delmas et al., 2013). While these programs report average reductions of 5–12%, variability in effect size and reliability highlights the need for more timely and precise interventions. Furthermore, studies suggest that feedback mechanisms providing real-time or near-real-time information are better suited to influence behavior change (Allcott and Rogers, 2014; Costa and Kahn, 2013).

Our study builds on this literature by exploring the potential of feedback mechanisms to address these issues. Specifically, we address two core questions: (1) How sustainable are reductions in electricity consumption when feedback is continuously available via a smartphone app? (2) How does user engagement with the app influence the effectiveness of the intervention?

Using a randomized controlled trial (RCT), we evaluate the causal effect of information provision on household electricity consumption. A total of 1,000 Austrian households were randomly assigned to either an information condition (N=457), where participants received feedback on their electricity consumption via a smartphone app, or a control group (N=454), which did not have access to the app. Electricity consumption was tracked for up to 70 weeks post-treatment and 3 weeks pre-treatment. Using Google Analytics data, we differentiate between the intent-to-treat group (all app recipients) and those who actively engaged with the app, effectively receiving the information treatment. Our analysis yields three main findings. First, households in the treatment group reduced their electricity consumption by an average of 5%, a statistically significant intent-to-treat (ITT) effect. Second, the ITT estimate underestimates the true impact for active users. Using an instrumental variable approach and a two-stage least squares (2SLS) estimator, we find that active app users achieve nearly double the savings compared to the ITT estimate. Third, significant reductions in electricity consumption persist for up to 30 weeks post-treatment. Beyond this period, consumption stabilizes at a lower level than the control group, although the difference is no longer statistically significant.

Our research contributes to the growing literature on feedback interventions (Allcott and Rogers, 2014; Bollinger and Hartmann, 2020) by addressing key limitations of earlier studies. Specifically, we extend this literature by using a larger sample size, a longer observation period, and incorporating data on actual app interactions. This allows us to address critical issues such as user attrition, including app deletion, which can bias treatment effect estimates. Moreover, the inclusion of gamification elements in the app, which helped users associate specific behaviors with their energy use, increased engagement and facilitated learning. This feature demonstrates how innovative design can overcome the challenge of user disengagement observed in previous studies.

This research demonstrates the scalability and cost-effectiveness of app-based feedback tools to overcome psychological barriers and drive meaningful, sustained reductions in household electricity consumption. By addressing key behavioural challenges, it contributes to the broader literature on pro-environmental behaviour, energy efficiency, and behavioural policy, offering actionable insights for tackling global energy challenges.

ABSTRACT. The building sector is the largest consumer of energy and one of the main sources of greenhouse gas emissions in France. Energy renovation presents a dual environmental and social benefit for public authorities by reducing both energy demand and fuel poverty. Without substantial efforts in energy renovation, achieving carbon neutrality by 2050 will be impossible. This is why the French government has set ambitious targets for building energy renovation, supported by various policy initiatives. The goal is to incentivize homeowners to undertake high-level energy-efficient renovations. However, the current rate of renovations remains too slow to meet these objectives. One of the primary reasons cited by policymakers is the prohibitive residual cost of efficient renovations, despite the possibility of combining multiple subsidies, which leaves bank loans as the only viable alternative (but unfortunately, they are not accessible to all households). This poses a challenge from a policy perspective, as more extensive and costly renovations increase both projected energy savings and the likelihood of achieving these savings. The issue of residual costs is critical because it is intertwined with non-financial market barriers such as information asymmetry, which creates a lack of trust in renovation professionals and their ability to deliver promised energy savings. This, in turn, reinforces a status quo bias among homeowners. Despite these challenges, few studies have thoroughly examined the financial and trust-related barriers that households face when undertaking comprehensive renovations. The objective of this study is to analyze homeowners’ decision-making in a framework of zero out-of-pocket expenses and reduced uncertainty regarding renovation outcomes. The study examines two financing mechanisms for energy renovation: third-party financing and mortgage-based financing. In the third-party financing model, an external entity covers the entire renovation cost. The homeowner repays this entity through a contract that stipulates reimbursement based on a share of energy savings, aligning the third party’s interests with the effectiveness of the renovation. In the mortgage-based financing model, repayment is deferred until the property is sold, with an interest rate that is adjusted every ten years. The study relies on a survey conducted in the spring of 2024 using Verian’s Public Voice probabilistic panel, involving 513 respondents (owner-occupiers of detached houses). A single adult per household was interviewed to gather information on household characteristics such as income and social class, home characteristics including size, region, and urbanization level, past renovation activities, awareness of renovation grants, the home’s energy performance certificate rating, perceptions of comfort, and expectations regarding future energy costs. Following this survey, participants completed a Discrete Choice Experiment to assess their renovation preferences under different financing conditions. Respondents were randomly divided into two groups, with one being introduced to the third-party financing option and the other to the mortgage-backed financing model. Each group evaluated twelve hypothetical renovation scenarios and chose among three options: undertaking a single renovation action, carrying out multiple actions or a full renovation, or doing nothing. Each option was described based on attributes such as renovation cost, projected energy savings, comfort improvement, the presence of a financing operator, and the involvement of a global renovation operator. These attributes varied across different scenarios. Multinomial logit models were then used to estimate the probability of homeowners choosing partial or full renovations over doing nothing. The preliminary survey results showed that half of owner-occupiers experience cold or dampness in their homes despite previous renovations. Additionally, eighty-eight percent of respondents expect energy prices to rise, and sixty percent express concern over their energy bills. Given these factors, the persistence of low renovation rates is puzzling. Lack of awareness of financial assistance does not appear to be the primary barrier, as seventy-eight percent of households are familiar with the MaPrimeRénov (https://www.service-public.fr/particuliers/vosdroits/F35083?lang=en) scheme and between thirty and forty percent are aware of other financial aid programs. As expected, higher renovation costs reduce the likelihood of homeowners opting for renovations, while higher projected energy savings increase this probability. Households with higher energy bills are also more inclined to undertake renovations. Risk aversion is another significant determinant, with more risk-averse homeowners being less likely to invest in energy efficiency renovations. The involvement of a renovation manager-operator increases the probability of renovations being carried out, as this entity assumes the risk that the costs will not be fully offset by future energy savings. Respondents in the third-party financing group demonstrated a greater willingness to undertake expensive renovation work compared to those in the mortgage-based financing group. This suggests that third-party financing significantly alleviates financial risk for households, whereas mortgage-backed financing does not offer the same level of perceived security. Comfort improvements did not have a statistically significant effect on renovation decisions in the initial estimates, likely due to the complexity of how comfort perceptions influence decision-making. However, gender differences emerged, with women being more likely than men to choose full renovations over no renovation. In the mortgage group, homeowners with larger properties were more likely to opt for renovations. This study is the first to assess household preferences regarding renovation financing mechanisms and the role of a global renovation operator. The findings highlight the critical importance of these financing models in promoting energy efficiency renovations, especially as renovation subsidies are set to decrease. In early 2025, the MaPrimeRénov program will be scaled back, significantly reducing financial aid for targeted renovations and increasing homeowners’ out-of-pocket costs. As demonstrated by this study, higher upfront costs are a decisive factor in renovation decisions, and the reduction in subsidies is likely to delay or stagger renovation efforts. Furthermore, financial support for higher-income households will also be reduced, potentially causing additional delays in renovation projects. The results indicate that third-party financing, which eliminates upfront costs, significantly increases the likelihood of homeowners undertaking comprehensive renovations. These findings provide valuable insights for policymakers in designing future energy renovation incentives. By reducing financial constraints, particularly through third-party financing, it is possible to accelerate energy efficiency improvements in the residential sector and move closer to achieving national and European carbon neutrality targets.

ABSTRACT. Introduction Energy theft remains a significant challenge in Nigeria, leading to financial losses for utility companies, reduced service reliability, increased operational costs for energy providers and law-abiding consumers, and strained relationships between communities and the government. The Nigerian Electricity Regulatory Commission (NERC) reports that in 2022, distribution companies in Nigeria lost up to 50% of their revenue mostly due to energy theft. This reinforces the vicious cycle of low availability and reliability of electricity supply while exacerbating socioeconomic disparities within marginalized communities. This study explores the role of reciprocity in shaping ethical practices among citizens regarding energy theft, using a select Nigerian community, Kabusa, known for its high levels of energy theft, as a case study. The research also investigates various nudging strategies, including behavioral interventions, designed to reduce energy theft and foster ethical consumption. By examining attitudes and behaviors surrounding energy theft, this study aims to provide insights into the interplay between societal norms, economic hardship, and interventions aimed at improving energy ethics.

Methodology The study employed a systematic sampling method to select a representative sample of 340 households from the target community. Structured questionnaires were used to collect data on energy consumption patterns, attitudes towards energy theft, and perceptions of sustainable energy practices. Face-to-face interviews were conducted by trained enumerators to ensure high-quality data collection, while also ensuring confidentiality and anonymity for the respondents. The data collected was analyzed using SPSS 27, allowing for the identification of trends and shifts in community behavior before and after the implementation of interventions. Behavioral nudges such as SMS reminders, multilingual pamphlets, and community engagement meetings were introduced to encourage ethical energy consumption and reduce theft.

Discussion of Findings The findings indicated a complex relationship between economic hardship, societal perceptions, and energy theft. Economic constraints were identified as the primary driver of energy theft, with over 80% of respondents citing high tariffs and financial challenges as reasons for engaging in theft. This finding underscores the survival-based motivation behind energy theft, rather than deliberate criminal intent. A significant percentage of respondents also expressed dissatisfaction with electricity pricing, which was perceived as unfair by 89.5% of participants. This dissatisfaction likely exacerbates negative behaviors such as energy theft and non-compliance with energy bills. Notably, 76.1% of respondents establish a linkage between service quality and theft. If people feel they are receiving consistent and reliable power, they may be less inclined to resort to theft. This measure seems to address a fundamental cause of theft: dissatisfaction with the current level of service in relation to high tariffs. The interventions led to a marked shift in community attitudes toward energy theft. At the baseline, a considerable portion of respondents (39.8%) felt that energy theft was morally acceptable, but by the endline, 50% of respondents rejected this belief. There was also a noticeable decrease in the perceived guilt associated with engaging in energy theft, suggesting that educational interventions may have altered the community’s moral stance. Similarly, discussions around the importance of paying for electricity decreased by the endline, indicating a shift in focus from payment compliance to combating theft. The reduction in the perception of energy theft as a widespread issue—from 44.2% to 17.7%—further highlights the success of the interventions. Interventions such as SMS reminders in multiple languages were particularly effective, with 29.6% of respondents acknowledging their impact. Pamphlet distribution and community meetings also proved successful, with respondents reporting a better understanding of the consequences of energy theft.

Policy Implications The study’s findings highlight the critical role of reciprocity in encouraging ethical behavior, particularly in the context of energy theft. One of the key policy implications is the need for energy providers and authorities to uphold minimum standards of service delivery. The high levels of dissatisfaction with electricity pricing and inconsistent service provision signal that the supply side must improve reliability and fairness in energy delivery. Energy providers should prioritize transparency, responsiveness, and accountability in their dealings with consumers. By elevating and mainstreaming consumer-focused practices, such as fair pricing, consistent supply, and timely communication, energy providers can foster an environment of trust, which will, in turn, encourage ethical behavior from citizens. Additionally, policymakers must recognize the importance of economic factors in shaping energy theft behaviors. Policies aimed at reducing energy poverty, offering subsidies for low-income households, and introducing progressive pricing structures could help alleviate the financial pressures that drive individuals to engage in energy theft. It is also crucial to establish community-driven monitoring systems to detect and deter energy theft while involving the public in sustainable energy practices.

Conclusion The study demonstrates that reciprocity, in the form of mutual commitment to ethical practices between the supply and demand sides, plays a central role in curbing energy theft. Through targeted behavioral interventions and community engagement, attitudes toward energy theft can be shifted, leading to significant reductions in its prevalence. However, the long-term success of such interventions depends on the continued improvement of service delivery standards by energy providers and the establishment of more sustainable, consumer-friendly policies.

Recommendations 1. Strengthening Service Delivery: Energy providers must commit to improving the reliability and affordability of electricity services, ensuring that consumers feel they are receiving value for their money. Regular maintenance of infrastructure and transparent pricing should be prioritized to reduce frustrations that lead to energy theft. 2. Sustained Behavioral Interventions: Continued community engagement through SMS reminders, multilingual pamphlets, and workshops is essential to reinforce ethical behavior. Additionally, employing social and behavioral science strategies, such as nudging, can help sustain the gains made in shifting attitudes. 3. Economic Support Programs: To address the root cause of energy theft, policymakers should consider providing economic relief for low-income households through subsidies or progressive billing systems. This will reduce the financial burden on vulnerable populations and diminish the need to resort to theft. 4. Monitoring and Enforcement: Establishing community-based monitoring systems will enhance the detection of energy theft while promoting collective responsibility. Encouraging citizens to report theft and participate in monitoring can strengthen community ties and improve compliance.

ABSTRACT. We live in an age defined by quantity. Our smart devices contain technology that would have required a van decades ago, functioning as phones, cameras, video recorders, and music players. We take more photos and send countless messages, yet seldom delete or organize our media. Consequently, vast amounts of images, videos, and social media content accumulate in data centers. With low-cost cloud services, our devices automatically upload files, often leading to forgotten and unused content, while individuals’ digital behaviour data is stored as log files. It’s estimated that 90% of data stored in cloud services is never reused (Morley et al., 2018), comprising largely of useless or outdated information that offers no value to individuals or organizations. This excess can be classified as digital data waste.

Digital data waste is generated by individuals, companies and organizations that store data often without knowing its future use. The belief that "data is the new gold" has led many to store data "just in case," including structured, unstructured, and "dark data" — the latter being unstructured content kept without a clear purpose and often considered digital waste. Al Kez et al., 2022 highlight that if dark data is improperly managed, it could lead to a significant global carbon, water, and land footprint.

Digitalization has an increasing negative impact on climate change. As human behaviour is the main cause of climate change, human behaviour is also the key in responding and adapting to it (Clayton et al., 2015).

The success of policies mitigating environmental problems depends on whether they motivate individuals, households, and organizations to make more sustainable decisions. Human decision-making is often influenced by limited resources, shortsightedness, and consideration of others' well-being. These behavioural biases affect consumption, investment decisions, and compliance with environmental regulations (OECD, 2017). The cumulation of digital waste depends on collective and individual decision-making and behaviour. Thus, digital waste and pro-environmental digitalization need to be addressed by individual frames and system-level interventions, as categorized by Chater & Loewenstein (2023).

The issue of digital data waste is complex and characterised by multi-layered interdependencies. Many activities to store data in cloud storage are automated – the cloud services automatically upload data to cloud storage and log files about our digital activities (e.g., ordering food online and ride-hailing services) accumulate without individuals realising it. As individuals are used to automated activities, one can assume that if corporations and organisations providing innovative solutions set the default settings with pro-environmental principles, it would accumulate less unused digital data. Default options are known as pre-selected choices that take effect if an individual does not make an active decision to choose an alternative. Green defaults may help promote environmentally friendly choices (Taube & Vetter, 2019).

The paper presents the results of a qualitative study, including semi-structured interviews with sustainability experts (3 interviews) and IT companies' data managers (up to 10 interviews), as well as focus group interviews with individuals (two focus group interviews with 4-6 persons). The goal is to find out the opportunities and motivations for tech companies and app providers to design their products to minimise the cumulation of digital data waste for an individual. This goal aligns with Environmental, Social, and Governance (ESG) principles; thus, this study integrates the COM-B model with ESG principles. The study results are the basis for the following research aiming to experiment with default choices.

The focus group interviews aim to identify individuals' primary vulnerabilities related to digital waste and explore ways to address and reduce it more easily. Additionally, these interviews assess their awareness of specific default settings that maintain log files of their digital behaviour.

The interview plan will be based on the COM-B behavioural change model (Michie et al., 2011). The COM-B framework asserts that three key elements are necessary for behaviour: a person's capability (C), opportunity (O), and motivation (M) to engage in a specific behaviour (B). Capability refers to psychological and physical abilities, while opportunity pertains to the possibilities presented by the physical or social environment. A person's capability and opportunity influence their motivation, which can be both conscious (reflective) and unconscious (automatic). The ongoing interviews will be coded according to the principles of qualitative content analysis (Mayring, 2015), utilizing the NVivo software for qualitative and mixed-methods research. The coding of the interviews will combine the ESG principles with the COM-B model categories.

Digital data waste and its negative environmental impact remain understudied, particularly regarding climate change. Therefore, this paper seeks to determine how default options can be used to pinpoint effective ways to reduce the accumulation of digital waste without limiting individuals' freedom of choice.

References Al Kez, D., Foley, A. M., Laverty, D., Del Rio, D. F., & Sovacool, B. (2022). Exploring the sustainability challenges facing digitalization and internet data centers: Journal of Cleaner Production. Journal of Cleaner Production, 371. Chater, N., & Loewenstein, G. (2023). The i-frame and the s-frame: How focusing on individual-level solutions has led behavioral public policy astray. Behavioral and Brain Sciences, 46, e147. Clayton, S., Devine-Wright, P., Stern, P. C., Whitmarsh, L., Carrico, A., Steg, L., Swim, J., & Bonnes, M. (2015). Psychological research and global climate change. Nature Climate Change, 5(7), 640–646. Mayring, P. (2015). Qualitative Content Analysis: Theoretical Background and Procedures. In Approaches to Qualitative Research in Mathematics Education (pp. 365–380). Springer, Dordrecht. Michie, S., van Stralen, M. M., & West, R. (2011). The behaviour change wheel: A new method for characterising and designing behaviour change interventions. Implementation Science, 6(1), 42. Morley, J., Widdicks, K., & Hazas, M. (2018). Digitalisation, energy and data demand: The impact of Internet traffic on overall and peak electricity consumption. Energy Research & Social Science, 38, 128–137. OECD. (2017, May 10). Tackling Environmental Problems with the Help of Behavioural Insights. OECD. Taube, O., & Vetter, M. (2019). How green defaults promote environmentally friendly decisions: Attitude-conditional default acceptance but attitude-unconditional effects on actual choices. Journal of Applied Social Psychology, 49(11), 721–732.

ABSTRACT. It has been more than three years since the start of the Russia-Ukraine war. With the onset of the war between Russia and Ukraine in February 2022, we have witnessed extensive changes in the European economy and global energy markets. In fact, it caused a huge negative shock in the energy market (and many other markets, including the food market) worldwide. The successive sanctions imposed by the European Union and its allies, such as the United States, Japan, and South Korea, have altered Russia’s energy consumption patterns, oil imports/exports, and target markets. Countries and allies of Russia, such as China, purchase energy-related goods from Russia at low prices and in high volumes. Additionally, Turkey’s fluctuating policy, which leverages its geopolitical position regarding energy supply to the European Union, has also played an important role. Turkey’s geopolitical stance, which does not fully align with the democratic values of the European Union, along with India’s continued import of energy from Russia, has somewhat mitigated the impact of the sanctions.

As time progresses, the effects of these sanctions are becoming increasingly evident in the Russian economy and the volume of energy, it exports. Concurrently, the European Union has made significant efforts to restrict energy imports from Russia, set price caps on energy-related products from Russia, enhance the use of renewable energy, conserve fossil fuels, and import energy from allied countries. In essence, Russia’s military aggression against Ukraine has acted as a catalyst, accelerating the achievement of major projects such as the European Green Deal (EGD) and REPowerEU. It is anticipated that, shortly, the European Union will achieve less dependence on fossil fuels and will considerably increase the production of green and renewable energies.

Initially, Americans and their Europeans allies strongly believed that their sanctions would have a huge effect on the Russian economy and would convince Russia to end their attack on Ukraine after a few months, if not weeks. On the other hand, Russians and their allies believed that the energy crisis in Europe would force the US and EU to put pressure on Ukraine to accept a peace agreement with a significant loss of territory. Both sides of this conflict proved to be wrong, and the conflict is continuing, even after more than three years. It seems that both sides of this conflict and their allies have miscalculated their abilities and at the same time, both sides have executed some type of “plan B” options that were not completely anticipated by their opponents. These plan B’s have led to extending the duration of the conflict beyond what was originally anticipated, which in turn leads to more losses of lives and economic resources. In this paper/presentation, we discuss the abovementioned shifts in the behaviors as well as actions and reactions of both sides of this conflict and their consequences with respect to the energy market in more detail.

ABSTRACT. A large body of evidence shows that peer pressure can increase risky behaviour, with more limited evidence indicating that peer pressure can also reduce risky behaviour. However, whether robots can extract similar influence is an open and important question. To study this problem, 172 participants completed the balloon analogue risk task (BART) under three conditions: Control (no robot present), the presence of an encouraging robot, and the presence of a discouraging robot. Participants also completed a self-report measure evaluating their risk attitude and a self-measure designed to assess attitudes toward robots. Our data revealed that participants in the robot-discouraging condition exhibited significantly reduced risky behaviours compared to those in the robot-encouraging and control conditions. They pumped significantly fewer times, experienced significantly fewer balloon explosions, and earned significantly less money compared to the control or encouraged condition. However, we did not find a significant effect between encouraging and the control conditions. Moreover, a more positive impression of the robot moderated the effect of the robot's discouraging statements on risk-taking. The results of our study open new possibilities for the employment of robots in preventive programs designed to reduce or alter risky behaviour.

ABSTRACT. Technological advancement is a double-edged sword, offering both opportunities and risks. While innovations can significantly enhance quality of life, they can also pose potential hazards that require careful consideration. For instance, genetically modified organisms (GMOs) in agriculture promise increased crop yields, enhanced nutritional content, and reduced reliance on pesticides, contributing to food security and environmental sustainability. However, they also raise concerns about potential health risks, environmental impacts such as biodiversity loss, and ethical issues related to genetic manipulation. Similarly, autonomous vehicles offer increased safety and efficiency in transportation but raise concerns about job displacement, privacy, and the reliability of artificial intelligence systems (Wang & Zhao, 2019). These examples illustrate how the benefits and costs of new technologies can have monetary, health-related, individual, and societal implications. In the current experimental study, we focus on the individual level. The aims of this experimental study are twofold: first, to investigate how individuals perceive the benefits and risks of new technologies, and second, to examine how individual attitudes toward risk and ambiguity influence the assessment of these benefits and risks relative to the source of the endowment available to invest. This study seeks to understand the complex interplay between effort exerted to gain the available income, perceived benefits, potential hazards, and individual risk tolerance. Our contribution lies in two strands of literature: the first relates to the relationship between cognitive effort and the valuation of new technology, and the second pertains to the relationship between source of income risk and ambiguity aversion. Exerting more effort during the pre-purchase period may lead individuals to value a product's benefits more for several reasons. First, difficulty and effort might be perceived as quality signaling (Giebelhausen et al., 2011) and investment effort (Lala & Chakraborty, 2015). Second, effortful purchases may reduce the guilt associated with luxury purchases (Kivetz & Simonson, 2002) and self-gifting (Clarke & Mortimer, 2013). Moreover, according to cognitive dissonance theory (Festinger, 1957), when individuals have high perceived control, high effort should lead to greater reward valuation than low effort (Harmon-Jones et al., 2024). However, recent evidence in behavioral economics suggests that exerting effort to gain endowment in economic experiments reduces subjects’ risk tolerance relative to the traditional endowment assigned by the experimenter (Jelschen & Schmidt, 2023). We posit that those individuals who play an effort task to gain their endowment will exhibit a higher (lower) willingness to pay (hereafter WTP) to avoid (gain) risky losses (benefit) associated with the adoption of a new technological product relative to their counterpart that receive the endowment by the experimenter. This relationship aims to elucidate the premium that individuals place on safety and risk mitigation. By examining WTP, we can better understand how different levels of risk aversion influence economic decisions related to new technology adoption. This insight is crucial for developing strategies that address consumer concerns and enhance the adoption of innovative technologies together with the source of the endowment available to invest in the adoption decision.               People tend to be risk-averse (Pratt, 1964; Arrow, 1965; Kahneman & Tversky, 1979) and loss-averse (Tversky & Kahneman, 1992; Schmidt & Zank, 2005; Abdellaoui et al., 2007). Empirical evidence consistently shows that individuals behave to avoid ambiguity (Hey et al., 2009; Hey et al., 2010; Hey & Pace, 2011; Morone & Özdemir, 2012). The decision to adopt a new technology is a risky choice under uncertainty, which comprises two distinct components: risk and ambiguity (Klibanoff et al., 2005). The effects of these preferences on the adoption of new technology have been widely investigated across different domains. Aggregate evidence suggests that more risk- or ambiguity-averse individuals are less likely to adopt new technology; this pattern is observed in financial services (Bauer & Hein, 2006), the agricultural sector (Knight et al., 2003; Engle-Warnick et al., 2007; Liu, 2013; Barham et al., 2014; Brick & Visser, 2015; Holden & Quiggin, 2017; Crentsil et al., 2020; Channa et al., 2021; Hui et al., 2023; Wu et al., 2023; Wu & Li, 2023), the automotive industry with the adoption of autonomous vehicles (Wang & Zhao, 2019), and health behavior, such as vaccine decision-making processes (Zimmermann et al., 2024). Behavioral theory posits that the source of money matters in shaping people’s behavior, with recent evidence of how risk preference is shaped by exerting effort to gain endowment in economic experiments (Jelschen & Schmidt, 2023). Based on this evidence, hypotheses are: (1) The higher the effort spent, the lower the WTP to gain the risky benefit from new technology adoption; (1a) The higher the effort spent, the higher the WTP to avoid the risky losses from new technology adoption; (2) The higher the effort spent, the lower the WTP to gain the ambiguous benefit from new technology adoption; (2a) The higher the effort spent, the higher the WTP to avoid the ambiguous losses from new technology adoption. Our hypotheses are explored in a 2x2 between-subjects design, where half of the participants will receive their initial endowment by the experimenter (baseline treatment), while the remaining half will play an effort task to gain it (effort treatment). Furthermore, a between-subjects design will characterize the assignment to self-reported WTP to gain benefits and WTP to avoid losses. Finally, we test our hypotheses in a within-subjects design with three ambiguous and risky unframed scenarios for each subject. This study provides insights into how individuals perceive and value the benefits and risks of adopting new technologies by examining the interplay between cognitive effort exerted to gain available income, risk attitudes, and valuation. Our findings will contribute to understanding the role of cognitive effort in valuation processes and the impact of risk and ambiguity aversion on decision-making. The results can inform policymakers and businesses on how to improve the communication of the benefits and risks of new technologies to the public, potentially leading to more informed and balanced decision-making processes. The insights gained from this study will be valuable for developing strategies to maximize the benefits of new technologies while minimizing their risks in an era of rapid technological advancement.

ABSTRACT. Arguably, elite chess players are the quintessential rational thinkers. As such, they are expected to remain unaffected by mood fluctuations when they participate in important chess tournaments. Yet, this paper provides evidence that weather-induced mood fluctuations affect their behaviour in official chess tournaments, consequential for their careers. The observed behavioural change most sensibly reflects a reduction in risk appetite. Our data comprise a large sample of super-elite chess games (N=141,323), sanctioned by the World Chess Federation and held between years 2003 and 2019. These data are merged with comprehensive weather data in the tournament site on the day of the game. The weather-induced mood fluctuations are captured by deseasonalized sky cloud coverage, and risk taking is operationalized by the likelihood of a tie. Our analyses indicate that risk taking is higher (lower) during better (worse) moods induced by sunny (overcast) days. Given the exceptional skill level of chess players in our sample, these results strongly suggest that expertise and acting in a professional capacity do not obviate the pervasive influence of mood on human decision-making under uncertainty. See: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4970134

ABSTRACT. 1. Motivation

People regularly decide how much risk they want to take in different areas, such as career choices, health, and investment decisions. For this reason, risk preferences profoundly impact various socioeconomic outcomes. Prominent examples are the persistent gender gaps in wages, earnings, and social positions, which have been (partly) attributed to gender differences in risk preferences. In textbook economics, a standard assumption is that risk preferences are stable over time. However, empirical evidence seems to contradict this assumption. Risk preferences are typically found to evolve early in life, during the first stages of education, are transmitted across generations, and are affected by contextual factors. Thus, the evolution of the gender gap in risk-taking should be rooted in early childhood development and adolescence. Säve-Söderbergh & Sjögren Lindquist (2017) and Andreoni et al. (2020) find that girls (not boys) become more risk-averse when they grow older.

Following on from this, in this study, we try to further understand what impacts the gender gap in risk attitudes. Specifically, we examine how positive feedback in a competitive setting shapes gender differences in risk tolerance from early years on. We use data from professional diving, a ‘real life, real risk’ environment where the notion of risk is very intuitive and associated with the height of the dive. Tracking careers in US diving from early years on, we analyse how winning a (low-risk) springboard contest (1 and 3 metres) affects the willingness of girls and boys to compete in (high-risk) platform competitions (5, 7.5, and 10 metres). Openness to all disciplines improves career prospects in the profession. Building on the work of Bandura (1977), we expect the mastery experiences and social persuasion gained from the first win to increase a diver’s self-efficacy and, eventually, his or her willingness to take risks. This is because believing in one’s superiority can make risks seem more controllable (Klein & Kunda 1994), so self-efficacy may work as a mediator between positive feedback and risk-taking. This nexus could be different for the genders; for instance, a recent study by Dohmen et al. (2023) suggests that men and women differ in their disposition to focus on positive or negative outcomes.

2. Methods

Our data was collected from the official TEAM USA / USA Diving website. It gives us a complete history of (mostly national) competitions between the years 2004 and 2021 including rankings and points. Moreover, we add data from international diving competitions listed on the international federation’s official website. After restricting to individuals aged 10 to 18 with at least 20 contests, our final sample consists of 41,788 diver-contest observations.

Our empirical approach aims to explain a diver’s tendency to participate in a high-risk (platform) contest after winning a low-risk (springboard) contest. Since divers have their first win at different points in time, we opt for a two-way fixed effect model with staggered treatment. The model includes twelve event-time dummies capturing five quarters before and seven quarters after the treatment, as well as diver and time (year-quarter) fixed effects. We define divers to be treated after their first win in a springboard contest without a platform contest win before that. Platform contest participation, however, is allowed. For the control group, platform wins are not excluded but very rare. Standard errors are clustered on the diver level.

3. Results

While individuals of both genders increase their general activity level after the treatment and are more willing to participate in platform competitions, the change in risk preference differs in magnitude: treated male divers are substantially more engaged in platform competitions, both on the extensive and intensive margin. Evaluated at the sample mean, males are, for instance, 37.2% more likely to dive from greater heights in a contest after the treatment (fourth column). For females in our sample, the effect size is 9.88%.

In a heterogeneity analysis, we provide evidence that positive feedback works by encouraging individuals who previously shy away from high-risk contests and for whom success is less expected. Moreover, for females, the intensity of the 'quasi-treatment' matters as the effect is entirely driven by the group of divers with below-median prior success, underlining the importance of success in low-risk contests for gaining confidence. Moreover, also in line with the concept of self-efficacy, we find supportive evidence in favour of a moderating role in the social environment. Finally, although (high-risk) platform diving cannot be seen as a promotion, we find that increasing the risk pays off: Athletes who add platform diving to their portfolios are more likely to be among the national or international top divers.

ABSTRACT. Introduction Philanthropy is vital for sustaining the cultural sector, yet increasing financial contributions to this domain remains a complex challenge. While research has examined charitable giving extensively (e.g., Bekker et el., 2011; Saeri et al., 2023), limited attention has been given to how the findings from this previous research apply to the cultural sector. In fact, the cultural sector competes with other causes that might be perceived as more relevant to the society or more in need of charitable donations. Particularly, the specificities of this sector might be even higher in Saudi, where the cultural landscape has recently started to evolve, and therefore might be perceived as less important to the community. To fill this gap, the Saudi Ministry of Culture (MoC), conducted an incentivized donation experiment aimed to better understand to what extent successful strategies used in previous research could also work to influence philanthropic behavior in the cultural sector. More specifically, the experiment aimed to explore two critical research questions: (1) Does sharing a donor’s name upon contribution enhance their motivation to donate by providing extrinsic recognition? (2) Does informing potential donors about the tangible impact of their contributions increase their willingness to support cultural initiatives by appealing to intrinsic motivations?

Methodology

The MoC Behavioral Insights Unit conducted an incentivized donation experiment with 3 between-subject conditions experimentally manipulating a motivational framing: control, extrinsic and intrinsic. The experiment was conducted between April 20 and October 24, 2024, and targeted a total sample of 945 Saudi national respondents, and aged 18 years to 70 years old. Participants were randomly intercepted in public places across Saudi Arabia, and completed a structured survey designed to test how different motivational strategies influence financial donations to the cultural sector. At the beginning, respondents were asked about their past donation behavior, and the perceived barriers and motivations to donate to the cultural sector, before entering the donation task. In this task, respondents were presented with a short description of two associations eligible to receive financial donations (one in the cultural sector and the other focused on environmental protection) and were informed that they had 25 SAR to donate to these associations. Their task was to decide how to split the received amount between the two associations (or donate all the money to one of them), and the instructions emphasized that the amounts allocated to each association would result in real donations upon the completion of the experiment. The experimental conditions varied in how the cultural association was described to the respondents: Besides the scope of the association’s work described in the control condition, the experimental conditions included an extrinsic (“By donating 15 SAR or more to the [cultural association name], you will be part of the people who are on the donors list and your name will be shared with the [cultural association name]”), or intrinsic (“By donating 15 SAR or more to the [cultural association name], you can make an active contribution to preserving the Saudi heritage and its national value.”). Additional questions on respondents’ beliefs about donations to each of the two associations as well as their intentions on future donations were added after the donation task. Ethical considerations were strictly observed. The study was approved by ethics committee from the GfeW (German Association for Experimental Economic Research, under IRB Certificate No. rt9ThGQe).

Results

Independent samples t-tests (two-sided) were used to test the impact of motivational framing on financial donations to the cultural sector, with a specific focus on extrinsic and intrinsic motivational drives. Results from the donation task showed that highlighting the impact of donations significantly enhanced actual donations to the cultural association. Respondents exposed to this framing allocated 9.16% more money to the cultural association than those in the control condition (t (628) = 2.73, p < 0.01). Providing an option for public recognition such as sharing the name of people who donated to the cultural association, also increased marginally actual donations. Respondents exposed to this framing donated 5.29% more money to the cultural association than those in the control condition, but this difference is only weakly significant t (629) = 1.68, p = 0.09).

Conclusion

The results emphasize the efficacy of tailored motivational strategies in encouraging donations to the cultural sector, extending the insights from previous research to the cultural sector (Saeri et al., 2023). Particularly, intrinsic motivation is highly effective in promoting donations to the cultural sector. These findings offer valuable insights into designing effective donation campaigns in the cultural sector, suggesting that impact awareness can play a fundamental role in fostering financial support. However, it is important to acknowledge potential limitations in the experimental design. Respondents might be more generous or ambivalent with money that they do not own, which could lead to inflated decisions. Individuals are generally more emotionally attached to their own resources, which influences how they allocate funds. This emotional component may be missing when participants handle external funds. Additionally, risk preferences and loss aversion tend to be stronger when dealing with personal money, often resulting in more conservative or calculated decisions compared to experimental settings. To address this limitation, future studies could implement real-money incentives where participants make decisions with their own money, even in smaller amounts, to introduce personal stakes into the decision-making process. To enhance future campaigns and further leverage intrinsic motivation, donation appeals should highlight the direct impact of contributions on preserving and promoting cultural heritage. This can include showcasing tangible outcomes, such as funding local artists, restoring historical landmarks, or supporting traditional crafts. Cultivating a sense of ownership by positioning donors as essential supporters of cultural continuity and aligning contributions with shared cultural values can also tap into intrinsic motivations. Providing donors with autonomy by allowing them to select specific cultural projects to support can foster deeper personal satisfaction and engagement. Regular updates, including impactful stories from beneficiaries, can strengthen the sense of relatedness and achievement. Framing donations as meaningful acts of cultural preservation that contribute to self-growth and legacy-building further emphasizes the lasting personal satisfaction associated with their contributions.

ABSTRACT. Commonly, left-leaning political orientations may be perceived to favor more social and benevolent policies that aim to achieve higher levels of equality as opposed to conservative or right-leaning policies. In a first of two studies, I investigate whether different measurements of prosocial behavior, including an incentivized donation experiment and a series of self-reported real-world behaviors – such as blood and money donations and voluntary work – correlate with political preferences. Data for this study were collected within a large-scale citizen survey comprising 13,499 observations from nine European countries. Participants were asked to rate their political preferences on a left-right scale. I use mixed linear models to estimate effects standardized at country level and observe that higher scores for most prosocial behavior markers are, on average, associated with left- rather than right-leaning political orientations. These results prompt further investigations into whether voters consider the potential impact on others in voting decisions in parliamentary elections, which may involve a conflict between one’s own and other-regarding interests. With study 2, I therefore investigate if voters’ decisions in parliamentary elections are motivated by egoistic or social concerns, that is, whether and to what degree voters consider potential effects of their votes on other members of the society. I do so by asking a representative sample of 6,107 German citizens collected in May 2024 to assess on 7-point response scales their perception of how the work of existing, major political parties affect, firstly, their personal wellbeing and, secondly, the overall wellbeing of people in their society. Results show that respondents see stark differences between parties, which strongly align with their general party preference. However, hardly any differences are seen between the same parties’ effect on oneself vs. on all others, indicating that voting for the favored party is commonly perceived as both the individually and socially best option. ---------------------------------------------------------------------------- see attachment for extended abstract

ABSTRACT. More than ever before, people make important decisions while distracted. Accordingly, institutions increasingly use default options to assist people in making decisions even when distracted. Defaults are powerful: when set wisely, defaults can promote a range of desirable behaviors. By the same token, however, poorly set defaults can promote undesirable outcomes. In the current work, we tackle the question of whether distractions increase the reliance on defaults and whether this increased reliance depends on the type of default. Specifically, we ask, are defaults set on self-serving, rather than prosocial alternatives, especially likely to be chosen in distracting environments?

Hypotheses Work on (i) moral wiggle room (people’s tendency to justify self-serving choices by using situational excuses) and (ii) motivated attention (people’s tendency to focus on self-serving, rather than self-harming, information) suggest that distractions will draw people’s attention away from task-relevant information, increasing people’s reliance on defaults. For those who need an excuse to make self-serving choices, such an environment should be more attractive when there is a self-serving, rather than a prosocial, default setting in place. Accordingly, we expect distractions to increase the likelihood of the default option being chosen, especially when the default is set on a self-serving option as opposed to a prosocial option (H1). We further hypothesize that individual differences in mind wandering will moderate the predicted effect. People who have a high tendency to mind wander—those who are likely to have stimulus-independent thoughts when performing well-practiced tasks—are more susceptible to external, task-irrelevant distractions. Mind-wandering can be deliberate, characterized by a willful shift of attention to task-irrelevant content, or spontaneous, reflecting the process of involuntary attentional capture despite one’s best attempt to focus on their current task. We predict that people who are high (vs. low) on deliberate mind-wandering will rely more on the self-serving (vs. prosocial) default under distraction (vs. no distraction; H2). We do not expect individual differences on spontaneous mind-wandering to moderate the predicted effect.

Methods To test our hypotheses, 584 participants completed an online repeated binary dictator game in which they decided between two options that determine their own payoff and the amount of money that will be donated to a child in need. We implemented a 2 (default: self-serving vs. prosocial) x 2 (distraction vs. no distraction) full factorial within-subjects design. There are 10 set of choices with jittered payoffs for self and the child. Participants reacted to the same set of 10 choices four times, once with a prosocial and once with a selfish default, as well as with and without distractions, making up to 40 trials in total. On distracting trials, we presented a positive-valence graphics interchange formats, and on non-distracting trials, a grey rectangle (Figure 1). Participants also completed the 6 primary sliders measuring Social Value Orientation (SVO), the Mind Wandering Deliberate scale, and the Mind Wandering Spontaneous scale.

Key finding #1: Strong default effect but no distraction effect When there is no distraction, participants were more likely than chance to choose the prosocial default (β = 1.142, p < .001). When there is no distraction, participants were less likely to choose the default option when it is self-serving compared to prosocial (β = -0.933, p < .001). The simple effect of distraction (β = -0.003, p = .953), and the interaction between distraction and default were nonsignificant (β = 0.009, p = .907), lending no support for H1.

Key finding #2: Deliberate and spontaneous mind wandering are associated with different behaviors and carry different financial consequences for the child. As depicted in Figure 2, panels A and B, high levels of deliberate (β = 0.173, p = .008) and spontaneous (β = 0.148, p = .024) mind wandering are related to a higher acceptance rate of the prosocial defaults. Keeping the tendencies to mind wander constant, participants are less likely to choose the self-serving compared to the prosocial defaults (deliberate: β = -0.935, p < .001; spontaneous: β = -0.937, p < .001). Those who mind wander spontaneously are more inclined to reject a default option that decreases donations to the child (β = -0.166, p = .003). Those who mind wander deliberately show less sensitivity to the default type (β = -0.083, p = .144), significantly reducing the donations when the default is self-serving rather than prosocial (β = -0.007, p < .001; Figure 3, panel C). The three-way interaction between deliberate mind wandering, default and distraction was nonsignificant, leading no support for H2.

Key finding #3: 40% of participants are unresponsive to defaults. Defaults have the strongest influence on participants with a prosocial SVO. Figure 3, panel A presents results from a k-means clustering analysis. A large fraction of participants have strong and relatively stable social preferences. Cluster A (n = 254) consists of participants who predominantly choose the prosocial options, with 125 choose strictly prosocially. Cluster B (n = 187) consists of participants who predominately choose the self-serving options, with 109 participants chose strictly selfishly. Defaults still exert an influence on a substantial fraction of participants: Cluster C (n = 76) consists of the intermediate type who are moderately influenced by the default option, accepting more prosocial than self-serving defaults. Cluster D (n = 67) consists of participants who are heavily influenced by default option, regardless of the default type. We further cross-tabulated the clustering results with participants’ SVO category (Figure 3, panel B). 95 percent of participants classified as altruistic are in cluster A. 83 percent of participants classified as competitive and 87 percent of participants classified as individualistic are in cluster B. Only 40 percent of participants classified as prosocial are in cluster A. Clusters C and D are primarily composed of participants with a prosocial SVO (79 percent and 64 percent respectively), indicating that defaults have the strongest influence on these individuals.

ABSTRACT. Inhibiting impulses is not completely explained through reactive inhibition. Rather, inhibiting impulses is achieved through proactive inhibition as well (Criaud et al., 2011). Proactive inhibition is a preparatory mode of inhibition which monitors upcoming impulses, thus ensuring consistency between preference and decisions (Braver et al. 2012). Moreover, resource distribution involves a conflict between preferences and impulsive choices (Speer & Boksem, 2019). It has been suggested that proactive inhibition is involved in the regulation of potentially conflicting upcoming events, thus regulating impulses in advance (Aron, 2011). Also, studies have explored the role of inhibitory processes in executing choices in resource distribution (Sutterlin et al., 2011).

Knoch et al. (2006) reported that inhibiting impulsive reactions is essential for decision-making in resource distribution. Likewise, individuals motivated by fairness suppress selfish impulses (Hu et al., 2022; Cheng et al., 2015). However, some researchers have reported that inhibition impeded fair choices in resource distribution (Calvillo & Burgeno, 2015; De Neys et al., 2011). Maier et al. (2021) also found no role of inhibition in responding to offers in resource distribution.

Hu et al. (2022) showed that response inhibition plays a role in rejection of unfair offers. Using transcranial direct current stimulation (tDCS) to stimulate inhibitory regions like the right dorsolateral prefrontal cortex (rDLPFC), they found that participants with enhanced inhibition were more likely to reject unequal offers. In support, Cheng et al. (2015) found that rejecting unfair offers was positively correlated with activity in brain regions responsible for inhibition.

In contrast, De Neys et al. (2011) found a negative correlation between response inhibition and rejection of unfair offers. Participants with stronger response inhibition were more likely to accept unfair offers. Similarly, Calvillo and Burgeno (2015) reported that those who performed better on the Cognitive Reflection Test (CRT), which measures response inhibition, were less likely to reject unequal offers. This indicates that inhibiting intuitive reasoning errors, rather than fairness, affects choices in resource distribution. Additionally, Maier et al. (2021) found no significant effect of theta burst stimulation (TBS) of the right Dorso Lateral Pre Frontal Cortex (rDLPFC) region in response to unfair opponents in a UG and Dictator Game (DG). Since, rDLPFC is known for engaging inhibition, they suggested that inhibition has no role in responding to offers in resource distribution.

Thus, empirical findings on inhibition’s role in resource distribution are mixed. Therefore, the current study examines the role of inhibition in resource distribution by exploring proactive inhibition of selfish impulses.

A total of 105 participants were recruited for an incentivized Ultimatum Game (UG) screening, with 68 males (64.8%) and 37 females (35.2%) from Maharashtra, India. All had at least an undergraduate education and normal or corrected vision. The screening aimed to identify participants with the highest and lowest rejection rates for unequal offers. Based on rejection rates, 32 participants (23 males, 9 females) with the highest rejection rates and 30 participants (16 males, 14 females) with the lowest were compared for proactive inhibition using a cued go/no-go task (Criaud et al., 2012).

Results showed significantly increased Response Times (RT) in uncertain Go compared to certain Go trials, suggesting that participants took more time to release inhibition in uncertain conditions. The enhanced performance in certain cued trials indicated that cue facilitated the deployment of inhibition in these trials. However, both groups did nit significantly differ in proactive inhibition.

The experiment investigated whether individuals who override selfish impulses in resource distribution differ in proactive inhibition from those who do not. ANOVA results revealed that participants responded significantly faster in certain Go trials than uncertain ones, indicating a facilitatory effect of cueing. However, the absence of an interaction effect between trial type and group suggests no significant difference in proactive inhibition between individuals with different distributional preferences.

The facilitatory effect of cues in the go/no-go task aligns with the finding that proactive inhibition is a default mechanism across tasks (Criaud et al., 2012). Similar findings by Nash et al. (2013) showed an influence of inhibition on exchange of monetary resources. Moreover, it could be that proactive inhibition is associated with initiating offers in resource distribution rather than responding to them. Earlier it has been suggested that inhibition might control selfish impulses of proposers to avoid prospective rejection of offers, thus favouring fair distributions.

The dual mechanisms of control (DMC) framework (Braver et al., 2012) suggests that proactive inhibition is deployed based on prospective threats to goals. However, in the current study’s one-shot incentivized UG, participants had no prior information about their opponents, which might have limited the deployment of proactive inhibition. Prior information about an interacting partner has been shown to enhance inhibition by suppressing goal-irrelevant impulses (Vavra et al., 2024). This suggests that proactive inhibition may play a more significant role when prior expectations are established, as opposed to playing against unknown opponents.

Alternatively, inhibition in resource distribution may operate reactively rather than proactively. De Neys et al. (2011) reported that reactive stopping of emotional impulses predicts UG decisions. Another possibility is that inhibition functions as a capacity-driven process rather than an ability. When individuals’ capacity to inhibit selfish impulses was impaired, they exhibited greater generosity (Schulz et al., 2014). Similarly, limiting cognitive resources affects the ability to regulate prepotent responses, impacting distributional preferences (Achtziger et al., 2016). The study has few limitations, such as gender imbalance, which may have influenced the findings, as research suggests females have superior inhibitory control in social contexts (Bjorklund & Kipp, 1996). Furthermore, lab-based experiments provide control but may lack ecological validity compared to real-world interactions. Future research should explore proactive inhibition in proposers’ offer decisions. Also, potential contribution of reactive inhibition in inhibiting selfish impulses should be considered.

Overall, the findings suggest that individuals who override selfish impulses and those who do not are similar in proactive inhibition.

ABSTRACT. In a growing number of societies disadvantaged, marginalized, and often discriminated groups are struggling with unfair access to resources. Since these vulnerable, underserved, and marginalized groups are more exposed to social injustice, it is crucial to explore ways to change and improve the overall societal situation of the disadvantaged to promote collective and sustainable prosperity. Several scientific organizations also argue that social inequality has become one of the increasingly pressing global problems. Hence, social sciences can inevitably contribute to favorable social changes by investigating the predictors of group solidarity and collective actions, i.e., actions aimed at improving the status and situation of a group and preventing social injustice (e.g., volunteerism, charitable giving, mobilization, participation in social movements, protest). These actions can be executed not only by the members of disadvantaged groups (ingroups), but also by outgroup members as allies. However, collective actions are costly, both instrumentally and socially, because these actions require a considerable amount of personal effort and sometimes resistance to established social norms. Previous studies have identified the dynamics and key predictors of collective action (e.g., group identification, emotions such as anger evoked by perceived injustice, perceived group efficacy of actions to achieve social change – for a review see, e.g., van Zomeren & Iyer, 2009). We propose that the accumulation of predictors can still be broadened by investigating the personal sense of social responsibility as a proximal predictor of collective action.

Although the personal sense of social responsibility is a long-ago suggested and relevant issue in potentially influencing collective welfare (e.g., Berkowitz & Lutterman, 1968; Starrett, 1996), it is still an understudied motivational factor that can increase people’s engagement in collective actions. Based on previous, but sometimes overly multi-faceted apprehensions and consequently long measures of social responsibility and similar concepts (e.g., philanthropy), we propose a concise, 8-item measure of the construct. The scale development was aimed at capturing the personal preferences for improving society, monitoring and shaping public affairs, and helping societal groups in need.

Given the previously identified, but typically weak-to-moderate relationships between collective action and various social beliefs (e.g., support for economic inequality, social dominance orientation), in Study 1 we examined the strength of the connection between social beliefs and social responsibility on one hand, and between this sense of responsibility and collective action on the other. The study was conducted on a Hungarian sample (N = 870) that was representative in terms of age, gender, and type of residence. We used our measure of social responsibility and – among other things – we measured different social and political beliefs, i.e., support for economic inequality, rationalization of inequality, social dominance orientation, and system justification. Participants also reported their socioeconomic status and collective actions they performed during the last months. Collective actions were defined broadly in our study, ranging from charitable giving or volunteerism to signing petitions or protesting. According to our results, the social responsibility scale showed a good internal consistency. Our findings also confirmed the negative and weak relationships between the measured social beliefs and collective action. Social responsibility scores were significantly and negatively related to all social beliefs measured in the study. In addition, social responsibility was positively associated with the reported level of collective actions. Analyses of mediation also confirmed that the negative associations between all the previously mentioned social beliefs and collective action was fully mediated by the personal sense of social responsibility.

Relying on the findings of Study 1, in Study 2 we wanted to check whether a frequently studied predictor of collective action, namely perceived group efficacy of actions in driving social change, has an indirect effect on collective action through the personal sense of social responsibility, and this time both past collective actions and future intentions to engage in collective actions were measured. Results from an again representative Hungarian sample (N = 1001) showed that perceived group efficacy in improving the situation of the disadvantaged positively predicted not only past helping, but also future collective action intentions, and these relationships were partially mediated by social responsibility.

In Study 3 (N = 680, Hungarian participants) we experimentally examined whether social responsibility can be increased by a simple writing task (adapted from Piff et al., 2020) making external (systemic) causes of being disadvantaged more accessible. Compared to participants in the control condition, those writing situational attributions for marginalization showed a higher level of social responsibility. In addition, an elevated level of social responsibility was significantly and positively associated with collective action intentions toward the presented disadvantaged groups (e.g., Roma people, the poor). We also found a partial mediation of social responsibility between the experimental shift of situational attributions and collective action intentions.

In sum, the presented studies suggest that the personal sense of social responsibility is a detectable, considerable, and even boostable predictor of collective actions. Thus, our findings imply that social change in favor of the disadvantaged can be achieved by increasing individuals’ sense of social responsibility. Limitations of our studies, practical implications of the results, and questions for future research will also be discussed in the presentation.

References Berkowitz, L., & Lutterman, K. G. (1968). The traditional socially responsible personality. Public Opinion Quarterly, 32(2), 169-185. https://doi.org/10.1086/267597 Piff, P. K., Wiwad, D., Robinson, A. R., Aknin, L. B., Mercier, B., & Shariff, A. (2020). Shifting attributions for poverty motivates opposition to inequality and enhances egalitarianism. Nature Human Behaviour, 4(5), 496-505. https://doi.org/10.1038/s41562-020-0835-8 Starrett, R. H. (1996). Assessment of global social responsibility. Psychological Reports, 78(2), 535-554. https://doi.org/10.2466/pr0.1996.78.2.535 van Zomeren, M., & Iyer, A. (2009). Introduction to the social and psychological dynamics of collective action. Journal of Social Issues, 65(4), 645-660. https://doi.org/10.1111/j.1540-4560.2009.01618.x

ABSTRACT. This article presents the creation of a network by Brazil's first Behavioral Science unit, CINCO. Shortly after its establishment, a derivative network, CINCONECTE, was launched in November 2023. In its first year, CINCONECTE has engaged over 2,000 participants, including individuals and partner institutions, standing out as an innovative initiative for disseminating and applying behavioral science within the Brazilian federal government. Its primary goal is to connect public servants, volunteer researchers, and policymakers interested in collaboratively using behavioral science to address public challenges. The network's governance has facilitated greater coordination across government levels, optimizing resources and fostering innovation, while also promoting horizontal knowledge exchange, enabling diverse stakeholders to contribute to the enhancement of public services and policies. In this context, CINCONECTE, as a network for innovation and behavioral science in the Brazilian public sector, can be analyzed in light of recent literature on network governance, which emphasizes inter-organizational collaboration and coordination among multiple actors in policymaking. This study seeks to answer the following questions: how has the network formation process unfolded? How has CINCONECTE contributed to expanding the use of behavioral science within the Brazilian government? What strategies have been employed and what key results have been achieved after one year of implementation? and how have the Study and Experiment Groups (GEEs), which form the network's core innovation units, been structured and developed? The methodology applied in analyzing CINCONECTE’s records is descriptive and qualitative, based on document collection and systematization of activities conducted in its first year. The main findings indicate that the network has influenced the formulation and implementation of public policies across various sectors. Among its 2,000-plus members, the Master Collaborators stand out, actively engaging in network governance and development through working groups that meet periodically to discuss and make consensus-based decisions on priority themes. Another key pillar of the network is the GEEs, which function as innovation labs, conducting applied research and testing solutions for public challenges. Currently, three GEEs are active: GEE Silence, which examines the impact of noise on decision-making; GEE Disinformation, which explores strategies to combat fake news; and GEE Management, which investigates the application of behavioral science in public administration. For 2025, the creation of the Integrity GEE is planned, focusing on interventions that promote ethical and integrity-driven behaviors. Despite having existed for just one year, two pilot experiments have already been conducted. The first, led by GEE Silence, piloted an intervention using an application to assess mindfulness as a tool for reducing the impact of everyday noise, such as conversations and construction sounds, involving approximately 25 participants. The second, led by GEE Disinformation, tested a nudge-based intervention to enhance users’ ability to identify fake news, engaging over 80 participants. The third active group, GEE Management, has yet to conduct an intervention but is researching why people perceive multitasking as more productive, despite scientific evidence suggesting otherwise, with the goal of establishing a deeper diagnostic understanding before designing an intervention. Beyond the GEEs, CINCONECTE fosters collaboration and knowledge sharing through events, publications, and experimental projects. In its first year, the network has published 10 newsletters (CINFORME) to expand behavioral science’s impact in the public sector, hosted seven webinars attracting nearly 900 live participants and generating almost 7,000 views on its YouTube channel, and offered six free training courses in behavioral science—COMPORTAMENTO & TAL—taught by network members. This exchange of evidence and insights has contributed to the implementation of innovative approaches and provided empirical support for more effective public policies. The descriptive analysis underscores that partnerships are crucial to CINCONECTE’s success. Collaboration between academic institutions, the private sector, and government agencies enhances the impact of initiatives and accelerates their implementation. However, challenges remain, including integrating diverse areas of expertise and securing resources to ensure the network’s long-term sustainability. In conclusion, CINCONECTE demonstrates the potential of collaborative networks in advancing behavioral science within the Brazilian government and serves as a valuable reference for other governments, particularly in the Global South. Ideally, regional networks could also emerge, driven by ongoing exchanges and cooperation. So far, CINCONECTE’s approach has proven effective in promoting evidence-based solutions and fostering a more efficient, citizen-centered public sector. From a practical standpoint, the network can serve as a model for other government initiatives and potentially become a benchmark. Theoretically, it reinforces the significance of network governance in public-sector innovation. Future research should focus on deepening the evaluation of the GEEs’ impact, possibly developing specific methodologies for this purpose. [1] CINCO – Coordenação-Geral de Inovação e Ciências Comportamentais – Ministry of Management and Innovation Brazil cinco@gestao.gov.br [2] CINCO – Coordenação-Geral de Inovação e Ciências Comportamentais – Ministry of Management and Innovation Brazil cinco@gestao.gov.br [3] Vértice Psi – Instituto de Psicologia Econômica e Ciências Comportamentais; IAREP- the International Association for Research in Economic Psychology President; verarita@verarita.psc.br

ABSTRACT. Despite the growing global recognition and adoption of applied behavioral sciences in public policy, the implementation of such approaches in the public sector varies across countries due to structural and institutional constraints (OECD, 2017). In Brazil, behavioral insights (BI) have primarily been applied within a few innovation centers and specific government departments, lacking a sustained strategy for broader integration into public policy. A significant milestone in advancing this agenda was the launch of CINCO, a dedicated behavioral insights unit within the federal government, in September 2023. Housed within the Ministry of Management and Innovation in Public Services, CINCO aims to expand the application of BI in policymaking. However, its capacity remains limited compared to the full potential of behavioral-informed policies, and the challenge of integrating this perspective and methodology more broadly in the public service persists. To address this challenge, CINCO established the CINCONECTE network, which brings together public servants, practitioners and academics interested in behavioral public policy. This initiative fosters knowledge exchange through discussions, webinars, training sessions, and other engagement opportunities. In alignment with this effort, we developed a mentorship program for public servants working on health-related behavior change challenges. The primary objectives of this program are to identify key stakeholders responsible for behavioral challenges within the public sector, and to investigate barriers and facilitators for applying behavioral methodologies. The mentoring sessions also have the objective of boosting the agenda in this domain, crafting a space for guided counseling on technical and practical questions that might arise when attempting to start a behavioral design project (whether to be advised by the specialists or by their public servant peers), and possibly creating further demand for technical expertise. The program will focus on the first and second stages of the behavioral design process (define and diagnose), as well as preliminary concerns (such as how to communicate about the agenda/ project to superiors, how to gather data, and how to prioritize projects). Rather than offering expository training, the mentorship program creates a safe and collaborative space where participants can openly discuss challenges and receive practical guidance. The mentorship will consist of five biweekly encounters, each lasting two hours, facilitated by two behavioral science specialists, with previous experience in the public and private health sectors, and one representative from CINCO. Participation is free of charge. Out of 54 applicants, 15 projects (each with one to three participants) were selected based on two criteria: 1. relevance of the proposed challenge (i.e., whether it constitutes a behavioral issue; and 2. participant commitment and availability, as assessed through a preliminary survey. The initiative was promoted through WhatsApp groups, email lists, and direct outreach to professionals in health-related public sector organizations, including the federal Ministry of Health and municipal health departments. Selected participants completed a baseline survey to assess personal and contextual characteristics influencing their projects, as well as to identify possible barriers and facilitators. A total of 11 participants responded. The survey included individual characteristics of the project proponent (asked to be answered only by the project leader), which maps capability and motivational aspects, social context characteristics of the project proponent, opportunity factors for conducting the project, and characteristics of the project itself. Individual characteristics to measure capability included age, gender, education, domain-specific knowledge, English proficiency (since most of the area’s material is in English), the Entrepreneurial Personality (EP) scale, which measures the dimensions of innovativeness, risk-taking propensity, achievement orientation, proactiveness, locus of control, self-efficacy, and autonomy orientation (Howard, 2023). We translated the scale into Portuguese and used an AI tool for double validation. The inclusion of entrepreneurial characteristics was inspired by the concept of policy entrepreneurs (Kingdon, 1984). Motivation was measured through asking about the interest in the topic, the motivation to participate in the mentorship, the motivation to conduct the project as part of one’s work duties, and the priority ranking relative to other duties (all of them in 1 to 7 likert scales). Social context characteristics assessed awareness of colleagues who have applied BI, involvement in behavioral science networks, and previous exposure to the field. As for the opportunity aspects, we mapped the support from direct supervisors and top-level policymakers, expected time allocated to the project, availability of financial resources, and team involvement. Finally, we investigated projects characteristics, following discussions on OECD’s BASIC report (Hansen, 2018), WHO’s report (2024), and our previous experience overseeing projects in Brazil’s public sector, such as the priority of the challenge being acted upon, the urgency of the challenge, data availability, access and organization, the estimated sample size, the clarity upon what is the behavioral challenge to be worked upon, the control over the process/ communication channel, and the number of areas involved in the policy (as to measure governance). Follow-up surveys will be conducted at the end of the mentorship program, as well as 6 and 12 months later, to assess changes in project progress, individual capacities, and contextual factors. Outcome measures include whether the project was continued, whether there was an Implementation or testing of a behavioral intervention, whether technical capacity was hired to conduct the project (behavioral scientists, data analysis), and whether other behavioral sciences projects were initiated. We will also map specific knowledge, motivation, social context, opportunity aspects, and project characteristics. This paper presents descriptive analyses of the baseline survey responses and qualitative insights from participant discussions during the mentorship sessions. Findings will contribute to understanding the key bottlenecks and enablers of applying BI in Brazil’s public sector, providing practical recommendations for scaling up behavioral science initiatives in government.

References: Howard, Matt C. Creation of the entrepreneurial personality scale: Removing conceptual and empirical barriers from the study of personality and entrepreneurship, Journal of Business Venturing Insights, Volume 20, 2023. https://doi.org/10.1016/j.jbvi.2023.e00398. Kingdon, J.W., 1984. Agendas, alternatives, and public policies. Brown and Company. OECD (2017), Behavioural Insights and Public Policy: Lessons from Around the World, OECD Publishing, Paris, https://doi.org/10.1787/9789264270480-en.

ABSTRACT. In this paper, we present the expansion of behavioural insights applications within Ofcom. From a standing start in 2022, we have built an inter-disciplinary Behavioural Insights Hub. Along the way, we have developed a toolkit of online Randomized Controlled Trials (RCTs), rapid A/B testing, behavioural audits, and strategic behaviour change programmes. Our discussion focuses on how we are using behavioural insights to develop and implement policy. We illustrate our findings through three mini-case studies:

1) Behavioural audits of social media companies’ practices. • Problem: Social media platforms’ online choice architecture (‘OCA’) practices can deliberately or inadvertently lead people to make choices which are not in their best interest and thereby make them less safe online. To understand the impact of these practices on users’ behaviour we needed a systematic way to analyse them. • Remedy: We conducted a behavioural risk audit on “age gates” on the most popular social media platforms, to learn what they’re doing and hypothesise how it might be affecting user behaviour. • Result: Our first behavioural audit highlighted the pervasiveness of suboptimal defaults on self-declaration age gates, and opened the door for further exploration of how OCA is being used to affect time people spend online.

2) Strategic application of behavioural theories to policy implementation • Problem: The Online Safety Act applies to platforms large and small that host user generated content. Many of these small firms will not be aware of their obligations nor will they have extensive resources to develop their understanding of their obligations when they do become aware of their obligations. • Remedy: We have designed implementation plans for the OSA for smaller businesses using the Stages of Change Model, combined with other frameworks such as COM-B for diagnosing problems and EAST for developing specific interventions – leading to a range of tools to drive compliance with the Act. • Result: The behaviourally-informed digital tools and communications will ‘go live’ soon.

3) Online randomised control trials • Problem: We needed to draft codes of practice for online platforms to follow. However, the evidence base for ‘what works’ in the design of safety measures was very limited. • Remedy: We ran a series of online randomised control trials to understand what works in the effective design of safety measures. • Result: The results of our trials supported the evidence base of the codes of practices which platforms must now adhere to.

This paper highlights the practical applications of behavioural insight in policy-making and the development of tools to support policy implementation, offering valuable insights for regulators and policymakers.

ABSTRACT. The article describes initiatives, mainly in the public sector, involving economic psychology and behavioural science taking place in Brazil as early as 2007 often combining with financial education in different areas. The extent to which they have been able to reach and spread over the country and sometimes the region, make it noteworthy that despite the fact that Brazil had yet barely begun to accommodate behavioural science research in the realm of academic work at that time, it was possible to carry them forward and open ways for those willing to try and incorporate economic psychology and behavioural science in their studies and work. Unlike established institutions more often found in the northern hemisphere, where economic psychology has been present in universities since the beginning of the 20th century (with Gabriel Tarde, in France), and more contemporarily, since 1958 (with Karl-Erik Wärneryd, in Sweden, followed by several other colleagues in other countries in Europe, later resulting in the creation of IAREP, in 1982), Brazil has started to directly apply research findings in policy-making, or at least clear the way so it could happen as the instances below indicate. One major initiative has been the pioneering introduction of economic psychology in the National Strategy for Financial Education, from 2008 on, initially led by 8 government departments (the four financial regulators – CVM, the Brazilian equivalent to the Securities and Exchange Comission, the Central Bank of Brazil, PREVIC, National Supplementary Pension Plans Superintendence, SUSEP, Private Insurance Superintendence; the Ministry of Education; the Ministry of Justice, with the National Consumer Secretary; the Ministry of Social Security; the Ministry of Economy). Another one involved the Central Bank of Brazil in several levels: starting with an introductory course on economic psychology for the financial citizenship and education department, with subsequent participation of economic psychology in a financial inclusion forum (both in 2010), a financial education workshop (2011), a full project with the British embassy to investigate credit and indebtedness in Brazil in 2012-13 (including exchanges with experts in the UK, a workshop for servants from different branches all over Brazil, two lengthy reports and a final seminar for stakeholders, authorities and the financial citizenship and education department). It culminated with a project to integrate economic psychology associated with financial education in their Money Museum (2013-15), with a Memorandum of Understanding with IAREP in 2013, and a final interactive exhibit of financial education incorporating economic psychology and behavioural insights at the Museum, and some branches, for a general audience but moreover students in all levels, particularly from public schools. Economic psychology contributions have also been made to financial education short videos, while the discipline was made into one of the pillars for their financial citizenship program and in 2014 a practitioner with expertise in the area was indicated by the Bank to become a member of the OECD International Network on Financial Education (INFE). The third initiative is related to CVM, the Brazilian Securities and Exchange Commission, that hosted the first behavioural science and investor education conference in Brazil, in 2013, holding yearly editions until the mid-pandemic period, and inviting several IAREP members as keynote speakers. In 2014, another pioneering step was the founding of a Behavioural Science Group (NEC, in Portuguese) in CVM, , with members coming from the academy, the financial market and other local experts, followed by the introduction of economic psychology and behavioural science in IOSCO-the International Organization of Securities Commissions, and in other countries over the American continent, the publication of a report on behaviourally-informed programs and initiatives and digital booklets covering different features of behavioural biases for investors, savers and consumers (2015-17). The fourth addressed consumer protection at PROCON-SP, the state consumer protection agency in São Paulo, taking the first steps back in 2007, with lectures for their employees, also open to interested consumers, and gradually developing into a formal economic psychology training for mediators and the agency technicians involved in a pilot program to tackle over indebtedness in 2012, in partnership with the State Court of Justice, that aimed to assist over indebted consumers negotiate with their creditors in collective agreements outside of formal judicial processes. Interest in the discipline also spread to other states and cities, with lectures and short courses provided. Lastly, an introductory extension course on economic psychology started to be offered in 2005, first at scientific conferences or in company, and as of 2006 until now, open to general audiences and linked to different educational institutions over the years, helping disseminate the discipline among students and potential policymakers as well. Expansions from these early initiatives are also mentioned as they have, directly or indirectly, triggered the participation of economic psychology often linked to financial education in events in other Latin American countries (Costa Rica, with their SEC, Uruguay and Paraguay, with their Central Banks, plus the US, with FINRA-The Financial Industry Regulatory Authority) and workshops sponsored by the World Bank in Vietnam (with the Ministry of Education) and Colombia (with their SEC). Other developments have taken place in Brazil, such as seminars at other public institutions, like the National Supplementary Pension Plans Superintendence, the Private Insurance Superintendence, the National Consumer Secretary at the Ministry of Justice. In conclusion, it is expected that this report may also inspire other countries in similar conditions to try and develop their own paths to include and develop economic psychology in whatever manner may be available to them at the time. The discipline holds vast solid literature and can help address different issues and specific challenges in different sectors, so exchanges of experience may enhance the track each builds towards making economic psychology relevant and useful. The Brazilian process may indicate that alternative routes can open doors for economic psychology (and behavioural science), especially in the Global South.

ABSTRACT. The article describes the Latin American Behavioral Science Conference held in November 2024 in Rio de Janeiro, presenting its objectives, outcomes, and implications for the regional advancement of behavioral science and public policy. It emphasizes the event’s importance as a milestone for Latin American Behavioral Science and explores its role in fostering collaboration, disseminating knowledge, while addressing culturally specific challenges through innovative approaches by regional stakeholders. The field of Behavioral Science has grown exponentially worldwide, particularly in its applications to public policy. In Latin America, this expansion is characterized by unique opportunities and challenges, requiring further documentation and dissemination of its contributions to the Global South. Behavioral Science applications in the public sector in Latin America began with pioneering initiatives in 2014 like NudgeRio by Rio de Janeiro City Hall and Núcleo de Estudos Comportamentais by The Securities and Exchange Commission of Brazil. Other initiatives have since emerged, including those by institutions from Brazil (011.LAB, CINCO, Federal Revenue Office), Uruguay (CEIBAL), Unidad de Ciencias del Comportamiento y Políticas Públicas del Gobierno (Argentina) Peru (MineEDU Lab), etc., and institutions from other parts of the world that develop projects in Latin America, like The Behavioral Insights Team, BeWay and Ideas 42, among others. While some of these have been discontinued, particularly government units, they highlight both progress and ongoing challenges in the region. It is important to recognize that these initiatives were preceded by efforts from researchers and consultancies, like Vértice Psi. Documenting this event preserves its contributions, facilitates the replication of best practices, and underscores the region's unique perspectives. The Conference took place in Rio de Janeiro on November 13, 2024, at the Rio Operations Center, inaugurating the “G20 Conference Room,” a new space for meetings during the G20 Summit. Organized and funded by NudgeRio, a unit of Rio de Janeiro City Hall, it was a pioneering event that gathered local and global stakeholders to discuss Latin American behavioral science, showcasing NudgeRio’s 10-year journey and exploring ideas for a multilateral document on intersectoral and interdisciplinary cooperation. Leveraging the G20 platform, the event amplified the visibility of Behavioral Science in the Global South, highlighting their alignment with global agendas on sustainability, public health, and governance. It was the sole behavioral science side event of the 2024 G20 Agenda and strategically timed within the Urban 20 Summit (November 14-16) in Rio. NudgeRio also hosted the panel “Behavioral Science to Address Urban Social Issues” on the U20 mainstage, allowing Conference speakers to discuss regional projects and NudgeRio’s achievements with the broader public. The target audience included Latin American and international representatives from Nudge Units, universities, research centers, consultancies, and public authorities. The 50 attendees at the conference, representing institutions from diverse fields, countries and regions of Brazil, were carefully selected to facilitate face-to-face interaction and dialogue. The event began with opening remarks by Rafaela Bastos, followed by two morning sessions featuring four distinguished speakers: 1. Michael Hallsworth, Chief Behavioral Scientist at The Behavioral Insights Team (BIT), discussed BIT’s projects in Latin America, including initiatives to improve tax compliance in Guatemala and increase vaccination uptake in Argentina; 2. Rafaela Bastos, President of the Instituto Fundação João Goulart and Head of NudgeRio, presented NudgeRio’s methodologies, emphasizing culturally responsive approaches to nudge thinking and experimentation; 3. Antônio Claret, Representative of CINCO – the General Coordination of Innovation and Behavioral Science of the Ministry of Management and Innovation in Public Services, highlighted the role of CINCO in democratizing behavioral insights for federal policies and fostering their nationwide development; 4. Gabriel Inchausti, Professor at ESPM, researcher, speaker, and consultant, addressed the state of the art in Behavioral Science academic research and the challenges related to replicability and scalability of behavioral interventions both locally and globally. The session was followed by the roundtable discussion: “Challenges and Contributions of Latin America to Behavioral Science”. Moderated by Rafaela Bastos, the panel featured Manuel Bonduki, professor at Insper and public policy specialist; Mary MacLennan, senior advisor on Behavioral Science at the UN; and Vera Rita de Mello Ferreira, a leading figure in economic psychology in Latin America and former IAREP president. The session explored challenges in knowledge management and application, replicability of projects across Latin American countries, and prospects for institutionalizing behavioral science initiatives in governments and organizations. It also emphasized the importance of tailoring interventions to local contexts and the potential of regional cooperation to strengthen collaboration networks. The afternoon was dedicated to debating macro-guidelines for cooperation and knowledge management in Behavioral Science. Key proposals from the discussions included: Interinstitutional cooperation in policymaking; Establishing a network linking universities, research institutions, and practitioners to facilitate knowledge, methods, and experience exchange; Prioritizing research on specific issues and demands unique to Latin America; Sharing experimental results from the region and fostering cooperation in projects, initiatives, and events; Accounting for cultural and contextual aspects in addressing public challenges and strategies; Promoting transnational studies to better understand differences between countries in behaviorally informed interventions; Creating a repository for scientific research, project reports, and methodological discussions to consolidate regional literature; Highlighting regional methodologies such as Nudge Thinking (NudgeRio), Simples Mente (CINCO), and the "Fab Five" perspective (Vera Rita de Mello Ferreira). The Conference laid the groundwork for a collaborative Latin American behavioral science agenda, with discussions highlighting the region's potential while also addressing challenges like linguistic barriers and limited cross-border representation. The event closed with an intention to strengthen networks, create contextually relevant methodologies, and position Latin America as a leader in behavioral science applications.

ABSTRACT. According to Fiske’s relational models theory (1992), there are four types of interpersonal relationships: communal sharing, market pricing, authority ranking, and equality matching. Among these, communal sharing and market pricing are the most distinct, governed by fundamentally different norms. Communal sharing is driven by intimacy, altruism, and mutual care, whereas market pricing is based on self-interest, proportional exchange, and cost-benefit analysis (Fiske & Haslam, 2004). Although communal sharing is psychologically rewarding and highly desirable, it may not function effectively for individuals with attachment insecurities (Clark & Aragon, 2013). For instance, individuals with high attachment anxiety tend to experience heightened emotional reactivity toward close others, whereas those with high attachment avoidance exhibit lower empathic concern, reduced affective empathy, and diminished perspective-taking, all of which can have maladaptive social consequences (Ecer et al., in preparation). In contrast, market pricing can serve as a buffer against attachment insecurities by providing structure, autonomy, and predictability in relationships (Gasiorowska & Zaleskiewicz, 2021, 2023). In this study, we conceptualize market mindset as an umbrella construct that reflects the tendency to treat interpersonal relationships as market-like, exchange-based interactions rather than communal ones. We propose that individuals with high attachment insecurities—specifically, high attachment anxiety and avoidance—are more likely to adopt a market mindset for several reasons. First, individuals with higher attachment anxiety often seek predictability and immediate reassurance (Gollwitzer & Clark, 2019), while those with higher attachment avoidance prefer independence and distance from vulnerability. Consequently, for individuals with attachment insecurities, asking for help in close relationships can create conflict, a sense of threat, and ambiguity (Gasiorowska & Zaleskiewicz, 2021). As a result, adopting a market mindset becomes an effective coping strategy (Gasiorowska et al., 2023). In a preregistered Study 1 (N = 885 U.K. participants, 452 women, M age = 43.54), we propose that higher levels of attachment insecurities—attachment anxiety and avoidance—are associated with a stronger preference for a market mindset. Furthermore, we predict this relationship will remain significant even after controlling for personality traits, dark triad personality traits, basic psychological needs, self-esteem, self-construal, emotional intelligence, material values, and greed. Additionally, we hypothesize that the need for cognitive closure will mediate the relationship between attachment anxiety and market orientation, while the relationship between attachment avoidance and market orientation will be mediated by agency. Our findings indicated that attachment insecurities were significantly related to a market mindset, and this relationship remained significant after controlling for the aforementioned variables. Most importantly, we found that attachment anxiety was positively associated with a higher market mindset through an increased need for cognitive closure. However, we did not find a mediation effect of agency in the relationship between attachment avoidance and market mindset. While Study 1 demonstrated a robust effect of attachment insecurities on market mindset, it was correlational in nature. Therefore, in a preregistered longitudinal Study 2, we re-invited participants from Study 1 who had passed attention checks and provided valid Prolific IDs (n = 879), and 648 participants (M age = 46.30, SD = 13.21) participated in the second wave one year after the first wave. We aimed to test the causal relationship between attachment insecurities and market mindset over time by examining whether the relationship between attachment insecurities and market orientation remained stable across time points (T1 to T2). Additionally, we tested whether attachment insecurities at T1 causally influenced market orientation at T2 (causal relationship model). We also explored a reversed causation model, in which market orientation at T1 predicted attachment insecurities at T2 and a reciprocal causation model, which combined both effects. We expected the causal relationship model to best explain the data, highlighting the significant predictive role of attachment insecurities in shaping market orientation over time. Similar to Study 1, market orientation was modeled as a latent variable including calculative mindset (Kim., 2021) and exchange orientation in both romantic relationships (partner/spouse) and acquaintance/colleague interactions (Gasiorowska et al., 2023). However, this latent variable did not exhibit a good model fit (TLI = 0.44, CFI = 0.17). Gasiorowska et al. (2023) found that correlations for exchange orientation shift when participants indicate different close and stranger identities over time. Consistent with this, the majority of participants in Study 2 (N = 513) reported a different stranger at Time 2 compared to Time 1. Therefore, we separately analyzed calculative mindset, exchange orientation toward a close person, and a stranger. Our causational model showed that attachment anxiety at Time 1 was not related to exchange orientation toward a stranger at Time 2, similar to attachment avoidance. However, both attachment anxiety and attachment avoidance at Time 1 were related to exchange orientation toward a close relationship at Time 2. Finally, attachment anxiety at Time 1 positively predicted the calculative mindset at Time 2. As we predicted, this model had the best model fit index. However, the reversed causation model, in which market mindset at T1 predicted attachment insecurities at T2, was not supported. Similarly, the reciprocal causation model showed weak fit indices (TLI = 0.44, CFI = 0.17), indicating that attachment insecurities more strongly influenced market mindset rather than vice versa. To sum up, we found that attachment insecurities have a significant effect even after controlling for various psychological traits. People with high levels of attachment anxiety tend to have an increased need for cognitive closure, which results in a market mindset. However, agency did not mediate the relationship between attachment avoidance and a market mindset. Finally, we confirmed that attachment insecurities predict a market mindset over time, particularly in close relationships. Our findings suggest that attachment insecurities play a significant role in shaping a market mindset

ABSTRACT. INTRODUCTION Among the theories of other-regarding preferences inspired by traces of altruism in economic behavior, the Fehr and Schmidt model (1999, henceforth FS) has arguably been the most influential. FS is a model of self–centered inequality aversion and posits that people are averse to disadvantageous and advantageous inequality — that is, to being poorer or richer than someone else.

Countless extensions to this framework have been proposed. However, to the best of my knowledge, the potential interplay between the advantageous and disadvantageous status has not yet been explored. This oversight is rather surprising, particularly given how saturated this field is and how straightforward the following questions are: Does the presence of the rich influence attitudes towards the poor? Does the presence of the poor influence attitudes towards the rich? In this project, I address this gap in the literature and test the following two hypotheses:

H1: Disadvantageous inequality decreases aversion to advantageous inequality. H2: Advantageous inequality decreases aversion to disadvantageous inequality.

I hypothesize that, in the presence of someone richer than themselves, people feel relieved of their obligations towards the poor and behave less prosocially towards them (H1). Additionally, I hypothesize that the presence of someone poorer makes people less bothered by the wealth of the rich, thus reducing spiteful behavior towards them (H2).

The economic literature has largely neglected such interplay, and yet insights from social psychology support my hypotheses. Studies on social comparison (Festinger, 1954) have shown that upward and downward social comparison (i.e., comparing oneself to someone perceived as superior or inferior) can alter behavior not only towards the target of comparison, but also towards neutral third parties (Moyal et al., 2020; Schlosser and Levy, 2016; Zheng et al., 2015). I believe these studies provide a compelling justification for examining whether, within the realm of income comparisons, resentment towards wealthier individuals can spill over and mitigate sympathy for poorer people, and whether compassion for the poor can mitigate hostility towards the rich.

CONTRIBUTION In this project, I extend the FS model to incorporate my hypotheses and explore how they alter the predictions of the standard model. Furthermore, I test my hypotheses empirically with an online experiment.

First and foremost, my project contributes to the literature on other-regarding preferences by highlighting dynamics previously overlooked. Additionally, it revisits past estimates of the FS model’s parameters, which were typically measured in groups of two players, e.g., where subjects are either richer or poorer than someone else. I argue that evidence from such dyadic interactions should be interpreted with caution, as they may lead to particularly high estimates of inequality aversion.

Moreover, I theorize pro-cyclical adjustments of inequality aversion to inequality itself, suggesting that people’s preferences might accommodate, rather than oppose, an already increasing inequality. Therefore, my research aligns with other micro founded theories of pro-cyclical fairness concerns (Roth and Wohlfart, 2018; Benabou, 2000; Cöte' et al., 2015) and contributes to understanding why income inequality can be a persistent phenomenon.

MODEL EXTENSION In the standard FS model, the utility of player i in a set of n players is given by

SEE EQUATION 1) IN THE PDF

Where R and P are the subsets of players who are richer and poorer than i, respectively. With standard FS preferences (α_i, β_i > 0), the utility of person i decreases over the income of richer people and increases over the income of poorer people. The second term in Eq. 1 is typically referred to as envy and the third term as guilt.

In my extension, envy towards the rich is a decreasing function of advantageous inequality, and guilt towards the poor is a decreasing function of disadvantageous inequality. In a set of n players, the utility of player i is given by

SEE EQUATION 2) IN THE PDF

I refer to γ_i as the relief coefficient, which measures i’s propensity to deflect envy and guilt towards poorer and richer people, respectively. I incorporate two maximum operators to prevent the arguments of envy and guilt from turning negative, meaning that relief can at most nullify the primary feelings it originates from. I assume 0 ≤ γ_i < 1 because, if γ_i > 1, i’s total guilt and envy decrease if the poor give money to the rich, which is implausible. I demonstrate through simple comparative statics that the linear effects I introduce alter the standard model’s predictions by modifying the marginal impact of inequality on i’s utility.

Concerning Hypothesis 1, I show that, in the presence of someone richer, i does not benefit as much from enriching the poor. This occurs because, as the poor become richer, i suffers less guilt but also grows more envious towards the rich. Namely, advantageous inequality aversion goes down from β_i/(n−1) to (β_i−α_i*γ_i)/(n−1) when disadvantageous inequality gets positive, making i less prosocial (or even antisocial) towards the poor.

Concerning Hypothesis 2, I show that the presence of someone poorer than i reduces her disadvantageous inequality aversion from α_i/(n−1) to (α_i−β_i*γ_i)/(n−1). This occurs because, when guilt is activated by advantageous inequality, a further enrichment of the rich makes i more envious but also alleviates her guilt towards the poor, making her less spiteful (or even prosocial) towards the rich.

EXPERIMENT I run an online experiment to test if disadvantageous inequality reduces advantageous inequality aversion (H1), and if advantageous inequality reduces disadvantageous inequality aversion (H2). I conduct a between-subject experimental design where participants are divided into groups of three players, each endowed with different amounts (x_R ≥ x_i ≥ x_P). The focus is on the median earner i.

For H1, I keep x_i and x_P constant across treatments while increasing x_R. Then, i employ a modified dictator game to measure i’s advantageous inequality aversion. In a separate study, I test H2 by keeping x_R and x_i constant across treatments while decreasing x_P. Then, I employ a modified ultimatum game to measure i’s disadvantageous inequality aversion. The experiment is programmed using oTree (Chen et al., 2016), and I plan to run it in the summer of 2025.

REFERENCES See PDF

ABSTRACT. The Problem:

Policymakers have to ignore most of the issues and most of the information available to them most of the time (Cairney 2020, Feldman 1989). In policymaking literature it is often explained by bounded rationality (Cairney 2020, Lindblom 1959, Peters and Fontaine 2022, Peters and Zittoun 2016, Scharpf 1997, Zahariadis 2016).

A Potential Solution:

Mindfulness-based training (MBT) seemingly benefits the quality of decision-making in general (Karelaia and Reb, 2015) and can be a cognitive enhancer (Bostrom and Roache 2007; Kirsh and Maglio 1994: 51). More specifically, “…mindfulness training might be considered an informal training in attention skills” (Verhaeghen 2021).

Based on current evidence, mind-wandering takes up about half of all waking time of a person (van Vugt and van der Velde 2018: 176 citing Killingsworth & Gilbert, 2010; Smallwood & Schooler, 2015, Jha 2021). Rumination and mind-wandering cause “declines in cognitive task performance” (van Vugt and van der Velde 2018: 175), and in model-based decision-making (Liu et al, 2023).

Van Vugt and van der Velde (2018) developed a mechanistic cognitive model of mind-wandering based on ACT-R (adaptive control of thought-rational) architecture and on assumptions that 1) the main task and “off” task mind-wandering are competing for person’s cognitive resources and 2) mind-wandering is “a process of memory retrieval” (van Vugt and van der Velder 2018: 177).

The research on MBT for attention and mind-wandering in particular shows evidence for specific objectives in healthy individuals in highly demanding jobs—military, first responders and fire-fighters (Jha et al 2015, Stanely et al 2011). The MBT application in political contexts is also expanding (Bristow 2019, Lilley 2020) and can be beneficial to policy decision making through various mechanisms, since the MBT reduces, for example, the escalation of commitment (Schmitzer-Torbert 2020), but there is still no data on whether it attenuates the effects of bounded rationality.

Experimental design:

To test the hypothesis that MBT can improve the completion of cognitively demanding task, I design and carry out a randomised field experiment with active and passive control groups. The participants’ problem solving skills are tested 1) prior to mindfulness-based attention training intervention (T1); 2) immediately after the intervention (T2); and 3) in a 30 days follow up (T3). Cognitively demanding tasks are loosely based on the European Personnel Selection Office (EPSO) mock case study—the participants are asked to suggest a solution to a policy issue while respecting a number of limitations. If the MBT (in regards to attention and mind-wandering) indeed helps to reduce “off task” time and frees cognitive resources for main task problem-solving, I expect to see the results at T2 to be better than those at T1; and T3 equal or worse than T2, but better than T1.

Bibliography:

Bostrom, N., Roache, R. 2007. Ethical Issues in Human Enhancement. In Ryberg, J. et al. (Eds.), New Waves in Applied Ethics. London: Palgrave Macmillan. Bristow, J. 2019. Mindfulness in politics and public policy. Current Opinion in Psychology, 28: 87–91. Cairney, P. 2020. Understanding Public Policy: Theories and Issues. London: Red Globe Press. Feldman, M.S. 1989. Order without Design: Information Production and Policy Making. Stanford: Stanford University Press. Jha A.P., Morrison, A.B., Dainer-Best, J., Parker, S., Rostrup, N., Stanley E.A. 2015. Minds “At Attention”: Mindfulness Training Curbs Attentional Lapses in Military Cohorts. PLoS ONE 10(2): e0116889. Jha, A. P. 2021. Peak Mind: Find Your Focus, Own Your Attention, Invest 12 Minutes a Day. San Francisco: Harper One. Karelaia, N.; Reb, J.. 2015. Improving decision making through mindfulness. In J. Reb & P. Atkins (Eds.), Mindfulness in Organizations: Foundations, Research, and Applications (Cambridge Companions to Management, pp. 163-189). Cambridge: Cambridge University Press. Killingsworth, M.A., Gilbert, D.T. 2010. A wandering mind is an unhappy mind. Science. 330, (6006):932. Kirsh, D., Maglio, P. 1994. On Distinguishing Epistemic from Pragmatic Action. Cognitive Science, 18: 513-549. Lilley, R. 2020. Rethinking Government Capacities to Tackle Wicked Problems: Mind, Emotion, Bias and Decision-Making. An Experimental Trial using Mindfulness and Behavioural Economics. Doctoral Thesis, Aberystwyth University. Lindblom, C. E. 1959. The Science of Muddling through. Public Administration Review, 19, 79-88. Liu, S., Rabovsky, M., Schad, D.J. 2023. Spontaneous mind wandering impairs model-based decision making. PLoS ONE 18(1):e0279532 Peters , B., Fontaine, G. (Eds.). 2022. Research Handbook of Policy Design, Cheltenham: Edward Elgar. Peters, G., Zittoun, P. (Eds.). 2016. Contemporary Approaches to Public Policy. Theories, controversies and perspectives. London: Palgrave Macmillan. Peters, B., Zittoun, P. 2016. Introduction. In: Peters, B., Zittoun, P. (Eds.) Contemporary Approaches on Public Policy: Theories, Controversies, Perspectives. London: Palgrave Macmillan UK. Scharpf, F.W. 1997. Games Real Actors Play: Actor-Centered Institutionalism in Policy Research. Westview Press, Boulder. Smallwood, J., Schooler, J. W. 2015. The science of mind wandering: Empirically navigating the stream of consciousness. Annual Review of Psychology, 66:487–518. Schmitzer-Torbert N. 2020. Mindfulness and decision making: sunk costs or escalation of commitment? Cognitive Processing, 21(3):391-402. Stanley, E.A., Schaldach, J.M., Kiyonaga, A., Jha, A.P. 2011. Mindfulness-based Mind Fitness Training: a case study of a high-stress predeployment military cohort. Cognitive and Behavioral Practice, 18: 566–576. van Vugt, M. K., van der Velde, M. 2018. How Does Rumination Impact Cognition? A First Mechanistic Model. Topics in Cognitive Science, 10(1): 175–191. Verhaeghen, P. 2021. Mindfulness as Attention Training: Meta-Analyses on the Links Between Attention Performance and Mindfulness Interventions, Long-Term Meditation Practice, and Trait Mindfulness. Mindfulness. 12:1-18. Zahariadis, N. 2016. Bounded Rationality and Garbage Can Models of Policy-Making. In: Peters, B., Zittoun, P. (Eds.) Contemporary Approaches to Public Policy. International Series on Public Policy. Palgrave Macmillan, London.

ABSTRACT. We focus on the preferences of a salient group of highly-experienced individuals who are entrusted with making decisions that affect the lives of millions of their citizens, heads of government. We test for the presence of a fundamental behavioral bias, loss aversion, by examining heads of governments' choice of decision rules for international organizations. Loss averse leaders would choose decision rules that oversupply negative (blocking) power at the expense of positive power (to initiate affirmative action), causing potential welfare losses through harmful policy persistence and reform deadlocks. If loss aversion is muted by experience and large-stakes it may not be exhibited in this context. We find evidence of significant loss aversion implied in the Qualified Majority rule of the Treaty of Lisbon, when understood as a Nash bargaining outcome. World leaders may be more loss averse than the populous they represent.

This paper focuses on the preferences of a very small, but nonetheless extremely salient, group of individuals who are entrusted with making decisions that affect the lives of millions of their citizens: heads of government. If indeed loss aversion is a basic evolutionary trait then we should expect to observe it within heads of government. On the other hand, heads of government are an unrepresentative sample of the human race. They are, for instance, substantially more cognitively able than average (Dal Bó et al., 2017). Perhaps unsurprisingly, therefore, there is growing evidence that these individuals (and other elite decision-makers) possess superior, or at least different, faculties of decision-making to a more representative sample of the population and, in particular, to the undergraduate students upon which many experimental estimates of loss aversion are based (e.g., Alevy et al., 2007; Hafner-Burton et al., 2013).

A growing body of evidence casts loss aversion as a potentially mutable behavioral bias, arising from the interplay of immediate emotional reactions with deep cognitive preferences in decision-making processes (e.g., Sokol-Hessner et al., 2009, 2013; Andersson et al., 2016; Cheng and He, 2017). Accordingly, some economists (e.g., List, 2003, 2011; List and Mason, 2011; Levitt and List, 2008) argue that loss aversion may go away with experience and large stakes. If so, world leaders, who make large-stakes decisions on a daily basis, should not be prone to loss aversion. Furthermore, political leaders also are known to have higher than average educational attainment (e.g., Dal Bó et al., 2009; Dal Bó and Rossi, 2011), and education is frequently negatively associated with the strength of loss aversion (Booij and Kuilen, 2009; Hjorth and Fosgerau, 2011; Gächter et al., 2022). Also, Inesi (2010) reports experimental ndings indicating that powerful people exhibit less loss aversion.

Our principal analysis studies the adoption in 2007 by European leaders of a new decision rule the so-called Lisbon Quali ed Majority (QM) rule for the European Union Council of Ministers (EUCO). The QM decision rule is a majority rule used by the EUCO as an alternative to unanimity for decision-making in a subset of policy domains. The Lisbon QM rule requires that, to pass, 55 percent of member states must vote in favor of a motion, and those in favor must also represent at least 65 percent of European Union (EU) citizens. Alternatively, a motion also passes if three or fewer countries vote against it. To rationalize this decision rule as a bargaining outcome requires estimates of loss aversion that are (well) above two, providing evidence that EU leaders are loss averse in both an absolute and relative sense. Consistent with our ndings, Axel Moberg, a witness to the negotiation of the earlier Nice QM rule as a member of the Swedish delegation, documents how member states were largely preoccupied with "...the ability of groups of like-minded states to block decisions" (Moberg, 2002: 261), i.e., a negative concept of power (see also Galloway, 2001, Ch. 4). As a robustness check, we show that our qualitative finding of absolute and relative loss aversion among world leaders also holds for the design of earlier negotiations of QM rules back to 1958, and is also robust to perturbations of the baseline methodology.