Sally Sadoff

Do People Anticipate Loss Aversion

There is growing interest in the use of loss contracts that offer performance incentives as upfront payments that employees can lose. Standard behavioral models predict a tradeoff in the use of loss contracts: employees will work harder under loss contracts than under gain contracts; but, anticipating loss aversion, they will prefer gain contracts to loss contracts. In a series of experiments, we test these predictions by measuring performance and preferences for payoff-equivalent gain and loss contracts. We find that people indeed work harder under loss than gain contracts, as the theory predicts. Surprisingly, rather than a preference for the gain contract, we find that people actually prefer loss contracts. In exploring mechanisms for our results, we find suggestive evidence that people do anticipate loss aversion but select into loss contracts as a commitment device to improve performance.

Dynamic Inconsistency in Food Choice: Experimental Evidence from a Food Desert

Despite the great deal of research on dynamic inconsistency in time preferences, few studies have ventured into investigating the question in a natural context. To address this gap, we conduct a natural field experiment with over 200 customers at a grocery store to investigate dynamic inconsistency and the demand for commitment in food choice. Over a 3 week time period, subjects are invited to allocate and re-allocate food items received as part of a grocery delivery program. We observe substantial dynamic inconsistency in our experiment, as well as a demand for commitment among a non-negligible number of subjects. Interestingly, individuals who demand commitment are more likely to be dynamically consistent in their prior behavior. For academics, our work provides direct evidence of dynamic inconsistency in consumption choices in the field and points towards potential extensions to models of temptation. For policy-makers, our findings provide insights on innovations to alter food choices.

The Effect of Recipient Contribution Requirements on Support for Social Programs

Whether aid programs should require recipients to contribute their own resources to receive benefits is widely debated, but little is known about public support for these requirements. Using randomized experiments, we find an inverted u-shape response to monetary contribution requirements for a food aid program: support increases when recipients make small monetary contributions and returns to baseline under large contribution requirements. Recipient time contribution requirements also increase program support. Analysis of mechanisms suggests that individuals screen recipients to target those who need and value the aid. We find suggestive evidence of stronger responses to monetary contributions among conservatives versus liberals.