Essays in Political Economy and Behavioral Economics

This thesis uncovers and studies determinants of economic decision making and political attitudes that have so far received little attention in economics. It focuses on three factors - social image concerns, moral values and sexual competition - all of which are shown to be relevant for the functioning of communities. The first chapter studies whether public shaming played a role in men's decision to join the British Army during World War I by exploiting a natural experiment. At the beginning of the war, young girls would hand out white feathers to men not in uniform in an attempt to shame them as cowards. The chapter shows that this shaming strategy had an effect on recruitment numbers suggesting that social image concerns can induce costly altruistic behavior that benefits the group. Whereas the first chapter studies a factor inducing cooperation in societies, the second and the third chapter look at two different factors which can explain social and political disagreement. The second chapter explores how moral values shape beliefs about facts based on results from an online experiment. It shows how the salience of the moral dimension of a political debate increases polarization in beliefs between people on the left and the right of the political spectrum. The third chapter looks at the consequences a skewed sex ratio can have on the political preferences and xenophobic attitudes of young men. We hypothesize that in environments where male-male competition for female partners is high, the frustration from being single and concerns about status and male identity are more severe and can foster out-group hatred. Using observational data for Germany, this chapter provides evidence that in areas which have a significant surplus of men people are more likely to hold xenophobic attitudes and vote for right-wing extremist parties.