Three Experiments about Human Behavior and Legal Regulation

Abstract

Each chapter of this dissertation presents the results of an experiment. Chapter 1 tests whether people engage in information avoidance when making privacy decisions. Participants decide whether to share their Facebook profile data with a survey-taker in exchange for money. When people make a direct tradeoff between 50 cents and privacy, roughly 64% refuse to share their Facebook data. However, when participants face a veiled tradeoff and must “click to reveal” to learn whether privacy is free or costs 50 cents, only 40% remain anonymous, and 58% of participants did not click to reveal to learn which payment option was associated with privacy. The findings show that even people who would otherwise pay for privacy seem able to exploit strategic ignorance and deal away their data for small amounts of money. The findings suggest that privacy regulations aimed at giving people more information about data choices will be difficult to execute. Chapter 2 measures race discrimination against Airbnb guests. It finds that applications from guests with distinctively African-American names are 16% less likely to be accepted relative to identical guests with distinctively White names. Discrimination occurs among landlords of all sizes, including small landlords sharing the property and larger landlords with multiple properties. It is most pronounced among hosts who have never had an African-American guest, suggesting only a subset of hosts discriminate. While rental markets have achieved significant reductions in discrimination in recent decades, the results suggest that Airbnb’s current design choices facilitate discrimination and raise the possibility of erasing some of these civil rights gains. Chapter 3 measures the effect of warning labels on soda purchasing. Governments have proposed text warning labels to decrease consumption of sugary drinks – a contributor to chronic diseases like diabetes. We field-tested the effectiveness of graphic warning labels (vs. text warning labels, calorie labels, and no labels) and assessed consumer sentiment. The findings show that graphic warning labels reduced the share of sugary drinks purchased in a cafeteria, but text and calorie labels did not. We also find that public support for graphic warning labels can be increased by conveying effectiveness information.