"Digital Addiction" (PDF) with Hunt Allcott and Matthew Gentzkow, American Economic Review, 112 (7): 2424-63.
Many have argued that digital technologies such as smartphones and social media are addictive. We develop an economic model of digital addiction and estimate it using a randomized experiment. Temporary incentives to reduce social media use have persistent effects, suggesting social media are habit forming. Allowing people to set limits on their future screen time substantially reduces use, suggesting self-control problems. Additional evidence suggests people are inattentive to habit formation and partially unaware of self-control problems. Looking at these facts through the lens of our model suggests that self-control problems cause 31 percent of social media use.
Our op-ed in the Washington Post, short summary in The Research On That. Media coverage: NPR Morning Edition, The Indicator from Planet Money, Fast Company, The Atlantic.
"Gotta Have Money to Make Money? Bargaining Behavior and Financial Need of Microentrepreneurs" (PDF) with Morgan Hardy and Gisella Kagy, American Economic Review: Insights, 4 (1): 1-17.
Bargaining over real prices with microenterprise owners in Ghana, we show that sellers with less per capita household liquidity agree to lower sale prices. This relationship is robust across firms and within firms over time, even after controlling for a plethora of time-varying observables. A computerized bargaining experiment, with randomized initial payout sizes, corroborates the real-bargaining findings. This pattern can be explained by an application of classical bargaining theory that includes endowments and utility functions with decreasing absolute risk aversion. The potential poverty multiplying implications of pricing behavior is a key frontier in understanding barriers to the profitability of microenterprises.
Our post in VoxDev. J-PAL Summary.
"Closing the Distance: The Effects of Social Media Content on Support for Racial Justice"
Social media content has the potential to either bring people together or push them apart. I conduct online survey experiments to investigate the effects of racial justice content on U.S. adults with varying racial attitudes. I show that the effect of social media content depends on the distance between the content and the audience's existing beliefs. This distance influences the audience's perception, beliefs/attitudes, and behavior. Individuals with conservative or moderate racial attitudes perceive more progressive content to be less informative and less reliable, while the reverse is true for progressives. I formalize a model that predicts an inverted-U relationship between distance and belief updating. Consistent with this prediction, racial moderates become more progressive after the exposure to moderately progressive content, while the same content has little effect on progressives and conservatives. Extremely progressive content has little effect on average, while generating some backlash among conservatives. Despite the lack of change in progressiveness of their beliefs/attitudes, progressives donated more to racial justice organizations after the exposure. These findings provide causal evidence that racial justice content can be persuasive and highlight the importance of distance in persuasion.
Mention: Slow Boring
"Knowledge is (Bargaining) Power – How Consumer Information Affects Pricing Mechanisms" (current draft)
Why do pricing mechanisms co-exist across different markets for the same good or shift over time? This paper explores a fundamental characteristic of the market – buyer composition and belief heterogeneity – to explain whether goods are sold via fixed price or bargaining. Using a bargaining game with second-order uncertainty (a seller does not know what a buyer knows) we show that when buyers have large gains from the transaction and are more heterogeneous in their knowledge of the seller, the seller receives a higher payoff from bargaining than from fixed price. The general solution for the payoff difference between pricing mechanisms depends on the potential gain from the transaction of the seller and the buyer, their patience parameters, and the probability distribution of types. These results explain why different pricing mechanisms co-exist for souvenir markets in developing countries and how the introduction of information technology, such as crowd-sourced review spaces, could affect market structures over time.
"The Profitability of Diversity in the Media"
"Flexibility through Delay" with Hunt Allcott, Matthew Gentzkow, Peter Maxted, and Carl Meyer
"Reaching Across the Political Aisle: Overcoming Challenges in Using Social Media for Recruiting Politically Diverse Respondents" with Maggie Macdonald, Megan A. Brown, Nejla Asimovic, Rajeshwari Majumdar, Laura Huber, Sarah Graham, Joshua A. Tucker, and Jonathan Nagler