Title:Putting Preference for Randomization to Work

Speaker:Songfa Zhong

Time:1:55pm May 25, 2018

Venue: Yide building H501

Abstract

Choice difficulty is commonly experienced in daily life, ranging from the insignificant decisions such as daily dress choice to the important ones such as family planning. Such difficulty leads to the behavioral biases of indecisiveness, inertia, and procrastination. Here we examine the usage of coin flipping to help resolve choice difficulty in the setting of donation. In a randomized field experiment, we find that coin flipping increases donation when choice is hard due to choosing between two equally attractive charities, but not when choice is relatively easy with matching fund provided to one of the two charities. A laboratory experiment replicates the observed patterns and further sheds light on the underlying psychological mechanism. More generally, our results point to the power of randomization as a nudge for difficult decisions.

Speaker’s Information

Songfa Zhong is associate professor at National University of Singapore. He received his Ph.D. degree from Hongkong University of Science and Technology. His research interests include behavioral Economics, Experimental Economics, Genoeconomics and Neuroeconomics. He has published extensively on AER, Econometrica, Review of Economics and Statistics, International Economic Review, Management Science, Economic Theory, PNAS, PLoS ONE, etc.