The available evidence from anthropology, economics, and psychology suggests that sensitivities to the emotions of shame and guilt vary across cultures. So does (over)confidence in ability and skills. Is there a connection between these observations? We address this question theoretically and empirically. Theoretically, we explore the socially optimal combination of psychological incentives and the emergence of different cultural equilibria. Empirically, we find significant evidence of a negative relationship between individual confidence and the cultural importance of shame versus guilt. The relationship holds across countries, and for U.S. immigrants relative to their culture of origin, suggesting a causal effect still significant after more than eight years.
Do people correctly perceive the limitation of their attention when dealing with multiple tasks? We develop a simple model that predicts that, under rational inattention, individuals can correctly perceive their attention on a future task and possible attention spillover in a dual-task setting. We test our theoretical predictions in an online experiment and find that individuals generally overestimate their future attention to a scheduled, incentivized task, and thus report exaggerated valuation of the task. We also document that dual tasks have positive spillover effects on each other, improving baseline attention level for task completion, and people can indeed anticipate such positive spillover effects.
Do people value their attention optimally? Existing findings suggest that individuals systematically undervalue by how much attention-increasing technologies, in particular reminders, can boost their chance of completing future tasks. In a theory-driven experiment, we revisit this question and elicit a measure of individuals' valuation of reminders that is free from arbitrary risk preferences, under an incentive scheme of accumulating probability points to win a binary lottery. We find that even under such incentive structure, individuals still do not fully value the effectiveness of reminders. The violation of optimality cannot be explained by potential probability weighting.
This paper provides causal evidence linking Net Promoter Score (NPS) to revenue growth from the airline industry. While NPS is widely used as a leading indicator of business performance, direct causal validation has been limited. Collaborating with a full-service international airline, the authors use flight delays as plausibly exogenous shocks to customer satisfaction and instrumental variables, and estimate that a one percentage-point increase in NPS raises the airline's cumulative monthly revenue by up to 0.5%, with a hump-shaped response peaking approximately two months later. The pattern is persistent across both pre- and post-pandemic samples. The NPS effect is largely driven by new customer acquisition, with heterogeneous effects across cabin classes, flight routes, and customer demographics. The authors further leverage a field experiment based on the airline's staggered rollout of complimentary in-flight Wi-Fi service. This intervention raised NPS by over 5.5 percentage points among treated flights and increased subsequent revenue by more than 10% after two weeks, with a similar hump-shaped response. Our findings corroborate the role of NPS as a predictive metric for revenue growth, offering actionable guidance for customer experience management in service industries.
This study examines whether online opinions expressed during trading versus non-trading hours have differential impacts on stock prices, exploiting the segmentation between individual and institutional investors. Using opinion data from a popular Chinese online stock forum, we find that non-trading-hour opinions generate positive concurrent overnight returns but are followed by reversals in the subsequent daytime trading periods, while trading-hour opinions show no such pattern. This reflects a systematic tug-of-war between individual investors who predominantly trade overnight and institutional investors who tend to trade intraday. We show that firms' release of operational events after market close creates distinct information environments that particularly influence individual investors who trade overnight. Such event announcements expose inexperienced individual investors to high uncertainty, leading them to seek advice through online forums and trade near market open. We also find that non-trading-hour opinions attract substantial investor attention when companies announce these events.
