Neslihan Uler
University of Michigan, Institute for Social Research, Faculty Member
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This paper focuses on the relationship between voluntary giving and the degree of inequality aversion. Our model suggests that voluntary giving is increasing in the degree of inequality aversion for individuals of higher than average... more
This paper focuses on the relationship between voluntary giving and the degree of inequality aversion. Our model suggests that voluntary giving is increasing in the degree of inequality aversion for individuals of higher than average income; however, the sign of the effect is reversed for individuals that are poorer than the average. Contributions are monotonically increasing in the income level, holding the degree of inequality aversion constant. We test our theoretical findings using the General Social Survey data on the United States and show that empirical results support our predictions.
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This paper examines the relationship between the level of charitable giving and the level of taxation. The theoretical model shows that although charitable contributions decrease with pre-tax income equality, they strictly increase with... more
This paper examines the relationship between the level of charitable giving and the level of taxation. The theoretical model shows that although charitable contributions decrease with pre-tax income equality, they strictly increase with tax rate. The experimental ndings support the theoretical predictions. The participants decrease their voluntary contributions as the pre-tax income distribution becomes more equal. In contrast, they increase their contributions with tax. Even quantitatively, individual contributions agree with the equilibrium predictions of the model in the later experimental rounds.
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This paper explores how a change in a default—specifically, an exogenously given reference point—affects individual preferences. While reference dependence is exten-sively studied, very little is known regarding the impact of reference... more
This paper explores how a change in a default—specifically, an exogenously given reference point—affects individual preferences. While reference dependence is exten-sively studied, very little is known regarding the impact of reference points on individual choice behavior when the reference points themselves are not chosen (Reference Effect). We identify critical properties that differentiate between classes of reference-dependent models and test them. We find that the reference effect exists for asymmetrically domi-nated reference points, but we do not see any evidence of a reference effect for symmet-rically dominated reference points. Some of the existing models are mostly consistent with our data but lack predictive power. None of the models offer the particular predic-tions that our experiment suggests. Finally, we also tease apart the differences between the reference effect and the asymmetric dominance effect (decoy effect), a well-known phenomenon observed in the literature ...
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The Revelation Principle depends on a seemingly innocuous assumption that theoretically outcome-equivalent (TOE) direct and indirect mechanisms are behaviorally equivalent as well. We use the first-price sealed-bid auction as our indirect... more
The Revelation Principle depends on a seemingly innocuous assumption that theoretically outcome-equivalent (TOE) direct and indirect mechanisms are behaviorally equivalent as well. We use the first-price sealed-bid auction as our indirect mechanism and construct corresponding TOE direct mechanisms. In contrast with what theory predicts, subjects behave significantly differently under direct and indirect mechanisms: (i) The revenue equivalence does not hold the indirect mechanism generated higher revenue than the direct mechanisms, (ii) subjects behaved as if they were less risk averse in the direct mechanisms, (iii) moreover, we observed different bids across direct mechanisms. We show that a reference-dependent model explains the behavioral differences.
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We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of... more
We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of income, we find that, although overall giving is similar in both countries when subjects know the actual role of luck and effort, Spanish subjects give more than American subjects when they are uninformed. Using elicited beliefs, we find that this is due to the Spanish subjects’ association of poverty with bad luck and American subjects’ association of poverty with a lack of effort.
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Hard price floors are a standard form of agricultural price support while soft floors (auction reserve prices) are often included in cap-and-trade programs. A hard floor is a government commitment to purchase at the floor price, in... more
Hard price floors are a standard form of agricultural price support while soft floors (auction reserve prices) are often included in cap-and-trade programs. A hard floor is a government commitment to purchase at the floor price, in unlimited amounts, whatever commodity is offered for sale, whereas a soft floor can be regarded as a commitment to buy at that price up to the limited amount of commodity the government auctions each period. We investigate theoretically the effect of each type of floor in the stochastic, competitive storage model adopted independently by agricultural and environmental economists. We find that, even if the floor is inserted below the initial spot price, that price will, under specified conditions, jump up—a phenomenon that we call “action at a distance.” Moreover, the jump is larger with a hard floor than with a soft floor. We distinguish our results from those of Krugman (1991) where a foreign exchange rate is supported by a hard floor. Unlike his case, t...
We use “real donation” laboratory experiments to compare independent fundraising, where donation requests from different charities arrive sequentially to potential donors, with coordinated fundraising, where donation requests from... more
We use “real donation” laboratory experiments to compare independent fundraising, where donation requests from different charities arrive sequentially to potential donors, with coordinated fundraising, where donation requests from different charities arrive simultaneously. We find that coordinated fundraising generates significantly larger total donations compared to independent fundraising. We show that the order of requests affects the level of donations only in independent fundraising; in particular, participants donate larger amounts to charities whose requests arrive earlier. We then test whether these differences might be explained by the informational asymmetry between these two fundraising mechanisms by varying the information received by the subjects.
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We use “real donation” laboratory experiments to compare independent fundraising, where donation requests from different charities arrive sequentially to potential donors, with collaborative fundraising, where donation requests from... more
We use “real donation” laboratory experiments to compare independent fundraising, where donation requests from different charities arrive sequentially to potential donors, with collaborative fundraising, where donation requests from different charities arrive simultaneously. We find that collaborative fundraising generates significantly larger total donations compared to independent fundraising. We show that the order of requests affects the level of donations only in independent fundraising; in particular, participants donated larger amounts to charities whose requests arrived earlier. We then test whether these differences might be explained by the informational asymmetry between these two fundraising mechanisms by varying the information received by the subjects.
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This paper studies the relationship between redistributive taxation and tax-deductible charitable contributions. Redistribution has two opposite eects,on voluntary giving. The price of charitable giving decreases with the degree of... more
This paper studies the relationship between redistributive taxation and tax-deductible charitable contributions. Redistribution has two opposite eects,on voluntary giving. The price of charitable giving decreases with the degree of redistribution, and this has a positive eect,on the total amount of giving (substitution eect). However, redistri- bution leads to lower consumption for the contributors and therefore has a negative eect,on
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Individuals extracting common-pool resources in the field sometimes form output-sharing groups to avoid costs of crowding. In theory, if the right number of groups forms, Nash equilibrium aggregate effort should fall to the socially... more
Individuals extracting common-pool resources in the field sometimes form output-sharing groups to avoid costs of crowding. In theory, if the right number of groups forms, Nash equilibrium aggregate effort should fall to the socially optimal level. Whether individuals manage to form the efficient number of groups and to invest within the chosen groups as theory predicts, however, has not been
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The Revelation Principle depends on a seemingly innocuous assumption that theoretically outcome-equivalent (TOE) mechanisms are behaviorally equivalent as well. However, this strong assertion has not yet been tested in previous... more
The Revelation Principle depends on a seemingly innocuous assumption that theoretically outcome-equivalent (TOE) mechanisms are behaviorally equivalent as well. However, this strong assertion has not yet been tested in previous experimental studies. In this paper, we aim to fill this gap. We settled on thefirst-price sealed-bid auction as our indirect mechanism and then constructed TOE direct mechanisms. In contrast with
Research Interests:
This paper explores how a reference point aects individual preferences. While reference-dependence is extensively studied, very little is known regarding the impact of reference points on individual choice behavior when the reference... more
This paper explores how a reference point aects individual preferences. While reference-dependence is extensively studied, very little is known regarding the impact of reference points on individual choice behavior when the reference point itself is abandoned. We show that reference-dependence is not limited to the endowment eect and status quo bias | choices appear to be inuenced by reference points,
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The Revelation Principle depends on a seemingly innocuous assumption that theoretically outcome-equivalent (TOE) mechanisms are behaviorally equivalent as well. However, this strong assertion has not yet been tested in previous... more
The Revelation Principle depends on a seemingly innocuous assumption that theoretically outcome-equivalent (TOE) mechanisms are behaviorally equivalent as well. However, this strong assertion has not yet been tested in previous experimental studies. In this paper, we aim to fill this gap. We settled on thefirst-price sealed-bid auction as our indirect mechanism and then constructed TOE direct mechanisms. In contrast with
Research Interests:
This paper focuses on the relationship between voluntary giving and the degree of inequality aversion. Our model suggests that voluntary giving is increasing in the degree of inequality aversion for individuals of higher than average... more
This paper focuses on the relationship between voluntary giving and the degree of inequality aversion. Our model suggests that voluntary giving is increasing in the degree of inequality aversion for individuals of higher than average income; however, the sign of the eect is reversed for individuals that are poorer than the average. Contributions are monotonically increasing in the income level,
Research Interests:
The classical choice theory assumes that an individual's choice does not depend on irrelevant alternatives or the way that alternatives are labeled; such as an endowment or a default. However, phenomena such as the "Status Quo... more
The classical choice theory assumes that an individual's choice does not depend on irrelevant alternatives or the way that alternatives are labeled; such as an endowment or a default. However, phenomena such as the "Status Quo Bias" and "Attraction Eect" which apparently imply violation of rationality, have been widely observed. Even though they exhibit similar pattern of choices, the relationship
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This paper compares two groups of reference-dependent models, loss aversion and status quo constraint, which dier not only in methodology but also in nature - while loss aversion models assume changing preferences, in status quo... more
This paper compares two groups of reference-dependent models, loss aversion and status quo constraint, which dier not only in methodology but also in nature - while loss aversion models assume changing preferences, in status quo constraint models, the underlying utility function does not change with the reference point. The,rst part of the paper is devoted to the construction of
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We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of... more
We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of income, we find that, although overall giving is similar in both countries when subjects know the actual role of luck and effort, Spanish subjects