nep-exp New Economics Papers
on Experimental Economics
Issue of 2004‒12‒20
seven papers chosen by
Daniel Houser
George Mason University

  1. Item nonresponse to financial questions in household surveys: An experimental study of interviewer and mode effects By Lothar Essig, Joachim Winter
  2. Tax Evasion and Social Interactions By Bernard Fortin; Guy Lacroix; Marie-Claire Villeval
  3. A Simplified Test for Preference Rationality of Two-Commodity Choice By Shomu Banerjee; James H. Murphy
  4. Teacher vs. Learner Responsibility in Management Education By JS Armstrong
  5. The excess burden of tax evasion - An experimental detection- concealment contest By Ralph C Bayer; Matthias Sutter
  6. The Natural Learning Project By JS Armstrong
  7. Network Externalities, Demand Inertia and Dynamic Pricing in an Experimental Oligopoly Market By Ralph C Bayer; Mickey Chan

  1. By: Lothar Essig, Joachim Winter (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: We analyze nonresponse to questions on financial items such as income and asset holdings in household surveys using data from a controlled field experiment. As part of the SAVE study, a representative survey conducted in Germany in 2001, questions on household income and financial assets were administered using different modes (personal interview vs. drop-off questionnaire). The data also allow to investigate the influence of interviewer characteristics on nonresponse. Our results are in line with predictions derived from models of survey response behavior that have been developed in survey research and social psychology.
    Date: 2003–11–17
  2. By: Bernard Fortin; Guy Lacroix; Marie-Claire Villeval
    Abstract: The paper extends the standard tax evasion model by allowing for social interactions. In Manski's (1993) nomenclature, our model takes into account social conformity effects (i.e., endogenous interactions), fairness effects (i.e., exogenous interactions) and sorting effects (i.e., correlated effects). Our model is tested using experimental data. Participants must decide how much income to report given their tax rate and audit probability, and given those faced by the other members of their group as well as their mean reported income. The estimation is based on a two-limit simultaneous tobit with fixed group effects. A unique social equilibrium exists when the model satisfies coherency conditions. In line with Brock and Durlauf (2001b), the intrinsic nonlinearity between individual and group responses is sufficient to identify the model without imposing any exclusion restrictions. Our results are consistent with fairness effects but reject social conformity and correlated effects.
    Keywords: Social interactions, tax evasion, simultaneous tobit, laboratory experiments
    JEL: H26 D63 C24 C92 Z13
    Date: 2004
  3. By: Shomu Banerjee; James H. Murphy
    Abstract: We provide a simplified test to determine if choice data from a two-commodity consumption set satisfies the Generalized Axiom of Revealed Preference (GARP), and thus the preference or utility maximization hypothesis. We construct an algorithm for this test and illustrate its application on experimental choice data.
    Date: 2004–12
  4. By: JS Armstrong (The Wharton School - University of Pennsylvania)
    Abstract: A literature review suggested that behavioral changes occur more rapidly when the learner assumed responsibility. Natural learning, an approach to help learners assume responsibility, was compared with the traditional strategy in seven field experiments. It produced more than twice as many long-term behavioral changes. It was superior also for attitude change, but not for gains in knowledge.
    Keywords: teacher, teaching, lerner, responsibilities, education
    JEL: A
    Date: 2004–12–10
  5. By: Ralph C Bayer (University of Adelaide); Matthias Sutter (Max Planck Institute for Research into Economic Systems & University of Innsbruck)
    Abstract: We present an experimental study on the wasted resources associated with tax evasion. This waste arises from taxpayers and tax authorities investing costly effort in the concealment and detection of tax evasion. We show that these socially inefficient efforts - as well as the frequency of tax evasion - depend positively on the prevailing tax rate, but not on the fine which is imposed in the event of detected tax evasion. Tax evasion is less frequent, though, than a model with risk neutral taxpayers predicts. We find evidence that this is due to individual moral constraints rather than to risk aversion.
    Keywords: tax evasion, contest, experiment, tax rates, fines
    JEL: H26 K42 C91
    Date: 2004–12–14
  6. By: JS Armstrong (The Wharton School - University of Pennsylvania)
    Abstract: In “natural learning” the learner takes responsibility for learning. This responsibility applies to setting objectives, selecting active learning tasks, obtaining feedback, and making applications. Self- oriented skill training (SOS) provides a highly structured procedure to help the learner through the above four phases of natural learning. Of particular importance in SOS is the experiential exercise; this can put the learner through the unfreezing, change, and refreezing steps. The design of SOS is based on substantial empirical evidence. Results from five crude field experiments were consistent with the hypothesis that SOS increases the efficiency of learning. In a 6-month follow-up, participants using SOS reported 2.1 behavioral changes vs. 0.6 for those following a traditional approach to learning.
    Keywords: learning, education
    JEL: A
    Date: 2004–12–10
  7. By: Ralph C Bayer (University of Adelaide); Mickey Chan (University of Adelaide)
    Abstract: This paper analyses dynamic pricing in markets with network externalities. Network externalities imply demand inertia, because the size of a network increases the usefulness of the product for consumers. Since past sales increase current demand, firms have an incentive to set low introductory prices to be able to increase prices as their networks grow. However, in reality we observe decreasing prices. This could be due to other factors dominating the network e¤ects. We use an experimental duopoly market with demand inertia to isolate the effect of network externalities. We find that experimental price dynamics are rather consistent with real world observations than with theoretical predictions.
    Keywords: Network Externalities, Demand Inertia, Experiments, Oligopoly
    JEL: L13 C92
    Date: 2004–12–14

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