Welcome! I'm a Postdoctoral Scholar at the University of Chicago and University of CEMA as part of the Joint Initiative for Latin American Experimental Economics.

In Fall 2024, I will join the Erasmus School of Economics in Rotterdam as a tenure-track Assistant Professor of Finance. I received my Ph.D. in 2023 from the University of Bonn.

My research fields are behavioral economics and household finance. In particular, I examine determinants and consequences of financial and moral decision-making using experiments, surveys, and linked survey-administrative data.

CV: Download
Affiliations: CESifo | JILAEE | IZA
Email: luca.henkel@uchicago.edu
Twitter: @Henkel_Lu
Luca Henkel

Working Papers

Proud to Not Own Stocks: How Identity Shapes Financial Decisions | with Christian Zimpelmann

Current version: September 2023

| Download paper |

This paper introduces a key factor influencing households’ decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from eleven countries, we document that a large majority of respondents view stockholders negatively on identity-relevant characteristics – they are perceived as greedy, gambler-like, and selfish individuals. By linking survey and administrative data, we show that these negative perceptions strongly predict households’ stock market participation with a magnitude comparable to leading alternative determinants. We then provide experimental evidence that negative perceptions causally influence decision-making: if people’s views about stockholders become more positive, they become more likely to choose stock-related investments. We further provide evidence that perceptions are stereotypical as they exaggerate actual group differences, leading people to hold overly negative views of stockholders. Our findings provide a novel explanation for the puzzlingly low stock market participation rates around the world, new perspectives on the malleability of financial decision-making, and evidence for the importance of identity in economic decision-making.

Eliciting Moral Preferences under Image Concerns: Theory and Experiment | with Roland Bénabou, Armin Falk, and Jean Tirole

Current version: January 2024

| Download paper

We analyze how the impact of image motives on behavior varies with two key features of the choice mechanism: single versus multiple decisions, and certainty versus uncertainty of consequences. Using direct elicitation (DE) versus multiple-price-list (MPL) or equivalently Becker-DeGroot-Marschak (BDM) schemes as exemplars, we characterize how image-seeking inflates prosocial giving. The signaling bias (relative to true preferences) is shown to depend on the interaction between elicitation method and visibility level: it is greater under DE for low image concerns, and greater under MPL/BDM for high ones. We experimentally test the model’s predictions and find the predicted crossing effect.

Ends versus Means: Kantians, Utilitarians, and Moral Decisions | with Roland Bénabou and Armin Falk

Current version: January 2024

| Download paper

Choosing what is morally right can be based on the consequences (ends) resulting from the decision – the Consequentialist view – or on the conformity of the means involved with some overarching notion of duty – the Deontological view. Using a series of experiments, we investigate the overall prevalence and the consistency of consequentialist and deontological decision-making, when these two moral principles come into conflict. Our design includes a real-stakes version of the classical trolley dilemma, four novel games that induce ends-versus-means tradeoffs, and a rule-following task. These six main games are supplemented with six classical self-versus-other choice tasks, allowing us to relate consequential/deontological behavior to standard measures of prosociality. Across the six main games, we find a sizeable prevalence (20 to 44%) of non-consequentialist choices by subjects, but no evidence of stable individual preference types across situations. In particular, trolley behavior predicts no other ends-versus-means choices. Instead, which moral principle prevails appears to be context-dependent. In contrast, we find a substantial level of consistency across self-versus-other decisions, but individuals' degree of prosociality is unrelated to how they choose in ends-versus-means tradeoffs.

Understanding climate polarization: Identification with and discrimination between climate policy opinion groups | with Philipp Sprengholz, Cornelia Betsch, and Robert Böhm

Current version: September 2023

| Download paper

While climate change requires decisive and rapid action, public discourse on the appropriateness of climate policies has intensified in many countries. Based on a quota-representative sample from Germany (N = 1,014), we show that people form groups based on their climate policy opinions, and that identification with these groups relates to different aspects of societal polarization and conflict. Specifically, more strongly identified individuals were more likely to surround themselves with like-minded people, discriminate against people with different opinions, and support extreme behaviors of opinion-congruent activist groups. Identification was further related to individual climate behavior. The results indicate that climate policy polarization has the potential to fuel conflicts between different opinion-based groups and may impede political negotiation as well as compromise processes and peaceful societal change.

Interpersonal Uncertainty as the Origin of Moral Behavior | with Anujit Chakraborty

| Manuscript coming soon

We show that several key patterns of prosocial behavior can be explained by interpersonal uncertainty – the uncertainty people perceive about how their actions impact other’s utility. Using standard social allocation decisions, we first replicate the classic patterns of ingroup favoritism, selfishness in dictator games, merit-based fairness ideals, and "avoiding the ask” behavior. We then show that these patterns also arise with almost identical distributions in inherently non-social allocation decisions where behavior reflects solely responses to interpersonal uncertainty. In these decisions, decision-makers are paid based on how their allocation would have impacted the recipient's utility, but no one actually receives their allocation. Behavior across social and non-social decisions is highly correlated, and self-reported interpersonal uncertainty predicts behavior in both situations. Our results suggest that several patterns of social behavior previously attributed to disparate motivations may instead have a common, cognitive origin based on interpersonal uncertainty.

Limited Self-knowledge and Survey Response Behavior | with Armin Falk, Thomas Neuber, and Philipp Strack

Updated manuscript in preparation | American Economic Review, Reject and Resubmit

Self-Image: A Review | with Roland Bénabou

Manuscript in preparation


Experimental Evidence on the Relationship between Perceived Ambiguity and Likelihood Insensitivity

Games and Economic Behavior, 2024, 145: 312-338

| Published version | Working paper

Observed individual behavior in the presence of ambiguity shows insufficient responsiveness to changes in subjective likelihoods. Despite being integral to theoretical models and relevant in many domains, evidence on the causes and determining factors of such likelihood insensitive behavior is scarce. This paper investigates the role of beliefs in the form of ambiguity perception – the extent to which a decision-maker has difficulties assigning a single probability to each possible event – as a potential determinant. Using an experiment, I elicit measures of ambiguity perception and likelihood insensitivity and exogenously vary the level of perceived ambiguity. The results provide strong support for a perception-based explanation of likelihood insensitivity. The two measures are highly correlated at the individual level, and exogenously increasing ambiguity perception increases insensitivity, suggesting a causal relationship. In contrast, ambiguity perception is unrelated to ambiguity aversion – the extent to which a decision-maker dislikes the presence of ambiguity.

Historical narratives about the COVID-19 pandemic are motivationally biased | with Philipp Sprengholz, Robert Böhm, and Cornelia Betsch

Nature, 2023, 623: 588–593

| Published version | Working paper |

How people recall the SARS-CoV-2 pandemic is likely to prove crucial in future societal debates on pandemic preparedness and appropriate political action. Beyond simple forgetting, previous research suggests that recall may be distorted by strong motivations and anchoring perceptions on the current situation. Here, using 4 studies across 11 countries (total n = 10,776), we show that recall of perceived risk, trust in institutions and protective behaviours depended strongly on current evaluations. Although both vaccinated and unvaccinated individuals were affected by this bias, people who identified strongly with their vaccination status—whether vaccinated or unvaccinated—tended to exhibit greater and, notably, opposite distortions of recall. Biased recall was not reduced by providing information about common recall errors or small monetary incentives for accurate recall, but was partially reduced by high incentives. Thus, it seems that motivation and identity influence the direction in which the recall of the past is distorted. Biased recall was further related to the evaluation of past political action and future behavioural intent, including adhering to regulations during a future pandemic or punishing politicians and scientists. Together, the findings indicate that historical narratives about the COVID-19 pandemic are motivationally biased, sustain societal polarization and affect preparation for future pandemics. Consequently, future measures must look beyond immediate public-health implications to the longer-term consequences for societal cohesion and trust.

The Association Between Vaccination Status Identification and Societal Polarization | with Philipp Sprengholz, Lars Korn, Cornelia Betsch, and Robert Böhm

Nature Human Behaviour, 2023, 7(2): 231-239

| Published version | Working paper |

Public discord between those vaccinated and those unvaccinated for COVID-19 has intensified globally. Theories of intergroup relations propose that identifying with one’s social group plays a key role in the perceptions and behaviors that fuel intergroup conflict. We test whether identification with one’s vaccination status is associated with current societal polarization. The study draws on panel data from samples of vaccinated (n = 3,267) and unvaccinated (n = 2,038) respondents in Germany and Austria that were collected in December 2021, February, March, and July 2022. The findings confirm that vaccination status identification (VSI) explains substantial variance in a range of polarizing attitudes and behaviors. VSI was also related to higher psychological reactance toward mandatory vaccination policies among the unvaccinated. Higher levels of VSI reduced the gap between intended and actual counter-behaviors over time by the unvaccinated. VSI appears to be an important measure for predicting behavioral responses to vaccination policies.

Different Interventions for COVID-19 Primary and Booster Vaccination? Effects of Psychological Factors and Health Policies on Vaccine Uptake | with Philipp Sprengholz, Robert Böhm, and Cornelia Betsch

Medical Decision Making, 2023, 43(2): 239-251

| Published version | Working paper

Background: Mitigation of the COVID-19 pandemic requires continued uptake of SARS-CoV-2 vaccines. To increase vaccination intention and uptake, key determinants of primary and booster vaccination need to be understood and potential effects of vaccination policies must be examined. Design: Using experimental data collected in Germany in February 2022 (n = 2,701), this study investigated (a) predictors of primary and booster vaccination, and (b) potential effects of policies combining vaccination mandates and monetary incentives. Results: Compared to unvaccinated participants, those with primary vaccination were less complacent, more often understood the collective protection afforded by vaccination, and less often endorsed conspiracy-based misinformation. Compared to participants with primary vaccination, boosted individuals were even less complacent, exhibited fewer conspiracy-based beliefs, perceived fewer constraints by prioritizing vaccination over other things, and more often favored compliance with official vaccination recommendations. Support for and reactance about vaccination mandates depended on vaccination status rather than policy characteristics, regardless of mandate type or incentives (up to 500 euro). While unvaccinated individuals rejected policy provisions and declined vaccination, boosted individuals indicated mid-level support for mandates and showed high vaccination intention. Among vaccinated individuals, higher incentives of up to 2,000 EUR had a considerable positive effect on the willingness to get boosted, especially in the absence of a mandate. Conclusions: While mandates may be needed to increase primary vaccination, our results indicate that financial incentives could be an alternative to promote booster uptake. However, combining both measures for the same target group seems inadvisable in most cases.

Payments and Freedoms: Effects of Monetary and Legal Incentives on COVID-19 Vaccination Intentions in Germany | with Philipp Sprengholz and Cornelia Betsch

PLOS ONE, 2022, 17(5): 1-11

| Published version | Working paper |

Monetary and legal incentives have been proposed to promote COVID-19 vaccination uptake. To evaluate the suitability of incentives, an experiment with German participants examined the effects of payments (varied within subjects: 0 to 10,000 EUR) and freedoms (varied between subjects: vaccination leading vs. not leading to the same benefits as a negative test result) on the vaccination intentions of previously unvaccinated individuals (n = 782). While no effect could be found for freedoms, the share of participants willing to be vaccinated increased with the payment amount. However, a significant change required large rewards of 3,250 EUR or more. While monetary incentives could increase vaccination uptake by a few percentage points, the high costs of implementation challenge the efficiency of the measure and call for alternatives. As experimental data suggest that considering vaccination as safe, necessary, and prosocial increases an individual’s likelihood of wanting to get vaccinated without payment, educational campaigns should emphasize these features when promoting vaccination against COVID-19.

Policy Writings

Identification, polarization, and their societal and political consequences | with Robert Böhm, Philipp Sprengholz, and Cornelia Betsch

United Nations Human Development Report 2023-24, 2024, 190-193


Personal motivations polarize people’s memories of the COVID-19 pandemic | with Philipp Sprengholz

Nature, 2023

| Download paper

How accurately a person recalls the COVID-19 pandemic is affected by motivational factors, including how they feel about their vaccination status. The recollections of vaccinated and unvaccinated people are skewed in opposite directions, leading to different retrospective narratives about the pandemic. This distorted recall influences how individuals evaluate past political action, and will complicate preparation for future crises.

Learning from the past? How biased memories of the pandemic endanger preparation for future crises | with Philipp Sprengholz, Robert Böhm, and Cornelia Betsch

Clinical and Translational Medicine, 2023, 13(12): e1510

| Download paper

As the world transitions to a postpandemic phase, societies are looking to evaluate their past responses to COVID-19 and prepare for future crises. However, a recently published series of studies sheds light on a concerning issue; sustained societal polarisation between the vaccinated and unvaccinated is distorting the accuracy of people's recall of the pandemic, fuelling societal conflict and complicating preparation for future pandemics. Here, we summarise the key findings and elaborate on the implications for clinical practice.

Wie die Pandemie zu Polarisierung und gesellschaftlicher Destabilisierung beiträgt | with Cornelia Betsch, Philipp Sprengholz, and Robert Böhm

| Download paper

Dies ist kein klassischer lessons-learnt Beitrag. Vielmehr nimmt dieser Artikel eine Metaperspektive ein und zeigt anhand verschiedener Studien auf, dass die zurückschauende Bewertung in diesem lessons-learnt Prozess durch systematische und motivierte Erinnerungsverzerrungen beeinflusst ist. Ferner zeigen wir, wie die dahinterliegenden Prozesse bis heute zu Konflikten und gesellschaftlichen Spannungen beitragen. Die Erkenntnisse und Schlussfolgerungen aus diesen Ergebnissen können sowohl den Prozess des Lernens aus der Pandemie unterstützen als auch im Umgang mit weiteren Krisen helfen, Polarisierung zu vermeiden.