Markets and Human Behavior: Evidence from Artefactual Field Experiments

Halefom Yigzaw Nigus, UNU-MERIT

There hardly exists a central concept as markets in the economics discipline. Markets are associated with the efficient allocation of scarce resources and are the fundamental drivers of material well-being. As a consequence, it is widely discernible that market societies are to a great extent materially better off relative to non-market societies. However, markets are not only economic but also social institutions where people meet and commune with each other. As humans are not automata, these interactions in the market commonly extend to economic and non-economic relationships. The overarching objective of this dissertation is, thus, to investigate whether and how markets shape human behavior. The dissertation consists of three self-contained but interrelated essays. The first essay investigates whether markets nurture or erode socially responsible behavior, the role regulation mechanisms and culture play in promoting social responsibility in markets, and the sequels of eroding socially responsible behavior. The second essay investigates whether the introduction of weather index insurance (WII) crowds in or crowds out social capital and the underlying mechanisms through which WII may crowd in or crowd out social capital. The third essay examines the impact of exposure to markets on investment decisions (adoption of high-risk high-return agricultural technologies). The findings show that markets have both intended and unintended effects on human behavior. The dissertation highlights the policy options on how markets could bring about the desired behavioral changes to improve human well-being.

Venue: Online:

Date: 14 September 2021

Time: 13:00 - 14:30