Contributions published at Department of Economics (Florian Scheuer)

Poor psychological health is associated with Takotsubo cardiomyopathy, cardiac syndrome X, coronary microcirculatory dysfunction, peripheral artery disease, or spontaneous coronary artery dissection. Data regarding pessimism, cardiovascular disease (CVD) events and mortality and all-cause mortality remained inconclusive. This systematic review and meta-analysis aim to provide an overview of the association between pessimism, CVD outcomes and mortality. A systematic search of electronic databases was conducted from inception through July 2022 for studies evaluating pessimism and adverse outcomes. A total of 17 studies published between 1966 and July 2022 met our inclusion criteria, for a total of 232,533 individuals. Pooled hazard ratios were calculated in random-effects meta-analyses. Based on pooled analysis of adjusted HRs, pessimism was associated with adjusted HR of 1.13 (95% CI 1.07-1.19) for all-cause mortality with minimal heterogeneity (I2 = 28.5%). Based on pooled analysis of adjusted HRs, pessimism was associated with adjusted HR of 1.30 (95% CI 0.43-3.95) for CHD mortality, adjusted HR of 1.41 (95% CI 1.05-1.91) for CVD mortality, and adjusted HR of 1.43 (95% CI 0.64-3.16) for stroke. In conclusion, pessimism seems to be significantly associated with a higher risk for and poorer outcomes from CVD events than optimistic styles. There are genetic and other bases for these life approaches, but behavioral, cognitive and meditative interventions can modify patients' level of pessimism, hopefully leading to better medical outcomes. Testing this theory would yield highly useful and practical data for clinical care.

We provide an axiomatic characterization of Bayesian updating, viewed as a mapping from prior beliefs and new information to posteriors, which is disentangled from any reference to preferences. Bayesian updating is characterized by Non-Innovativeness (events considered impossible in the prior remain impossible in the posterior), Dropping (events contradicted by new evidence are considered impossible in the posterior), and Proportionality (for other events, the posterior simply rescales the prior’s probabilities proportionally). The result clarifies the differences between the normative Bayesian benchmark, alternative models, and actual human behavior.

Transitivity is perhaps the most fundamental choice axiom and, therefore, almost all economic models assume that preferences are transitive. The empirical literature has regularly documented violations of transitivity, but these violations pose little problem as long as they are simply a result of somewhat-noisy decision making and not a reflection of the deterministic part of individuals’ preferences. However, what if transitivity violations reflect individuals’ genuinely nontransitive preferences? And how can we separate nontransitive preferences from noise-generated transitivity violations – a problem that so far appears unresolved? Here we tackle these fundamental questions on the basis of a newly developed, non-parametric method which uses response times and choice frequencies to distinguish genuine preferences from noise. We extend the method to allow for nontransitive choices, enabling us to identify the share of weak stochastic transitivity violations that is due to nontransitive preferences. By applying the method to two different datasets, we document that a sizeable proportion of transitivity violations reflect nontransitive preferences. Specifically, in the two datasets, 19% and 14% of all cycles of alternatives for which preferences are revealed involve genuinely nontransitive preferences. These violations cannot be accounted for by any noise or utility specification within the universe of random utility models.

The potential benefits and mechanistic effects of working memory training (WMT) in children are the subject of much research and debate. We show that after five weeks of school-based, adaptive WMT 6–9 year-old primary school children had greater activity in prefrontal and striatal brain regions, higher task accuracy, and reduced intra-individual variability in response times compared to controls. Using a sequential sampling decision model, we demonstrate that this reduction in intra-individual variability can be explained by changes to the evidence accumulation rates and thresholds. Critically, intra-individual variability is useful in quantifying the immediate impact of cognitive training interventions, being a better predictor of academic skills and well-being 6–12 months after the end of training than task accuracy. Taken together, our results suggest that attention control is the initial mechanism that leads to the long-run benefits from adaptive WMT. Selective and sustained attention abilities may serve as a scaffold for subsequent changes in higher cognitive processes, academic skills, and general well-being. Furthermore, these results highlight that the selection of outcome measures and the timing of the assessments play a crucial role in detecting training efficacy. Thus, evaluating intra-individual variability, during or directly after training could allow for the early tailoring of training interventions in terms of duration or content to maximise their impact.

Background: Whenever vaccines for a new pandemic or widespread epidemic are developed, demand greatly exceeds the available supply of vaccine doses in the crucial, initial phases of vaccination. Rationing protocols must then fulfill a number of ethical principles balancing equal treatment of individuals and prioritization of at-risk and instrumental subpopulations. For COVID-19, actual rationing methods used a territory-based first allocation stage based on proportionality to population size, followed by locally-implemented prioritization rules. The results of this procedure have been argued to be ethically problematic. Methods: We use a formal-analytical approach arising from the mathematical social sciences which allows to investigate whether any allocation methods (known or unknown) fulfill a combination of (ethical) desiderata and, if so, how they are formulated algorithmically. Results: Strikingly, we find that there exists one and only one method that allows to treat people equally while giving priority to those who are worse off. We identify this method down to the algorithmic level and show that it is easily implementable and it exhibits additional, desirable properties. In contrast, we show that the procedures used during the COVID-19 pandemic violate both principles. Conclusions: Our research delivers an actual algorithm that is readily applicable and improves upon previous ones. Since our axiomatic approach shows that any other algorithm would either fail to treat people equally or fail to prioritize those who are worse off, we conclude that ethical principles dictate the adoption of this algorithm as a standard for the COVID-19 or any other comparable vaccination campaigns.

Do financial crises radicalize voters? We study Germany’s 1931 banking crisis, collecting new data on bank branches and firm-bank connections. Exploiting cross-sectional variation in precrisis exposure to the bank at the center of the crisis, we show that Nazi votes surged in locations more affected by its failure. Radicalization in response to the shock was exacerbated in cities with a history of anti-Semitism. After the Nazis seized power, both pogroms and deportations were more frequent in places affected by the banking crisis. Our results suggest an important synergy between financial distress and cultural predispositions, with far-reaching consequences.

Serial dictatorships have emerged as the canonical simple mechanisms in the literature on the allocation of indivisible goods without transfers. They are the only neutral and group-strategy-proof mechanisms in environments in which agents have no outside options and hence no individual rationality constraints (Svensson in Soc Choice Welfare 16:557–567, 1999). Accounting for outside options and individual rationality constraints, our main result constructs the class of group-strategy-proof, neutral, and non-wasteful mechanisms. These mechanisms are also Pareto efficient and we call them binary serial dictatorships. The abundance of the outside option - anybody who wants can opt out to get it - is crucial for our result.

Wann die nächste Finanzkrise kommt, lässt sich kaum vorhersagen. Wie man in einer solchen richtig reagiert, hingegen schon. Der diesjährige Nobelpreis ehrt drei Ökonomen für ihre Forschung zu Banken und ihrer Rolle bei der Entstehung von Finanzkrisen.

In this paper I study whether citizens’ tax morale (and, more broadly, citizens’ attitudes towards the state) can be affected by past institutions, focusing on the role of historical fiscal capacity. Exploiting the features of the tax collection system of a pre-unification state in XIX Century Italy I identify differences in local historical fiscal capacity (as proxied by geographical proximity to a tax collector) and map them into contemporary tax morale, as measured by evasion of the TV Tax in 2014. Exploiting only variation in historical fiscal capacity that arises within matched pairs of neighbouring towns on the border of tax districts, I find imprecisely estimated and arguably small differences in tax morale today between towns where fiscal capacity was different. Investigating the mechanisms of transmission, I provide evidence that phenomena associated with structural transformation are likely to have halted the persistence of the historical fiscal capacity effect.

Surveys and opinion polls are essential instruments to elicit societal preferences and uncover differences between socioeconomic or demographic groups. However, survey data is noisy, and survey bias is ubiquitous, limiting the reliability and usefulness of standard analyses. We provide a new method that uncovers group preferences and unambiguously ranks the relative strength of preference between groups of agents, leveraging the information contained in response times. The method delivers a nonparametric criterion to determine whether a group (defined, e.g., by gender, age cohort, socioeconomic status, political orientation, etc.) prefers an option over its alternative, and whether it does so more strongly than another group, without any assumptions on the underlying noise. We demonstrate the practical value of this method by studying preferences over important socioeconomic topics in a representative sample of the U.K. population. We find that the new method often provides results when tests based on choice frequencies are inconclusive, and also identifies cases where tests are significant but inferences on preferences are unwarranted.

In the history of humanity, most conflicts within and between societies have originated from perceived inequality in resource distribution. How humans achieve and maintain distributive justice has therefore been an intensely studied issue. However, most research on the corresponding psychological processes has focused on inequality aversion and has been largely agnostic of other motives that may either align or oppose this behavioral tendency. Here we provide behavioral, computational, and neuroimaging evidence that distribution decisions are guided by three distinct motives—inequality aversion, harm aversion, and rank reversal aversion—that interact with each other and can also deter individuals from pursuing equality. At the neural level, we show that these three motives are encoded by separate neural systems, compete for representation in various brain areas processing equality and harm signals, and are integrated in the striatum, which functions as a crucial hub for translating the motives to behavior. Our findings provide a comprehensive framework for understanding the cognitive and biological processes by which multiple prosocial motives are coordinated in the brain to guide redistribution behaviors. This framework enhances our understanding of the brain mechanisms underlying equality-related behavior, suggests possible neural origins of individual differences in social preferences, and provides a new pathway to understand the cognitive and neural basis of clinical disorders with impaired social functions.

To better understand the physiological basis of obesity in women, we investigated whether obesity or menstrual cycle phase affects laboratory test-meal size or meal-stimulated plasma cholecystokinin (CCK) concentration. Women with healthy weight (body mass index [BMI] of 18.5-24.9 kg/m2, N = 16) or obesity (BMI 30-39.9 kg/m2, N = 20) were tested once in the late-follicular or peri-ovulatory phase (LF/PO) and once in the mid-luteal phase (ML). Meals of ham sandwiches were offered and blood was sampled. Menstrual cycle phases were verified with participants’ reports of menses and measurements of progesterone and luteinizing hormone (LH) concentrations. Women with obesity ate significantly larger meals than women with healthy weight, (mean, 711 [95% CI, 402-1013] kJ, P = 0.001, during the LF/PO and 426 [105-734] kJ, P = 0.027, larger during the ML). Women with healthy weight ate smaller meals during LF/PO than ML (decrease, 510 [192-821 kJ], P = 0.008), but women with obesity did not (decrease, 226 [−87-542] kJ, P = 0.15). CCK concentrations 18 to 30 minutes after meal onset were lower in women with obesity than in women with healthy weight during LF/PO (3.6 [3.1-4.1] vs 6.1 [4.5-7.7] pmol/L; P = 0.004), but not during ML, with a significant interaction effect (1.8 [1.2-2.4] pmol/L, P = 0.048). Women with obesity consumed larger meals than women with healthy weight but displayed reduced meal-stimulated plasma CCK concentrations. These data are consistent with the hypothesis that a defect in CCK secretion compromises satiation in obese women and contributes to the development or maintenance of obesity.

Participation payments are used in many transactions about which people know little, but can learn more: incentives for medical trial participation, signing bonuses for job applicants, or price rebates on consumer durables. Who opts into the transaction when given such incentives? We theoretically and experimentally identify a composition effect whereby incentives disproportionately increase participation among those for whom learning is harder. Moreover, these individuals use less information to decide whether to participate, which makes disappointment more likely. The learning-based composition effect is stronger in settings in which information acquisition is more difficult.

We investigate the impact of peer interaction on the quality of financial decision making in a laboratory experiment. Face-to-face communication with a randomly assigned peer significantly improves the quality of subsequent private decisions even though simple mimicry would have the opposite effect. We present evidence that the mechanism involves general conceptual learning (because the benefits of communication extend to previously unseen tasks), and that the most effective learning relationships are horizontal rather than vertical (because people with weak skills benefit most when their partners also have weak skills). The benefits of demonstrably effective financial education do not propagate to peers.

Processing more likely inputs with higher sensitivity (adaptive coding) enables the brain to represent the large range of inputs coming in from the world. Healthy individuals high in schizotypy show reduced adaptive coding in the reward domain but it is an open question whether these deficits extend to non-motivational domains, such as object categorization. Here, we develop a novel variant of a classic task to test range adaptation for face/house categorization in healthy participants on the psychosis spectrum. In each trial of this task, participants decide whether a presented image is a face or a house. Images vary on a face-house continuum and appear in both wide and narrow range blocks. The wide range block includes most of the face-house continuum (2.50–97.5% face), while the narrow range blocks limit inputs to a smaller section of the continuum (27.5–72.5% face). Adaptive coding corresponds to better performance for the overlapping smaller section of the continuum in the narrow range than in the wide range block. We find that participants show efficient use of the range in this task, with more accurate responses in the overlapping section for the narrow range blocks relative to the wide range blocks. However, we find little evidence that range adaptation in our object categorization task is reduced in healthy individuals scoring high on schizotypy. Thus, reduced range adaptation may not be a domain-general feature of schizotypy.

Wages are higher in urban regions. These urban wage premia may be driven by sorting of more productive workers into urban regions, by a static productivity advantage, and by higher wage growth. This paper documents a size-earnings elasticity of five per cent in Germany. Sorting of more productive workers into larger regions explains 40 per cent of this elasticity. The remainder is driven in equal parts by a static productivity effect and a dynamic learning effect. The urban wage premium is strongly increasing in educational attainment. This is largely driven by different degrees of sorting between education groups. Similarly, there are large urban wage premium differences between occupation groups, which are entirely driven by differences in sorting.