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on Experimental Economics |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Pascal Sulser (Department of Economics, University of Konstanz, Germany) |
| Abstract: | We present results from a field experiment at Swiss high schools in which we compare the effectiveness of a classroom experiment against conventional economics teaching. We randomly assigned classes into different teaching environments or a control group. Our results suggest that both teaching methods improve economic understanding considerably in contrast to classes without prior training. We do not observe a significant overall effect of the classroom experiment, but more able students benefit from the experiment while others lose out. Furthermore there is no robust impact of economic training on social preferences, measured as both individual behavior in incentivized decisions or political opinions. |
| Keywords: | Education of Economics, Classroom Experiments, Field Experiments, Indoctrination |
| JEL: | A21 C93 I21 |
| Date: | 2013–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1304&r=exp |
| By: | Vanessa Mertins (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Andrea B. Schote; Jobst Meyer |
| Abstract: | Laboratory experiments have documented substantial heterogeneity in social preferences, but little is known about the origins of such behavior. Previous research on public goods experiments suggests that individual-level demographic and psychological variables correlate with player types. However, the key question about biological sources of variation in these preferences remains open. The aim of this study is to uncover genetic variations that influence differences in cooperative behavior. For this reason, we identify types of players within a strategic public goods experiment. We explicitly test for an association between individual variance in strategy choice and the functional promoter-region repeat of the monoamine oxidase A gene (MAOA). Our experimental findings suggest a link between MAOA and the occurrence of free-riding in females. Females with MAOA-L are less likely to behave like weak free-riders than MAOA-H carriers, whereas among males, our results did not support a significant relation between genotype and player type. Furthermore, MAOA-L female carriers contribute more than MAOA-H subjects to the public good if they know that others contribute nothing, and they showed slightly lower scores on the Machiavellianism scale. This is the first piece of evidence that genotype might predict player type within a public goods setting. It contributes to our understanding of biological drivers of economic decision-making and points to the need for further exploration. |
| Keywords: | gene, player type, public good, conditional cooperation, experimental economics |
| JEL: | H41 D87 C91 C72 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201302&r=exp |
| By: | Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Xiangdong Qin (School of Economics, Shanghai Jiao Tong University, China) |
| Abstract: | Many previous empirical studies have suggested that cooperation and trust affect economic growth. However, the precise relationship between trust and cooperation (i.e., whether trust leads to cooperation or cooperation leads to trust) remains unclear and it is not known how the level of economic development affects the level of cooperation and trust. Using a combination of public goods experiment, gambling game experiment, and trust game experiment, we investigate the links among cooperation, trust, and economic development in four regions of China. Our results suggest that first, there is a U-shaped or V-shaped relationship between cooperation and economic development; second, on the one hand, cooperation leads to trust, and on the other hand, more cooperative behavior may be created by rewarding trusting behavior; and third, men are more cooperative and trusting than women. Furthermore, we find that the widely used 'GSS trust' question from the General Social Survey (GSS) does not predict either cooperation or trust, whereas the questions 'GSS fair' and 'GSS help' have weak predictive power for trusting behavior but not for cooperative behavior. |
| Keywords: | Cooperation, Trust, Economic development, Experiment, China |
| JEL: | C91 H41 I32 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2013-13&r=exp |
| By: | Utteeyo Dasgupta (Franklin and Marshall College); Subha Mani (Fordham University) |
| Abstract: | In an artefactual field experiment, we introduce a novel allocation game to investigate the role of procedural altruism in household decision-making and study choices of married spouses. Subjects can distribute their earnings from the experiment either on food items (joint consumption good), or on gender specific personal clothing (private consumption good). Subjects’ consumption choices are observed under two treatments – earnings with effort, and earnings without effort. At the aggregate we find that subjects exhibit a strong preference for own private consumption good when assigned to the effort treatment. However, further scrutiny suggests that women’s choice for the joint consumption good in the household remains largely independent of the treatment. In contrast, men exhibit a strong preference for private consumption good in the effort treatment. |
| Keywords: | Procedural utility, Household decision making, Gender, Experiment |
| JEL: | C93 D1 Z1 |
| URL: | http://d.repec.org/n?u=RePEc:frd:wpaper:dp2013-01&r=exp |
| By: | Daniela Glätzle-Rützler; Matthias Sutter; Achim Zeileis |
| Abstract: | Myopic loss aversion (MLA) has been found to play a persistent role for investment behavior under risk. We study whether MLA is already present during adolescence. Quite surprisingly, we find no evidence of MLA in a sample of 755 adolescents. This finding is at odds with previous findings, and it might be explained by self-selection effects. In other dimensions, however, we are able to replicate stylized findings in our pool of adolescents, such that teams invest higher amounts than individuals and that women invest less than men. |
| Keywords: | myopic loss aversion, experiment, adolescents, team-decision making |
| JEL: | C91 D03 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2013-07&r=exp |
| By: | Bar-El, Ronen (Open University of Israel); Tobol, Yossi (Jerusalem College of Technology (JTC)) |
| Abstract: | We conduct a contribution game for a real public good and show that when the contributors value the real public good highly, they increase their contributions in each round. Thus, contrary to previous literature, free riding decreases over rounds and the end-game effect is reversed. |
| Keywords: | public goods experiment, end-game effect, free-riding |
| JEL: | C72 C92 H41 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7307&r=exp |
| By: | Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton) |
| Abstract: | In this paper we investigate the relationship between earnings and charitable giving. We set up a real effort experiment, in which subjects enter data in four one-hour occasions and are paid a piece rate. From the second occasion onwards, we randomly assign half of the subjects to a treatment with higher piece rates. At the end we ask subjects whether they want to donate a share of their earnings to a charity of their choice. We find that, despite large differences in earnings due to the different piece rates, subjects receiving the higher piece rate are actually less likely to give, and that givers in the two groups give the same share of their total earnings. Charities receive the same average donation from members of the two groups indicating that subjects in this experiment do not treat charitable giving as a normal good. |
| Keywords: | charity, earnings, luck, effort, windfall |
| JEL: | D64 J39 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7294&r=exp |
| By: | Guzmán, Andrea (Universidad Nacional de Colombia-Sede Medellin); Villegas-Palacio, Clara (Universidad Nacional de Colombia-Sede Medellin); Wollbrant, Conny (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | A growing literature in economics examines the development of preferences among children and adolescents. This paper combines a repeated dictator game with treatments that either provides participants with information about the average behavior of others or not. Collecting data on 384 children aged 5-17, we find that sensitivity to social information is present already in early life and that information about others’ donations can reduce, but primarily increases donations.<p> |
| Keywords: | Children; Charitable giving; Social information; Preference development |
| JEL: | C93 D02 D03 D64 |
| Date: | 2013–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0564&r=exp |
| By: | E. Glenn Dutcher; Loukas Balafoutas; Florian Lindner; Dmitry Ryvkin; Matthias Sutter |
| Abstract: | Managers often use tournaments which motivate workers to compete for the top, compete to avoid the bottom, or both. In this paper we compare the effectiveness and efficiency of the corresponding incentive schemes. To do so, we utilize optimal contracts in a principal-agent setting, using a Lazear-Rosen type model that predicts equal effort and efficiency levels for the three mechanisms with the appropriate distribution of prizes. We test the model's predictions in a laboratory experiment and find that a mechanism which incorporates both competition for the top and away from the bottom produces the highest effort from agents, especially in contests of a relatively larger size. Avoiding being last is shown to produce the lowest variance of effort, be more effective and, in larger contests, more efficient than competing for the top. Finally, we show that behavior in all mechanisms is consistent with basic directional and reinforcement learning. |
| Keywords: | tournament, reward, punishment, promotion, firing, contract, experiment, learning |
| JEL: | M52 J33 J24 D24 C90 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2013-08&r=exp |
| By: | Gurdal, Mehmet Y.; Ozdogan, Ayca; Saglam, Ismail |
| Abstract: | Recent experimental studies find excessive truth-telling and excessive trust in one sender/one receiver cheap talk games with an essentially unique and babbling equilibrium. We extend this setup by adding a second sender into the play and study the behavior of the players both theoretically and experimentally. We examine games where senders are assumed to communicate with the receiver either simultaneously or sequentially as well as a game where the receiver chooses one of these two communication methods. The theoretical predictions for truth-telling, non-conflicting messages observed and trust frequencies are the same for both the simultaneous and sequential plays; however, we observe systematic differences between the treatments of these plays. While the truth-telling frequencies stay above the theoretical prediction of the one half during all the experiments, the nature of truth-telling seems to differ between sequential and simultaneous plays. Under simultaneous communication, the messages of senders are non-conflictive more than half of the time, while the non-conflicting messages are significantly more likely to be correct than not. The frequency of non-conflicting messages is lower under sequential plays due to the tendency of the second sender to revert the message of the first sender. We observe that subjects who prefer to get non-conflicting messages prefer simultaneous mode of communication more often. When acting as senders, these subjects also adjust their truth-telling frequencies so as to generate conflictive messages. |
| Keywords: | Strategic information transmission; truth-telling; trust; sender-receiver game. |
| JEL: | C72 C90 D83 |
| Date: | 2013–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:45727&r=exp |
| By: | Fosgaard, Toke (Department of Food and Resource Economics, University of Copenhagen); Hansen , Lars Gårn (Department of Food and Resource Economics, University of Copenhagen); Wengström, Erik (Department of Economics, Lund University) |
| Abstract: | We investigate framing effects in a large-scale public good experiment. We measure indicators of explanations previously proposed in the literature, which when combined with the large sample, enable us to estimate a structural model of framing effects. The model captures potential causal effects and the behavioral heterogeneity of cooperation variability. We find that framing only has a small effect on the average level of cooperation but a substantial effect on behavioral heterogeneity and we show that this can be explained almost exclusively by a corresponding change in the heterogeneity of beliefs about other subjects’ behavior. Preferences are on the other hand stable between frames. |
| Keywords: | Framing; Public Goods; Internet Experiment; Simulation |
| JEL: | C13 C71 C93 H41 |
| Date: | 2013–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_006&r=exp |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany) |
| Abstract: | The heterogeneous effort supply in intergroup contests explains why groups have a manager. However, the objectives of group managers and members often differ. Using data from an experiment this paper studies whether this conflict of interests affects leadership effectiveness. The managers have an advisory role only and cannot change the monetary incentives of the group members in any context. Depending on the treatment some managers prefer more competition than the group members, some less, and some do not have any incentive at all. The results show that managers can coordinate their groups rather effectively. Their incentives shape the competitive behavior of the 'subordinates'. However group members follow the non-binding investment recommendations of their group manager more closely if management compensation is not incentivized. |
| Keywords: | Communication, Experiment, Rent-seeking, Management compensation, Group decision making |
| JEL: | C72 C92 D72 D74 M12 |
| Date: | 2013–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1306&r=exp |
| By: | Mujcic, Redzo (University of Queensland); Frijters, Paul (University of Queensland) |
| Abstract: | We employ a natural field experiment to study the extent and nature of racial discrimination in Queensland, Australia. Mimicking the historical case of Rosa Parks who was denied seating in a bus because she was black, an important moment for the U.S. civil rights movement, we sent trained testers who differed in ethnic appearance to bus stops asking the driver for a free ride on the basis that their bus pass was faulty (which it was). In total, we obtained 1,552 observations of testers either allowed a free ride or not, in each case recording the characteristics of the bus driver, the tester, and the circumstances. We find strong evidence of discrimination against black-skinned individuals. In the baseline scenario, white testers were accepted during 72% of the interactions versus only 36% for black testers. Indian testers were let on 51% of the time and Asian testers (mainly Chinese) were let on 73% of the time. Favors were more likely to be granted when the bus driver and tester were of the same ethnicity, and when there were fewer people in the bus. Patriotic appearance matters in that testers wearing army uniforms were accepted at a rate of 97% if they were white and 77% if they were black. Status appearance also mattered in that black testers dressed in business attire were just as likely to be favored as casually dressed white testers. When bus drivers were confronted with hypothetical baseline scenarios using photos taken of the real testers, 86% responded they would let on the black individual, more than double the actual number accepted, indicating dishonest self-reporting on this topic. |
| Keywords: | racial bias, discrimination, natural field experiment, prosocial behavior |
| JEL: | C93 J15 J71 D03 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7300&r=exp |
| By: | Dietmar Fehr; Frank Heinemann; Aniol Llorente-Saguer |
| Abstract: | The authors show how the influence of extrinsic random signals depends on the noise structure of these signals. They present an experiment on a coordination game in which extrinsic random signals may generate sunspot equilibria. They measure how these signals affect behavior. Sunspot equilibria emerge naturally if there are salient public signals. Highly correlated private signals may also cause sunspot-driven behavior, even though this is no equilibrium. The higher the correlation of signals and the more easily these can be aggregated, the more powerful these signals are in moving actions way from the risk-dominant equilibrium. |
| Keywords: | Human behavior |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:13-2&r=exp |
| By: | Wanda Mimra (ETH Zurich, Switzerland); Alexander Rasch (Universität zu Köln); Christian Waibel (ETH Zurich, Switzerland) |
| Abstract: | In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. As experts provide both diagnosis and treatment, this leaves scope for fraud. We experimentally investigate how intensity of price competition and the level of customer information about past expert behavior influence an expert’s incentive to defraud his customers when the expert can build up reputation. We show that the level of fraud is significantly higher under price competition than when prices are fixed. The price decline under competitive prices superimposes quality competition. More customer information does not necessarily decrease the level of fraud. |
| Keywords: | Credence good; Expert; Fraud; Price competition; Reputation; Overcharging; Undertreatment. |
| JEL: | D82 L15 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:13-176&r=exp |
| By: | KOHLER, Stefan |
| Abstract: | Two deviations of alternating-offer bargaining behavior from economic theory are observed together, yet have been studied separately. Players who could secure themselves a large surplus share if bargainers were purely self-interested incompletely exploit their advantage. Delay in agreement occurs even if all experimentally controlled information is common knowledge. This paper rationalizes both regularities coherently by modeling heterogeneous social preferences, either self-interest or envy, of one bargaining party as private information in a three period game of bargaining and preference screening and signaling. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:euiflo:urn:hdl:1814/23782&r=exp |
| By: | Grossman, Zachary; van der Weele, Joël |
| Abstract: | Avoiding information about adverse welfare consequences of self-interested decisions, orstrategic ignorance, is an important source of corruption, anti-social behavior and even atrocities. We model an agent who cares about self-image and has the opportunity to learn the social benefits of a personally costly action. The trade-off between self-image concerns and material payoffs can lead the agent to use ignorance as an excuse, even if it is deliberately chosen. Two experiments, modeled after Dana, Weber, and Kuang (2007), show that a) many people will reveal relevant information about others' payoffs after making an ethical decision, but not before, and b) some people are willing to pay for ignorance. These results corroborate the idea that Bayesian self-signaling drives people to avoid inconvenient facts in moral decisions. |
| Keywords: | Economics, Economics, General, prosocial behavior, dictator games, strategic ignorance, self-signaling |
| Date: | 2013–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsbec:qt0bp6z29t&r=exp |
| By: | Antoinette Baujard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Frédéric Gavrel (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Herrade Igersheim (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II); Jean-François Laslier (PREG - Pole de recherche en économie et gestion - CNRS : UMR7176 - Polytechnique - X); Isabelle Lebon (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie) |
| Abstract: | Under evaluative voting, the voter freely grades each candidate on a numerical scale, with the winning candidate being determined by the sum of the grades they receive. This paper compares evaluative voting with the two-round system, reporting on an experiment which used various evaluation scales, conducted during the first round of the 2012 French presidential election. Invitations to participate in the study were extended to around 5,000 voters in three cities, and the experiment attracted 2,340 participants. Basing our argument on the ranks, relative scores, and grade profiles of candidates, we show that the two-round system favors "exclusive" candidates, that is candidates who elicit strong feelings, while evaluative rules favor "inclusive" candidates, that is candidates who attract the support of a large span of the electorate. These differences are explained by two complementary reasons: the opportunity for the voter to support several candidates under evaluative voting rules, and the specific pattern of strategic voting under the official, two-round voting rule. |
| Keywords: | Voting, In Situ Experiment, Evaluative Voting, Approval Voting, Two-round system |
| Date: | 2013–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00803024&r=exp |
| By: | Siegfried K. Berninghaus (Karlsruhe Institute of Technology, Institute for Economic Theory and Statistics); Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Charlotte Klempt (Institute for Applied Economic Research); Kerstin Pull (Eberhard Karls Universität Tübingen) |
| Abstract: | Two participants have to decide jointly, with the discussions preceding their choice being video/audiotaped. For two tasks, one with and one without strategic interaction, we refer to obvious reasoning styles as mental models. The videotaped discussions are analyzed according to which mental models are mentioned by one or both participants in the same pair and how decisive such arguments were. The mental models for the risky choice task are "analytic approach", "commitment mode", and "avoid chance", and for the outside-option game "equality seeking", "backward induction", and "forward induction". We classify each pair according to their mental constellation in both tasks and assess mental models in addition to collecting choice data. Altogether, this allows for better explanations, especially of heterogeneity in reasoning and deciding. |
| Keywords: | behavioral principles, videotaped experiments, outside option games |
| JEL: | C72 C90 D03 G11 |
| Date: | 2013–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-012&r=exp |
| By: | Antecol, Heather (Claremont McKenna College); Eren, Ozkan (University of Nevada, Las Vegas); Ozbeklik, Serkan (Claremont McKenna College) |
| Abstract: | Using data from a randomized experiment and fixed effect quantile regression (FEQR), we look at the effects of having a TFA teacher on test scores across the entire achievement distribution of primary school students in disadvantaged neighborhoods. While we find that TFA teachers neither help nor hurt students in terms of reading test scores, we find positive and statistically significant effects of TFA over the entire math achievement distribution for the full sample and the effects are fairly uniform. We find a similar effect of TFA across the math test score distribution irrespective of student gender, although the FEQR estimates for female students are two to three times larger than for male students. In addition, we find that there is significant heterogeneity in the effects of TFA for Hispanic and black students and for students taught by novice teachers. Finally, we find that the effect of TFA is homogeneous across the math achievement distribution irrespective of certification type. Taken together, these patterns suggest that allowing highly qualified recent college graduates and mid-career professionals, who in the absence of TFA would not have taught in these disadvantaged neighborhoods, should have a positive influence not just on students at the top of the math achievement distribution but across the entire math achievement distribution. |
| Keywords: | student achievement, random assignment, fixed effect quantile regression |
| JEL: | C21 I21 I28 J24 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7296&r=exp |