New Economics Papers
on Experimental Economics
Issue of 2011‒12‒13
thirty papers chosen by

  1. Group Decision Making Under Risk: An Experiment with Student Couples By Haoran He; Peter Martinsson; Matthias Sutter
  2. Do Monetary Incentives and Chained Questions Affect the Validity of Risk Estimates Elicited via the Exchangeability Method? An Experimental Investigation By Simone Cerroni; Sandra Notaro; W. Douglass Shaw
  3. Do People Keep Socially Unverifiable Promises? By Cary Deck; Maroš Servátka; Steven Tucker
  4. The Effect of Religion on Cooperation and Altruistic Punishment: Experimental Evidence from Public Goods Experiments By Akay, Alpaslan; Karabulut, Gökhan; Martinsson, Peter
  5. Managerial incentives under competitive pressure: Experimental investigation By Ahmed Ennasri; Marc Willinger
  6. Group outcomes and reciprocity By Ioannou, Christos; Qi, Shi; Rustichini, Aldo
  7. Gender Differences in Risk Aversion: Do Single-Sex Environments Affect their Development? By Booth, Alison L.; Cardona Sosa, Lina; Nolen, Patrick J.
  8. Rewarding Altruism? A Natural Field Experiment By Nicola Lacetera; Mario Macis; Robert Slonim
  9. Coordination under threshold uncertainty in a public goods game By Astrid Dannenberg; Andreas Löschel; Gabriele Paolacci; Christiane Reif; Alessandro Tavoni
  10. A Note on a Weighted Voting Experiment: Human Mistakes in Cooperative Games By Eric Guerci; Nobuyuki Hanaki; Naoki Watanabe; Gabriele Esposito; Xiaoyan Lu
  11. Imperfect public monitoring with costly punishment - An experimental study By Attila Ambrus; Ben Greiner
  13. Do Security-differentiated Water Rights Improve Efficiency? By Marianne LEFEBVRE; Lata GANGADHARAN; Sophie THOYER
  14. Damaging the perfect image of athletes: How sport promotes envy By Jérémy CELSE
  15. A novel computerized real effort task based on sliders By Gill, David; Prowse, Victoria
  16. Strategic behavior in Schelling dynamics: A new result and experimental evidence By Juan Miguel Benito; Pablo Branas-Garz; Penelope Hernandez; Juan A. Sanchis
  17. Efficient Renegotiation in Search Markets: Theory and Field Experimental Evidence By Bengtsson, Niklas
  18. "One Muslim is Enough!" - Evidence from a Field Experiment in France By Adida, Claire L.; Laitin, David D.; Valfort, Marie-Anne
  19. Effects of Parental Background on Other-regarding Preferences in Children By MIchal Bauer; Julie Chytilova; Barbara Pertold-Gebicka
  20. Complexity of Networking - An Experimental Study of the Network Hawk Dove Game By Siegfried Berninghaus; Stephan Schosser; Bodo Vogt
  21. Are homosexuals discriminated against in the hiring process? By Ahmed, Ali; Andersson, Lina; Hammarstedt, Mats
  22. How does income inequality affect cooperation and punishment in public good settings? By Sebastian Prediger
  23. Rational Inattention to Subsidies for Charitable Contributions By Kimberly Scharf; Sarah Smith
  24. Does Easily Accessible Nutritional Labelling Increase Consumption of Healthy Meals away from Home? A Field Experiment Measuring the Impact of a Point-of-Purchase Healthy Symbol on Lunch Sales. By Thunström, Linda; Nordström, Jonas
  25. Conflicted Minds: Recalibrational Emotions Following Trust-based Interaction. By Eric Schniter; Roman M. Sheremeta; Timothy Shields
  26. The Effect of Religiosity and Religious Festivals on Positional Concerns: An Experimental Investigation of Ramadan By Akay, Alpaslan; Karabulut, Gökhan; Martinsson, Peter
  27. Is Sex Like Driving? Risk Compensation Associated with Randomized Male Circumcision in Kisumu, Kenya By Nicholas Wilson; Wentao Xiong; Christine Mattson; Christine Mattson
  28. On policy feedback: insights from survey experiments By Clem Brooks; Inés Calzada
  29. The Effect of Bidding Information in Ascending Auctions. By Mun Chuia; David Porter; Stephen Rassenti; Vernon Smith
  30. Willingness to pay for wholesome canteen takeaway By Nordström, Jonas

  1. By: Haoran He; Peter Martinsson; Matthias Sutter
    Abstract: In an experiment, we study risk-taking of cohabitating student couples, finding that couples’ decisions are closer to risk-neutrality than single partners’ decisions. This finding is similar to earlier experiments with randomly assigned groups, corroborating external validity of earlier results.
    Keywords: Risk experiment, Student couples, Group decision making
    JEL: C91 C92
    Date: 2011–12
  2. By: Simone Cerroni; Sandra Notaro; W. Douglass Shaw
    Abstract: Using a laboratory experiment, we investigate the validity of stated risks elicited via the Exchangeability Method (EM) by defining a valuation method based on de Finetti’s notion of coherence. The reliability of risk estimates elicited through the EM has been theoretically questioned because the chained structure of the game, in which each question depends on the respondent’s answer to the previous one, is thought to potentially undermine the incentive compatibility of the elicitation mechanism even when real monetary incentives are provided. Our results suggest that superiority of real monetary incentives is not evident when people are presented with chained experimental design
    Keywords: lab experiment, risk elicitation, exchangeability, validity, pesticide residue
    JEL: C44 D81 I10
    Date: 2011
  3. By: Cary Deck; Maroš Servátka (University of Canterbury); Steven Tucker (University of Canterbury)
    Abstract: Previous research has suggested that communication and especially promises increase cooperation in laboratory experiments. This has been taken as evidence for internal motivations such as guilt aversion or preference for promise keeping. The original goal of this paper was to examine promises under a double blind payoff procedure to test the alternative explanation that promise keeping was due to external influence and reputational concerns. We find no evidence that communication increases the overall level of cooperation in our double blind experiment. However, our results are due in part to the high level of cooperation that we observe, leading us to conduct additional single blind conditions. Ultimately, we find no evidence that communication or payoff procedures impact aggregate cooperation.
    Keywords: Anonymity; experiment; promises; partnership; guilt aversion; psychological game theory; trust; lies; social distance; behavioral economics; hidden action
    JEL: C70 C91
    Date: 2011–12–01
  4. By: Akay, Alpaslan (IZA); Karabulut, Gökhan (Istanbul University); Martinsson, Peter (University of Gothenburg)
    Abstract: This paper experimentally examines how religious festivals and the degree of religiosity affect cooperation and altruistic punishment by using public goods experiments. We conducted the experiments in Turkey at different points in time; one on the most religious day during Ramadan (the Night of Power – Laylat al-Qadr) and the other at a time without any religious festivals other than the normal daily prayers. The overall results show no differences in cooperation or altruistic punishment among individuals during Ramadan, even when the degree of their religiosity varied. However, less religious people did change their cooperative behaviour in response to religious festivals. Most of the differences can, however, be explained by differences in beliefs about others contributions. By and large, this indicates the importance of conditional cooperation.
    Keywords: cooperation, experiment, public goods, punishment, religion
    JEL: C72 C91 H41
    Date: 2011–11
  5. By: Ahmed Ennasri; Marc Willinger
    Abstract: We investigate the effects of competition on managerial incentives and effort in a laboratory experiment. Each owner offers compensation to his manager in two different contexts: monopoly and Cournot duopoly. After accepting the compensation, the manager chooses an effort level to increase the probability of reduced costs of his firm. Theory predicts that the entry of a rival firm in a monopolistic industry affects negatively both the incentive compensation and the effort level. Our experimental findings confirm that the entry of a rival firm reduces the incentive compensation but not the manager’s effort level. However, despite the reduction of the incentive compensation, the manager continues to accept the contract offers and exert the same level of effort.
    Keywords: Managerial Incentives, Effort, Competition, Moral hazard, Experiments
    Date: 2011–06
  6. By: Ioannou, Christos; Qi, Shi; Rustichini, Aldo
    Abstract: Group membership affects an agent's individual behavior. We determine how, by testing two competing hypotheses. One is that group membership operates through social identity, and the other is that group membership implements a correlation among the actions of in-group members in response to an implicit signal. We introduce two novel features in the experimental design. The first feature is the display of group outcomes. This allows us to assess directly the importance of relative group performance on subjects' decisions. The second is a careful manipulation of the Dictator game and the Trust game. More specifically, we choose parameters strategically so as to ensure no change in the pecuniary incentives across the two games. For a precise quantitative test of the two hypotheses we develop a structural model to describe an agent's behavior across treatments. Our findings suggest that the role of social identity on motivating agents' decisions has been exaggerated. The display of group outcomes induces a group effect, but a careful analysis of this effect reveals that participants use group outcomes as a signal to coordinate in-group members on favorable outcomes. Furthermore, we find evidence in support of recent experimental studies which demonstrate that an agent's allocation choice is sensitive to the behavior of the agent that generated the choice set. <br><br> Keywords; groups, trust game, dictator game, reciprocity
    Date: 2011–04–08
  7. By: Booth, Alison L. (Australian National University); Cardona Sosa, Lina (University of Essex); Nolen, Patrick J. (University of Essex)
    Abstract: Single-sex classes within coeducational environments are likely to modify students' risk-taking attitudes in economically important ways. To test this, we designed a controlled experiment using first year college students who made choices over real-stakes lotteries at two distinct dates. Students were randomly assigned to classes of three types: all female, all male, and coeducational. They were not allowed to change group subsequently. We found that women are less likely to make risky choices than men at both dates. However, after eight weeks in a single-sex environment, women were significantly more likely to choose the lottery than their counterparts in coeducational groups. These results are robust to the inclusion of controls for IQ and for personality type, as well as to a number of sensitivity tests. Our findings suggest that observed gender differences in behaviour under uncertainty found in previous studies might partly reflect social learning rather than inherent gender traits.
    Keywords: gender, risk preferences, single-sex groups, cognitive ability
    JEL: C9 C91 C92 J16 D01 D80 J16 J24
    Date: 2011–11
  8. By: Nicola Lacetera; Mario Macis; Robert Slonim
    Abstract: We present evidence from a natural field experiment involving nearly 100,000 individuals on the effects of offering economic incentives for blood donations. Subjects who were offered economic rewards to donate blood were more likely to donate, and more so the higher the value of the rewards. They were also more likely to attract others to donate, spatially alter the location of their donations towards the drives offering rewards, and modify their temporal donation schedule leading to a short-term reduction in donations immediately after the reward offer was removed. Although offering economic incentives, combining all of these effects, positively and significantly increased donations, ignoring individuals who took additional actions beyond donating to get others to donate would have led to an under-estimate of the total effect, whereas ignoring the spatial effect would have led to an over-estimate of the total effect. We also find that individuals who received a reward by surprise were less likely to donate after the intervention than subjects who received no reward, suggesting that for some individuals a surprise reward adversely affected their intrinsic motivations. We discuss the implications of these findings for understanding pro-social behavior.
    JEL: C93 D01 D03 D64 H41 I12
    Date: 2011–12
  9. By: Astrid Dannenberg (Centre for European Economic Research (ZEW)); Andreas Löschel (Centre for European Economic Research (ZEW)); Gabriele Paolacci (Ca’ Foscari University of Venice); Christiane Reif (Centre for European Economic Research (ZEW)); Alessandro Tavoni (London School of Economics and Political Science (LSE))
    Abstract: We explored experimentally how threshold uncertainty affects coordination success in a threshold public goods game. Whereas all groups succeeded in providing the public good when the exact value of the threshold was known, uncertainty was generally detrimental for the public good provision. The negative effect of threshold uncertainty was particularly severe when it took the form of ambiguity, i.e. when players were not only unaware of the value of the threshold but also of its probability distribution. Early signaling of willingness to contribute and share the burden equitably helped groups in coping with threshold uncertainty.
    Keywords: public good, threshold uncertainty, ambiguity, experiment
    JEL: C72 C92 H41 Q54
    Date: 2011
  10. By: Eric Guerci (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); Nobuyuki Hanaki (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, Economics Department - Université de Tsukuba); Naoki Watanabe (Economics Department - Université de Tsukuba); Gabriele Esposito (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); Xiaoyan Lu (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)
    Abstract: We conducted a sensitivity analysis of results in weighted voting experiments by varying the following two features of the protocol by Montero et al. (2008): (a) the way subjects' roles are reassigned in each round (random versus semi-fixed roles) and (b) the number of proposals that subjects can approve simultaneously (multiple versus single approval). We found that the possibility of simultaneously approving many proposals (multiple approvals) may result in more confusion and mistakes by subjects than the case without such a possibility (single approval). We also found that frequencies of minimal winning coalitions (MWCs) observed under the protocol with semi-fixed roles and single approval are consistent with our hypothesis: each subject prefers a MWC in which his or her relative weight is larger, and the probability of each MWC occurring depends on a score in the social ordering determined by the Borda count, when there is no veto player.
    Keywords: weighted voting; experiment; cooperative game; mistakes; winning coalition
    Date: 2011–11–28
  11. By: Attila Ambrus (Department of Economics, Harvard University); Ben Greiner (School of Economics, The University of New South Wales)
    Abstract: This paper experimentally investigates the effects of a costly punishment option on cooperation and social welfare in long finitely repeated public good contribution games. In a perfect monitoring environment increasing the severity of the potential punishment monotonically increases both contributions and the average net payoffs of subjects. In a more realistic imperfect monitoring environment, we find a U-shaped relationship between the severity of punishment and average net payoffs. Access to a standard punishment technology in this setting significantly decreases net payoffs, even in the long run. Access to a very severe punishment technology leads to roughly the same payoffs as with no punishment option, as the benefits of increased cooperation offset the social costs of punishing.
    Keywords: public good contribution experiments; imperfect monitoring; welfare implications of costly punishment
    JEL: C72 C92 H41
    Date: 2011–08
  12. By: Antoine BERETTI; Charles FIGUIERES; Gilles GROLLEAU
    Abstract: Economists recognize that monetary incentives can backfire through the crowding-out of moral and social motivations leading to an overall decrease of the desired behavior. We implement a field experiment where participants are asked to fill a questionnaire on pro-environmental behaviors under different incentive schemes, either with no monetary incentive (control) or with low or high monetary incentive directed either to the respondents or to an environmental cause. We investigate whether (i) there is a significant crowding-out effect, (ii) directing monetary incentive to the cause rather than to the respondents reduces the overall impact of a crowding-out effect, and (iii) offering the choice regarding the money recipient aects participation. Except for a high monetary incentive where the respondent chooses himself the end-recipient, we show that monetary rewards directed either at the individual or at the cause actually harms intrinsic motivations, but not to the same extent. We formalize our results building on an adaptation of an original model by Bolle and Otto (2010) and introduce agents heterogeneity in terms of intrinsic motivation. This heterogeneity has key implications for the understanding of the crowding-out eect. Several policy recommendations regarding the use of market-based instruments are drawn.
    Date: 2011–06
  13. By: Marianne LEFEBVRE; Lata GANGADHARAN; Sophie THOYER
    Abstract: Most existing water markets combine water rights trading and water allocation trading. Offering different levels of security for rights can make the market more sophisticated and allow water users to manage the risks of supply uncertainty better. We compare results from a laboratory experiment with two water right designs, one with a unique security level and another with two security levels. We find that a two security levels system improves both allocative eciency and risk management, but only when transactions costs are higher in the market for water allocation than in the market for water rights.
    Keywords: Crude Oil Pricing, Currency Basket, OPEC, Exchange Rate of Dollar, Euros, Yen.
    Date: 2011–06
  14. By: Jérémy CELSE
    Abstract: We explore the behavioural and affective differences between subjects practicing sport activities and subjects not practicing sport. Are athletes more distressed by unfavourable social comparisons and more prone to engage in hostile behaviour than non-athletes? Using experimental methods, we investigate the connection between sport practice and antisocial behaviour. In our experiment we capture the satisfaction subjects derive from unflattering social comparisons by asking them to evaluate their satisfaction after being informed of their own endowment and after being informed of their opponent’s endowment. Then subjects can decide to reduce their opponent’s endowment by incurring a cost. We observe that sport plays a key role on both individual well-being and behaviour: 1) sport practice amplifies the negative impact of unfavourable social comparisons on individual well-being and 2) sport practice exerts subjects to reduce others’ income. Besides the satisfaction sporty subjects report from social comparisons predicts their decisions to reduce others’ income. Finally we provide empirical evidences suggesting that envy affects significantly athletes’ satisfaction and behaviour.
    Date: 2011–06
  15. By: Gill, David; Prowse, Victoria
    Abstract: In this note, we present a novel computerized real effort task based on moving sliders across a screen which overcomes many of the drawbacks of existing real effort tasks. The task was first developed and used by us in Gill and Prowse (forthcoming). We outline the design of our \slider task", describe its advantages compared to existing real effort tasks and provide a statistical analysis of the behavior of subjects undertaking the task. We believe that the task will prove valuable to researchers in designing future real effort experiments, and to this end we provide z-Tree code and guidance to assist researchers wishing to implement the slider task. <br><br> Keywords; real effort task, slider task, design of laboratory experiments, learning and time effects, individual heterogeneity
    Date: 2011–01–01
  16. By: Juan Miguel Benito (Departamento de Economia, Universidad Publica de Navarra, Spain); Pablo Branas-Garz (Departamento de Teoria e Historia Economica, Universidad de Granada, Spain and Economic Science Institute Affliate, Chapman University); Penelope Hernandez (Departamento de Analisis Economico y ERI-CES, Spain); Juan A. Sanchis (Departamento de Estructura Econ´omica y ERI-CES, Spain)
    Abstract: In this paper we experimentally test Schelling’s (1971) segregation model and confirm the striking result of segregation. In addition, we extend Schelling’s model theoretically by adding strategic behavior and moving costs. We obtain a unique subgame perfect equilibrium in which rational agents facing moving costs may find it optimal not to move (anticipating other participants’ movements). This equilibrium is far for full segregation. We run experiments for this extended Schelling model. We find that the percentage of strategic players dramatically increases with the cost of moving and that the degree of segregation depends on the distribution of rational subjects.
    Keywords: Subgame perfect equilibrium, segregation, experimental games
    Date: 2011
  17. By: Bengtsson, Niklas (Uppsala Center for Labor Studies)
    Abstract: In this paper, I study the conditions that enable search efficiency in a search market in which the firms advertise incomplete terms of trade. The posted terms give rise to cost incentives so perverse that they could result in no trade at all if they are not renegotiated. I show that the private equilibrium is socially efficient if the customers retain the right to trade at the posted terms. The customers will never execute this right in practice, but the threat of doing so will frame the renegotiation in a socially efficient manner. I confirm the mechanisms in a controlled, randomized eld experiment in the market for metered taxis in Cape Town. Renegotiation is always privately efficient and does not lead to holdup. However, despite the absence of holdup and the availability of Pareto gains, renegotiations occur too seldom, which suggests that the trading parts do not understand the bene ts from renegotiation, or that there are some hidden costs associated with renegotiation.
    Keywords: Matching; Diamond Paradox; Taxi Experiment; Incomplete Contracts; Transaction Costs; Institutions; Natural Field Experiment; Search frictions; Price advertisements; Price Posting
    JEL: C78 C93 L51
    Date: 2011–12–05
  18. By: Adida, Claire L. (University of California, San Diego); Laitin, David D. (Stanford University); Valfort, Marie-Anne (University of Paris 1 Panthéon-Sorbonne)
    Abstract: Anti-Muslim prejudice is widespread in Western countries. Yet, Muslims are expected to constitute a growing share of the total population in Western countries over the next decades. This paper predicts that this demographic trend will increase anti-Muslim prejudice. Relying on experimental games and a formal model, we show that the generosity of rooted French toward Muslims is significantly decreased with the increase of Muslims in their midst, and demonstrate that these results are driven by the activation of rooted French taste-based discrimination against Muslims when Muslim numbers increase. Our findings call for solutions to anti-Muslim prejudice in the West.
    Keywords: discrimination, Islam, France, group salience, experimental economics, economic theory, group threat theory, intergroup contact theory
    JEL: A12 C90 D03 J15 J71 Z12
    Date: 2011–11
  19. By: MIchal Bauer; Julie Chytilova; Barbara Pertold-Gebicka
    Abstract: Other-regarding preferences are central for the ability to solve collective action problems and thus for society’s welfare. We study how the formation of other-regarding preferences during childhood is related to parental background. Using binary-choice dictator games to classify subjects into other-regarding types, we find that children of less educated parents are less altruistic and more spiteful. This link is robust to controlling for a range of child, family, and peer characteristics, and is attenuated for smarter children. The results suggest that less educated parents are either less efficient to instill social norms or their children less able to acquire them.
    Keywords: other-regarding preferences; altruism; spite; experiments with children; family background; education;
    JEL: C91 D03 D64 I24
    Date: 2011–10
  20. By: Siegfried Berninghaus (Karlsruhe Institute of Technology); Stephan Schosser (Karlsruhe Institute of Technology); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: Complexity of strategies is central for human decision making and attracted interest of different game theorists in the recent years. Nevertheless, behavioral economists have neglected the importance of complexity in their analyses. In this paper, we analyze network formation and action selection in a Hawk Dove Game with focus on complexity aspects. We conduct experiments with three variants of the game which are equivalent from a game theoretic perspective, but differ from a complexity theoretic perspective. Our results show, that complexity of decision making has an impact on the strategies played and that efficiency is higher the less complex the decision problem is.
    Date: 2011–11
  21. By: Ahmed, Ali (Linnaeus University); Andersson, Lina (Linnaeus University); Hammarstedt, Mats (Linnaeus University)
    Abstract: This paper presents the first field experiment on sexual orientation discrimination in the hiring process in the Swedish labor market. Job applications were sent to about 4,000 employers in 10 different occupations in Sweden. Gender and sexual orientation were randomly assigned to applications. The results show that sexual orientation discrimi-nation exists in the Swedish labor market. The discrimination against gays and lesbian varies across different occupations and appears only in the private sector. The results also seem to suggest a new dimension of traditional gender roles; the gay applicant was discriminated against in typical male-dominated occupations whereas the lesbian applicant was discriminated against in typical female-dominated occupations. Thus, the results suggest that gays to some extent face the same obstacles on the labor market as heterosexual women.
    Keywords: Labor market discrimination; sexual orientation; field experiment
    JEL: C93 J15 J71
    Date: 2011–11–28
  22. By: Sebastian Prediger (GIGA)
    Abstract: In the frame of decentralization reforms in Namibia, local water point associations evolved that have to collect water fees from community members to cover maintenance costs. Enforcement, however, is weak and water point associations have to rely on moral pleas. As a consequence, several users refuse to pay. I test the impact of informal sanction mechanisms on cooperation among water point users in groups with equal and unequal incomes. Interestingly, and in contrast to the vast majority of related studies, cooperation does not increase under the threat of punishment, though the punishment option was frequently used. At individual level I show that while punishments do not affect cooperative behaviour, they provoke counter-punishment. This suggests that peer-sanctioning mechanisms as a means to enforce norm-compliance are not accepted among water point association members. Contribution levels were higher in heterogeneous groups compared with homogenous ones, and both pro-social and anti-social punishments occurred more frequently in homogenous groups. A comparison between different income types further reveals that the poor contribute larger shares of their income than those endowed with higher incomes and that they use punishment as frequently and as vehemently as the better-off, despite higher opportunity costs.
    Keywords: Income heterogeneity, public goods experiment, peer punishment, anti-social punishment, Namibia
    Date: 2011
  23. By: Kimberly Scharf; Sarah Smith
    Abstract: Evidence suggests that individuals fail to process all relevant attributes when making decisions. Recent literature has mainly focused on shrouded attributes. Here we present a simple model where agents rationally choose not to process attributes even when they are not shrouded, and we investigate its predictions for the case of subsidies for charitable donations. These are offered as rebates or matches. Both lower the price of giving, but, crucially, with different implications for rational non-processing choices. Survey and experimental evidence on donation responses to equivalent changes in the match and the rebate is consistent with our model of rational inattention.
    Keywords: Tax salience, rational inattention, charitable giving
    JEL: H2 D0 D8
    Date: 2011–07
  24. By: Thunström, Linda (HUI Research AB); Nordström, Jonas (Department of Economics, Lund University)
    Abstract: This paper analyses the effect on meal consumption away from home of a point-of-purchase healthy symbol. We base the analysis on a field experiment in a lunch restaurant. Our results suggest that meal consumption does not increase if the meal is labeled with a healthy symbol. Also, the mean nutritional content of meals consumed seems unaffected by the introduction of a healthy labeled meal on the menu. Even if easily accessible and understood, menu labeling therefore seems inefficient in promoting healthier meal choices. Factors influencing meal consumption are meal ingredients and the order of the meal on the menu.
    Keywords: Consumer economics; food labelling; experiment; health
    JEL: D12 I10
    Date: 2011–11–07
  25. By: Eric Schniter (Economic Science Institute, Chapman University); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); Timothy Shields (Argyros School of Business and Economics, Chapman University)
    Abstract: Consistent with a modular view of the mind, both short-sighted and long-sighted programs may be simultaneously active in the mind and in conflict with one another when individuals face choice dilemmas in trust-based economic interactions. Recalibrational theory helps us identify the adaptive design features shared among subsets of superordinate emotion programs. According to this design logic and the computation of adaptive problem features produced by Trust games, we predict the activation of emotions after Trust games. While this study successfully predicts reports of twenty distinct emotional states, further studies are needed to demonstrate ultimate recalibrational functions of emotions.
    Keywords: emotions, recalibrational theory, modularity, Trust game, experiments
    Date: 2011
  26. By: Akay, Alpaslan (IZA); Karabulut, Gökhan (Istanbul University); Martinsson, Peter (University of Gothenburg)
    Abstract: This paper examines the effect of religion on positional concerns using survey experiments. We focus on two of the dimensions of religion – degree of religiosity and religious festivals. By conducting the experiments during both the most important day of Ramadan (the Night of Power) and a day outside Ramadan, we find that Ramadan overall has a small and negative impact on positional concerns. Detailed analyses based on the sorting of individuals' degree of religiosity reveal that the decrease in the degree of positional concerns during Ramadan is mainly explained by a decrease in positionality among individuals with a low degree of religiosity. We also discuss the broader welfare implications of our findings.
    Keywords: religion, positional concerns, Ramadan, Islam
    JEL: C90 D63
    Date: 2011–11
  27. By: Nicholas Wilson (Williams College); Wentao Xiong (Williams College); Christine Mattson; Christine Mattson (University of Illinois at Chicago School of Public Health)
    Abstract: Mass adult male circumcision campaigns for HIV prevention are underway across much of Sub-Saharan Africa. However, concern remains about risk compensation associated with the reduction in the probability of HIV transmission per risky act. This paper examines the behavioral response to male circumcision using experimental data from Kisumu, Kenya. Contrary to the presumption of risk compensation, we find that the response due to the perceived reduction in HIV transmission appears to have been a reduction in risky sexual behavior. We suggest a mechanism for this finding: circumcision reduces fatalism about acquiring HIV and increases the salience of the tradeoff between engaging in additional risky behavior and living longer. We also find what appears to be a competing effect that does not operate through the circumcisioncrecipient's belief about the reduction in the risk of acquiring HIV.
    Keywords: HIV/AIDS, male circumcision, risk compensation, beliefs, Kenya
    JEL: D81 D84 I18
    Date: 2011–08
  28. By: Clem Brooks; Inés Calzada
    Abstract: In comparative social science, policy feedback has become a widely popular device with which to understand policy persistence and the impacts of state-making and political entrepreneurship on mass opinion. Although the existence of such effects is frequently taken for granted, recent work has challenged prevailing assumptions about the unproblematic nature of feedback from policy change to mass opinion. This is an opportune time to put policy feedback to further test. We do so by bringing to bear the two main theoretical perspectives that underlie established and recent scholarship, and applying for the first time survey experiments to evaluate key expectations. Focusing on the relatively novel domain of counter-terrorism policy, we analyze data drawn from a national survey conducted in 2009. Results from embedded experiments suggest new evidence for policy feedback effects. Analysis of mechanisms suggests limits in interest-centered explanations, and the relevance of some under-studied, cognitive factors. We discuss implications and limits of our study for policy feedback scholarship, and with further reference to the case of U.S. attitudes toward the war on terror.
    Date: 2011–04
  29. By: Mun Chuia (School of Economics and Smith's Center for Experimental Economics Research, Shanghai Jiao Tong University, China); David Porter (Economic Science Institute, Chapman University); Stephen Rassenti (Economic Science Institute, Chapman University); Vernon Smith (Economic Science Institute, Chapman University)
    Abstract: We study the effect of the drop out and reenter information in an environment where bidders' values involve both private and common value components. We find that (1) providing bidding information does not have a significant effect on expected revenue and expected efficiency. (2) The effect of information on winner's expected profit depends on the range of uncertainty of the common value component and the level of Nash profit prediction, which the auctioneer has no a priori knowledge. In our environment, where bidders have a private component to their value and the auction takes place in ascending clock format, (3) bidders do not suffer from the winner's curse when information is not provided. (4) Information substantially increases the variability of revenue and winner?s profit when the range of uncertainty of the common value component is large. (5) Bidders? response to information depends on the range of uncertainty.
    JEL: D44
    Date: 2011
  30. By: Nordström, Jonas (Department of Economics, Lund University)
    Abstract: The primary objective of this study was to estimate the willingness to pay (WTP) for a new intervention at the workplace: wholesome canteen takeaways (CTA), i.e. a low fat meal with a large amount of vegetables prepared at the workplace canteen that only requires re-heating. The contingent valuation method was used to elicit the WTP. Two surveys were carried out in Denmark; one large-scale Internet based survey and one survey at a workplace that introduced CTA. The results from the large-scale survey suggest that this concept attracts relevant target groups; groups of individuals with a less healthy diet, low physical activity and a high body mass index. For males and individuals with low education, who also constitute relevant target groups, the results suggest no significant difference in WTP between males and females, whereas low educated individuals have a significantly lower WTP than highly educated individuals. However, the workplace study, carried out at a hospital, found that females have a significantly higher WTP for CTA compared with males. In conclusion, the concept appears to attract relevant target groups, although for a given price a smaller fraction of low educated individuals compared to high educated individuals would be willing to buy CTA.
    Keywords: Workplace intervention; healthy; contingent valuation; diet; willingness to pay; fast food; takeaway meal; demand
    JEL: D12 I10
    Date: 2011–11–07

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.