How Field Experiments in Economics Can Complement Psychological Research on Judgment Biases

Abstract

This review summarizes results of field experiments examining individual behaviors across several market settings—from open-air markets to rideshare markets to tax-compliance markets—where people sort themselves into market roles wherein they make consequential decisions. Using three distinct examples from my own research on the endowment effect, left-digit bias, and omission bias, I showcase how field experiments can help researchers understand mediators, heterogeneity, and causal moderation involved in judgment biases in the field. In this manner, the review highlights that economic field experiments can serve an invaluable intellectual role alongside traditional laboratory research.

Food safety and cognitive biases: what we know, what we need to know, and why

“…The resulting arguments have proved influential in many fields, including behavioral economics, where the influence stems from the effort to understand how biases influence key economic variables with which policymakers and economists concern themselves. For example, List (2021) provides evidence from field experiments on how judgment biases such as the endowment effect, left-digit bias, and omission bias influence individual behaviors in different types of market settings, from open-air markets to tax-compliance markets. Kahneman et al (1991) present experimental evidence supporting the endowment effect and status quo bias, and they discuss how such anomalies violate assumptions of standard economic theory.…”