Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269207 
Year of Publication: 
2022
Series/Report no.: 
LawFin Working Paper No. 51
Publisher: 
Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin), Frankfurt a. M.
Abstract: 
Lack of privacy due to surveillance of personal data, which is becoming ubiquitous around the world, induces persistent conformity to the norms prevalent under the surveillance regime. We document this channel in a unique laboratory-the widespread surveillance of private citizens in East Germany. Exploiting localized variation in the intensity of surveillance before the fall of the Berlin Wall, we show that, at the present day, individuals who lived in high-surveillance counties are more likely to recall they were spied upon, display more conformist beliefs about society and individual interactions, and are hesitant about institutional and social change. Social conformity is accompanied by conformist economic choices: individuals in high-surveillance counties save more and are less likely to take out credit, consistent with norms of frugality. The lack of differences in risk aversion and binding financial constraints by exposure to surveillance helps to support a beliefs channel.
Subjects: 
Cultural Finance
History & Finance
Social Learning
Beliefs
Persistence
Household Finance
Behavioral Finance
Big Data
FinTech
JEL: 
D14
E21
E51
G21
Document Type: 
Working Paper

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