Essays in Behavioral and Experimental Economics

Abstract

This dissertation consists of essays in behavioral and experimental economics, with a focus on information processing and its economic implication.

The first chapter, coauthored with Yuen Ho, studies the Spiral of Silence theory. According to this idea, people who hold perceived socially inappropriate views self-censor, generating a distribution of expressed views that is skewed towards appropriate opinions. If the attention paid to silence is limited, this can exacerbate self-censorship and create an equilibrium where only socially appropriate views are expressed and considered dominant. We experimentally test this hypothesis based on a simple model in which self-censorship and limited attention to silence interact to jointly establish equilibrium norms. In our experiment, UC Berkeley undergraduates discuss controversial political and socioeconomic issues. Students with socially inappropriate views self-censor to a significant degree. Given the limited attention students pay to silence, self-censorship amplifies over time. We experimentally increase the salience of silence and show that this affects both beliefs about others’ views and public expression decisions. Because inference and expression amplify each other, different levels of attention to silence can produce divergent perceived social norms in equilibrium.

The second chapter, co-authored with Yixi Jiang and Ziqi, explores correlation neglect on social media and its economic implication. In a field experiment on a popular Chinese social media site, we exposed Chinese college students to redundant negative posts about civil service jobs. Consequently, they developed more negative view of these jobs and became less likely to register for civil service exams, compared to the control group. Our study demonstrates that correlation neglect can affect beliefs and real-life outcomes, including career choice.

The third chapter, co-authored with Juanjuan Meng and Xi Weng, studies how awareness of media bias affects news consumers' reactions to potentially biased news. We propose that news consumers’ tendency to repost news articles whose political inclination is inconsistent with the media outlet's general ideology, defined as “inconsistent news”, is an indicator of their strategic responses to news. By combining data from Chinese microblog users and an online experiment that exogenously varies whether news sources are revealed, we provide both observational and causal evidence that Microblog users are more likely to repost inconsistent news, an indication of strategic reaction to media bias. We also show that simply reminding people of media bias can raise their awareness and change their reactions to news reports on social media.