David Clingingsmith, Assistant Professor of Economics at the Weatherhead School of Management at Case Western Reserve University, presented on November 25, 2013 as part of the AEDE Applied Economics Seminar Series. His presentation focused on his recent research: "Mental Accounts, Selective Attention, and the Mutability of Altruism: An Experiment with Online Workers."
Abstract: The theory of mental accounts holds that we classify income by source and link sources to appropriate use (Thaler, 1999). When deciding whether to share money with another person, we consider the income at our disposal. I conduct a framed field experiment in which participants accrue income in two accounts. They earn income in a real-effort task and also receive a windfall. They then make a sharing choice. Overall, participants are more generous with windfall income than earned income. More intriguingly, participants pay selective attention to the income sources at hand in a self-interested way. Their marginal willingness to give is positive only for the account with the largest balance. They ignore the smaller account and the total. This behavior is consistent with a self-signaling model in which multiple mental accounts reduce the strength of the bad signal sent by being selfish (Benabou and Tirole, 2011).