nep-exp New Economics Papers
on Experimental Economics
Issue of 2012‒06‒13
fourteen papers chosen by
Daniel Houser
George Mason University

  1. Emergent Star Networks with Ex Ante Homogeneous Agents By Rong Rong; Daniel Houser
  2. Social Class and (Un)ethical Behavior: Evidence from a Large Population Sample By Trautmann, Stefan T.; van de Kuilen, Gijs; Zeckhauser, Richard J.
  3. In Broad Daylight: Full Information and Higher-order Punishment Opportunities Promote Cooperation By Kenju Kamei; Louis Putterman
  4. A structural estimation of French farmers’ risk preferences: an artefactual field experiment By Douadia Bougherara; Xavier Gassmann; Laurent Piet
  5. Moral Hypocrisy, Power and Social Preferences By Aldo Rustichini; Marie-Claire Villeval
  6. Sex, morals and exam cheating By Michał Krawczyk
  7. Aging and Attitudes Towards Strategic Uncertainty and Competition: An Artefactual Field Experiment in a Swiss Bank By Thierry Madiès; Marie-Claire Villeval; Malgorzata Wasmer
  8. Let's (not) talk about sex: The effect of information provision on gender differences in performance under competition By Nagore Iriberri; Pedro Rey-Biel
  9. One person in the battlefield is not a warrior: Self-construal, perceived ability to make a difference, and socially responsible behavior By Irina Cojuharenco; Gert Cornelissen; Natalia Karelaia
  10. Group Membership, Team Preferences, and Expectations (This is a new version of CEEL WP 6-09) By Francesco Guala; Luigi Mittone; Matteo Ploner
  11. A Field Experiment on Moral Suasion and Tax Compliance Focusing on Under-Declaration and Over-Deduction By Benno Torgler
  12. The Relative Efficiency of Active Labour Market Policies: Evidence From a Social Experiment and Non-Parametric Methods By Vikström, Johan; Rosholm, Michael; Svarer, Michael
  13. Following through on Good Intentions: The Power of Planning Prompts By Milkman, Katherine L.; Beshears, John; Choi, James J.; Laibson, David; Madrian, Brigitte C.
  14. Calamity, Aid and Indirect Reciprocity: the Long Run Impact of Tsunami on Altruism By Leonardo Becchetti; Stefano Castriota; Pierluigi Conzo

  1. By: Rong Rong (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: The acquisition and dispersion of information, a critical aspect of economic decisions, can occur through a network of agents (Jackson, 2009). Empirical and theoretical findings suggest that an efficient information dispersion network takes the form of a star: small numbers of agents gather information and distribute it to a large group. Despite these findings, controlled tests of this theory failed to find evidence of the emergence of such networks with an exception of Goeree et al (2008), which reports frequent star network formation with ex ante heterogeneous agents and perfect information. Empirical evidence suggests that these conditions may not always be feasible in natural environments (Feick and Price, 1987; Conley and Udry, 2010). Complement to earlier experimental research, we study institutional conditions under which star networks emerge in the presence of ex ante homogeneous agents. We find that investment limits and the "right-of-first-refusal," both of which regularly coexist with star networks in natural environments, have a surprisingly strong ability to promote the formation of star networks with ex ante homogeneous agents. Using a cluster analysis, we trace the large positive effects of these institutions to the impact they have on individuals' behavioral rules. In particular, we find that these institutions encourage individual rationality as well as positive habits, which then lead to the frequent and stable emergence of star networks. Our results may have important implications for environments characterized by ex ante homogeneous agents, e.g., those found in technology, marketing and agricultural sectors. Length: 51
    Keywords: experimental economics, networks, information.
    Date: 2012–06
  2. By: Trautmann, Stefan T. (Tilburg University); van de Kuilen, Gijs (Tilburg University); Zeckhauser, Richard J. (Harvard University)
    Abstract: We test whether and how membership in the upper class affects ethical behavior in a large representative population sample. Using objective measures of socioeconomic status to define class, we find no evidence of a general tendency for upper class to be less ethical, although we do replicate previous findings that higher status leads to less condemnation of infidelity. We also find evidence that higher class status leads to more self-focus and disengagement, as previously shown in laboratory studies with convenience samples.
    Date: 2012–05
  3. By: Kenju Kamei; Louis Putterman
    Abstract: The expectation that non-cooperators will be punished can help to sustain cooperation, but there are competing claims about whether opportunities to engage in higher-order punishment (punishing punishment or failure to punish) help or undermine cooperation in social dilemmas. In a set of experimental treatments, we find that availability of higher-order punishment increases cooperation and efficiency when subjects have full information on the pattern of punishing, including its past history, and opportunities to punish are unrestricted. Availability of higher-order punishment reduces cooperation and efficiency if it is restricted to counter-punishing alone, if past history is unavailable, and if there is a dedicated counter-punishment stage.
    Keywords: collective action, social dilemma, voluntary contribution, public goods, punishment, counter-punishment, higher-order punishment.
    Date: 2012
  4. By: Douadia Bougherara; Xavier Gassmann; Laurent Piet
    Abstract: We designed an artefactual field experiment involving real payments to elicit French farmers’ risk preferences. We test for two descriptions of farmers’ behaviour: expected utility and cumulative prospect theory and for preference stability across context (price risk and yield risk). We use multiple price lists where farmers make series of choices between two lotteries with varying probabilities and outcomes in the gain and loss domains. We estimate parameters describing farmers’ 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. We also estimate the reference point and find it not significantly different from zero. Cumulative prospect theory is a better description of farmers’ risk attitudes. We find risk preferences vary across context.
    Keywords: risk attitudes, field experiment, farmer
    JEL: C93 D81 Q10
    Date: 2011
  5. By: Aldo Rustichini (Department of Economics, University of Minnesota - University of Minnesota); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: We show with a laboratory experiment that individuals adjust their moral principles to the situation and to their actions, just as much as they adjust their actions to their principles. We first elicit the individuals' principles regarding the fairness and unfairness of allocations in three different scenarios (a Dictator game, an Ultimatum game, and a Trust game). One week later, the same individuals are invited to play those same games with monetary compensation. Finally in the same session we elicit again their principles regarding the fairness and unfairness of allocations in the same three scenarios. Our results show that individuals adjust abstract norms to fit the game, their role and the choices they made. First, norms that appear abstract and universal take into account the bargaining power of the two sides. The strong side bends the norm in its favor and the weak side agrees : Stated fairness is a compromise with power. Second, in most situations, individuals adjust the range of fair shares after playing the game for real money compared with their initial statement. Third, the discrepancy between hypothetical and real behavior is larger in games where real choices have no strategic consequence (Dictator game and second mover in Trust game) than in those where they do (Ultimatum game). Finally the adjustment of principles to actions is mainly the fact of individuals who behave more selfishly and who have a stronger bargaining power. The moral hypocrisy displayed (measured by the discrepancy between statements and actions chosen followed by an adjustment of principles to actions) appears produced by the attempt, not necessarily conscious, to strike a balance between self-image and immediate convenience.
    Keywords: Moral hypocrisy; fairness; social preferences; power; self-deception
    Date: 2012–05–30
  6. By: Michał Krawczyk (University of Warsaw, Faculty of Economic Sciences)
    Abstract: This paper reports a field experiment investigating effectiveness of moral appeal in discouraging exam cheating. Substantial level of cheating was identified using an index of test answers similarity, contrasted with low self-reports. The treatment manipulation made an impact on self-reported but not observed frequency of cheating. Hypothesized gender difference, whereby males took but not gave more illicit information than females was also found.
    Keywords: exam cheating, moral appeal, gender differences, field experiments
    JEL: C93 D82 I23
    Date: 2012
  7. By: Thierry Madiès (Department of Economics - University of Fribourg - University of Fribourg); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Malgorzata Wasmer (Department of Economics - University of Fribourg - University of Fribourg)
    Abstract: We study the attitudes of junior and senior employees towards strategic uncertainty and competition, by means of a market entry game inspired by Camerer and Lovallo (1999). Seniors exhibit higher entry rates compared to juniors, especially when earnings depend on relative performance. This difference persists after controlling for attitudes towards non-strategic uncertainty and for beliefs on others' competitiveness and ability. Social image matters, as evidenced by the fact that seniors enter more when they predict others enter more and when they are matched with a majority of juniors. This contradicts the stereotype of risk averse and less competitive older employees.
    Keywords: Aging; risk; ambiguity; competitiveness; self-image; confidence; experiment
    Date: 2012–05–30
  8. By: Nagore Iriberri; Pedro Rey-Biel
    Abstract: We study how gender differences in performance under competition are affected by the provision of information regarding rival’s gender and/or differences in relative ability. In a laboratory experiment, we use two tasks that differ regarding perceptions about which gender outperforms the other. We observe women’s underperformance only under two conditions: 1) tasks are perceived as favoring men and 2) rivals’ gender is explicitly mentioned. This result can be explained by stereotype-threat being reinforced when explicitly mentioning gender in tasks in which women already consider they are inferior. Omitting information about gender is a safe alternative to avoid women’s underperformance in competition.
    Keywords: gender differences, competition, feedback information, gender perception, stereotype-threat
    JEL: C72 C91 D81
    Date: 2011–09
  9. By: Irina Cojuharenco; Gert Cornelissen; Natalia Karelaia
    Abstract: We suggest that cultivating an individual's connectedness to others promotes socially responsible behavior both directly and indirectly – through increased perceived ability to make a difference. Individuals whose interdependent self is more prominent feel they have more of an impact on larger scale societal outcomes and, therefore, engage more in socially responsible behaviors than do individuals whose independent self is more prominent. We test these hypotheses in two experiments in which participants make financial contributions or exert an effort for a social cause. In a survey, we find that perceived effectiveness mediates the effect of self-construal on socially responsible consumption.
    Keywords: self-construal, interdependent self, independent self, socially responsible behavior, perceived effectiveness
    JEL: C91 D64
    Date: 2011–10
  10. By: Francesco Guala; Luigi Mittone; Matteo Ploner
    Abstract: Group membership increases cooperation in social dilemma games, altruistic donation in dictator games, and fair offers in ultimatum games. While the empirical study of group action has grown rapidly over the years, there is little agreement at the theoretical level on exactly why and how group membership changes individual behaviour. According to some theorists, the effect of group framing is channelled primarily via the beliefs of group members, while others identify changes in preference as the key explanatory mechanism. We report an experiment using the minimal group paradigm and a prisoner’s dilemma with multiple actions, in which we manipulate players’ beliefs and show that common knowledge of group affiliation is necessary for group action. We also observe puzzling variations in behaviour when knowledge of group membership is asymmetric, which may be interpreted as cognitive dissonance generated by a normative cue administered in a highly unusual situation.
    Keywords: group identity, team preferences, social dilemmas, experimental economics
    JEL: C72 C92 H41
    Date: 2012
  11. By: Benno Torgler
    Abstract: Field experiments in the area of tax compliance are rare. This field experiment generates a unique data set with respect to individuals’ under-declaration of income and wealth and over-deductions of tax credits by obtaining exclusive full access to the audits. Using this commune level data from Switzerland, the paper explores the influence of moral suasion on tax compliance. Moral suasion was introduced through a treatment in which taxpayers received a letter signed by the commune’s fiscal commissioner containing normative appeals. Interestingly, I observe differences between under-declaration and over-deductions. Moreover, the overall finding is in line with former results that moral suasion has hardly any effect on taxpayers’ compliance.
    Keywords: tax compliance; moral suasion; field experiment
    JEL: H26 H71
    Date: 2012–06
  12. By: Vikström, Johan (IFAU-Uppsala); Rosholm, Michael (Department of Economics, Aarhus School of Business); Svarer, Michael (Department of Economics, Aarhus School of Business)
    Abstract: We re-analyze the effects of a Danish active labour market program social experiment, that included a range of sub-treatments, including monitoring, job search assistance and training. Previous studies have shown that the overall effect of the experiment is positive. We apply newly developed non-parametric methods to determine which of the individual policies that explains the positive effect. The use of non-parametric methods to separate sub-treatment effects is important from a methodological point of view, since the alternative, namely parametric/distributional assumptions, is in conflict with the concept of experimental evidence. Our results are highly relevant in a policy perspective, as optimal labour market policy design requires knowledge on the effectiveness of specific policy measures
    Keywords: Active labour market policy; treatment effect; non-parametric bounds
    JEL: C14 C41 C93
    Date: 2011–03–13
  13. By: Milkman, Katherine L. (University of PA); Beshears, John (Stanford University); Choi, James J. (Yale University); Laibson, David (Harvard University); Madrian, Brigitte C. (Harvard University)
    Abstract: We study whether prompts to form and recall a plan can increase individuals' responsiveness to reminders to make and attend beneficial appointments. At four companies, all employees due for a colonoscopy were randomly assigned to receive either a control mailing or a treatment mailing. The mailings were identical except that the control mailing included a blank sticky note while the treatment mailing included a sticky note that prompted the recipient to write down the appointment date for a colonoscopy and the name of the doctor who would conduct the procedure. During the seven-month follow-up period, 7.2% of treatment employees received a colonoscopy compared to 6.2% of control employees, a statistically significant difference that is roughly equal to the variation in compliance associated with a 10 percent increase in the fraction of the procedure's cost covered by insurance. The treatment effect was largest for demographic groups judged to be at the highest risk of failing to receive a colonoscopy due to forgetfulness.
    Date: 2012–05
  14. By: Leonardo Becchetti (Università di Roma "Tor Vergata"); Stefano Castriota (Università di Roma "Tor Vergata"); Pierluigi Conzo (Università di Napoli and CSEF)
    Abstract: Natural disasters have been shown to produce effects on social capital, risk and time preferences of victims. We run experiments on altruistic preferences on a sample of Sri Lankan microfinance borrowers affected/unaffected by the tsunami shock in 2004 at a 7-year distance from the event (a distance longer than in most empirical studies). We find that people who suffered at least a damage from the event behave in dictator games less altruistically as senders (and expect less as receivers) than those who do not report any damage. Interestingly, among damaged, those who suffered also house damages or injuries send (expect) more than those reporting only losses to the economic activity. Since the former are shown to receive significantly more help than the latter we interpret this last finding as a form of indirect reciprocity.
    Keywords: tsunami, disaster recovery, social preferences, altruism, development aid
    JEL: C90 D03 O12
    Date: 2012–05–30

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