Is there a social cost of randomization?

Randomized controlled trials, which randomly allocate benefits to a treatment group and not a control group, ascribe differences in post-treatment welfare to the benefits being allocated. However, it is possible that potential recipients' welfare is not only affected by the receipt of the program, but also by the allocation mechanism (procedural utility). In this paper, we ask whether potential recipients support or oppose random allocation of financial benefits, by allowing them to reward or punish an allocator conditional on her choice of allocation mechanism: direct allocation to one recipient vs. randomization among potential recipients. We find that when potential recipients have equal endowments, they on average reward the allocator for randomizing. When instead there is inequality in the potential recipients' endowments, the relatively poorer recipients punish allocators who randomize, while the relatively richer potential recipients neither reward nor punish the allocator for randomizing. Our results suggest that an allocator who chooses to randomize between potential recipients with unequal endowments imposes a social cost on the relatively poorer potential recipients.

The effect of hydrocortisone administration on intertemporal choice.

Intertemporal choices - decisions involving trade-offs of outcomes at different points in time - are often made under stress. Stress activates the hypothalamic-pituitary-adrenal (HPA) axis, resulting in the release of corticosteroids. Recent studies provide evidence that corticosteroids can induce rapid non-genomic effects focused on immediate resolution of the stressful situation, followed by slower genomic effects focused on long-term recovery after stress. It remains unknown, however, how corticosteroids affect intertemporal choice. We randomly assigned healthy men to receive either 10 mg hydrocortisone or a placebo before measuring intertemporal choice. To target time-dependent effects, hydrocortisone was administered either 195 or 15 min before choice elicitation, while a placebo was administered at the other timepoint, in a double-blind design. Intertemporal choices were elicited by offering subjects decisions between small rewards available sooner vs. large rewards available later. We demonstrate a time-dependent effect of hydrocortisone administration on intertemporal choice: when tested 15 min after hydrocortisone administration, subjects showed a strongly increased preference for the small, soon reward over the larger, delayed reward. In contrast, this effect was not found when testing occurred 195 min after hydrocortisone administration. Together, these results suggest that the physiological effects of acute, but not delayed, stress may increase temporal discounting.

Measuring self-efficacy, executive function, and temporal discounting in Kenya.

Developing countries have low adherence to medical regimens like water chlorination or antenatal and postnatal care, contributing to high infant and child mortality rates. We hypothesize that high levels of stress affect adherence through temporal discounting, self-efficacy, and executive control. Measurement of these constructs in developing countries requires adaptation of existing measures. In the current study, we adapt psychological scales and behavioral tasks, measuring each of these three constructs, for use among adults in Kenya. We translated and back-translated each measure to Kiswahili and conducted cognitive interviewing to establish cultural acceptability, refined existing behavioral tasks, and developed new ones. Then, in a laboratory session lasting 3 h, participants (N=511) completed the adapted psychological inventories and behavioral tasks. We report the psychometric properties of these measures. We find relatively low reliability and poor correlational evidence between psychological scales and behavioral tasks measuring the same construct, highlighting the challenges of adapting measures across cultures, and suggesting that assays within the same domain may tap distinct underlying processes.

Stuff goes wrong, so act now.

Pepper & Nettle make an ambitious and compelling attempt to isolate a common cause of what they call the behavioral constellation of deprivation. We agree with the authors that limited control can indeed help explain part of the difference in observed present-oriented behavior between the poor and the rich. However, we suggest that mortality risk is not the primary mechanism leading to this apparent impatience.