Armin Falk
Behavioral economist and professor of economics at the University of Bonn
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At present, the book is only available in German. You can find more information on the publisher's website. Here's a brief insight into what it's all about (German):
Research
Can interventions in early childhood development reduce inequality in Germany? How do markets and organizations influence our moral behavior? Is it possible to measure the global distribution of altruism or other economic preferences? These are just some of the questions that I explore in my research.
For me, equal opportunity is one of the most important social goals, although unfortunately Germany is still a long way from achieving this. One’s socioeconomic background still determines the life course of our children to an alarming degree. How bad is the situation regarding equal opportunities in Germany? What can be done to reduce social and economic inequalities?
A research project that I initiated provides answers to both questions. Together with other researchers, I launched the briq family panel. Since 2011, we have been interviewing around 500 children and their families every year. The interviews include experimental games to document the children’s intelligence and personality development. We know that our intelligence as well as social and economic preferences and traits have a strong influence on our success in life, while personality primarily develops in the first years of life. Both factors make it particularly important to increase our understanding of personality development.
We divided the participating families into two groups: namely (i) families who have a comparatively high socioeconomic background and (ii) those who have a lower socioeconomic background. Decisive factors for the socioeconomic status are the level of education, whether parents are single parents, and parents' income. This breakdown allows us to study whether children develop differently depending on the status of their parents, and it offers us insights into the origins of social inequality in Germany.
In addition, some children from socioeconomically weaker households took part in a mentoring program called 'Balu und Du', within which the randomly-selected primary school-age children were assigned a mentor for one year. The idea behind the project is to broaden the children's horizons and boost their self-confidence. Such interactions bring new stimuli, ideas, and resources into the family context; for example, the experience of having attended high school or university. If you would like to know more about the program, please visit the program's website .
The data collected each year allows us to analyze the extent to which the three groups develop differently. Based on the unique data set, we can study the children's personality development and increase our understanding of the influence of the social environment on this development.
In a study based on the briq family panel, we examined the intelligence and economic preferences of the participating children. Alarming differences between children from families with low or high socioeconomic status already become apparent at elementary school age.
Further, we analyze whether the mentoring program reduces the substantial differences between socioeconomic groups. The randomized intervention has a positive impact on educational mobility in Germany. Children from socioeconomically weaker families who were assigned a mentor are subsequently significantly more likely to attend high school later on. The intervention halved the gap in attendance at high school between children from families with high and low socioeconomic status.
The mentoring program also has positive effects on other measures. For example, the participating children are more prosocial, honest, and better at assessing their abilities. Gender differences in salary expectations and willingness to compete with others are also reduced.
The inequality of opportunity in Germany is unfair and inefficient, as the circumstances of our situation at birth should not determine our life path. My research shows that investing in early childhood development can counteract this injustice. If you’d like to know more, feel free to take a look at the research papers:
Many clever minds have failed to define morality in a generally binding way. Nevertheless, a kind of minimal consensus has formed, according to which it is immoral to consciously cause pain or harm to others.
Research in recent years has shown that our moral behavior is fluctuating. In principle, we are always both good and evil, although our actions are strongly dependent on the circumstances and the situation in which the decision is made. Our personality and emotions also play a crucial role. My research seeks to understand the complexity of moral transgressions in more detail. This knowledge can help us to design fairer markets and curb immoral or harmful behavior, such as inhumane working conditions or environmentally damaging behavior.
Moral and Markets
Do market mechanisms lead us to adapt our moral behavior? In a recently-published study, I examine whether group decisions change the willingness to kill a mouse for a small amount of money. Compared to individual decision-making, it emerges that group participants were significantly more likely to choose self-interest and kill the mouse. In another study that I published with Nora Szech in Science, we present experimental evidence that markets negatively influence our moral behavior. Both studies illustrate how the diffusion of responsibility that arises from interaction with other agents – such as in the firm or within markets – gets in the way of moral behavior.
Image Concerns
Another driver of moral behavior is our desire to be viewed as a "good person" by ourselves and others, i.e. to enjoy a positive reputation. Numerous studies show that the pursuit of a good reputation promotes prosocial behavior. However, what about self-perception? To answer this question, I conducted an experiment in which participants had to decide whether to inflict a painful shock on another person for a small amount of money. The trick of the experiment was that with the help of mirrors and webcams, some test subjects had their ego awareness increased. This randomly-selected sub-group had to look themselves in the eye when deciding between self-interest and morality. My study shows that these subjects were much less likely to shock others, i.e. more likely to make the moral decision. Increased self-awareness at the moment of decision can thus promote moral behavior. However, "image concerns" also have their dark side, especially when different concerns conflict with each other. In an experiment, I could show that people are more likely to accept the death of a mouse if they can prove to themselves that they are intelligent. The desire to appear skillful – another source of positive self-image – can causally reduce moral behavior.
Does Prosocial Behavior Promote Happiness?
The conflation of happiness and morality is a nice and widespread idea. However, in a study with my colleague Thomas Graeber, I could show that acting prosocially does not necessarily make us happier. On the contrary, participants in an experiment felt happier in the long term when they received a sum of money than when they triggered a life-saving donation.
Personality
People are different, and this also applies to our prosocial characteristics. Representative surveys show how different our altruistic dispositions are and which factors play a role. You can find details in the Preferences section.
Want to know more? Feel free to take a look at my research papers:
Economic preferences such as patience, attitudes towards risk or prosociality have a strong influence on various indicators of success. For example, more patient people are less likely to be involved in criminal acts, have higher average educational attainments, are wealthier, healthier, and more successful at work. Alternatively, take prosociality: it aids the smooth functioning of our society by influencing the provision of public goods or compliance with contracts. Our prosociality also affects individual behavior; for example, by positively influencing our health, sense of well-being, or success in the labor market.
For a long time, economic decision-making models did not take such preferences into account. Nonetheless, motives such as fairness or reciprocity are central drivers of human behavior, as a large part of my empirical research shows.
For example, together with colleagues, I initiated the Global Preferences Survey (GPS), a representative survey of more than 80,000 individuals in 76 countries covering 90 percent of the world's population and global income. This unique data source enables innovative research on the influence of economic preferences on the development of countries and regions.
A comparison of countries reveals a whole series of interesting differences. Let's start with patience: here, we show that European countries are in the top group, while they score less well on prosocial preferences. Altruism is particularly prevalent in Asian countries. When it comes to willingness to take risks, countries from Africa and the Middle East have high scores on average.
It is important to note that the differences between individuals within a country are larger in magnitude than all country differences. The observed differences are systematic; for example, on average women are more patient, prosocial, and risk-averse.
Where do the contemporary population-level heterogeneities in risk aversion, time preference, altruism, positive reciprocity, negative reciprocity, and trust come from? In a study, I could show that the differences in preferences partly trace back to the structure of the migration patterns of our very early ancestors. Formative life circumstances also play a role here, such as the extent to which pre-industrial societies relied on animal herding. In a research paper, I could show that people from regions that practiced more animal husbandry prior to industrialization are more willing to punish unfair behavior and take revenge. The production methods of our pre-industrial ancestors thus still influence our preferences today.
If you would like to learn more about the dataset and research, you can listen to an English-language talk I gave on the topic of culture and economic preferences here, visit the GPS-Website, or read some of my related research papers:
Research highlights
In this section, I discuss selected research papers that are close to my heart or have had a particular impact on the economics literature. If you are interested in the complete list of my research papers, please feel free to visit my visit briq profile page.