Working Paper: NBER ID: w16547
Authors: Omar Alubaydli; Uri Gneezy; Min Sok Lee; John A. List
Abstract: A stylized fact is that agents respond more acutely to negative than positive stimuli. Such findings have generated insights on mechanism-design, have been featured prominently in policymaking, and more generally have led to discussions of whether preferences are defined over consumption levels or changes in consumption. This study reconsiders this stylized fact. In doing so, it provides insights into an important domain wherein positive stimuli induce a greater response than negative stimuli: a principal-agent game with reputational considerations and with the agent on the market's short end. This common setting represents an important feature of labor markets with involuntary unemployment.
Keywords: reciprocity; behavioral economics; experiments
JEL Codes: C9; C91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative reciprocity (Z13) | behavioral response (D91) |
| positive reciprocity (D64) | behavioral response (D91) |
| reputation treatment (L14) | positive reciprocity (D64) |
| reputation treatment (L14) | negative reciprocity (Z13) |
| strategic concerns (L21) | reciprocal behavior (D16) |
| threat of exclusion (Y60) | reciprocal behavior (D16) |
| institutional features (D02) | reciprocal actions (D16) |
| one-shot environments (C91) | negative reciprocity strength (Z13) |
| reputation sessions (Y70) | positive reciprocity strength (Z13) |