|
on Cognitive and Behavioural Economics |
| By: | Christoph Helbach; Klemens Keldenich |
| Abstract: | This study uses a laboratory experiment to analyze the effectiveness of performance-based monetary incentives in the teaching process. The process of knowledge transmission is recreated using a video-stream. Four different teacher payment schemes are compared, three of which depend on the student‘s success. Furthermore, the experiment is done with two different subject pools: prospective teachers and regular students. Results indicate that prospective teachers do not react to monetary incentives in the given task. However, regular students do react in the expected way: Teachers transmit a significantly higher share of their knowledge when paid according to student performance. |
| Keywords: | Education; monetary incentives; video analysis |
| JEL: | C91 D03 I21 J33 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0328&r=cbe |
| By: | Julie Rosaz (University of Montpellier 1, LAMETA, avenue Raymond Dugrand - Site Richter C.S. 79606, F-34960 Montpellier Cedex 2, France); Robert Slonim (University of Sydney, Department of Economics, Merewether building, NSW 2006 Sydney, Australia; IZA, Bonn, Germany); Marie-Claire Villeval (University of Lyon 2, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne, Ecully, F-69130, France; IZA, Bonn, Germany. GATE: 93, Chemin des Mouilles, 69130 Ecully, France) |
| Abstract: | While peer effects have been shown to affect worker's productivity when workers are paid a fixed wage, there is little evidence on their influence on quitting decisions. This paper presents results from an experiment in which participants receive a piece-rate wage to perform a real-effort task. After completing a compulsory work period, the participants have the option at any time to continue working or quit. To study peer effects, we randomly assign participants to work alone or have one other worker in the room with them. When a peer is present, we manipulate the environment by giving either vague or precise feedback on the co-worker's output, and also vary whether the two workers can communicate. We find that allowing individuals to work with a co-worker present does not increase worker's productivity. However, the presence of a peer in all working conditions causes workers to quit at more similar times. When, and only when, communication is allowed, workers are significantly more likely to (1) stay longer if their partner is still working, and (2) work longer the more productive they are. We conclude that when workers receive a piece-rate wage, critical peer effects occur only when workers can communicate with each other. |
| Keywords: | Quits, peer effects, communication, feedback, experiment |
| JEL: | C91 D83 J63 J28 J81 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1204&r=cbe |
| By: | Simona Cicognani (School of Social Sciences, University of Trento, Italy); Aanna D'Ambrosio (School of Social Sciences, University of Trento, Italy); Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Simone Pfuderer (School of Social Sciences, University of Trento, Italy); Matteo Ploner (Cognitive and Experimental Economics Laboratory, University of Trento, Italy) |
| Abstract: | We define and experimentally test a public provision mechanism that meets three basic ethical requirements and allows community members to influence, via monetary bids, which of several projects is implemented. For each project, participants are assigned personal values, which can be positive or negative. We provide either complete or only private information about others' personal values. This produces two distinct public provision games which are experimentally implemented and analysed for various projects. In spite of the complex experimental task, participants do not rely on truth-telling as an obvious and simple heuristic whose general acceptance would result in fair and efficient outcomes. Rather, they yield to strategic underbidding. Although underbidding is affected by projects' characteristics, the provision mechanism seems quite functional. |
| Keywords: | Public Provision, Procedural Fairness, Experiment |
| JEL: | C91 C72 D63 |
| Date: | 2012–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-015&r=cbe |
| By: | Klemens Keldenich |
| Abstract: | This paper presents a laboratory experiment to measure the effect of group membership on individual behavior in modified dictator games. The results suggest that this effect is influenced by the degree of group membership saliency. A within-subject design is employed: in stage 1, each subject decides individually; in stage 2, the subjects are divided into groups of three and one person is selected at random from each group to make the decision (the “hierarchical decision rule”). In stage 3, additional pre-play communication in the group is allowed before the decision and, in stage 4, the decisions are again made on an individual basis. Interestingly, the dictators behave more selfishly when group members are not allowed to communicate. However, if groups are allowed to communicate, decisions do not differ from individual choices. Chat content shows that groups are concerned with reaching a consensus, even though talk is “cheap” and only one group member will make the binding decision. |
| Keywords: | Group decision making; social comparison; leadership; communication |
| JEL: | C91 C92 D71 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0322&r=cbe |
| By: | Owens, David; Grossman , Zachary; Fackler , Ryan |
| Abstract: | We document a lower bound for thecontrol premium: agents' willingness to pay to control their own payoff. Participants choose between an asset that will pay only if they later answer a particular quiz question correctly and one that pays only if their partner answers a different question correctly. However, they first estimate the likelihood that each asset will pay off. Participants are 20% more likely to choose to control their payoff than a group of payoff-maximizers with accurate beliefs. While some of this deviation is explained by overconfidence, 34% of it can only be explained by the control premium. The average participant expresses a control premium equivalent to 8% to 15% of the expected asset-earnings. Our results show that even agents with accurate beliefs may incur costs to avoid delegating and suggest that to correctly infer beliefs from choices, one should account for the control premium. |
| Keywords: | Economics, experiment, principal-agent, overconfidence, control premium, desire for control, control, Delegation |
| Date: | 2012–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsbec:qt5bg845s1&r=cbe |
| By: | Christos A. Ioannou; Julian Romero |
| Abstract: | We modify the self-tuning Experience Weighted Attraction (EWA-lite) model of Camerer, Ho, and Chong (2007) and use it as a computer testbed to study the likely performance of a set of twostate automata in four symmetric 2 x 2 games. The model suggested allows for a richer specification of strategies and solves the inference problem of going from histories to beliefs about opponents' strategies, in a manner consistent with \belief-learning". The predictions are then validated with data from experiments with human subjects. Relative to the action reinforcement benchmark model, our modified EWA-lite model can better account for subject-behavior. |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1269&r=cbe |
| By: | Steffen Huck; Jidong Zhou |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ste:nystbu:11-16&r=cbe |
| By: | Josse Delfgaauw (Erasmus University Rotterdam); Robert Dur (Erasmus University Rotterdam, CESifo, IZA); Arjan Non (Erasmus University Rotterdam); Willem Verbeke (Erasmus University Rotterdam, ERIM) |
| Abstract: | We conduct a field experiment in a large retail chain to test basic predictions of tournament theory regarding prize spread and noise. A random subset of the 208 stores participates in two-stage elimination tournaments. Tournaments differ in the distribution of prize money across winners of the first and second round of the tournament. As predicted by theory, we find that a more convex prize spread increases performance in the second round at the expense of first-round performance, although the magnitude of these effects is small. Moreover, the treatment effect is significantly larger for stores that historically have relatively stable performance as compared to stores with more noisy performance. |
| Keywords: | Elimination tournaments; Incentives; Prize spread; Performance measurement; Field experiment |
| JEL: | C93 M51 M52 |
| Date: | 2011–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110120&r=cbe |
| By: | Coates, Dennis (Dept of Economics, UMBC); Humphreys, Brad (University of Alberta, Department of Economics); Zhou, Li (University of Alberta, Department of Economics) |
| Abstract: | We develop a consumer choice model of live attendance at a sporting event with reference-dependent preferences. The predictions of the model motivate the “uncertainty of outcome hypothesis” (UOH) as well as fan’s desire to see upsets and to simply see the home team win games, depending on the importance of the reference-dependent preferences and loss aversion. A critical review of previous empirical tests of the UOH reveals significant support for models with reference-dependent preferences, but less support for the UOH. New empirical evidence from Major League Baseball supports the loss aversion version of the model. |
| Keywords: | uncertainty of outcome hypothesis; attendance demand; prospect theory |
| JEL: | D12 L83 |
| Date: | 2012–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2012_007&r=cbe |
| By: | Grazzini, J. (University of Turin) |
| Abstract: | This paper builds an agent based model to reproduce the results of an experimental stock market that studies how the market aggregates private information. The aim is to contribute to the relationship between experiments and agent-based modeling and to understand the behavior of the agents. Using the experimental environment and results, it is possible to formulate a hypothesis about the behavior of the subjects and thereby formalize (algorithmically) the behavior of the traders. This allows a better understanding of how the market converges toward the equilibrium and the mechanism that allows for the dissemination of private information in the market. |
| URL: | http://d.repec.org/n?u=RePEc:ams:ndfwpp:11-07&r=cbe |
| By: | Ying-Fang Kao; V.Ragupathy; K. Vela Velupillai; Stefano Zambelli |
| Abstract: | We outline, briefly, the role that issues of the nexus between noncomputability and unpredictability, on the one hand, and between undecidability and un-solvability, on the other, have played in Computable Economics. The mathematical underpinnings of Computable Economics are provided by (classical) recursion theory, varieties of computable and constructive analysis and aspects of combinatorial optimization. The inspiration for this outline was provided by Professor Graca's thought-provoking recent article. |
| Keywords: | Computable Economics, Unpredictability, Undecidability, Uncomputability |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpas:1211&r=cbe |
| By: | Joaquín (Departamento de Organización de empresas y Marketing, Universidad Pablo de Olavide); Juan Carlos (Departamento de Organización de empresas y Marketing, Universidad Pablo de Olavide) |
| Abstract: | This paper aims at explaining the role performed by organizational commitment, trust and organizational learning capability (OLC) regarding product innovation and, more specifically, testing double mediation from a manager perspective. On the one hand, we test the mediator role performed by supervisors’ trust between the employees commitment perceived by managers and organizational learning capability. On the other, we test the mediator role performed by organizational learning capability between the trust provided by supervisors and product innovation. Our findings thus indicate that, although some commitment was perceived and both supervisors’ trust and OLC show significant relationships, trust does not mediate between these variables. Also, we conclude that trust is related to product innovation through organizational learning capability, which verifies its full mediator role. We conclude that, first, OLC is the mechanism by which the trust perceived by employees has an impact on innovation, and second, the manager decides to trust those employees that display commitment.. |
| Keywords: | North-South, growth model, innovation assimilation |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpbsad:12.04&r=cbe |
| By: | Julie Rosaz (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro); Robert Slonim (University of Sydney, School of economics - University of Sydney); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon) |
| Abstract: | While peer effects have been shown to affect worker's productivity when workers are paid a fixed wage, there is little evidence on their influence on quitting decisions. This paper presents results from an experiment in which participants receive a piece-rate wage to perform a real-effort task. After completing a compulsory work period, the participants have the option at any time to continue working or quit. To study peer effects, we randomly assign participants to work alone or have one other worker in the room with them. When a peer is present, we manipulate the environment by giving either vague or precise feedback on the co-worker's output, and also vary whether the two workers can communicate. We find that allowing individuals to work with a co-worker present does not increase worker's productivity. However, the presence of a peer in all working conditions causes workers to quit at more similar times. When, and only when, communication is allowed, workers are significantly more likely to (1) stay longer if their partner is still working, and (2) work longer the more productive they are. We conclude that when workers receive a piece-rate wage, critical peer effects occur only when workers can communicate with each other. |
| Keywords: | Quits; peer effects; communication; feedback; experiment |
| Date: | 2012–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00684812&r=cbe |