nep-exp New Economics Papers
on Experimental Economics
Issue of 2010‒11‒06
twelve papers chosen by
Daniel Houser
George Mason University

  1. Does procedural fairness crowd out other-regarding concerns? A bidding experiment By Werner Güth; M. Vittoria Levati; Matteo Ploner
  2. Matched Fundraising: Evidence from a Natural Field Experiment By Huck, Steffen; Rasul, Imran
  3. The Relative Performance of Head Start By Cory Koedel
  4. Trust me, it is High Trust: On Trust and its Measurement By Christian Lukas; Peter Walgenbach
  5. Referenda under Oath By Nicolas Jacquemet; Alexander James; Stephane Luchini; Jason Shogren
  6. Deciding to Decide: Gender, Leadership and Risk-Taking in Groups By Seda Ertac; Mehmet Y. Gurdal
  7. The Repeated Prisoner’s Dilemma in a Network By Markus Kinateder
  8. Are there gambling effects in incentive-compatible elicitations of reservation prices? An empirical analysis of the BDM-mechanism By Holger Müller; Steffen Voigt
  9. The Impact of Protest Responses in Choice Experiments By Melina Barrio; Maria Loureiro
  10. The Survival of the Conformist: Social Pressure and Renewable Resource Management By Alessandro Tavoni; Maja Schlüter; Simon Levin
  11. The Influence of the Self-Regulatory Focus on the Effectiveness of Stop-Smoking Campaigns for Young Smokers By L. ADAMS; T. FASEUR; M. GEUENS
  12. Eliciting probabilistic expectations with visual aids in developing countries : how sensitive are answers to variations in elicitation design ? By Delavande, Adeline; Gine, Xavier; McKenzie, David

  1. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group); Matteo Ploner (Department of Economics, CEEL, University of Trento, Italy)
    Abstract: Bidding rules that guarantee procedural fairness may induce more equilibrium bidding and moderate other-regarding concerns. In our experiment, we assume commonly known true values and only two bidders to implement a best-case scenario for other-regarding concerns. The two-by-two factorial design varies ownership of the single indivisible commodity (an outside seller versus collective ownership) and the price rule (first versus second price). Our results indicate more equilibrium behavior under the procedurally fair price rule, what, however, does not completely crowd out equality and efficiency seekin
    Keywords: Auctions, Fair Division Games, Procedural fairness
    JEL: D44 C92
    Date: 2010–10–26
  2. By: Huck, Steffen (University College London); Rasul, Imran (University College London)
    Abstract: We present evidence from a natural field experiment designed to shed light on the efficacy of fundraising schemes in which donations are matched by a lead donor. In conjunction with the Bavarian State Opera House, we mailed 14,000 regular opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to treatments designed to explore behavioral responses to linear matching schemes, as well as the mere existence of a substantial lead donor. We use the exogenous variation in match rates across treatments to estimate the price elasticities of charitable giving. We find that straight linear matching schemes raise the total donations received including the match value, but partially crowd out the actual donations given excluding the match. If charitable organizations can use lead gifts as they wish, our results show they maximize donations given by simply announcing the presence of a lead gift. We contrast our price elasticity estimates with those based on changes in rules regarding tax deductions for charitable giving, as well as from the nascent literature using large-scale natural field experiments on giving.
    Keywords: natural field experiment, matched fundraising, charitable giving
    JEL: C93 D12 D64
    Date: 2010–10
  3. By: Cory Koedel (Department of Economics, University of Missouri-Columbia)
    Abstract: We examine the link between math skills and labor-market outcomes using a resume-based field experiment. Specifically, we send fictitious resumes in response to online job postings, randomly assigning some resumes to indicate stronger math skills, and measure responses from employers. The resumes that are randomly assigned to indicate stronger math skills receive more callbacks than the comparison resumes. Our findings add to the body of evidence showing that stronger math skills positively affect labor-market outcomes.
    Keywords: Math skills, math skills and employment, math skills field experiment, math skills resume experiment.
    JEL: J23 J24 I20
    Date: 2010–10–29
  4. By: Christian Lukas (Department of Economics, University of Konstanz, Germany); Peter Walgenbach (School of Economics and Business Administration, Friedrich Schiller University of Jena, Germany)
    Abstract: As the positive impact of trust on business success is widely undisputed, the question of how to measure trust naturally arises. Both expectations of trustworthy behavior and possible gains and losses from a trusting relationship influence the level of trust between two parties or individuals. This paper explores whether an exchange featuring (almost) equal expected gains and expected losses for a trusting individual is evidence for high trust or low trusts; we argue that such an exchange tends to display low trust. A simple trust measure is suggested that can be applied both in experimental and analytical research.
    Keywords: trust, trust measurement, trust as behavior, agency theory, behaviroal game theory, investment game
    JEL: D6 M5
    Date: 2010–10–29
  5. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Alexander James (University of Wyoming - Department of Economics and Finance); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Jason Shogren (Departement Economy and Finance, University of Wyoming - University of Wyoming)
    Abstract: Herein we explore whether a solemn oath can eliminate hypothetical bias in a voting referenda, a design commonly promoted in nonmarket valuation exercises for its incentive compatibility properties. First, we reject the null hypothesis that a hypothetical bias does not exist. Second, we cannot reject the hypothesis that people who sign an oath are as likely to vote for the public good (e.g., wind energy R&D) in a hypothetical referenda as in a real one. This result opens interesting avenues for improving the elicitation of preferences in the lab.
    Keywords: Dichotomous Choice Mechanism; Hypothetical bias; Oath; Preference revelation
    Date: 2010–06–08
  6. By: Seda Ertac (Koc University); Mehmet Y. Gurdal (TOBB ETU)
    Abstract: Being the leader in a group often involves making risky decisions that affect the payoffs of all members, and the decision to take this responsibility in a group is endogenous in many contexts. In this paper, we experimentally study: (1) the willingness of men and women to make risky decisions on behalf of a group, (2) the amount of risk men and women take for the group, in comparison to their individual decisions. We observe a striking difference between males and females, with a much lower fraction of women being willing to make the group decision than men. The amount of risk taken for the group is generally lower than in the case where subjects decide for themselves only, indicating a cautious shift. The women that would like to make the group decision and the women that do not are no different in terms of how much risk they take for themselves, nor for their group. For men, on the other hand, we find that the ones who would like to lead tend to take more risk on behalf of the group. We also present several results on the relationship of risk-taking and leadership decisions with personality traits.
    Keywords: Conditional CAPM
    Date: 2010–10
  7. By: Markus Kinateder (Universidad de Navarra)
    Abstract: Imperfect private monitoring in an infinitely repeated discounted Prisoner’s Dilemma played on a communication network is studied. Players observe their direct neighbors’ behavior only, but communicate strategically the repeated game’s history throughout the network. The delay in receiving this information requires the players to be more patient to sustain the same level of cooperation as in a complete network, although a Folk Theorem obtains when the players are patient enough. All equilibria under exogenously imposed truth-telling extend to strategic communication, and additional ones arise due to richer communication. There are equilibria in which a player lies. The flow of information is related with network centrality measures.
    Keywords: Repeated Game, Prisoner’s Dilemma, Imperfect Private Monitoring, Network, Strategic Communication, Centrality
    JEL: C72 C73 D85
    Date: 2010–09
  8. By: Holger Müller (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Steffen Voigt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: Pricing research suggests incentive compatible evaluations of separate products in so-called monadic designs when consumers' situation-specific WTP is to be elicited in a monopolistic purchase setting. In our study, the lottery-based BDM-mechanism is applied for measuring subjects' WTP for a fast moving consumer good in binding one-on-one interviews at the point of purchase. In previous studies, the validity of elicited WTP measures is commonly checked within subjects with respect to indicators of face and criterion validity (such as interest in buying, preference ratings, compliance rates). In addition, we observed real purchases of a separate validation sample at the point of purchase, thus checking external validity between subjects. As a result, the BDM-based WTPs reveal a sufficient degree of internal face validity. However, the external validity in terms of a goodness of fit between WTP-based predictions and purchases of the validation sample is significantly reduced. Specifically, we observed a substantial underestimation of shares of non-buyers. Hence, a potential bias is indicated, leading to an overrating of consumers' true WTP in the lottery-based BDM-mechanism in the setting of our survey.
    Keywords: Pricing, Willingness to Pay (WTP), BDM-mechanism, Validation
    Date: 2010–10
  9. By: Melina Barrio (Universidade de Santiago de Compostela); Maria Loureiro (Universidade de Santiago de Compostela)
    Abstract: Not much attention has been given to protest responses in choice experiments (CE). Using follow-up statements, we are able to identify protest responses and compute welfare estimates with and without the inclusion of such protest responses. We conclude that protest responses are fairly common in CE, and their analysis affects the statistical performance of the empirical models. In particular, when the sample is corrected by protests, our results come from utility consistent models. Thus, future choice experiments should consider the role of protest responses as contingent valuation studies have done.
    Keywords: Protest Responses, Choice Experiments
    JEL: Q01 Q10 Q50
    Date: 2010–10
  10. By: Alessandro Tavoni (Advanced School of Economics at the University of Venice); Maja Schlüter (Leibniz-Institute of Freshwater Ecology and Inland Fisheries); Simon Levin (Department of Ecology and Evolutionary Biology at Princeton University)
    Abstract: This paper examines the role of pro-social behavior as a mechanism for the establishment and maintenance of cooperation in resource use under variable social and environmental conditions. By coupling resource stock dynamics with social dynamics concerning compliance to a social norm prescribing non-excessive resource extraction in a common pool resource (CPR), we show that when reputational considerations matter and a sufficient level of social stigma affects the violators of a norm, sustainable outcomes are achieved. We find large parameter regions where norm-observing and norm-violating types coexist, and analyze to what extent such coexistence depends on the environment.
    Keywords: Cooperation, Social Norm, Ostracism, Common Pool Resource, Evolutionary Game Theory, Replicator Equation, Agent-based Simulation, Coupled Socio-resource Dynamics
    JEL: C73 Q20 D70
    Date: 2010–10
    Abstract: People’s self-regulatory focus may determine the effectiveness of stop-smoking campaigns. An experiment with 226 young smokers investigated the persuasiveness of different emotional appeals (fear-relief versus sadness-joy) for different self-regulatory foci (prevention versus promotion). A congruency effect emerges for attitude toward the advertisement and behavioral intentions: Young smokers with a promotion focus are more persuaded by sadness-joy than fear-relief campaigns, and the opposite is true for those with a prevention focus. As predicted by the regulatory relevancy principle, ad involvement mediates this effect.
    Date: 2010–09
  12. By: Delavande, Adeline; Gine, Xavier; McKenzie, David
    Abstract: Eliciting subjective probability distributions in developing countries is often based on visual aids such as beans to represent probabilities and intervals on a sheet of paper to represent the support. The authors conducted an experiment in India that tested the sensitivity of elicited expectations to variations in three facets of the elicitation methodology: the number of beans, the design of the support (pre-determined or self-anchored), and the ordering of questions. The results show remarkable robustness to variations in elicitation design. Nevertheless, the added precision offered by using more beans and a larger number of intervals with a predetermined support improves accuracy.
    Keywords: Economic Theory&Research,Information Security&Privacy,Markets and Market Access,Statistical&Mathematical Sciences,Crops&Crop Management Systems
    Date: 2010–10–01

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