Gary Charness

Gary Charness
University of California, Santa Barbara | UCSB · Department of Economics

Ph.D.

About

271
Publications
62,259
Reads
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18,082
Citations
Citations since 2017
57 Research Items
8503 Citations
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201720182019202020212022202305001,0001,500
201720182019202020212022202305001,0001,500
Additional affiliations
July 2001 - present
University of California, Santa Barbara
Position
  • Professor (Full)

Publications

Publications (271)
Article
We investigate how strategic behavior is affected by the set of notions (frames) used when thinking about the game. In our games, the action set consists of visual objects: each player must privately choose one, trying to match the counterpart’s choice. We propose a model where different player-types are aware of different attributes of the action...
Article
Full-text available
Background Widespread vaccination is certainly a critical element in successfully fighting the COVID-19 pandemic. We apply theories of social identity to design targeted messaging to reduce vaccine hesitancy among groups with low vaccine uptake, such as African Americans and political conservatives. Methods Participants We conducted an online exper...
Article
We provide experimental evidence on whether engaging in a creative task affects the degree to which one tolerates ambiguity. We find that subjects who completed a creative task invest significantly more in a lottery with unknown odds than subjects involved in a non-creative task, suggesting that being exposed to creativity may engender higher openn...
Article
Using an online real-effort experiment, we investigate whether and how delaying competition affects the individuals’ willingness to compete. Unlike our prior, we find that men and women are equally likely to compete in our baseline no-delay condition, with a task considered to be gender-neutral. We discuss how the gender gap in entry rates does not...
Preprint
Vaccination has both private and public benefits. We ask whether social preferences—concerns for the well-being of other people—influence one's decision regarding vaccination. We measure these social preferences for 549 online subjects: We give each subject \$4 to play a public-good game and make contributions to public welfare. To the extent that...
Preprint
Vaccination has both private and public benefits. We ask whether social preferences—concerns for the well-being of other people—influence one’s decision regarding vaccination. We measure these social preferences for 549 online subjects: We give each subject $4 to play a public-good game and make contributions to public welfare. To the extent that o...
Article
Social categories matter to people, but it is not obvious ex ante which ones matter more. To explore this, we conduct a novel experimental market of anonymous partners based on social categories. Participants have the option of choosing or discarding a peer according to their gender, ethnicity, and religion. Our research design allows us to explore...
Article
We examine how pre-play communication and clustering affect play in a challenging hybrid experimental game on networks. Free-form chat is impressively effective in achieving the non-equilibrium efficient outcome, but restricted communication has little effect. We support this result with a model about the credibility of cheap-talk messages. We also...
Article
Expectations are a critical factor in determining actions in a great variety of economic interactions. Hence, being able to measure beliefs is important in many economic environments. In this article, we review the approaches that have been used to measure beliefs and make comparisons of their effectiveness. We also discuss belief elicitation when...
Article
Full-text available
In experimental economics there is a norm against using deception. But precisely what constitutes deception is unclear. While there is a consensus view that providing false information is not permitted, there are also “gray areas” with respect to practices that omit information or are misleading without an explicit lie being told. In this paper, we...
Article
People in our experiment choose between two information sources with opposing biases in order to inform their guesses about a binary state. By varying the nature of the bias, we vary whether it is optimal to consult information sources biased towards or against prior beliefs. Even in our deliberately-abstract setting, there is strong evidence of co...
Article
Group identity has been shown to be a powerful force. The crowding-out of intrinsic motivation is also a well-documented phenomenon in psychology and, increasingly, in economics. We conduct a field experiment (in which people do not know that they are in an experiment) to test for the effect of group identity on the crowding out of intrinsic motiva...
Article
The issue of one's identity has loomed large recently and has unfortunately been used more and more as a wedge to separate subgroups. It is important to understand the ramifications of identity, both to limit the negative consequences (such as so-called identity politics) and to be able to use one's sense of identity as a positive force in the worl...
Article
This paper studies experimentally whether potential perceived discrimination affects decisions in a labor-market setting with different stereotypes. Participants are assigned to a seven-person group and randomly allocated a role as a firm or worker. In each group, there are five workers and two firms. The only information firms have about each work...
Article
Full-text available
We consider the external validity of laboratory measures of risk attitude. Based on a large-scale experiment using a representative panel of the Dutch population, we test if these measures can explain two different types of behavior: (i) behavior in laboratory risky financial decisions, and (ii) behavior in naturally-occurring field behavior under...
Article
We investigate how a player’s strategic behavior is affected by the set of notions she uses in thinking about the game, i.e., the “frame”. To do so, we consider matching games where two players are presented with a set of objects, from which each player must privately choose one (with the goal of matching the counterpart’s choice). We propose a nov...
Article
We conduct experiments comparing the performance of individuals and teams of four subjects in solving two rather different tasks. The first involves nonograms, logic puzzles that require a series of incremental steps to solve. The second task uses CRT-type questions, which require a single, specific insight. Contrary to the existing literature, tea...
Article
Theory of Mind (ToM), the ability to correctly attribute mental states to others, is important in social interactions. We evaluate the development of ToM in about 800 mostly disadvantaged young children. We next conduct a field experiment with about 160 children in which we find that the low ToM rates for these disadvantaged children improve substa...
Preprint
Full-text available
We conduct experiments comparing the performance of individuals and teams of four subjects in solving two rather different tasks. The first involves nonograms (numerical logic puzzle). Here the solution requires a series of incremental steps. The second task uses CRT-type questions, which require a single, specific insight. Contrary to the existing...
Article
We study strategic interactions that may be affected by belief-dependent, conformist preferences. Specifically, we propose that beliefs about the behavior of individuals in the same role (i.e., beliefs about “peer behavior”) directly affect a player's utility. In examining conformism we propose an experimental design that verifies the presence of t...
Article
We study how subjects with identical public data first make estimates and then bid in common-value environments. The data presented rows of numbers and values associated with them by our (undisclosed) rule. Subjects were asked to estimate the missing value in the last row with only the numbers given, and then bid for that value in a second-price au...
Article
Modigliani and Miller (1958) show the total market value of a firm is unaffected by a repackaging of asset return streams to equity and debt if pricing is arbitrage‐free. We investigate this invariance theorem in experimental asset markets, finding value‐invariance for assets of identical risks when returns are perfectly correlated. However, exploi...
Article
Full-text available
Significance An important research area in the social and biological sciences is how endogenous sanctions can promote cooperation in social dilemma situations, particularly in a budget-balanced (no need for external financing) manner. Punishment has had some success in experimental studies, but has serious shortcomings: It is socially wasteful mate...
Article
Full-text available
We use different incentive schemes to study truth-telling in a die-roll task when people are asked to reveal the number rolled privately. We find no significant evidence of cheating when there are no financial incentives associated with the reports, but do find evidence of such when the reports determine financial gains or losses (in different trea...
Article
The study of effort provision in a controlled setting is a key research area in experimental economics. There are two major methodological paradigms in this literature: stated effort and real effort. In the stated-effort paradigm the researcher uses an “effort function” that maps choices to outcomes. In the real-effort paradigm, participants work o...
Article
Creativity is a complex and multidimensional phenomenon with tremendous economic importance. A crucial question for economists and for firms is the interplay of incentives and creativity. We present experiments where subjects face creativity tasks where, in one case, ex ante goals and constraints are imposed on their answers (“closed” tasks), and i...
Article
We conduct a laboratory experiment in which participants can make donations to real charities. We vary whether the experimenter provides matching funds for any such donations, and whether there is individual or team competition for these matching funds. Our results indicate that providing matching funds for all donations does increase donations fro...
Article
Full-text available
The Holt and Laury (American Economic Review, 92(5), 1644–1655, 2002) mechanism (HL) is the most widely-used method for eliciting risk preferences in economics. Participants typically make ten decisions with different variance options, with one of these choices randomly chosen for actual payoff. For this mechanism to provide an accurate measure of...
Article
We investigate an experimental labor market setting in which we introduce the novel aspect that workers have the chance of investing money in a long-term project in order to increase their income. We find a strong relationship between what happens inside the labor market (worker's performance) and what happens outside the labor market (long-term in...
Article
We suggest that overconfidence (conscious or unconscious) is motivated in part by strategic considerations, and test this experimentally. We find compelling supporting evidence in the behavior of participants who send and respond to others’ statements of confidence about how well they have scored on an IQ test. In two-player tournaments where the h...
Article
We investigate whether the confirmation bias is mitigated in signal-extraction environments by outside financial interests. We include a background strategic consideration leading to ‘motivated beliefs’ for people in one role, as they receive higher equilibrium payoffs in a background game in one of two states, while people in the other role receiv...
Article
An important methodological issue in experimental research is the extent to which one should use context-rich or abstract language in the instructions for an experiment. The traditional use of abstract context in experimental economics is commonly viewed as a way to achieve experimental control. However, there are some advantages to using context-f...
Article
We provide evidence on how cooperation rates vary across payoff parameters in the Prisoner's Dilemma (PD), using four one-shot games that differ only in the payoffs from mutual cooperation. In our experiment, participants play only the PD game, and play the game once and only once, so there are no potential confounds or methodological issues. Our r...
Article
We investigate how donating worker earnings for voluntary extra work, a form of corporate social responsibility, affects worker behavior. Participants entered data for 60 minutes, with piece-rate pay. They could then stay for up to another 30 minutes; we varied the piece-rate pay and whether it was paid to the worker or to charity. When this piece-...
Article
In some experiments participants make multiple decisions; this feature facilitates gathering a considerable amount of incentivized data over the course of a compact session. A conservative payment scheme is to pay for the outcome from every decision made. An alternative approach is to pay for the outcome of only a subset of the choices made, with t...
Article
This paper studies selection and procedural effects in experimental contracting when sellers choose unenforceable trade quality after a possible cost shock. Br and ts, Charness, and Ellman (2016) investigate how communication affects behavior and outcomes in contractswith rigid prices, relative to contractswhere buyers can raise prices after observ...
Article
Until the late 1980s, textbooks portrayed economics as a nonexperimental science because it was thought that “Economists…cannot perform the controlled experiments of chemists or biologists.…Like astronomers or meteorologists, they generally must be content largely to observe” ( 1 ). Since then, economics has experienced an experimental revolution (...
Article
This paper experimentally investigates wage setting and effort choices in a multi-worker setting when there is heterogeneity in worker productivity and managers’ perception of this productivity is imperfect. Worker ability is assigned via an aptitude test and, in an innovative design, manager uncertainty concerning this ability is related to the ma...
Article
Full-text available
We make two main contributions in this article. We examine whether social comparisons affects workers' performance when a firm can choose workers' wages or let them choose their own. Firms can delegate the wage decision to neither, one or both workers in the firm. We vary the information workers receive, finding that social comparisons concerning b...
Article
Social norms involve observation by others and external sanctions for violations, whereas moral norms involve introspection and internal sanctions. To study such norms and their effects, we design a laboratory experiment. We examine dictator choices, where we create a shared understanding by providing advice from peers with no financial payoff at s...
Article
Economists typically predict that people are inherently selfish; however, experimental evidence suggests that this is often not the case. In particular, delegating a choice (such as a wage) to the performing party may imbue this party with a sense of responsibility, leading to improved outcomes for both the delegating entity and the performing part...
Article
Until the late 1980s, textbooks portrayed economics as a nonexperimental science because it was thought that “Economists…cannot perform the controlled experiments of chemists or biologists.…Like astronomers or meteorologists, they generally must be content largely to observe” (1). Since then, economics has experienced an experimental revolution (2–...
Article
Full-text available
Unethical behavior within organizations is not rare. We investigate experimentally the role of status-seeking behavior in sabotage and cheating activities aiming at improving one's performance ranking in a flat-wage environment. We find that average effort is higher when individuals are informed about their relative performance. However, ranking fe...
Article
Full-text available
We investigate the nature of continuous time strategic interactions in public-goods games. In one set of treatments, four subjects make contribution decisions in continuous time during a 10-minute interval while in another they make them only at 10 discrete points of time during this interval. The effect of continuous time is muted in public-goods...
Article
The notions of one's social identity and group membership have recently become topics for economic theory and experiments, and recent research has shown the importance of identity in a wide array of economic environments. But predictions are unclear when there is some trade-off between one's identity (e.g., race, gender, handedness) and potential m...
Article
In this paper, we describe a series of laboratory experiments that implement specific examples of a general network structure. Specifically, actions are either strategic substitutes or strategic complements, and participants have either complete or incomplete information about the structure of a random network. Since economic environments typically...
Article
We test a mechanism whereby groups are formed voluntarily, through the use of voting. These groups play a public-goods game, where efficiency increases with group size (up to a limit, in one treatment). It is feasible to exclude group members, to exit one's group, or to form larger groups through mergers involving the consent of both merging groups...
Article
This survey explores the contributions of behavioral economics, laboratory experiments, and field experiments to our understanding of the economics of trust, trustworthiness, and reciprocal behavior. A general summary presenting the evolution of trust and reciprocity, departing from pure self-interest in the understanding of "homo economicus", begi...
Article
In this paper, we propose a new channel of contract design to boost efficiency. If deviating from one's own words induces a self-imposed moral burden, the optimal contracting procedure with regard to cheap talk shall assign the responsibility for installing the nonbinding promise in the contract to whoever has the residual right to break such promi...
Data
Full-text available
We devise an experiment to explore the effect of different degrees of bargaining power on the design and the selection of contracts in a hidden-information context. In our benchmark case, each principal is matched with one agent of unknown type. In our second treatment, a principal can select one of three agents, while in a third treatment an agent...
Article
Full-text available
Evidence suggests that whether or not people dislike lying is situation-dependent. We argue that the theory of simple guilt can accommodate this well.
Article
Economists and psychologists have developed a variety of experimental methodologies to elicit and assess individual risk attitudes. Choosing which to utilize, however, is largely dependent on the question one wants to answer, as well as the characteristics of the sample population. The goal of this paper is to present a series of prevailing methods...
Article
We test experimentally an explanation of over and under confidence as motivated by (perhaps unconscious) strategic concerns, and find compelling evidence supporting this hypothesis in the behavior of participants who send and respond to others' statements of confidence about how well they have scored on an IQ test. In two-player tournaments where t...
Article
Individuals, groups, and societies all experience conflict, and attempt to resolve it in numerous ways. The Oxford Handbook of Economic Conflict Resolution brings together scholars from multiple disciplines to offer perspectives on the current state and future challenges in negotiation and conflict resolution. It aims to act as an aid in identifyin...
Article
This paper analyzes the effect on performance and earnings of delegating the wage choice to employees. Our results show that such delegation significantly increases effort levels. Moreover, we observe a Pareto improvement, as the earnings of both employers and employees increase when employers delegate than when they do not. Interestingly, we also...
Article
In this paper, we describe what economists have learned about differences between group and individual decision-making. This literature is still young, and in this paper, we will mostly draw on experimental work (mainly in the laboratory) that has compared individual decision-making to group decision-making, and to individual decision-making in sit...
Article
We study experimentally how the ability to communicate affects the frequency and effectiveness of flexible and inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are mo...
Article
Full-text available
Are men more willing to take financial risks than women? The answer to this question has immediate relevance for many economic issues. We assemble the data from 15 sets of experiments with one simple underlying investment game. Most of these experiments were not designed to investigate gender differences and were conducted by different researchers...
Article
We conduct laboratory experiments to investigate the effects of deterrence mechanisms under controlled conditions. The effect of the expected cost of punishment of an individual’s decision to engage in a proscribed activity and the effect of uncertainty on an individual’s decision to commit a violation are very difficult to isolate in field data. W...