nep-exp New Economics Papers
on Experimental Economics
Issue of 2007‒04‒14
five papers chosen by
Daniel Houser
George Mason University

  1. Truth and Trust in Communication: An Experimental Study of Behavior under Asymmetric Information By Rode, Julian
  2. IT IS HOBBES, NOT ROUSSEAU: AN EXPERIMENT ON SOCIAL INSURANCE By Antonio Cabrales; Rosemarie Nagel; Jose V. Rodriguez Mora
  3. Do hiring subsidies reduce unemployment among the elderly? : Evidence from two natural experiments By Boockmann, Bernhard; Zwick, Thomas; Ammermüller, Andreas; Maier, Michael
  4. Is Vote Buying Effective? Evidence from a Randomized Experiment in West Africa By Pedro C. Vicente
  5. Replication in Economics By Daniel S. Hamermesh

  1. By: Rode, Julian (Universitat Pompeu Fabra)
    Abstract: The paper presents an experimental study of truth telling and trust in communication under asymmetric information. In a two-player Communication Game (cf., Gneezy, 2005), an informed “advisor” sends a message to an uninformed “decision maker”, who then has to decide whether to follow the advice. The advisor may gain more by lying in the message. In two treatments, either a cooperative or a competitive context is induced before participants play the Communication Game. Advisors are unaffected by this contextual variation. In contrast, decision makers in the competitive context trust the advice less than in the cooperative context. The data provide evidence that this change in trust is due to different perceptions of the incentive structure. Individual differences in behavior can be related to certain personal characteristics (field of studies, gender, personality test scores). The data are largely in line with Subjective Equilibrium Analysis (Kalai & Lehrer, 1995).
    Keywords: experimental economics; truth telling; trust; asymmetric information; individual differences; context effects; subjective beliefs
    JEL: D01 D80 Z13
    Date: 2007–04–10
  2. By: Antonio Cabrales; Rosemarie Nagel; Jose V. Rodriguez Mora
    Abstract: We perform an experiment on social insurance to provide a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing to redistribute. A solution to the repeated game allows for redistribution and high effort, by the threat to revert to the worst of these equilibria. Our results show that redistribution with high effort is not sustainable. The main reason for the absence of redistribution is that rich agents do not act differently depending on whether the poor have worked hard or not. There is no social contract by which redistribution may be sustained by the threat of punishing the poor if they do not exert effort. Thus, the explanation of the behavior of the subjects lies in Hobbes, not in Rousseau.
    Date: 2006–06
  3. By: Boockmann, Bernhard; Zwick, Thomas; Ammermüller, Andreas; Maier, Michael
    Abstract: We estimate the effects of hiring subsidies for older workers on transitions from unemployment to employment in Germany. Using a natural experiment, our first set of estimates is based on a legal change extending the group of eligible unemployed persons. A subsequent legal change in the opposite direction is used to validate these results. Our data cover the population of unemployed jobseekers in Germany and was specifically made available for our purposes from administrative data. Consistent support for an employment effect of hiring subsidies can only be found for women in East Germany. Concerning other population groups, firms´ hiring behavior is hardly influenced by the program and hiring subsidies mainly lead to deadweight effects.
    Keywords: Hiring subsidies, older workers, evaluation, natural experiments
    JEL: C31 H24 J64
    Date: 2007
  4. By: Pedro C. Vicente
    Abstract: Vote buying is a frequent practice during election time in many parts of the world. But no research has been done to quantify its effects on voters` electoral behavior. To address this challenge, we have designed and conducted a randomized experiment during the presidential elections of July 2006 in Sao Tome and Principe. This is a newly found oil-rich West African country that has been facing an increase in `retail` vote buying. Our research design included a randomized campaign against vote buying sponsored by the Electoral Commission of the country, and pre-electoral campaign/post-election panel surveys in treatment (exposed to the campaign) and control locations, including 1034 subjects across 50 different areas. We observe a significant effect of the campaign on perceptions of vote buying, which constitutes the exogenous variation we use to identify effects on voting behavior. We characterize determinants of vote buying (more frequent in swing and rural locations), and find that vote buying energizes the electorate by increasing turnout. Crucially, we capture real effects on candidates` relative performance, by identifying the challenger to be driving more votes through vote buying (after the treatment), which is consistent with the timeline of events (late challenger candidacy). This result controls for changes in information about the candidates (e.g. policy platforms) and location-specific minutes spent by international electoral observers.
    Keywords: Vote Buying, Electoral Politics, Political Economy, Randomized Experiment, West Africa
    JEL: D72 O55 P16
    Date: 2007
  5. By: Daniel S. Hamermesh
    Abstract: This examination of the role and potential for replication in economics points out the paucity of both pure replication -- checking on others' published papers using their data -- and scientific replication -- using data representing different populations in one's own work or in a Comment. Several controversies in empirical economics illustrate how and how not to behave when replicating others' work. The incentives for replication facing editors, authors and potential replicators are examined. Recognising these incentives, I advance proposals aimed at journal editors that will increase the supply of replication studies, and I propose a way of generating more scientific replication that will make empirical economic research more credible.
    JEL: A14 B41 C59
    Date: 2007–04

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