briq Newsroom

student fellows

briq student fellow portraits: Luca Henkel

The briq scholarship program supports about 25 Ph.D. students at the Bonn Graduate School of Economics. Some of them are directly involved in briq research activities. In a series of short portraits, the briq newsroom introduces our student fellows and what they do. One of them is Luca Henkel, who has been at briq since July 2017.

What is your favorite research area?

I’m generally interested in individual decision-making: how do people make choices under various circumstances and situations, and what drives them? In particular, I’m interested in the determinants of moral decision-making and decision-making under uncertainty. The former concerns situations where individual choices might have consequences for other living creatures, while the latter concerns situations where the consequences of decisions are not known with certainty in advance. What makes it particularly interesting for me is that those situations relate to almost all relevant decisions made by individuals in reality.

What is your approach to these questions?

I’m most excited about combining theoretical insights with experimental evidence. That is, bringing together economic modeling and experimental methods to gain new insights into the process of human decision-making in different contexts.

Can you give an example?

In a joint paper with my advisor Armin Falk, as well as Roland Bénabou and Jean Tirole, we use a model to show that individuals’ answers in morally sensitive choices can generally differ from their preferences or “true” moral types if people have reputational concerns. By reputational concerns we mean the desire of people to see themselves, and be seen by others, as a “good person.” As the mo­del makes clear, such tendencies interact with different methods of asking moral questions, generating interesting predictions on the frequency of moral behavior.

How did you test those predictions?

We conducted an experiment where participants face moral choices that have the following options: one option is to trigger a donation to help patients suffering from tuberculosis. The other is to take money for themselves. In one condition, participants made this choice privately, while in another, their choices were observed by multiple other persons. 

What was the outcome of the experiment?

We indeed find evidence for the predi­ctions by the model. We compare two methods commonly used to infer moral preferences from choices. In one method, participants make multiple choices for different sums of money, and only one is potentially implemented with real consequences. In the other method, participants face a single choice for a fixed monetary amount. Presenting multiple choices leads to more donation decisions compared to a single choice – but only if choices are observed by other persons. If choices are made in private, the opposite is true: then presenting a single choice generates more donations. 

What do these findings tell us?

The results may give guidance for the design of questions and choices when the aim is to maximize moral or prosocial behavior such as donations. At the same time, they provide a caveat for those experiments and contingent-valuation surveys that aim at categorizing people by their “true” moral types.

briq student fellow portraits: Peter Andre

The briq scholarship program supports about 25 Ph.D. students at the Bonn Graduate School of Economics. Some of them are directly involved in briq research activities. In a series of short portraits, the briq newsroom introduces our student fellows and what they do. One of them is Peter Andre, who has been at briq since October 2016.

What kind of topics are you working on?

My current research focuses mostly on beliefs and perception. Beliefs matter not only for decision-making under risk as traditional economics would claim. They can matter whenever behavior and reasoning depend on the environment – which is to say: virtually always. It’s usually our perception of the environment, our mental representations, that shape our thoughts and conduct. Now, in some cases, it may be reasonable to assume that our perceptions are correct and reflect what’s out there. However, we know already that this assumption will lead us astray in many important settings: educational or financial decisions, parenting, causal or political reasoning, and social or moral behavior.

Can you give an example?

In a project with Chris Roth, Johannes Wohlfart, and Carlo Pizzinelli, we study macroeconomic belief formation. We analyze how unemployment and inflation expectations react to hypothetical exogenous shocks such as changes in the oil price or federal funds rate. These beliefs are important because they can determine the trajectory of the economy and the effectiveness of policies. They can fuel booms and busts. So are they formed in line with standard macroeconomic models? It turns out that forecasts are often off the mark. This holds particularly for inflation forecasts and respondents with little knowledge and exposure to education.

What is a typical problem you are facing in your research?

In the context of beliefs, measurement is a huge challenge. You often face a trade-off between making the elicitation technique easy to understand for the respondent and theoretically sound.

You also spent two months in Papua New Guinea for field work. What brings an economist to that remote part of the world?

One of the traditional themes in behavioral economics: social behavior. I worked on a project with Andreas Pondorfer and Susann Adloff in the province of Bougainville. We elicited beliefs about what is socially appropriate behavior in different communities and investigated how this perception and the structure of the social network shape behavior and social-image effects.

While overseas, I also experienced personally how crucial perception is. The Bougainvilleans literally live in a different world. As an outsider, foreign to their fascinating culture and norms, I probably misunderstood many of their gestures and statements – and vice versa. On one day, two lunchs were prepared for me at different places – without me knowing about this. And the lunch that I arranged with my host was surprisingly cancelled. I still don’t fully understand what happened.