Publications
- Gueye, M., Quérou, N., & Soubeyran, R. (2020). Social preferences and coordination: An experiment. Journal of Economic Behavior & Organization, 173, 26-54. https://doi.org/10.1016/j.jebo.2020.02.017
Abstract:
In this paper, we use a laboratory experiment to analyze the effect of social preferences in a coordination game with Pareto-ranked equilibria. Inequality is increased by increasing the coordination payoffs of some subjects while the coordination payoffs of others remain unchanged. Theoretically, in this setting, inequality aversion may lead to a negative relationship between inequality and coordination success, while total payoff motivations lead to a positive relationship. Using a within-subject experimental design, we find that more inequality unambiguously yields a higher level of coordination success. Furthermore, this result holds even for subjects whose payoffs remain unchanged. Our results suggest that total payoff motivations drive the positive relationship between inequality and coordination success found in this experiment. Moreover, our data highlight that the order of treatment matters. Groups facing over time a reduction in inequalities reach the efficient outcome more often, over the entire experiment, compared to groups facing over time an increase in inequalities. This study thus contributes to understanding whether social preferences and variations in inequality affect the outcome of coordination problems.
Working Papers
Motivated by the potential tension between coordination, which may require discriminating among identical workers, and social comparisons, which may intuitively calls for small pay differentials, we analyze the design of optimal rewards in an organization with inequality-averse workers whose tasks are complementary. We show that inequality aversion may imply less inequality and, more surprisingly, higher monetary incentives. We also show that disadvantageous inequality aversion is of first-order importance compared to advantageous inequality aversion, a result that is consistent with existing evidence. Moreover, the distribution of rewards maybe non monotonic, with the most inequality-averse agents lying at both ends of the distribution. Our analysis also sheds light on the crucial role of coordination, as most results would be reversed if the principal could costlessly select her most preferred equilibrium outcome.
- Gueye, M., Quérou, N., & Soubeyran, R. (2020). Inequality aversion and the distribution of rewards in organizations. CEE-M Working-Paper 2021-02. 26 p. (Submitted for publication)
Motivated by the potential tension between coordination, which may require discriminating among identical workers, and social comparisons, which may intuitively calls for small pay differentials, we analyze the design of optimal rewards in an organization with inequality-averse workers whose tasks are complementary. We show that inequality aversion may imply less inequality and, more surprisingly, higher monetary incentives. We also show that disadvantageous inequality aversion is of first-order importance compared to advantageous inequality aversion, a result that is consistent with existing evidence. Moreover, the distribution of rewards maybe non monotonic, with the most inequality-averse agents lying at both ends of the distribution. Our analysis also sheds light on the crucial role of coordination, as most results would be reversed if the principal could costlessly select her most preferred equilibrium outcome.
Works in progress
- Gueye, M. Contracting Under Spatial Effects
While incentive contracts are extensively used to tackle environmental issues such as biodiversity losses, their efficiency remains understudied so far. This paper considers a principal-agents model to study how spatial characteristics -- retention effects and diffusion effects --, which occur in certain public good provisions (environmental goods for instance), influence the efficiency of the contract outcome. The theoretical finding suggests that an optimal contracting scheme is always inefficient from a social viewpoint. Heterogeneity of the spatial characteristics helps to identify the agent who drives such inefficiency. I show that contracting with an agent who can create high diffusion effects while receiving low diffusion effects increases the inefficiency gap, therefore, driving the inefficiency of the contracting outcome. These results suggest that bilateral contracts may not be the most appropriate instrument to solve the issues raised by spatial externalities.
- Gueye, M.; Monjon, S. Sorting Behavior In Higher Education.
- Gueye, M.; Berlin, N. Information and Pro-environmental Behavior: An experimental Investigation of Waste Sorting Behavior.
- Gueye, M. Altruistic Decision-making Under Strategic Uncertainty.
- Stokes, A., Bocquého, G., Carrere, P., Salazar, R. C., Deconchat, M., Gaba, S., Garcia, L., Gardarin, A., Gary, C., Gaucherel, C., Gueye, M., Hedde, M., Lescourret, F., Magda, D., Mao, Zhun., Quérou, N., Rudi, G., Salles, J-M., Soubeyran, R., Subervie, J., Thomas, M., Vialatte, A., Vinatier, F. (2021). Services Provided by Agroecosystems: Twenty Questions to Link Science and Practice in Future Research Initiatives
Book Chapter
- Courtois, P., Gueye, M., Martinet, V., Préget, R., Salles, J. M., Sauquet, A., ... \& Julie, S. (2019). Quelles politiques publiques pour favoriser des paysages agricoles multifonctionnels? In Paysage biodiversité fonctionnelle et santé des plantes, Sciences en Partage (Quae), Page 215-230. Editions Quae. (link)
PhD Dissertation
- Behavior and Incentives Under Spatial Externalities
Environmental Economics typically studies the problem of internalizing externalities using uniform (price or quantity) instruments. However, uniform regulations seem not well suited in heterogeneous contexts and when abatement efforts are complementary. This arises when farmers with neighboring plots make efforts to protect biodiversity (e.g. pollinators). Incentive contracts are a potential useful instrument for regulating heterogeneous externalities. The theoretical literature on the subject shows that the scheme of optimal subsidies may be nonuniform when externalities are positive. Moreover, the optimal scheme is discriminatory when the efforts are complementary, in other words, two identical agents obtain differentiated subsidies. Two important aspects have received little attention in this literature: the role of private benefits and behavioral aspects. This thesis contributes to the literature in analyzing the role of these two dimensions in the design of optimal contracts when agents generate heterogeneous externalities: Chapter 2 investigates the role of private benefits in a model of contracting with externalities. We study the efficiency of the optimal contract outcome. We show that private benefits may lead the principal to induce efficient contributions. When reaching efficiency is not optimal, we characterize the structure of spatial effects that lead to inefficiency. Specifically, we show that the principal tends to induce agents characterized by high levels of private benefits and moderate levels of externalities to make inefficient contributions. In Chapter 3, we focus on the acceptability of the optimal contract with externalities using lab experiments. We study how subjects play a coordination game that is derived from the optimal solution of a model of contracting with heterogeneous externalities. This coordination game involves a trade-off between efficiency and equity in the sense that the most efficient equilibrium is the more unequal one. We find that subjects play the more unequal equilibrium more frequently. Using two treatments that differ in the level of equity at the efficient equilibrium, we find evidence which is consistent with subjects having social welfare motivations. Finally, Chapter 4 analyzes the role of inequality-aversion preferences when the objective of the principal is to induce participation of two agents in a project. The agents generate positive externalities for each other when they both participate. We study the role of inequality aversion in this context and we find that advantageous inequality aversion has a first order effect: if the agents are not averse to advantageous inequality, then the optimal contract does not depend on the agents’ disadvantageous inequality aversion.