Selection and Sorting when Supervisors have Discretion: Experimental Evidence from a Tanzanian Factory [JMP] – with Yihong Huang, Working paper, October 2024, (Conferences: CEGA Africa Evidence Summit, 2024; NEUDC 2024)

Almost all firms rely on supervisor discretion to select and motivate workers. But what are the benefits and costs of doing so? In partnership with a large garment manufacturing firm in Tanzania, we implement a series of field experiments to examine supervisor discretion in the selection of workers for promotion to managerial positions. In a first field experiment with supervisors, we randomize whether supervisors face financial incentives based on the quality of their referrals. In a complementary experiment with workers, we randomly vary whether supervisor referrals are emphasized in the selection process when workers make application decisions. Our results show that discretion crowds in supervisors’ private information about the managerial potential of workers. Supervisors appear to have private information beyond what the firm could infer from existing administrative data, workers’ self-assessments, or from the private information of coworkers. However, discretion also generates costs for firms. Supervisor referrals do not appear to be perfectly aligned with the firm’s objectives, and supervisors show preferences consistent with gender bias and favoritism. Furthermore, discretion is disliked by workers and reduces the number of workers who apply for promotion, suggesting there is also misalignment between workers and supervisors. In practice, almost all firms rely on discretion to make promotion decisions. Our results show that this can be explained, at least in part, because discretion leverages valuable private information.

Breaking the Spiral of Silence – with Yihong Huang, Working paper, October 2024; (Conferences: Stanford SITE 2024)

Self-censorship is pervasive in today's opinion climate, which distorts political discourse and decision making processes that rely on public opinion. What drives self-censorship, and how can misperceptions about public opinion be corrected? The Spiral of Silence theory offers insights, positing that people who hold views perceived as socially inappropriate tend to self-censor, generating a distribution of expressed views that is skewed towards appropriate opinions. If the attention paid to silence is limited, this can exacerbate self-censorship and create an equilibrium where only socially appropriate views are expressed and considered dominant. We experimentally test this hypothesis based on a simple model in which self-censorship and limited attention to silence interact to jointly establish equilibrium norms. In our experiment, college students discuss controversial political and socioeconomic issues together. Students with socially inappropriate views self-censor to a significant degree. Given the limited attention students pay to silence, self-censorship amplifies over time. We experimentally increase the salience of silence and show that this both leads to more accurate beliefs about public opinion and increases the diversity of views expressed. Because inference and expression amplify each other, different levels of attention to silence produce divergent social norms in equilibrium.

The Psychology of Poverty: Current and Future Directions – with Ye Rang Park, Kristina Hallez, Supreet Kaur, Mahesh Srinivasan, and Jiaying Zhao, Forthcoming, Current Directions in Psychological Science (draft).

An emerging literature on “the psychology of poverty” suggests that the experience of poverty itself has psychological consequences, some of which may make escaping poverty more difficult. We synthesize the evidence base from both psychology and economics using an organizing framework comprising four sets of mechanisms: cognitive function, mental health, beliefs, and preferences. We discuss the strength of the evidence supporting both how poverty affects these four mechanisms, and how these four mechanisms in turn affect poverty. As our review shows, the existing evidence has clearly established proof of concept that psychological factors exist in the experience of and response to poverty. However, there is still a lack of evidence on whether these effects are meaningful in magnitude and lead to the perpetuation of poverty. We conclude by summarizing promising future directions for research which could help close these evidence gaps, with important implications for the design of poverty reduction policies.

Gender Differences in Competition: The role of Rank Effects – Draft available upon request.

People inevitably rank themselves against others - but when are these comparisons performance enhancing and when are they hindering? Estimating the effects of rank on outcomes poses an empirical challenge because rank is often endogenously determined. This paper exploits quasi-exogenous variation in relative rank in a high-stakes, real world setting to study the causal effects of rank on performance. In competitive swimming, swimmers are usually divided into sub-groups, or heats, based on their ex-ante rankings. The difference in entry times between any two swimmers ex-ante is quite small, often tenths of seconds, but swimmers just above the threshold will be placed in a faster heat, as the last ranked swimmer, while swimmers just below the threshold will be placed in a slower heat, as the first ranked swimmer. Exploiting this quasi-exogenous variation in relative rank, I use a regression discontinuity design to estimate the causal effects of rank on performance. Standard economic models would predict no effect of group rank on performance in this setting, as it is rank in the overall competition rather than rank in a specific heat that matters for tournament outcomes. In contrast, the results show there are significant gender differences in response to rank. Women significantly improve their performance when they are ranked first in a slower heat relative to when they are ranked last in a faster heat, whereas there is no comparable effect of rank on performance for men. Taken together, the results suggest there are significant gender differences in response to competition incentives in a real-world, high stakes setting that cannot be captured by standard economic models.

Other Writing

Institutions and Economic Development: Taking Stock and Looking Forward – with Ernesto Dal Bó and Frederico Finan, CEGA Working Paper, 2022.