Florian Zimmermann works as an Assistant Professor at the University of Bonn and the Institute on Behavior and Inequality. He conducts research in behavioral, experimental and labor economics. Before joining briq, Florian spent four years at the University of Zurich as a Postdoctoral Researcher. He graduated with a PhD in economics from the University of Bonn after studying economics at the University of Mannheim and the University of California, Los Angeles. For his research, Florian was awarded the CESifo Prize in Behavioral Economics and was a runner-up for the Hillel-Einhorn Award by the Society for Judgment and Decision Making.
Social interactions pervade daily life and thereby create an abundance of social experiences. Such personal experiences likely shape what we believe and who we are. In this paper, we ask if and how personal experiences from social interactions determine individuals’ inclination to trust others? We implement an experimental environment that allows us to manipulate prior social experiences—either being paid or not being paid by a peer subject for a task—and afterwards measure participant’s willingness to trust others. We contrast this situation with a control condition where we keep all aspects of the prior experiences identical, except that we remove the social dimension. Our key finding is that after positive social experiences, subjects’ willingness to trust is substantially higher relative to subjects who made negative social experiences. No such effect is obtained in the control condition where we removed the social aspect of experiences. Findings from a difference-in-difference analysis confirm this pattern. Our results cannot be explained by rational learning, income effects, pay-related mood, disappointment aversion and reference-dependence. Delving into the underlying mechanisms, we provide evidence that non-standard belief patterns are an important driver of experience effects.
Falk, A. & Zimmermann, F. Beliefs and utility: Experimental evidence on preferences for information.
Recent models assume that beliefs about or the anticipation of future consumption have direct utility-consequences. This gives rise to preferences over the timingand structure of information. Using a novel and purposefully simple set-up, we investigate four key questions related to information preferences. Our main results are as follows: We find that the majority of subjects prefers receiving information sooner. This preference, however, is not uniform but depends on context. When the environment allows subjects to not focus attention on (negative) consumption events, later information becomes more attractive. We also identify an aversion towards piecemeal information. Finally, variations in prior distributions do not seem to affect information preferences.
Enke, B., & Zimmermann, F. (2019). Correlation neglect in belief formation. Review of Economic Studies, 86(1), 313-332.
Many information structures generate correlated rather than mutually independent signals, the news media being a prime example. This paper provides experimental evidence that many people neglect the resulting double-counting problem in the updating process. In consequence, beliefs are too sensitive to the ubiquitous “telling and re-telling of stories” and exhibit excessive swings. We identify substantial and systematic heterogeneity in the presence of the bias and investigate the underlying mechanisms. The evidence points to the paramount importance of complexity in combination with people’s problems in identifying and thinking through the correlation. Even though most participants in principle have the computational skills that are necessary to develop rational beliefs, many approach the problem in a wrong way when the environment is moderately complex.Thus, experimentally nudging people’s focus towards the correlation and the underlying independent signals has large effects on beliefs.
Altmann, S., Falk, A., Jäger, S., & Zimmermann, F. (2018). Learning about job search: A field experiment with job seekers in Germany. Journal of Public Economics, 164, 33-49.
We conduct a large-scale field experiment in the German labor market to investigate how information provision affects job seekers’ employment prospects and labor market outcomes. Individuals assigned to the treatment group of our experiment received a brochure that informed them about job search strategies and the consequences of unemployment, and motivated them to actively look for new employment. We study the causal impact of the brochure by comparing labor market outcomes of treated and untreated job seekers in administrative data containing comprehensive information on individuals’ employment status and earnings. While our treatment yields overall positive effects, these tend to be concentrated among job seekers who are at risk of being unemployed for an extended period of time. Specifically, the treatment effects in our overall sample are moderately positive but mostly insignificant. At the same time, we do observe pronounced and statistically significant effects for individuals who exhibit an increased risk of long-term unemployment. For this group, the brochure increases employment and earnings in the year after the intervention by roughly 4%. Given the low cost of the intervention, our findings indicate that targeted information provision can be a highly effective policy tool in the labor market.
Falk, A., & Zimmermann, F. (2018). Information processing and commitment. The Economic Journal, 128(613), 1983-2002.
Beliefs are often found to be sticky and rather immune to new information. In this paper we highlight a specific mechanism that raises resistance to incorporate new information. We provide results from a lab study in the context of an estimation task where subjects need to provide an estimate about an objective state of the world. In this context we provide causal evidence that commitment to a first opinion leads to a neglect of new and challenging information. Investigating the sources of this effect, we show that our findings are well explained by an internal desire to act consistently. We also present a simple model that formalizes how a desire for consistency can produce our pattern of findings.
Gneezy, U., Goette, L., Sprenger, C., & Zimmermann, F. (2017). The limits of expectations-based reference dependence. Journal of the European Economic Association, 15(4), 861-876.
Theories of expectations-based reference-dependent preferences have provided a critical modeling innovation, incorporating a structured theory of the formation of reference points. An important prediction of these models is a monotone response in behavior to changes in expectations. To test such models we conduct a real-effort experiment manipulating expectations and examining consequences on effort provision. In contrast to the theory, we document substantial non-monotonicities in the effort response to changing expectations. Our results provide some evidence on the limitations of expectations-based reference dependence.
Falk, A., & Zimmermann, F. (2017). Consistency as a signal of skills. Management Science, 63(7), 2197-2210.
This paper studies the role of consistency as a signaling device. We propose a two-period model that highlights the informativeness of consistency as a signal of skills and allows for the analysis of consequences for behavior. In a simple principal–agent experiment, we test the basic intuition of the model. We show that consistency is indeed associated with skills. Consequently, consistency is valued by others, inducing people to act consistently.
Ewers, M., & Zimmermann, F. (2015). Image and misreporting. Journal of the European Economic Association, 12(2), 363-380.
In this paper we analyze how image utility can lead to misreporting of private information in contexts where truthful reports maximize monetary outcomes. In a controlled experiment, subjects go through a series of quiz questions and subsequently report a performance measure. We vary whether reports are made to an audience or not. In an additional feedback treatment, reports are also stated to an audience and afterwards the experimenter publicly verifies whether reports were correct. We find that in the audience treatment, stated reports are significantly higher relative to the private treatment as well as the feedback treatment. Our findings suggest that overconfident appearance might be a consequence of social approval seeking.
Zimmermann, F. (2015). Clumped or piecewise? Evidence on preferences for information. Management Science, 61(4), 740-753.
In this paper we examine individuals’ attitudes toward the timing of information. We test a theoretical prediction that people prefer to get information “clumped together” rather than piecewise. We conduct a controlled lab experiment where subjects participate in a lottery and can choose between different resolutions of uncertainty (clumped or piecewise) and analyze which kind of resolution is preferred. Two additional treatments allow us to get a quantitative measure of subjects’ preferences over different information structures. Our data provide little support for a systematic aversion to piecewise information on the aggregate level. In additional treatment conditions, we demonstrate the robustness of our findings and explore potential explanations.