nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2006‒06‒24
two papers chosen by
Marco Novarese
Universita del Piemonte Orientale

  1. Where are you from? Cultural Differences in Public Good Experiments. By Massimo Finocchiaro Castro
  2. Effort and Comparison Income: Experimental and Survey Evidence By Andrew E. Clark; David Masclet; Marie-Claire Villeval

  1. By: Massimo Finocchiaro Castro (Department of Economics, Royal Holloway, University of London)
    Abstract: We study the effect of cultural differences on contributions in a public good experiment, analysing real-time interactions between Italian and British subjects in their home countries. In the first treatment, subjects play in nationally-homogeneous groups. In the second treatment, Italian and British subjects play in heterogeneous groups, knowing the nationality of the group members. In the third treatment, we control for a possible “country effect” by giving players no information on nationality. The data suggest that, in homogeneous groups, British subjects contribute significantly more to the public good; contributions are lower in heterogeneous groups; there is no country effect.
    Keywords: public goods, experiments, real time interactions, cultural differences
    JEL: C92 H41 Z13
    Date: 2006–06
  2. By: Andrew E. Clark (PSE and IZA Bonn); David Masclet (CNRS and CREM); Marie-Claire Villeval (CNRS, GATE and IZA Bonn)
    Abstract: This paper considers the effect of status or relative income on work effort combining experimental evidence from a gift-exchange game with ISSP survey data. We find a consistent negative effect of others’ incomes on individual effort in both datasets. The individual’s rank in the income distribution is a stronger determinant of effort than others’ average income, suggesting that comparisons are more ordinal than cardinal. We then show that effort is also affected by comparisons over time: those who received higher income offers or had higher income rank in the past exert lower levels of effort for a given current income and rank.
    Keywords: effort, comparison income, rank, peak-end, experiments
    JEL: M54 J33 A13 C92 D63
    Date: 2006–06

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