nep-exp New Economics Papers
on Experimental Economics
Issue of 2008‒08‒31
six papers chosen by
Daniel Houser
George Mason University

  1. Individual Laboratory-Measured Discount Rates Predict Field Behavior By Christopher F. Chabris; David Laibson; Carrie L. Morris; Jonathon P. Schuldt; Dmitry Taubinsky
  2. On Reputation: A Microfoundation of Contract Enforcement and Price Rigidity By Fehr, Ernst; Brown, Martin; Zehnder, Christian
  3. Getting Past No: Gender and the Propensity to Persist in Negotiation By Bowles, Hannah Riley; Flynn, Francis J.
  4. The Impact of Social Comparisons on Reciprocity By Gächter, Simon; Nosenzo, Daniele; Sefton, Martin
  5. Recalling Mixed Emotions By Aaker, Jennifer L.; Drolet, Aimee L.; Griffin, Dale
  6. Powerful Women: Does Exposure Reduce Bias? By Beaman, Lori; Chattopadhyay, Raghebendra; Duflo, Esther; Pande, Rohini; Topalova, Petia

  1. By: Christopher F. Chabris; David Laibson; Carrie L. Morris; Jonathon P. Schuldt; Dmitry Taubinsky
    Abstract: We estimate discount rates of 555 subjects using a laboratory task and find that these individual discount rates predict inter-individual variation in field behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each field behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in our dataset (e.g., sex, age, education). The correlation between the discount rate and field behavior rises when field behaviors are aggregated: these correlations range from 0.09-0.38. We present a model that explains why specific intertemporal choice behaviors are only weakly correlated with discount rates, even though discount rates robustly predict aggregates of intertemporal decisions.
    JEL: C91 D9 I1
    Date: 2008–08
  2. By: Fehr, Ernst (University of Zurich); Brown, Martin (Swiss National Bank); Zehnder, Christian (University of Zurich)
    Abstract: We study the impact of reputational incentives in markets characterized by moral hazard problems. Social preferences have been shown to enhance contract enforcement in these markets, while at the same time generating considerable wage and price rigidity. Reputation powerfully amplifies the positive effects of social preferences on contract enforcement by increasing contract efficiency substantially. This effect is, however, associated with a considerable bilateralisation of market interactions, suggesting that it may aggravate price rigidities. Surprisingly, reputation in fact weakens the wage and price rigidities arising from social preferences. Thus, in markets characterized by moral hazard, reputational incentives unambiguously increase mutually beneficial exchanges, reduce rents, and render markets more responsive to supply and demand shocks.
    Keywords: wage rigidity, price rigidity, relational contracts, reciprocity, reputation
    JEL: D82 J3 J41 E24 C9
    Date: 2008–08
  3. By: Bowles, Hannah Riley (Harvard U); Flynn, Francis J. (Stanford U)
    Abstract: Gender stereotypes suggest that men will persist more in negotiation than women, particularly in mixed-gender pairs. In contrast, a gender-in-context perspective suggests that women will vary their persistence behavior more than men and become more rather than less persistent in mixed-gender pairs in order to resist male dominance in negotiation. Results of three studies support the gender-in-context perspective, showing that women vary the degree and quality of their persistence behavior more than men depending on their counterpart’s gender. Women became more persistent with male than female negotiating counterparts (Studies 1-3). Consistent with the proposition that women persist more with men than women out of resistance to stereotypical male dominance in negotiation, women relied on characteristically low-status forms of influence (more indirect than direct) when persisting with men but not women (Study 3) and women’s extra persistence with male counterparts helped them reduce the gender gap in negotiation performance (Study 3).
    Date: 2007–12
  4. By: Gächter, Simon (University of Nottingham); Nosenzo, Daniele (University of Nottingham); Sefton, Martin (University of Nottingham)
    Abstract: We investigate the effects of pay comparison information (i.e. information about what co-workers earn) and effort comparison information (information about how co-workers perform) in experimental firms composed of one employer and two employees. Exposure to pay comparison information in isolation from effort comparison information does not appear to affect reciprocity toward employers: in this case own wage is a powerful determinant of own effort, but co-worker wages have no effect. By contrast, we find that exposure to both pieces of social information systematically influences employees’ reciprocity. A generous wage offer is virtually ineffective if an employee is matched with a lazy co-worker who is also paid generously: in such circumstances the employee tends to expend low effort irrespective of her own wage. Reciprocity is more pronounced when the co-worker is hard-working, as effort is strongly and positively related to own wage in this case. Reciprocity is also pronounced when the employer pays unequal wages to the employees: in this case the co-worker’s effort decision is disregarded and effort decisions are again strongly and positively related to own wage. On average exposure to social information weakens reciprocity, though we find substantial heterogeneity in responses across individuals, and find that sometimes social information has beneficial effects. We suggest that group composition may be an important tool for harnessing the positive effects of social comparison processes.
    Keywords: reciprocity, gift-exchange, social information, social comparisons, pay comparisons, peer effects
    JEL: A13 C92 J31
    Date: 2008–08
  5. By: Aaker, Jennifer L. (Stanford U); Drolet, Aimee L. (U of California, Los Angeles); Griffin, Dale
    Abstract: In two longitudinal experiments, conducted both in the field and lab, we investigated the recollection of mixed emotions. Results demonstrated that the intensity of mixed emotions is generally underestimated at the time of recall—an effect that increases over time and does not occur to the same degree with unipolar emotions. Of note, the decline in memory of mixed emotions is distinct from the pattern found for memory of negative emotions, implying that the recall bias is diagnostic of the complexity of mixed emotions rather than of any association with negative affect. Finally, the memory decay effect was driven by the felt conflict aroused by the experience of mixed emotions.
    Date: 2008–04
  6. By: Beaman, Lori (University of California, Berkeley and Northwestern University); Chattopadhyay, Raghebendra (Indian Institute of Management); Duflo, Esther (Massachusetts Institute of Technology); Pande, Rohini (Harvard U); Topalova, Petia (International Monetary Fund)
    Abstract: We exploit random assignment of gender quotas across Indian village councils to investigate whether having a female chief councillor affects public opinion towards female leaders. Villagers who have never been required to have a female leader prefer male leaders and perceive hypothetical female leaders as less effective than their male counterparts, when stated performance is identical. Exposure to a female leader does not alter villagers' taste preference for male leaders. However, it weakens stereotypes about gender roles in the public and domestic spheres and eliminates the negative bias in how female leaders' effectiveness is perceived among male villagers. Female villagers exhibit less prior bias, but are also less likely to know about or participate in local politics; as a result, their attitudes are largely unaffected. Consistent with our experimental findings, villagers rate their women leaders as less effective when exposed to them for the first, but not second, time. These changes in attitude are electorally meaningful: after 10 years of the quota policy, women are more likely to stand for and win free seats in villages that have been continuously required to have a female chief councillor.
    Date: 2008–07

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