Area of Expertise
- Behavioral Economics
- Development Economics
- Experimental Economics
My primary area of research is behavioural economics, using field and lab experiments to understand broad interactions between information, beliefs, and behaviour. My work on motivated beliefs studies whether and how belief formation and updating can lead to overconfidence, optimism, and discrimination. In other areas of my research, I have utilized randomized controlled trials (RCTs) to investigate how information affects beliefs and behaviour in the context of the political resource curse in Mozambique and health in Guinea-Bissau.
Coutts, A., Armand, A., Vincente, P. and Vilela, L. (2020), "Does Information Break the Political Resource Curse? Experimental Evidence from Mozambique", American Economic Review, 110(11), 3431-53.
Natural resources can have a negative impact on the economy through corruption and civil conflict. This paper tests whether information can counteract this political resource curse. We implement a large-scale field experiment following the dissemination of information about a substantial natural gas discovery in Mozambique. We measure outcomes related to the behavior of citizens and local leaders through georeferenced conflict data, behavioral activities, lab-in-the-field experiments, and surveys. We find that information targeting citizens and their involvement in public deliberations increases local mobilization and decreases violence. By contrast, when information reaches only local leaders, it increases elite capture and rent-seeking.
Coutts, A. (2019), "Good News and Bad News are Still News: Experimental Evidence on Belief Updating", Experimental Economics, 22(2), 369-395.
Bayesian updating remains the benchmark for dynamic modeling under uncertainty within economics. Recent theory and evidence suggest individuals may process information asymmetrically when it relates to personal characteristics or future life outcomes, with good news receiving more weight than bad news. I examine information processing across a broad set of contexts: 1) ego relevant, 2) financially relevant, and 3) non value relevant. In the first two cases, information about outcomes is valenced, containing either good or bad news. In the third case, information is value neutral. In contrast to a number of previous studies I do not find differences in belief updating across valenced and value neutral settings. Updating across all contexts is asymmetric and conservative: the former is influenced by sequences of signals received, a new variation of confirmation bias, while the latter is driven by non-updates. Despite this, posteriors are well approximated by those calculated using Bayes’ rule. Most importantly these patterns are present across all contexts, cautioning against the interpretation of asymmetric updating or other deviations from Bayes’ rule as being motivated by psychological biases.
Coutts, A. (2018), "Testing Models of Belief Bias: An Experiment", Games and Economic Behavior, 113, 549-565.
Optimistic beliefs affect important areas of economic decision making, yet direct knowledge on how belief biases operate remains limited. To better understand these biases I introduce a theoretical framework that trades off anticipatory benefits against two potential costs of forming biased beliefs: (1) material costs which result from poor decisions, of Brunnermeier and Parker (2005), and (2) direct psychological costs of distorting reality, of Bracha and Brown (2012). The experiment exploits the potential of the BDM elicitation procedure adopted to lotteries to distort beliefs in different directions, depending on which costs are most important. Relative to an elicitation procedure without distortionary incentives, beliefs are biased in the optimistic direction. Increasing payments for accuracy further increases belief reports, in many cases away from the truth, consistent with psychological costs of belief distortion. Yet the overall results suggest that such theories of optimism fail to explain how beliefs respond to financial incentives.
Project Title Role Award Amount Year Awarded Granting Agency Project TitleThe Signals We Give: Gender, Feedback, and Competition RoleCo-PI (PI: Boon Han Koh) Award Amount$17,164.00 Year Awarded2020 Granting AgencyThe British Academy Project TitleGender and Competition RoleCo-PI (PI: Zahra Murad) Award Amount$8,603.00 Year Awarded2019 Granting AgencyFaculty of Business & Law, Portsmouth University Project TitleBelief Systems and Health Behaviours in Guinea Bissau RoleCo-PI (PI: Pedro Vicente) Award Amount$358,903.00 Year Awarded2018 Granting AgencyFundação para a Ciência e Tecnologia - Research Grant (Portugal) Project TitlePerformance Beliefs and Allocation of Teamwork: An Experiment RoleCo-PI (with Leonie Gerhards and Zahra Murad) Award Amount$ Year Awarded2017 Granting AgencyHamburgische Wissenschaftliche Stiftung Project TitleBelief Biases with Financial Stakes RolePI Award Amount$ Year Awarded2013 Granting AgencyRussell Sage Foundation