|
on Experimental Economics |
| By: | Uwe Dulleck (QUT); Jacob Fell (The commonwealth Grants Commission); Jonas Fooken (QUT) |
| Abstract: | We compare the consistency of choices in two methods to used elicit risk preferences on an aggregate as well as on an individual level. We asked subjects to choose twice from a list of nine decision between two lotteries, as introduced by Holt and Laury (2002, 2005) alternating with nine decisions using the budget approach introduced by Andreoni and Harbaugh (2009). We nd that while on an aggregate (subject pool) level the results are (roughly) consistent, on an individual (within-subject) level, behavior is far from consistent. Within each method as well as across methods we observe low correlations. This again questions the reliability of experimental risk elicitation measures and the ability to use results from such methods to control for the risk aversion of subjects when explaining effects in other experimental games. |
| Keywords: | risk preferences, laboratory experiment, elicitation methods, subject heterogeneity |
| JEL: | C91 D81 |
| Date: | 2011–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:qut:auncer:2011_5&r=exp |
| By: | Martin Fochmann (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Joachim Weimann (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | We conduct a framed field experiment with 245 employed persons (no students) as subjects and a real tax, which is levied on the subjects' income from working in our real effort task. In our first three treatments, the net wage is constant but gross wages are subject to different constant marginal tax rates (0, 25%, 50%). It turns out that the effort is significantly higher under the tax than in the no tax treatment. Subjects perceive a too high net wage because they underestimate the tax. We conjecture that tax perception depends on the tax rate, the presentation of the tax and the experience subjects have with taxation. These conjectures are confirmed in four further treatments employing a direct and an indirect progressive tax scale. It turns out that simple flat taxes are particularly prone to being misperceived because their simplicity reduces the tax salience. |
| Keywords: | Field experiment, real effort experiment, tax perception, tax salience, tax experience, behavioral economics |
| JEL: | C91 D14 H24 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:110020&r=exp |
| By: | Lora R. Todorova (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Siegfried K. Berninghaus (Karlsruhe Institute of Technology (KIT), Institute for Economic Theory and Statistics); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | This paper presents results from an experiment designed to study the effect of self reporting risk preferences on strategy choices made in a subsequently played 2× 2 coordination game.The main finding is that the act of answering a questionnaire about one's own risk preferences significantly alters strategic behavior. Within a best response correspondence framework, this result can be explained by a change in either risk preferences or beliefs. We find that self reporting risk preferences induces an increase in subjects' risk aversion while keeping their beliefs unchanged. Our findings raise some questions about the stability of strategy choices in coordination games. |
| Keywords: | coordination game, questionnaire, risk preferences, beliefs, best response correspondence |
| JEL: | D81 C91 C72 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:110019&r=exp |
| By: | Bocqueho, Geraldine; Jacquet, Florence; Reynaud, Arnaud |
| Abstract: | We elicit risk preferences of French farmers in a field experimental setting under expected utility theory and cumulative prospect theory. We use two different estimation methods, namely the interval approach and the estimation of a random preference model. On average, farmers are risk averse and loss averse. They also exhibit an inverse S-shaped probability weighting function, meaning that they tend to overweight small probabilities and underweight high probabilities. We infer from our results that CPT explains farmersâ behaviour better than EUT in the context of our experiment. We also investigate how preferences correlate with individual socio-demographic characteristics. We find that education and agricultural innovation are negatively linked with risk aversion. Our results also show that age, education, household size and the level of secured income tend to lower farmersâ loss aversion. Finally, older farmers and farmers with large farms distort probabilities less than the others. These findings contribute to the literature which compares expected utility with competing decision theories. They also give important insights into farmersâ behaviour towards risk, which is critical for relevant public policy design. |
| Keywords: | risk preferences, field experiment, experimental economics, prospect theory, Risk and Uncertainty, C91, D81, J16, Q12, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114257&r=exp |
| By: | Schosser, Stephan; Vogt, Bodo |
| Abstract: | We analyze cooperative behavior of participants who faced a loss. In particular, we extend the Public Good Game by a fixed loss in the beginning of every period. We show that humans change their behavior compared to corresponding studies with gains only. First, in contrast to literature on gains, we observe significant order effects. When participants first play a treatment with punishment, they cooperate less and face higher punishment costs than when first playing a treatment without punishment. The changes are that drastic that punishment does not pay in the first case, while it does in the later. Second, for participants first playing without punishment the contributions in the very first period of play determine the contributions throughout both treatments of the game, yielding higher contributions in the punishment treatment than when playing with gains. Participants punishing first, show no comparable behavior. -- |
| Keywords: | public good,punishment,losses,experiment |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:33&r=exp |
| By: | Katerina Sherstyuk (Department of Economics, University of Hawaii at Manoa); Nori Tarui (Department of Economics, University of Hawaii at Manoa); Majah-Leah Ravago (Department of Economics, University of Hawaii at Manoa); Tatsuyoshi Saijo (Department of Economics, Osaka University) |
| Abstract: | We consider payment schemes in experiments that model infinite-horizon games by using random termination. We compare paying subjects cumulatively for all periods of the game; with paying subjects for the last period only; with paying for one of the periods, chosen randomly. Theoretically, assuming expected utility maximization and risk neutrality, both the cumulative and the last-period payment schemes induce preferences that are equivalent to maximizing the discounted sum of utilities. The last-period payment is also robust under different attitudes towards risk. In comparison, paying subjects for one of the periods chosen randomly creates a present-period bias. Experimentally, we find that the cumulative payment appears the best in inducing long-sighted behavior. |
| Keywords: | economic experiments; infinite-horizon games; random termination |
| JEL: | C90 C73 |
| Date: | 2011–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201102&r=exp |
| By: | Bougherara, Douadia; Gassmann, Xavier; Piet, Laurent |
| Abstract: | We designed a field experiment involving real payments to elicit farmersâ risk preferences. Farmers are a very interesting sample to study since risk has always played an important role in agricultural producersâ decisions. Besides, European farmers may face more risky situations in the future. In this context, it is very important for any economic analysis focusing on agriculture to correctly assess farmersâ behaviour in the face of different sources of risk. We test for two descriptions of farmersâ behaviour: expected utility and cumulative prospect theory. We use two elicitation methods based on the procedures of Holt and Laury (2002) and Tanaka et al. (2010) on a sample of 30 French farmers. The experiment consists in asking subjects to make series of choices between two lotteries with varying probabilities and outcomes. We estimate parameters describing farmersâ risk preferences derived from structural models. We find farmers are slightly risk averse in the expected utility framework. In the cumulative prospect theory frame, we find farmers display either loss aversion or probability weighting, tending to overweight small probabilities and to underweight high probabilities. In our study, expected utility is not a good description of farmersâ behaviour towards risk. |
| Keywords: | Risk Attitudes, Field Experiment, Farming, Risk and Uncertainty, C93, D81, Q10, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114266&r=exp |
| By: | Robert Amano; Jim Engle-Warnick; Malik Shukayev |
| Abstract: | In this paper, we use an economics decision-making experiment to test a key assumption underpinning the efficacy of price-level targeting relative to inflation targeting for business cycle stabilization and mitigating the effects of the zero lower bound on nominal interest rates. In particular, we attempt to infer whether experimental participants understand the stationary nature of the price level under price-level targeting by observing their inflation forecasting behaviour in a laboratory setting. This is an important assumption since, without it, price-level targeting can lead to worse outcomes than inflation targeting. Our main result suggests that participants formulate inflation expectations consistent with the target-reverting nature of the price level but that they do not fully utilize it in their forecasts of future inflation. |
| Keywords: | Monetary policy framework |
| JEL: | E32 E52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:11-18&r=exp |
| By: | Phillia Restiani (The School of Economics and Centre for Energy and Environmental Markets at UNSW); Regina Betz (Centre for Energy and Environmental Markets (CEEM), School of Economics, Australian School of Business, University of NSW) |
| Abstract: | This paper investigates the behavioural implications of penalty designs on market performance using an experimental method. Three penalty types and two penalty levels are enforced in a laboratory permit market with auctioning, including the Australian Carbon Pollution Reduction Scheme proposed design of tying the penalty rate to the auction price. Compliance strategies are limited to undertaking irreversible abatement investment decisions or buying permits. We aim to assess how penalty design under the presence of subjects‟ risk preferences might affect compliance incentives, permit price discovery, and efficiency. In contrast to theory, we find that penalty levels serve as a focal point that indicates compliance costs and affects compliance strategies. The make-good provision penalty provides stronger compliance incentives than the other penalty types. However, the theory holds with regard to permit price discovery, as we find no evidence of the effect of penalty design on auction price. Interestingly, risk preference does not directly affect compliance decision, but it does influence price discovery, which evidently is a significant factor in compliance decisions as well as efficiency. Most importantly, a trade-off between investment incentives and efficiency is observed. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1087&r=exp |
| By: | Gerhard Riener (Graduate College "The Economics of Innovative Change", Friedrich Schiller University, Jena); Alexander Schacht (Graduate College "The Economics of Innovative Change", Friedrich Schiller University, Jena) |
| Abstract: | We experimentally study the inuence of induced group identity on the determination of prices and beliefs in a small market game. We create group identity through a focal point coordination game. Subjects play a three-person bargaining game where one seller can sell an indivisible good to one of two competing buyers under four different treatments varying the buyer-seller constellation. We find evidence of in group favoritism on the buyer side. However we do not detect a lower ask prices for in-group sellers for in-group buyers, indicating that in-group favoritism is in favor of the more powerful market participant. |
| Keywords: | Group identity, Experiments, Markets, Bargaining |
| JEL: | C91 D45 L13 L14 |
| Date: | 2011–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-043&r=exp |
| By: | J. Phillip Reiss; Irenaeus Wolff |
| Abstract: | We examine the incentive effects of funding contracts on entrepreneurial effort decisions and allocative efficiency. We experiment with four types of contracts (standard debt contract, outside equity, non-monotonic contract, full-subsidy contract) that differ in the structure of investor repayment and, therefore, in the incentives for entrepreneurial effort provision. Theoretically the replacement of a standard debt contract by a repayment-equivalent non-monotonic contract reduces effort distortions and increases efficiency. We test this non-monotonic-contracts hypothesis in the laboratory as well. Our results reveal that the incentive effects of funding contracts need to be experienced before they reect in observed behavior. With sufficient experience observed behavior is consistent with the theoretical predictions and supports the non-monotonic-contracts hypothesis: we find that the replacement of a standard debt contract by a repayment-neutral non-monotonic contract increases entrepreneurial income by 170% and total surplus by 30% in our setting. |
| Keywords: | hidden information, funding contracts, incentives, experiment, standard debt contract, non-monotonic contract |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0070&r=exp |
| By: | Andries De Grip (Research Centre for Education and the Labour Market (ROA), Maastricht University and Institute for the Study of Labor (IZA), Bonn); Jan Sauermann (Research Centre for Education and the Labour Market (ROA), Maastricht University) |
| Abstract: | This paper analyses the effects of work-related training on worker productivity. To identify the causal effects from training, we combine a field experiment that randomly assigns workers to treatment and control groups with panel data on individual worker performance before and after training. We find that participation in the training programme leads to a 10 percent increase in performance. Moreover, we provide experimental evidence for externalities from treated workers on their untreated teammates: An increase of 10 percentage points in the share of treated peers leads to a performance increase of 0.51 percent. We provide evidence that the estimated effects are causal and not the result of employee selection into and out of training. Furthermore, we find that the performance increase is not due to lower quality provided by the worker. |
| Keywords: | Training, field experiment, peer effects, productivity |
| JEL: | J24 M53 C93 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0067&r=exp |
| By: | M. Casari; D. Dragone |
| Abstract: | We study intertemporal choices through an experiment that elicits a subject's plan and then tracks its implementation over time. There are two main results. When facing a costly task to be completed under a deadline, two thirds of subjects prefer anticipating it rather than postponing it. Choice reversals are common although present-biased preferences alone cannot explain them. This evidence is compatible with models based on anticipatory feelings and stochastic utility. |
| JEL: | C91 D01 D80 D90 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp777&r=exp |
| By: | Balgah, Roland Azibo; Buchenrieder, Gertrud |
| Abstract: | Increasing occurrence of devastating natural shocks has stimulated research interest in the economics of natural disasters. Much of this scholarly work concentrates on effects of shocks on poverty, risk and vulnerability, and very little on understanding the effects of natural shocks on risk behavior. Referring to a 25 year-old disaster, we use unique survey data and experiment results from two disaster affected communities in rural Cameroon to test two hypotheses: (1) Natural shocks affect long term risk behavior; and (2) self-relocation into risk-prone areas is an explicit demonstration of risk taking. The results reveal differentiated risk behavior in self-relocated and state-resettled households, with the former taking higher risks compared to resettled households. Experiments strongly support trends observed in the empirical study, but captured cognitive behavior better than the survey. Results support previous evidence on applying experiments in understanding cognitive risk behavior and confirm our hypotheses. |
| Keywords: | Shocks, risk behavior, experiment, Cameroon, Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114215&r=exp |
| By: | Maart, Syster Christin; Musshoff, Oliver; Odening, Martin; Schade, Christian |
| Abstract: | Agrarian structures are often characterized by some kind of economic inertia. It is particularly puzzling why unprofitable farms persist over time instead of being sold. In this paper we analyze the exit decision of farmers using the real options approach. The validity of the real options theory is assessed by means of laboratory experiments. Our results show that real options models are able to predict actual disinvestment decisions better than traditional investment theory. Nevertheless, the observed disinvestment reluctance was even more pronounced as predicted by theory. This finding suggests the inclusion of bounded rationality into normative disinvestment models. |
| Keywords: | Disinvestment, Real Options, Experimental Economics, Agricultural Finance, Farm Management, C91, D81, D92, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114375&r=exp |
| By: | Diederich, Johannes; Goeschl, Timo |
| Abstract: | In the climate policy debate, a rhetoric has evolved that attributes a high potential to "voluntary climate action". We turn to the population of Germany, the fourth largest cumulative GHG emitter, to obtain an Internet-)representative estimate of the individual willingness to abate one ton of CO2, the equivalent of 10 percent of annual per-capita CO2 emissions. The estimate derives from a large-scale (n=2,440) framed field experiment in which subjects choose between a guaranteed reduction of one ton of EU CO2 emissions and a randomly drawn cash award between €2 and €100. At €6.30, estimated mean WTP is considerably lower than prior hypothetical or non-representative estimates. Median WTP is non-positive. The almost bimodal nature of WTP in the population has important policy implications. |
| Keywords: | climate change mitigation; field experiment; voluntary climate action; willingness to pay |
| Date: | 2011–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0517&r=exp |
| By: | Wieland Mueller; Fangfang Tan |
| Abstract: | Previous experimental results on one-shot sequential two-player games show that group de- cisions are closer to the subgame-perfect Nash equilbirum than individual decisions. We extend the analysis of inter-group versus inter-individual decision making to a Stackelberg market game, by running both one-shot and repeated markets. Whereas in the one-shot markets we ?nd no signi?cant di¤erences in the behavior of groups and individuals, we ?nd that the behavior of groups is further away from the subgame-perfect equilibrium of the stage game than that of individuals. To a large extent, this result is independent of the method of eliciting choices (sequential or strategy method) and the method used to account for observed ?rst- and second- mover behavior. We provide evidence on followers?response functions and electronic chats to o¤er an explanation for the di¤erential e¤ect that the time horizon of interaction has on the extent of individual and group players?(non)conformity with subgame perfectness. |
| JEL: | C72 C92 L13 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1111&r=exp |
| By: | Asen Ivanov (Department of Economics, VCU School of Business); Douglas D. Davis (Department of Economics, VCU School of Business); Korenok Oleg (Department of Economics, VCU School of Business) |
| Abstract: | We introduce a novel approach for organizing behavior and explaining cooperation in repeated games. Our approach is based on the idea that players differ according to an inherent propensity to cooperate that systematically affects behavior and cooperation levels. We formulate the empirical implications of this idea and test them in the lab. Our data support our approach. Our main conclusions are: (i) players’ strategies in a repeated game can be ranked along a single dimension, (ii) this ranking remains stable across repeated games, and (iii) the composition of a group, in terms of its players’ propensities, strongly affects cooperation levels. |
| Keywords: | repeated games, cooperation, experiment |
| JEL: | D74 C92 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:vcu:wpaper:1101&r=exp |
| By: | Besedes, Tibor; Deck, Cary; Quintanar, Sarah; Sarangi, Sudipta; Shor, Mikhael |
| Abstract: | Individuals bring effort to a group to achieve a common objective. Group membership introduces a free riding incentive, reducing effort, as well as a social responsibility incentive, increasing effort. This paper shows that the free riding effect is stronger. Individuals significantly reduce their effort as the difficulty of the task increases when they cannot collaborate in the group. Once collaboration is allowed, the negative effects of free riding are not observed. Collaborating groups outperform both groups without collaboration and individuals. They do as well as the best constituent member would have done on her own, thus aggregating existing knowledge. |
| Keywords: | group behavior; decision making; free-riding; experiments |
| JEL: | D71 C92 Z13 |
| Date: | 2011–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33948&r=exp |
| By: | Larsen, Karen; Ollikainen, Markku |
| Abstract: | This research studies the use of auctions for reducing leaching of phosphorus and nitrogen into the Baltic Sea. Auctions are introduced as a tool for creating environmental contracts in agriculture for the first time in Finland. A controlled laboratory experiment is used to analyze the effect of introducing a bundle mechanism in the auction. Landholders submit sealed bids on multiple parcels in a one shot reverse auction. Each parcel is assigned an environmental quality and varies in size. In one treatment landholders can offer bids on environmental contracts for their parcels individually. In the other treatment landholders are given the opportunity to bundle parcels of land together when submitting bids as well as submitting bids for individual parcels. The results suggest that the bundle mechanism increase environmental efficiency of the auction compared to the individual parcel auction. In the treatment with individual parcel bids environmental value significantly affects over half of landholdersâ offers. The bundle treatment however shows sign of a cognitive bias where landholders use the hectare size to determine their offers. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114401&r=exp |
| By: | Cerroni, Simone; Notaro, Sandra; Shaw, W. Douglass |
| Keywords: | Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114313&r=exp |
| By: | Veronika Nemes (Centre for Energy and Environmental Markets, The University of New South Wales and Victorian Government Department of Sustainability and Environment.); Lata Gangadharan (Department of Economics, Monash University) |
| Abstract: | In this paper we examine how individuals behave in situations of risk and uncertainty in public and private goods context. We find that subjects are willing to pay a much higher amount to find out information relating to the probabilities of providing the private good than information relating to the public good even if this information has greater consequences for the individual in he public goods context. We find strong support for the free-rider hypothesis and extend it to cases when risk and uncertainty are present. We find that subjects treat risks and uncertainties associated with the provision of private good and public good differently. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:10107&r=exp |
| By: | Alfnes, Frode; Rickertsen, Kyrre; Shogren, Jason F. |
| Abstract: | We explore preference stability at the individual and market level. We examine individual bidding behavior among 116 French consumers who participated in experimental auctions conducted seven months apart for five types of fish. We reject preference stability at the individual level, but not at the aggregate market level. |
| Keywords: | aggregation, consumer preferences, demand, experimental auctions, food choice, Marketing, C91, D12, Q13, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114219&r=exp |
| By: | Avitia, Jessica; Costa-Font, Montserrat; Gil, Jose Maria; Lusk, Jayson L. |
| Abstract: | This paper analyses the role of agro-systems preservation on making food choices. It employs the âCalibrate Auction-Conjoint Valuation methodâ (CACM), which relates hypothetical conjoint valuation of product attributes with real market behavior using real economic incentives. The paper also allows comparing the hypothetical and nonhypothetical valuations in order to value the difference between the theoretic and the incentive-compatible WTP for a same respondent and within a single experiment. Thus the paper aims at testing for: 1) the internal consistency on peopleâs behavior towards sustainable agriculture, and 2) the relevance of the price attribute versus agro-ecosystems preservation for a fresh product. Results suggest that Spanish respondentsâ valuation of an agricultural product highly depends on the type of system used for its production. Nevertheless, respondents mainly differ between sustainable and non sustainable production, and do not discriminate between organic and integrated systems. In addition, both the price and the protection of the environment are the most important elements taken into account when purchasing. Moreover, consumers tend to overestimate their WTP in hypothetical settings (60% of the sample). Finally, factors such as gender, respondentsâ knowledge towards organic production and practices, health concerns, trust on organic marketing agents and risk perception are significant on explaining differences between individualâs hypothetical and non-hypothetical experiments. |
| Keywords: | Consumer/Household Economics, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114213&r=exp |
| By: | Wieland Mueller; Eline van der Heijden; Tobias J. Klein; Jan Potters |
| Abstract: | We elicit time preferences of a representative sample of 1,102 Dutch individuals and also confront them with a series of incentivized investment decisions. There are two treatments which di¤er by the frequency at which individuals decide about the invested amount. The low frequency treatment provides a nudge by stimulating decision makers to frame a sequence of risky decisions broadly rather than narrowly. We ?nd that impatient individuals are more ?nudgeable? than patient ones as the e¤ect of the treatment on investment levels is signi?cantly larger within the group of high discounters than within the group of low discounters. This result is robust to controlling for various economic and demographic variables and cognitive ability. This ?nding is interesting from a policy perspective because impatient individuals are often the target group of nudges as impatience is associated with problematic behaviors such as low savings, little equity holdings, low investments in human capital, and an unhealthy lifestyle. |
| JEL: | C93 D81 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1110&r=exp |
| By: | Richards, Timothy J.; Allender, William J.; Fang, Di |
| Keywords: | Marketing, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114814&r=exp |
| By: | Brummer, Bernhard; Loy, Jens-Peter; Requate, Till |
| Abstract: | Since 2000 Germany has introduced a fairly unique market mechanism to trade milk quotas between dairy farms. The two major features are: (1) a quasi auctioning system that produces excess demands which are covered by state reserves free of charge and (2) a price band that is used to exclude highest bids. For both features an experimental design is developed to study the impact in reference to a regular sellerâs sealed bid double auction. Results show that both treatments lead to significant misallocations. These are due to the direct impact of regulations and due to an imperfect adjustment of bidding functions. The major goal of the market design to reduce quota prices is reached, however, at significant trade losses. |
| Keywords: | Livestock Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114377&r=exp |
| By: | Cristina Ottaviani (Università degli Studi di Roma - La Sapienza); Daniela Vandone (University of Milan) |
| Abstract: | In this study we empirically estimated the role played by attitudes toward risk in insurance decision-making. To this end, we used the Iowa Gambling Task coupled with skin conductance recording, a validated experimental task of decision making under ambiguity which provides two dimensions of risk taking: the performance at the risk, as a measure of risk propensity, and the functioning of the somatic marker, as a measure of risk perception, that is the ability of the individual to “feel” the risk, independently of his/her risk attitude. The sample was made by 445 households and demographic-socio economical profiles were also obtained. Aside from confirming the role played by socio-economic explanatory variables, such as income level and marital status, on insurance purchase, results from the probit model showed the relevance of psychophysiological data: the likelihood of insurance demand is higher for people who are more risk seeking (worse performance at the task) but are adaptively able to feel the risk (anticipatory skin conductance responses to disadvantageous decks). Results are discussed in light of the need of interdisciplinary research. |
| Keywords: | insurance demand, decision making, ambiguity, risk taking, Iowa gambling task, |
| Date: | 2011–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:bep:unimip:unimi-1108&r=exp |
| By: | Stachtiaris, Spiros; Drichoutis, Andreas C.; Klonaris, Stathis |
| Abstract: | 2011) using the Contingent valuation (CV) as well as the Inferred valuation (IV) method (Lusk and Norwood 2009b). We find that when moving in the context of a familiar market for consumers (i.e., the food market) we only observe weak effects of inconsistencies. In addition, we find that the IV method is no better (and no worse) than the CV method in generating more consistent preference orderings. Surprisingly, we also find that the IV method generates higher valuations than CV, rendering one of its advantages of mitigating social desirability bias questionable. |
| Keywords: | willingness-to-pay (WTP), Contingent Valuation (CV), Inferred Valuation(IV), preference reversals, Resource /Energy Economics and Policy, C9, C93, D12, Q51, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:116013&r=exp |
| By: | Kaplan, Todd (Department of Economics, University of Haifa); Ruffle, Bradley (Department of Economics, Ben-Gurion University) |
| Abstract: | We introduce a two-player, binary-choice game in which both players have a privately known incentive to enter, yet the combined surplus is highest if only one enters. Repetition of this game admits two distinct ways to cooperate: turn taking and cutoffs, which rely on the player's private value to entry. A series of experiments highlights the role of private information in determining which mode players adopt. If an individual's entry values vary little (e.g., mundane tasks), taking turns is likely; if these potential values are diverse (e.g., difficult tasks that differentiate individuals by skill or preferences), cutoff cooperation emerges. |
| JEL: | C90 Z13 |
| Date: | 2011–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:haf:huedwp:wp201105&r=exp |
| By: | Mehmet Y. Gurdal; Ayca Ozdogan; Ismail Saglam |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:tob:wpaper:1106&r=exp |
| By: | John Bridges; Christine Buttorff; Karin Groothuis-Oudshoorn |
| Abstract: | Background: Most applications of choice-based conjoint analysis in health use choice tasks with only two profiles, while those in marketing routinely use three or more. This study reports on a randomized trial comparing paired with triplet profile choice formats focused on measuring patient preference for hearing aids. Methods: Respondents with hearing loss were drawn from a nationally representative cohort, completed identical surveys incorporating a conjoint analysis, but were randomized to choice tasks with two or three profiles. Baseline differences between the two groups were explored using ANOVA and chi-square tests. The primary outcomes of differences in estimated preferences were explored using t-tests, likelihood ratio tests, and analysis of individual-level models estimated with ordinary least squares. Results: 500 respondents were recruited. 127 had no hearing loss, 28 had profound loss and 22 declined to participate and were not analyzed. Of the remaining 323 participants, 146 individuals were randomized to the pairs and 177 to triplets. The only significant difference between the groups was time to complete the survey (11.5 and 21 minutes respectively). Pairs and triplets produced identical rankings of attribute importance but homogeneity was rejected (P<0.0001). Pairs led to more variation, and were systematically biased toward the null because a third (32.2%) of respondents focused on only one attribute. This is in contrast to respondents in the triplet design who traded across all attributes. Discussion: The number of profiles in choice tasks affects the results of conjoint analysis studies. Here triplets are preferred to pairs as they avoid non-trading and allow for more accurate estimation of preferences models. |
| JEL: | C91 I11 I18 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17482&r=exp |
| By: | Colson, Gregory; Grebitus, Carola |
| Abstract: | Childhood obesity, which is directly linked to chronic illnesses and increased medical costs, has emerged as a critical national policy issue in the EU and the US. At the forefront of programs to reduce childhood obesity are efforts to shift consumption away from high-caloric and high-fat foods to healthier alternatives. One challenge in combating childhood obesity via induced shifts towards a healthier diet is that the majority of food consumed by younger children is purchased or prepared by someone else, i.e., a parent. Hence, it is critical to design initiatives aimed at affecting parents' purchases of healthy foods for their children. In this study we focus on the potential of front-of-package health labels specifically designed to signal parents foods that are healthy for children. We report results of a choice experiment administered to 733 parents with children between the ages of three and ten. In the experiments branded and unbranded yogurts marketed to children are considered with different health labels. In our analysis, we explicitly control for the child's body mass index (BMI) to assess how labels affect parents' food choices conditional on the health status of their child. Results from two mixed logit models are promising, indicating that (1) parents are willing to pay a premium for yogurts with a label denoting the food is a healthy choice for children and (2) parents with children who are overweight or obese, and hence already in the high risk category due to their body weight, are most affected by the labels. |
| Keywords: | health label, childrenâs diet, parentsâ food choices, BMI, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114284&r=exp |
| By: | Disdier, Anne-Celia; Marette, Stephan |
| Keywords: | Food Consumption/Nutrition/Food Safety, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114439&r=exp |