Magnus Våge Knutsen

Journal of Behavioral and Experimental Economics 119 p. 102435-102435 Doi: https://doi.org/10.1016/j.socec.2025.102435

Management science Doi: https://doi.org/10.1287/mnsc.2024.04684

In this article, we investigate how information about production externalities, such as ecolabels, can be presented to create market pressure on firms to reduce these externalities. Specifically, we explore whether integrating information on externalities with consumer product ratings into a single combined rating can generate pressure to reduce externalities from all consumers, not just environmentally conscious ones. Theoretically, we demonstrate the existence of an equilibrium where producers invest in both high product quality and low production externalities. We show that under separate ratings, this equilibrium depends on a high proportion of “green” consumers, whereas a combined rating achieves similar results without such a requirement. More broadly, our model suggests that bundling ratings can compel producers to address niche concerns more effectively. We experimentally validate this prediction across two studies, confirming that bundling ratings significantly increases producer investment in additional attributes, such as reducing externalities, while maintaining the rating system’s ability to incentivize high product quality. This paper was accepted by Marie-Claire Villeval, behavioral economics and decision analysis. Funding: This research was financed by BI Norwegian Business School and the University of Bergen. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.04684 .

RAND Journal of Economics 56(3) p. 269-284 Doi: https://doi.org/10.1111/1756-2171.12502

Games and Economic Behavior 136 p. 454-468 Doi: https://doi.org/10.1016/j.geb.2022.10.011

We experimentally investigate the role of two-sided reputation-building in dynamic bargaining. In the absence of outside options, rational bargainers have an incentive to imitate obstinate types that are committed to an aggressive demand, inducing delay. Outside options remove this incentive and ensure immediate agreement whenever two rational bargainers match. Our data support the hypothesis that outside options cut down on imitation and ensure timely agreements, but only if subjects share a belief about what constitutes obstinacy. Further, we find that outside options are exercised excessively and that efficiency is no better than it is in their absence. We ascribe this result to the presence of fairness preferences in the subject pool.

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