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The Department of Environmental Economics and Management

The Robert H. Smith Faculty
of Agriculture, Food and Environment
The Hebrew University of Jerusalem

Herzl 229, Rehovot 7610001
Fax: 08-9466267

Department Head:
Dr. Ohad Raveh, Tel: 08-9489373

Head of the teaching program:
Dr. Ohad Raveh, Tel: 08-9489373

Miri Arazi, Tel: 08-9489230


Becker, C. K. ; Ert, E. ; Trautmann, S. T. ; van de Kuilen, G. Experiencing Risk: Higher-Order Risk Attitudes in Description- and Experience-Based Decisions. JOURNAL OF EXPERIMENTAL PSYCHOLOGY-LEARNING MEMORY AND COGNITION 2021, 47, 727-746.Abstract
Risky decisions are often characterized by (a) imprecision about consequences and their likelihoods that can be reduced by information collection, and by (b) unavoidable background risk. This article addresses both aspects by eliciting risk attitude, prudence, and temperance in decisions from description and decisions from experience. The results reveal a novel description-experience gap for prudence and replicate the known gap for risky decisions. While widespread prudence has been observed in decisions form description, we find no evidence of prudent decision making from experience. In decisions from experience people are strongly influenced by the sampled mean, while skewness plays a smaller role than in decisions from description.
Fleischer, A. ; Ert, E. ; Bar-Nahum, Z. The Role of Trust Indicators in a Digital Platform: A Differentiated Goods Approach in an Airbnb Market. Journal of Travel Research 2021, 00472875211021660. Publisher's VersionAbstract
We employed a differentiated goods market analysis where we utilized, in addition to the prevailing goods’ attributes, different types of the sellers’ attributes including trust indicators. We incorporated both sets of attributes into a structural model of the whole market including demand and pricing equations with the hotels as an outside good. Applying the model to Stockholm’s Airbnb market reveals that hosts’ attributes significantly affect market performance. Simulations of market scenarios show that the very high review scores and the Superhost certification help Airbnb compete with hotels and increase profitability. We also show that the “Airbnb plus” luxury program, which makes the apartments a closer substitute for hotels, leads to an increase in Airbnb’s market welfare. Our analysis provides a framework for understanding the full impact of the different attributes of the products, their providers, and their management in the sharing-economy accommodation market.
Ert, E. ; Fleischer, A. What do Airbnb hosts reveal by posting photographs online and how does it affect their perceived trustworthiness?. Psychology & Marketing 2020. Publisher's VersionAbstract
Abstract The use of sellers' personal photographs online is ubiquitous in sharing economy platforms such as Airbnb. This paper addresses two questions. First, what type of personal photos do hosts choose to post on Airbnb? Second, which of the characteristics of their photos affects their perceived trustworthiness? We answer these questions by building a structural equation model of the relation between the characteristics of the photos and the perceived trustworthiness of the hosts. The antecedents of trust in this model were defined based on insights from psychology regarding first impressions. We found that the hosts' visual characteristics (e.g., gender) as revealed in their online photographs affect their perceived trustworthiness both directly and indirectly via attractiveness. We also found that image characteristics, which are not related directly to the traits of the host in the picture (e.g., photograph quality), play a significant role in trust inference. Interestingly, the hosts' choices of their personal photos suggest that they may not be aware of these effects.
Shirley Hershko, ; Cortese, S. ; Ert, E. ; Anna Aronis, ; Adina Maeir, ; Yehuda Pollak,. Advertising Influences Food Choices of University Students With ADHD. Journal of Attention Disorders 2019, online first. Publisher's VersionAbstract
Objective: Previous research in adults with ADHD showed high rates of obesity and unhealthy food choices. There is evidence that contextual cues, for example, advertisements, influence food choices. This study assessed the sensitivity of university students with ADHD to advertised food. Method: University students (N = 457) with and without ADHD participated in a cafeteria field experiment. Food choices were examined in periods of advertising either healthy or unhealthy sandwiches. Results: Students with ADHD (a) chose less healthy food items, (b) were more influenced by advertising, (c) showed the same overall healthy food choices as controls when exposed to healthy advertising. Conclusion: Students with ADHD chose unhealthier foods at the cafeteria but were also more influenced by advertising. Healthy food advertisements raised their healthy food choices. As this population has strong association with unhealthy dietary patterns, it is important to investigate the influence of food cues on their eating habits.
Elimelech, E. ; Ert, E. ; Ayalon, O. Bridging the gap between self-assessments and measured household food waste: A hybrid valuation approach. Waste Management 2019, 95, 259 - 270. Publisher's VersionAbstract
Great effort is invested in mapping the extent of household food waste and its main determinants. However, food waste valuation remains a challenging task. Valuation methods can be divided roughly into objective measurements that are based on physical waste surveys, and subjective self-assessments that are based on diaries or questionnaires. Self-assessment methods have been more popular than food waste measurement because they are less costly. The goal of this paper is to empirically test whether self-assessments can accurately reflect objective measurement. To answer this question, we implemented a hybrid valuation approach by integrating and comparing three methods: a self-assessment questionnaire, a physical waste survey, and a food expenditure survey. Self-assessments slightly underestimated measured food waste proportion (13.7% vs. 16.3%, respectively). The results also show a positive, yet, not very strong correlation between the measures and the self-assessments of unconsumed and partly consumed avoidable food waste in most food categories. Self-assessments of monetary losses were €42.07 per household per month on average, overestimating calculated losses of €25.74 on average. Our findings question the validity of self-assessments. The current paper demonstrates the questionable nature of the implicit assumption that self-assessment reflects the true level of food waste and suggests a rigorous method for exploring this relation.
Elimelech, E. ; Ert, E. ; Ayalon, O. Exploring the Drivers behind Self-Reported and Measured Food Wastage. Sustainability 2019, 11. Publisher's VersionAbstract
Understanding households’ food waste drivers is crucial for forming a coherent policy to meet the sustainable development goals. However, current studies have documented mixed evidence regarding food waste determinants. Most studies have relied on self-reports, assuming they reflect actual behaviors. This study applies a structural equation model that evaluates both self-reported and measured food wastage, and how they are affected by different households’ attributes, attitudes, and behaviors. As such, it also provides a test for the underlying logic that self-reports are a proxy for actual food waste. Results show that measured food wastage is, at best, weakly correlated with self-reports. Moreover, drivers affecting self-reported and measured food wastage are not necessarily the same. Household size affects only measured food wastage. Source separation behavior negatively affects self-reported and measured food wastage, while environmental attitudes have a negative effect only on self-reports. Meal planning, unplanned shopping, and food purchased have no impact on self-reported and measured food wastage. The relation between self-reported and actual food waste and their drivers are even less understood than we thought. The distinction between self-reports and actual waste is crucial for follow-up research on this subject as well as assessing policy measures.
Ert, E. ; Fleischer, A. The evolution of trust in Airbnb: A case of home rental. Annals of Tourism Research 2019, 75, 279 - 287. Publisher's VersionAbstract
Airbnb, a leader of P2P accommodation markets, has acknowledged that “trust is what makes Airbnb work” and has implemented several trust indicators over the years: reputation system, impression formation, and certification. We evaluate the changes in these indicators over time: 1. the modification of the reputation system, 2. the removal of hosts’ photos from the main search screen, and 3. the introduction of the Superhost program. We find that the change of the rating system was associated with a small, yet significant, reduction in ratings, that the removal of the hosts’ photos might have eliminated the price premium of trustworthy images, and that Superhost certification involves a price premium, but does not seem to compensate for established reputation. This article also launches the Annals of Tourism Research Curated Collection on Peer-to-peer accommodation networks, a special selection of research in this field.
Ert, E. ; Cohen-Amin, S. ; Dinar, A. The effect of issue linkage on cooperation in bilateral conflicts: An experimental analysis. Journal of Behavioral and Experimental Economics 2019, 79, 134 - 142. Publisher's VersionAbstract
Bilateral conflicts, e.g., common pool resource allocation, pollution prevention, collusion of markets, or share transboundary water, often involve more than one issue that requires solution. The theoretical literature suggests that linking conflictive issues opens new opportunities for cooperation. We present a new experimental setting of bilateral conflicts, in which each issue is modeled as a separate Prisoner's Dilemma game. In two experiments, the effect of issue-linkage on cooperation is evaluated by comparing a treatment in which the two games are played sequentially (isolated treatment) with one where they are played simultaneously (linked treatment). Specifically, in the linked treatment each agent observes the payoffs from playing the different paths across games (e.g., cooperate in game1 but defect in game2) and then acts accordingly by committing to one of these paths. We differentiate the case where issue linkage implies symmetrical payoffs across games (Experiment 1), from the asymmetric case where one agent receives higher benefits from issue-linkage (Experiment 2). We find that issue linkage increases mutual cooperation and decreases mutual defection. Asymmetry reduces the level of cooperation in both isolated and linked games, yet issue linkage facilitates cooperation even when payoffs are asymmetric.
Elimelech, E. ; Ayalon, O. ; Ert, E. What gets measured gets managed: A new method of measuring household food waste. Waste Management 2018, 76, 68-81.Abstract
The quantification of household food waste is an essential part of setting policies and waste reduction goals, but it is very difficult to estimate. Current methods include either direct measurements (physical waste surveys) or measurements based on self-reports (diaries, interviews, and questionnaires). The main limitation of the first method is that it cannot always trace the waste source, i.e., an individual household, whereas the second method lacks objectivity. This article presents a new measurement method that offers a solution to these challenges by measuring daily produced food waste at the household level. This method is based on four main principles: (1) capturing waste as it enters the stream, (2) collecting waste samples at the doorstep, (3) using the individual household as the sampling unit, and (4) collecting and sorting waste daily. We tested the feasibility of the new method with an empirical study of 192 households, measuring the actual amounts of food waste from households as well as its composition. Household food waste accounted for 45% of total waste (573 g/day per capita), of which 54% was identified as avoidable. Approximately two thirds of avoidable waste consisted of vegetables and fruit. These results are similar to previous findings from waste surveys, yet the new method showed a higher level of accuracy. The feasibility test suggests that the proposed method provides a practical tool for policy makers for setting policy based on reliable empirical data and monitoring the effectiveness of different policies over time.
Pinto, O. Y. ; Ert, E. Risk preferences of people with disabilities and their relation to labor market participation. Journal of Neuroscience, Psychology, and Economics 2018, 11, 106 - 115.Abstract
Previous studies have suggested that the participation of people with disabilities in the labor market might be affected by their risk perception, as finding a job might be perceived as an action that risks their allowance. The current study explores 2 main questions that relate to risk preferences among people with disabilities. First, it explores the potential relationship between risk preferences and employment by comparing the risk preferences of employed and unemployed people with disabilities. Second, it questions whether the risk preferences of people with disabilities are different from those of people without disabilities. To measure risk preferences in these 3 populations, we used 2 common elicitation methods: the Holt–Laury task and the balloon analogue risk task. The 2 methods complement each other, as the Holt–Laury task measures decisions from description and “explicit” risk-taking, whereas the balloon analogue risk task measures decisions from experience and “implicit” risk-taking. The results revealed no difference in risk preferences between people with and without disabilities. However, contrary to propositions from earlier studies, employed people with disabilities were found to be more risk-averse than unemployed people with disabilities. One possible interpretation of the results could be that risk aversion increases the willingness of people with disabilities to make compromises in order to participate in the labor market. (PsycINFO Database Record (c) 2018 APA, all rights reserved)
Ert, E. ; Lejarraga, T. The Effect of Experience on Context-dependent Decisions. Journal of Behavioral Decision Making 2018, 31, 535 - 546. Publisher's VersionAbstract
Abstract Does the well-documented ?decoy effect? emerge in decisions from experience among risky options? We conducted a series of experiments where participants made choices between gambles, and we varied whether participants learned about the options from description, experience, or both. Our results consistently showed no traces of the decoy effect when participants learned from experience. Even when participants read precise descriptions of the options, actually experiencing those options eliminated the decoy effect. Moreover, in decisions under risk (decisions from description), the decoy effect is less robust than previously thought. The decoy effect only emerged in an experimental design in which we used two decoys generating attraction for different options but did not emerge when only one decoy was used. Increasing the distance between the decoy and the target did not make the decoy effect emerge in decisions from experience but seemed to reduce the decoy effect in decisions from description. Overall, we identify two boundary conditions for the decoy effect in decisions under risk: First, it is not robust to situations that involve learning from experience; and second, the attraction of a single decoy may not be sufficient to observe a decoy effect. Copyright ? 2018 John Wiley & Sons, Ltd.
Ert, E. ; Heiman, A. Potential psychological accounts for the relation between food insecurity and body overweight. Behavioral and Brain Sciences 2017, 40, 53. Publisher's VersionAbstract
We suggest two psychological mechanisms, temporal discounting and feeling of resource scarcity, for explaining the relation between food insecurity and body overweight. We demonstrate how Nettle et al.'s findings could be explained, post hoc, by each of these accounts, suggesting that their data are not rich enough to allow identification of mechanisms that underlie food insecurity and overweight relationship.
Erev, I. ; Ert, E. ; Plonsky, O. ; Cohen, D. ; Cohen, O. From anomalies to forecasts: Toward a descriptive model of decisions under risk, under ambiguity, and from experience. Psychological Review 2017, 124, 369 - 409.Abstract
Experimental studies of choice behavior document distinct, and sometimes contradictory, deviations from maximization. For example, people tend to overweight rare events in 1-shot decisions under risk, and to exhibit the opposite bias when they rely on past experience. The common explanations of these results assume that the contradicting anomalies reflect situation-specific processes that involve the weighting of subjective values and the use of simple heuristics. The current article analyzes 14 choice anomalies that have been described by different models, including the Allais, St. Petersburg, and Ellsberg paradoxes, and the reflection effect. Next, it uses a choice prediction competition methodology to clarify the interaction between the different anomalies. It focuses on decisions under risk (known payoff distributions) and under ambiguity (unknown probabilities), with and without feedback concerning the outcomes of past choices. The results demonstrate that it is not necessary to assume situation-specific processes. The distinct anomalies can be captured by assuming high sensitivity to the expected return and 4 additional tendencies: pessimism, bias toward equal weighting, sensitivity to payoff sign, and an effort to minimize the probability of immediate regret. Importantly, feedback increases sensitivity to probability of regret. Simple abstractions of these assumptions, variants of the model Best Estimate and Sampling Tools (BEAST), allow surprisingly accurate ex ante predictions of behavior. Unlike the popular models, BEAST does not assume subjective weighting functions or cognitive shortcuts. Rather, it assumes the use of sampling tools and reliance on small samples, in addition to the estimation of the expected values. (PsycINFO Database Record (c) 2017 APA, all rights reserved)
Dubovski, N. ; Ert, E. ; Niv, M. Y. Bitter mouth-rinse affects emotions. Food Quality and Preference 2017, 60, 154 - 164. Publisher's VersionAbstract
The sense of taste enables evaluation of food and is an important regulator of food consumption. In general, sweet is an attractive taste modality that leads to ingestion of nutritive food, while sour and bitter are aversive taste modalities that lead to avoidance of spoiled and toxic food. Recent studies suggest inter-connections between taste, emotion and cognition. Here we test the potential effects of two prototypical taste modalities, bitter and sweet, on emotions and on generalized avoidance behaviors, such as risk aversion and mistrust. Three experiments included over 250 participants who tasted, without swallowing, one of the following stimuli: water control, quinine solution, sucrose solution, quinine-sucrose mixture solution, or propylthiouracil (PROP) solution. The participants had to identify the taste, rank its intensity, perform seemingly unrelated behavioral tasks, and fill a PANAS mood questionnaire. Our results indicate that oral exposure to bitter compounds negatively correlates with mood scores; that the effect depends on perceiving the solution as bitter; that bitter mouth rinse can lower PANAS mood score and that there is a potential asymmetry in the effects of bitter and sweet taste modalities on mood.
Ert, E. ; Haruvy, E. Revisiting risk aversion: Can risk preferences change with experience?. Economics Letters 2017, 151, 91 - 95. Publisher's VersionAbstract
The Holt–Laury measure for risk aversion has been used extensively in economic studies to measure individuals’ risk aversion. The idea behind this measure is that individuals have stable risk preferences when making decisions under risk. We show that having repeated experiences with the Holt–Laury task can move individuals from exhibiting “risk aversion” to displaying “risk neutrality.” This finding suggests that either risk preferences are not robust to a few experiences or that responses to the tasks indicate something else. We show that a simple model of adaptation can capture this behavioral pattern.
Ert, E. ; Raz, O. ; Heiman, A. (Poor) seeing is believing: When direct experience impairs product promotion. International Journal of Research in Marketing 2016, 33, 881 - 895. Publisher's VersionAbstract
Marketing tools that enable pre-purchase experience (e.g., product trials, sampling) are considered efficient means of reducing uncertainty and increasing demand for unfamiliar products. It is widely agreed that having more information improves the quality of choice, so demonstrations, sampling, and other experience-generating marketing tools are expected to increase consumers' welfare. The current paper challenges this concept by suggesting that experiencing some product types for a limited time might provide unrepresentative information, and thus might result in suboptimal choices. In three experiments, we evaluated the effect of potentially unrepresentative experience on consumer product acceptance. The results show that while experiencing products affects consumers even when it provides little information, the effect might be positive or negative, depending on the product value distribution. Specifically, short experience with the product increases the appeal of negatively skewed products, which appear appealing after a short, yet unrepresentative experience. Yet short experience impairs the appeal of positively skewed products, which appear unappealing given short or low-intensity experience. This pattern emerges even though the most likely result of a given sample is not a good predictor of the expected utility of the product. Theoretical and practical implications are discussed.
Ert, E. ; Fleischer, A. ; Magen, N. Trust and reputation in the sharing economy: The role of personal photos in Airbnb. Tourism Management 2016, 55, 62-73.
Ert, E. ; Fleischer, A. Mere Position Effect in Booking Hotels Online. Journal of Travel Research 2016, 55, 311-321. Publisher's VersionAbstract
When travelers book hotels online, they are typically provided with a list of relevant hotels. Although presenting hotels on the screen in a list format seems appropriate for organizing the information, it creates a new (spurious) attribute for them: their position on the list. We tested experimentally whether the hotel’s position on the list affects its likelihood of being selected. Results revealed a nonlinear effect of hotel position on the list on choice: hotels that were listed at the top and bottom of the list were more likely to be chosen than those listed in the middle. This study suggests that even trivial web design choices, such as the choice of presenting data in lists, might result in nontrivial consequences on the behavior of prospective customers.
Golan, H. ; Ert, E. Pricing decisions from experience: The roles of information-acquisition and response modes. Cognition 2015, 136, 9 - 13. Publisher's VersionAbstract
While pricing decisions that are based on experience are quite common, e.g., setting a selling price for a used car, this type of decision has been surprisingly overlooked in psychology and decision research. Previous studies have focused on either choice decisions from experience, or pricing decisions from description. Those studies revealed that pricing involves cognitive mechanisms other than choice, while experience-based decisions involve mechanisms that differ from description-based ones. Thus, the mutual effect of pricing and experience on decision-making remains unclear. To test this effect, we experimentally compared real-money pricing decisions from experience with those from description, and with choices from experience. The results show that the mode of acquiring information affects pricing: the tendency to underprice high-probability prospects and overprice low-probability ones is diminished when pricing is based on experience rather than description. The findings further reveal attenuation of the tendency to underweight rare events, which underlies choices from experience, in pricing decisions from experience. The difference occurs because the response mode affects the search effort and decision strategy in decisions from experience.