New Economics Papers
on Experimental Economics
Issue of 2013‒04‒13
29 papers chosen by

  1. Room Effects By Marco Castillo; Gregory Leo; Ragan Petrie
  2. Contracting under Incomplete Information and Social Preferences: An Experimental Study By Hoppe, Eva I; Schmitz, Patrick W
  3. Cooperation preferences and framing effects By Dariel A.
  4. Strategies and Evolution in the Minority Game: A Multi- Round Strategy Experiment By Jona Linde; Joep Sonnemans; Jan Tuinstra
  5. An Experimental Study of Gender Differences in Distributive Justice By Ismael Rodriguez-Lara
  6. 'I'll do it by myself as I knew it all along': On the failure of hindsight-biased principals to delegate optimally By Danz, David; Hüber, Frank; Kübler, Dorothea; Mechtenberg, Lydia; Schmid, Julia
  7. Blind Stealing: Experience and Expertise in a Mixed-Strategy Poker Experiment By Matt Van Essen; John Wooders
  8. Deception detection and the role of self-selection By Konrad, Kai A.; Lohse, Tim; Qari, Salmai
  9. A Theoretical and Experimental Appraisal of Five Risk Elicitation Methods By Paolo Crosetto; Antonio Filippin
  10. Preference for randomization: Empirical and experimental evidence By Dwenger, Nadja; Kübler, Dorothea; Weizsäcker, Georg
  11. Advice and Fictive Learning: The Pricing of Assets in the Laboratory By Jonathan E. Alevy; Michael K. Price
  12. Is It How You Look or Speak That Matters? “An Experimental Study Exploring the Mechanisms of Ethnic Discrimination” By Magnus Rodin; Gulay Ozcan
  13. Tax Compliance and Psychic Costs: Behavioral Experimental Evidence Using a Physiological Marker By Uwe Dulleck; Jonas Fooken; Cameron Newton; Andrea Ristl; Markus Schaffner; Benno Torgler
  14. The Importance of the Cognitive Environment for Intertemporal Choice By Michael A. Kuhn; Peter Kuhn; Marie Claire Villeval
  15. The mutual impact of deferral labour taxation and capital income taxation on risk-taking behaviour: An experimental analysis By Massarrat-Mashhadi, Nima
  16. As Easy as Pie: How Retirement Savers use Prescribed Investment Disclosures By Hazel Bateman; Isabella Dobrescu; Ben R. Newell; Andreas Ortmann; Susan Thorp
  17. Responsibility effects in decision making under risk By Pahlke, Julius; Strasser, Sebastian; Vieider, Ferdinand M.
  18. Employee recognition and performance: A field experiment By Bradler C.; Non J.A.; Neckermann S.; Dur R.
  19. Girls will be Girls: An Experimental Study on Female Entrepreneurship By Artinger, Sabrina; Schade, Christian
  20. Do Income Projections Affect Retirement Saving? By Gopi Shah Goda; Colleen Flaherty Manchester; Aaron Sojourner
  21. Default options and training participation By Borghans L.; Golsteyn B.H.H.
  22. Rational parasites By Benoit, Jean-Pierre; Galbiati, Roberto; Henry, Emeric
  23. Profitability of fertilizer: Experimental evidence from female rice farmers in Mali By Beaman, Lori; Karlan, Dean S.; Thuysbaert, Bram; Udry, Christopher
  24. Labor Market Returns to Early Childhood Stimulation: A 20-year Followup to an Experimental Intervention in Jamaica By Gertler, Paul; Heckman, James; Pinto, Rodrigo; Zanolini, Arianna; Vermeerch, Christel; Walker, Susan; Chang, Susan M.; Grantham-McGregor, Sally
  25. Asymmetric default bias in dishonesty – how defaults work but only when in one’s favor By Toke Reinholt Fosgaard
  26. Turnout, political preferences and information: Experimental evidence from Perú By Gianmarco León
  27. Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes By Gertler, Paul; Vermeerch, Christel
  28. Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance? By Erlend Berg; Maitreesh Ghatak; R Manjula; D Rajasekhar; Sanchari Roy
  29. Mutual Altruism: Evidence from Alzheimer Patients and Their Spouse Caregivers By König, Markus; Pfarr, Christian; Zweifel, Peter

  1. By: Marco Castillo (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Gregory Leo (Department of Economics, University of California, Santa Barbara); Ragan Petrie (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We present clean evidence of a direct social context effect on behavior in a laboratory experiment: the gender composition of the room significantly alters the risk decisions of subjects even when the actions or presence of others are neither payoff nor information relevant. Our design is such that subjects do not know the decisions of others, nor can they be inferred. We find that women become more risk taking as the proportion of men in the group increases. This is most consistent with women imitating the expected behavior of others in the session. Our results imply that aggregate behavior is not a simple extrapolation of individual preferences. Groups might have more extreme behavior than the average individual. Length: 27
    Keywords: gender, context effect, risk aversion, experiment
    JEL: C91 D81 J16
    Date: 2013–04
  2. By: Hoppe, Eva I; Schmitz, Patrick W
    Abstract: Principal-agent models in which the agent has access to private information before a contract is signed are a cornerstone of contract theory. We have conducted an experiment with 720 participants to explore whether the theoretical insights are reflected by the behavior of subjects in the laboratory and to what extent deviations from standard theory can be explained by social preferences. Investigating settings with both exogenous and endogenous information structures, we find that agency theory is indeed useful to qualitatively predict how variations in the degree of uncertainty affect subjects' behavior. Regarding the quantitative deviations from standard predictions, our analysis based on several control treatments and quantal response estimations shows that agents' behavior can be explained by social preferences that are less pronounced than in conventional ultimatum games. Principals' own social preferences are not an important determinant of their behavior. However, when the principals make contract offers, they anticipate that social preferences affect agents' behavior.
    Keywords: Adverse selection; Agency theory; Experiment; Information gathering; Social preferences; Ultimatum game
    JEL: C72 C91 D82 D86
    Date: 2013–01
  3. By: Dariel A. (GSBE)
    Abstract: This paper presents the results from an experiment investigating whether framing affects the elicitation and predictive power of preferences for cooperation, i.e., the willingness to cooperate with others. Cooperation preferences are elicited in three treatments using the method of Fischbacher, Gächter and Fehr (2001). The treatments vary two features of their method: the sequence and order in which the contributions of other group members are presented. The predictive power of the elicited preferences is evaluated in a one-shot and a finitely-repeated public-good game. I find that the order in which the contributions of others are presented, by and large, has no impact on the elicited preferences and their predictive power. In contrast, presenting the contributions of others in a sequence has a pronounced effect on the elicited preferences and reduces substantially their predictive power. Overall, elicited preferences are more accurate at predicting behavior when others contributions are presented simultaneously and in ascending order, like in Fischbacher, Gächter and Fehr (2001).
    Keywords: Design of Experiments: Laboratory, Individual;
    Date: 2013
  4. By: Jona Linde (University of Amsterdam); Joep Sonnemans (University of Amsterdam); Jan Tuinstra (University of Amsterdam)
    Abstract: Minority games are a stylized description of strategic situations with both coordination and competition. These games are widely studied using either simulations or laboratory experiments. Simulations can show the dynamics of aggregate behavior, but the results of such simulations depend on the type of strategies used. So far experiments provided little guidance on the type of strategies people use because the set of possible strategies is very large. We therefore use a multi-round strategy method experiment to directly elicit people's strategies. Between rounds participants can adjust their strategy and test the performance of (possible) new strategies against strategies from the previous round. Strategies gathered in the experiment are subjected to an evolutionary competition. The strategies people use are very heterogeneous although aggregate outcomes resemble the symmetric Nash equilibrium. The strategies that survive evolutionary competition achieve much higher levels of coordination.
    Keywords: minority game; strategy experiment; evolution; simulation
    JEL: C63 C72 C91 D03
    Date: 2013–03–07
  5. By: Ismael Rodriguez-Lara (ERICES, Universidad de Valencia)
    Abstract: This paper shows that women are more likely than men to employ the fair allocation that most benefits their financial payoff. The experimental evidence is gleaned from a dictator game with production, in which subjects first solve a quiz to accumulate earnings and then divide the surplus by choosing one over five different allocations, some of which represent a fairness ideal. The data also suggest that women are more sensitive to the context as their allocation choices depend on whether they have accumulated more or less money than their counterparts. This is not the case for men’s allocation choices
    Keywords: gender differences, distributive justice, fairness ideals, self-serving choices, experimental economics, dictator game with production
    JEL: C91 D30 D64 J16
    Date: 2013–04
  6. By: Danz, David; Hüber, Frank; Kübler, Dorothea; Mechtenberg, Lydia; Schmid, Julia
    Abstract: With the help of a simple model, we show that the hindsight bias can lead to inefficient delegation decisions. This prediction is tested experimentally. In an online experiment that was conducted during the FIFA World Cup 2010 participants were asked to predict a number of outcomes of the ongoing World Cup and had to recall their assessments after the outcomes had been realized. This served as a measure of the hindsight bias for each participant. The participants also had to make choices in a delegation game. Our data confirm that hindsight-biased subjects more frequently fail to delegate optimally than subjects whom we have classified as not hindsight biased. --
    Keywords: hindsight bias,delegation,experiments
    JEL: C72 C91 D84
    Date: 2013
  7. By: Matt Van Essen (Department of Economics, Finance, and Legal Studies, University of Alabama); John Wooders (Economics Discipline Group, University of Technology, Sydney)
    Abstract: We explore the role of experience in mixed-strategy games by comparing, for a stylized version of Texas Hold-em, the behavior of experts, who have extensive experience playing poker online, to the behavior of novices. We find significant differences. The initial frequencies with which players bet and call are closer to equilibrium for experts than novices. And, while the betting and calling frequencies of both types of subjects exhibit too much heterogeneity to be consistent with equilibrium play, the frequencies of experts exhibit less heterogeneity. We find evidence that the style of online play transfers from the field to the lab.
    Keywords: mixed-strategy Nash equilibrium; minimax; poker; experiment; expertise
    JEL: C72 C92 C93 D03
    Date: 2013–03–01
  8. By: Konrad, Kai A.; Lohse, Tim; Qari, Salmai
    Abstract: We consider a lie-catching experiment with 9240 judgements. A set of videotapes shows subjects participating in a tax compliance experiment. The subjects chose whether or not to misreport. Subjects knew that underreporters were chosen for an audit with some probability. An audit led to detection and to a punishment fee. This compliance framework induced only persons with high deceptive abilities to underreport and, so, caused self-selection. Among the students who judged these videos, we find that the deception detection rate was significantly below 50 percent and even lower if the self-selection pressure in the tax compliance experiment was higher. This suggests that, when subjects can choose whether to state the truth or to lie, there is a self-selection effect by which individuals with higher deceptive ability are more likely to lie.
    Keywords: Decision making; Interpersonal interaction; Judgment; Perception
    JEL: D83 H26
    Date: 2013–03
  9. By: Paolo Crosetto; Antonio Filippin
    Abstract: We perform a comparative analysis of five incentivized tasks used to elicit risk preferences. Theoretically, we compare the elicitation methods in terms of completeness of the range of the estimates as well as their precision, the likelihood of triggering loss aversion, and problems arising when multiple choices are required. Using original data from a homogeneous population, we experimentally investigate the distribution of estimated risk preferences, whether they differ by gender, and the complexity of the tasks. We do so using both non-parametric tests and a structural model estimated with maximum likelihood. We find that the estimated risk aversion parameters vary greatly across tasks and that gender differences appear only when the task is more likely to trigger loss aversion.
    Keywords: Risk attitudes, Elicitation methods, Experiment
    JEL: C81 C91 D81
    Date: 2013
  10. By: Dwenger, Nadja; Kübler, Dorothea; Weizsäcker, Georg
    Abstract: We investigate violations of consequentialism in the form of the stochastic dominance property. The property is shared by many theories of choice and implies that the decisionmaker prefers receiving the best outcome for sure over all lotteries that involve multiple outcomes. We run experiments to demonstrate that dominated randomization can be attractive. In treatments where decision-makers are asked to submit multiple decisions without knowing which one is relevant, many participants submit contradictory sets of decisions and thereby induce a dominated lottery between outcomes. Explicit choice of non-consequentialist randomization is observed in a separate treatment. A possible reason for the effect is the desire to avoid having to make the decision. A large data set on (highstake) university applications in Germany shows patterns that are consistent with a preference for randomization. --
    Keywords: stochastic dominance violations,individual decision making,university choice,matching
    JEL: D03 D01
    Date: 2013
  11. By: Jonathan E. Alevy (Department of Economics, University of Alaska Anchorage); Michael K. Price (Department of Economics, Georgia State University)
    Abstract: A burgeoning literature in the neurosciences suggests that individuals modify their behavior not only in response to their own experiences, but also from what they learn about the experiences of others engaged in similar tasks. Importantly, these different forms of learning are associated with common neurological processes. We explore whether others’ advice provides a fictive learning signal that substitutes for one’s own experience. We examine this question in an environment where inexperienced traders frequently perform poorly – an experimental asset market. Prices in sessions with advice tend towards fundamentals mitigating the severity of price bubbles. Further, advice allays behaviors shown to yield bubbles in prior studies. Taken jointly, our data suggest that advice triggers fictive learning which helps agents avoid the “mistakes” made by naïve counterparts.
    Keywords: asset pricing, laboratory experiments, advice
    JEL: C92 D83 G12
    Date: 2012–12
  12. By: Magnus Rodin (Swedish Institute for Social Research, Stockholm University and Stockholm University Linnaeus Center for Integration Studies (SULCIS)); Gulay Ozcan (Swedish Institute for Social Research, Stockholm University and Stockholm University Linnaeus Center for Integration Studies (SULCIS))
    Abstract: Using a unique laboratory experiment where subjects are asked to guess the test performance of candidates presented by facial portraits and voice messages, this paper explores the following questions: Are beliefs about performance affected by if a candidate is perceived to have looks that are non-stereotypical for the dominant population and do these beliefs change if the candidate has native-like versus accented speech? The experiment is conducted in Sweden and the results show that candidates not perceived as stereotypically Swedish are considered to be worse performers. These beliefs are found in within-gender but not in cross-gender evaluations and are not eliminated when additional performance-related information about the candidates is provided. When candidates are presented by both looks and speech,differential evaluations based on looks disappear. Instead, we ?nd strong negative beliefs about performance for candidates that speak Swedish with a foreign accent implying that ethnic stereotypes associated with speech override stereotypes associated with appearance. The negative beliefs associated with foreign-accented speech are not supported by corresponding mean differences in the candidates’ actual test performance.
    Keywords: Experiment, Appearance, Speech, Beliefs, Performance, Stereotypes
    JEL: J71 J15 D03
    Date: 2013–03
  13. By: Uwe Dulleck (QUT); Jonas Fooken (QUT); Cameron Newton (QUT); Andrea Ristl; Markus Schaffner (QUT); Benno Torgler (QUT)
    Abstract: Although paying taxes is a key element in a well-functioning civilized society, the understanding of why people pay taxes is still limited. What current evidence shows is that, given relatively low audit probabilities and penalties in case of tax evasion, compliance levels are higher than would be predicted by traditional economics-of-crime models. Models emphasizing that taxpayers make strategic, financially motivated compliance decisions, seemingly assume an overly restrictive view of human nature. Law abidance may be more accurately explained by social norms, a concept that has gained growing importance as a facet in better understanding the tax compliance puzzle. This study analyzes the relation between psychic cost arising from breaking social norms and tax compliance using a heart rate variability (HRV) measure that captures the psychobiological or neural equivalents of psychic costs (e.g., feelings of guilt or shame) that may arise from the contemplation of real or imagined actions and produce immediate consequential physiologic discomfort. Specifically, this nonintrusive HRV measurement method obtains information on activity in two branches of the autonomous nervous system (ANS), the excitatory sympathetic nervous system and the inhibitory parasympathetic system. Using time-frequency analysis of the (interpolated) heart rate signal, it identifies the level of activity (power) at different velocities of change (frequencies), whose LF (low frequency) to HF (high frequency band) ratio can be used as an index of sympathovagal balance or psychic stress. Our results, based on a large set of observations in a laboratory setting, provide empirical evidence of a positive correlation between psychic stress and tax compliance and thus underscore the importance of moral sentiment in the tax compliance context.
    Keywords: tax compliance, psychic costs, stress, tax morale, cooperation, heart rate variability, biomarkers, experiment
    JEL: H26 H41 K42 D31 D63 C91
    Date: 2012–11–07
  14. By: Michael A. Kuhn (Department of Economics, University of California San Diego, 9500 Gilman Drive # 0508, La Jolla, CA 92093); Peter Kuhn (Department of Economics, University of California Santa Barbara, 2127 North Hall, Santa Barbara, CA 93106-9210, USA); Marie Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)
    Abstract: We experimentally manipulate two aspects of the cognitive environment — cognitive depletion and recent sugar intake — and estimate their effects on individuals’ time preferences in a way that allows us to identify the structural parameters of a simple (α,β,δ) intertemporal utility function for each person. We find that individuals exposed to a prior cognitive load, individuals who consumed a sugared drink and individuals who consumed a sugar-free drink all defer more income than a control group exposed to none of these conditions. Structural estimates show that all three effects are driven entirely by increases in the intertemporal substitution elasticity parameter (α). Together, our results suggest that at least for complex economic decisions like intertemporal financial choice, the ‘attention/focusing’ effect of both prior cognitively demanding activity and prior assignment of a primary reward can improve decision-making.
    Keywords: Time preferences, self-control, depletion, sucrose, experiment
    JEL: C91 D90
    Date: 2013
  15. By: Massarrat-Mashhadi, Nima
    Abstract: Does the timing of labour earnings taxation encroaches upon capital income taxation and individual risk-taking investment decisions, i.e. portfolio selection? This paper presents the results of a laboratory experiment that is, contrary to previous approaches, not restricted to the analysis of capital income taxation (fully taxable vs. tax-exempt investment earnings) and individual risktaking, but adds other dimensions of taxation, i.e. deferral or immediate labour earnings taxation. Empirical findings support the view that tax framing effects affect tax burden visibility, changing individuals' risk-taking propensity substantially. A tax system applying deferral taxation of labour earnings turns out to be more attractive to taxpayers with regard to risk-taking investment than immediate labour taxation with tax-exempt earnings from investment. --
    Keywords: deferral labour taxation,capital income taxation,experimental tax research,retirement accounts
    JEL: C91 H24 H31
    Date: 2013
  16. By: Hazel Bateman (School of Risk and Actuarial Studies, University of New South Wales); Isabella Dobrescu (CEPAR and School of Economics, University of New South Wales); Ben R. Newell (School of Psychology, University of New South Wales); Andreas Ortmann (School of Economics, University of New South Wales); Susan Thorp (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
    Abstract: : We report the results of two laboratory experiments that study how university student and staff participants chose retirement savings investment options using ?user-friendly? information prescribed by regulators. We demonstrate that choices of more than 20% of participants cannot be predicted using any of the prescribed information items but that 30% of participants used all, or almost all, items, frequently in unexpected ways. A pie-chart showing asset allocation had the largest marginal impact on investment choices. Participants preferred options with more segmented pies (lower concentration) and with equally sized segments (lower deviation froma 1/n allocation). This choice behavior is consistent with the application of a simple diversification heuristic. Participants cannot choose more than one investment but are guided by the extent to which a pre-mixed investment option appears evenly balanced across asset classes. This novel application of a 1/n strategy is distinct from existing findings of na?ve diversification in ?mix-it-yourself? conditions where participants spread resources evenly across funds or categories. The results highlight that information contained in prescribed investment disclosures may not be used in the manner intended by the regulator. The results also pose interesting methodological questions about the way ?user-friendly? information prescribed by regulators is validated before being legislated.
    Keywords: consumer finance; diversification heuristics; pensions; choice experiment
    JEL: G11 D14 C91
    Date: 2013–03–01
  17. By: Pahlke, Julius; Strasser, Sebastian; Vieider, Ferdinand M.
    Abstract: We explore situations in which a decision-maker bears responsibility for somebody else's outcomes as well as for her own. For gains we confirm the intuition that being responsible for somebody else's payoffs increases risk aversion, while in the loss domain we find increased risk seeking. In a second experiment we replicate the finding of increased risk aversion for large probabilities of a gain, while for small probability gains we find an increase of risk seeking under conditions of responsibility. This discredits hypotheses of a cautious shift under responsibility, and indicates an accentuation of the fourfold pattern of risk attitudes usually found for individual choices. --
    Keywords: risk attitude,prospect theory,social norms,responsibility,other-regarding preferences
    JEL: D03 D81
    Date: 2012
  18. By: Bradler C.; Non J.A.; Neckermann S.; Dur R. (ROA)
    Abstract: This paper reports the results from a controlled field experiment designed to investigate the causal effect of public recognition on employee performance. We hired more than 300 employees to work on a three-hour data-entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly so when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. This result is consistent with workers having a preference for conformity.
    Date: 2013
  19. By: Artinger, Sabrina; Schade, Christian
    Abstract: We experimentally investigate gender- and occupation-specific differences in market entry behavior and test whether female entrepreneurs are more willing to take strategic risk and engage in competition than other women. To facilitate strategic thinking, we induce asymmetric gain and loss experiences. We find that female entrepreneurs react to own gains and losses like other women and to opponents’ experiences like male entrepreneurs. Overall entry of female entrepreneurs is much lower than that of male entrepreneurs and does not differ from other women indicating that also female entrepreneurs dislike strategic competition. Risk aversion does not to account for this finding.
    Keywords: gender differences, entrepreneurship, occupational choice, gain and loss experiences, Labor and Human Capital, Teaching/Communication/Extension/Profession, D03, L26,
    Date: 2013–01
  20. By: Gopi Shah Goda; Colleen Flaherty Manchester; Aaron Sojourner
    Abstract: Americans’ retirement security increasingly depends on how much they save during their working years. One impediment to making good saving decisions may be a lack of knowledge on how saving translates into income in retirement. To address this issue, the U.S. Congress has considered whether to require 401(k) plans to project the value of a lifetime annuity that the participant could purchase at retirement given his current savings. By explicitly showing the connection between saving and income in retirement, the hope is that workers will generally make better saving decisions. This brief is based on a recent field experiment, conducted with employees of the University of Minnesota, which tested the effect of retirement income projections on saving decisions. The brief proceeds as follows. The first section describes the experimental treatments and the methodology used to analyze the results. The second section presents the results, which address three specific questions: 1) Did subjects receiving the treatments change their saving and by how much? 2) Was any change random or did the treatments improve subjects’ knowledge and confidence? and 3) Did personal characteristics influence the saving decisions? The final section concludes that providing individuals with retirement income projections, along with related information on retirement planning, could modestly increase saving at low marginal cost.
    Date: 2013–04
  21. By: Borghans L.; Golsteyn B.H.H. (ROA)
    Abstract: This paper analyzes whether defaults affect the choice for courses followed at work. In addition, we analyze whether the size of the default effect varies with employees’ personality and skill-deficiencies. We perform an experiment in which workers are hypothetically offered three courses which they can accept or exchange for other courses. Randomizing the default package of courses, we identify the default effect. Default courses are chosen approximately three times more often than other courses. They are chosen more often if people have skill-deficiencies in these courses, suggesting that people consider the default to be an advice. Women choose default courses more often than men. Women with less self-confidence and men with lower cognitive skills choose the default courses more often.
    Keywords: Human Capital; Skills; Occupational Choice; Labor Productivity;
    Date: 2013
  22. By: Benoit, Jean-Pierre; Galbiati, Roberto; Henry, Emeric
    Abstract: Understanding the impact of legal protection on investment is of major importance. This paper provides a framework for addressing this issue, and shows that investment may actually be higher in the absence of legal protection. Focusing on the application to innovation, in an environment where an innovator (the host) repeatedly faces the same imitators (parasites), we show that investment can take place even without patent protection, as parasites limit their imitation to preserve the innovator's incentives to invest. We show further that an innovator might be more active without legal protection: it is forced to increase its investment to keep the parasites satisfied and, thus, cooperative. We provide experimental evidence consistent with the theoretical results: in the experiment, investment levels with and without legal protection are comparable, and sometimes greater without patents. Our framework is general enough to apply to other situations such as investment in developing countries, commons' management and long-distance trade.
    Keywords: experiment; investment; patent; repeated games
    JEL: C91 K0 O3
    Date: 2013–02
  23. By: Beaman, Lori; Karlan, Dean S.; Thuysbaert, Bram; Udry, Christopher
    Abstract: In an experiment providing fertilizer grants to women rice farmers in Mali, we found that women who received fertilizer increased both the quantity of fertilizer they used on their plots and complementary inputs such as herbicides and hired labor. This highlights that farmers respond to an increase in availability of one input by re-optimizing other inputs, making it challenging to isolate the returns to any one input. We also found that while the increase in inputs led to a significantly higher level of output, we find no evidence that profits increased. Our results suggest that fertilizer's impact on profits is small compared to other sources of variation. This may make it difficult for farmers to observe the impact of fertilizer on their plots, and accordingly this affects their ability to learn about the returns to fertilizer and could affect their decision to adopt even in the absence of credit constraints.
    Keywords: agricultural economics; returns to fertilizer
    JEL: O12 O13 Q12
    Date: 2013–02
  24. By: Gertler, Paul; Heckman, James; Pinto, Rodrigo; Zanolini, Arianna; Vermeerch, Christel; Walker, Susan; Chang, Susan M.; Grantham-McGregor, Sally
    Keywords: Sociology, Early Childhood Development, Stunting, Randomized Trial
    Date: 2013–03–31
  25. By: Toke Reinholt Fosgaard (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: Based on a dice rolling task where participants can cheat on the outcome, this paper asks if default answers change dishonesty? The paper finds that various default answers have asymmetric effects. Compared to not having a default answer at all, providing a low default answer, or adding the expected mean as the default answer when participants report the outcome of the task do not affect behavior. Adding a high default answer, however, significantly increases the reported outcome.
    Keywords: Dice task, Cheating, Default bias
    JEL: C91 D03
    Date: 2013–04
  26. By: Gianmarco León
    Abstract: Electoral institutions that encourage citizens to vote are widely used around the world. Yet little is known about the effects of such institutions on voter participation and the composition of the electorate. In this paper, I combine a field experiment with a change in Peruvian voting laws to identify the effect of monetary (dis-)incentives on voting. Using the random variation in the fine for abstention and an objective measure of turnout at the individual level, I estimate the elasticity of voting with respect to cost to be -0.21. Consistent with the theoretical model presented, the reduction in turnout induced by the reduction in the fine is driven by voters who (i) are in the center of the political spectrum, (ii) are less interested in politics, and (iii) hold less political information. However, voters who respond to changes in the cost of abstention do not have different preferences for policies than those who vote regardless of the cost. Further, involvement in politics, as measured by the decision to acquire political information, seems to be independent of the level of the fine. Additional results indicate that the reduction in the fine does not affect the incidence of vote buying, but increases the price paid for a vote.
    Keywords: Voting Behavior; Incentives to Vote, Public Choice, Perú.
    JEL: D71 D72 O53
    Date: 2013–03
  27. By: Gertler, Paul; Vermeerch, Christel
    Abstract: We nested a large-scale field experiment into the national rollout of the introduction of performance pay for medical care providers in Rwanda to study the effect of incentives for health care providers. In order to identify the effect of incentives separately from higher compensation, we held constant compensation across treatment and comparison groups – a portion of the treatment group’s compensation was based on performance whereas the compensation of the comparison group was fixed. The incentives led to a 20% increase in productivity, and significant improvements in child health. We also find evidence of a strong complementarity between performance incentives and baseline provider skill.
    Keywords: Health Services/Allied Health/Health Sciences, General, Public Health, Performance Incentives, Results-Based Financing, Pay-for-Performance, Child Health, Maternal and Child Services
    Date: 2013–02–12
  28. By: Erlend Berg; Maitreesh Ghatak; R Manjula; D Rajasekhar; Sanchari Roy
    Abstract: This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to at pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent.
    Keywords: public services, information constraints, incentive pay, social proximity, knowledge transmission
    JEL: C93 D83 I38 M52 O15 Z13
    Date: 2013–03
  29. By: König, Markus; Pfarr, Christian; Zweifel, Peter
    Abstract: Background: Preferences of both Alzheimer patients and their spouse caregivers are related to a willingness-to-pay (WTP) measure which is used to test for the presence of mutual (rather than conventional unilateral) altruism. Methods: Contingent valuation experiments were conducted in 2000 – 2002, involving 126 Alzheimer patients and their caregiving spouses living in the Zurich metropolitan area (Switzerland). WTP values for three hypothetical treatments of the demented patient were elicited. The treatment Stabilization prevents the worsening of the disease, bringing dementia to a standstill. Cure restores patient health to its original level. In No burden, dementia takes its normal course while caregiver’s burden is reduced to its level before the disease. Results: The three different types of therapies are reflected in different WTP values of both caregivers and patients, suggesting that moderate levels of Alzheimer’s disease still permit clear expression of preference. According to the WTP values found, patients do not rank Cure higher than No burden, implying that their preferences are entirely altruistic. Caregiving spouses rank Cure before Burden, reflecting less than perfect altruism which accounts for some 40 percent of their to-tal WTP. Still, this constitutes evidence of mutual altruism. Conclusions: The evidence suggests that WTP values reflect individuals’ preferences even in Alzheimer patients. The values found suggest that an economically successful treatment should provide relief to caregivers, with its curative benefits being of secondary importance.
    Keywords: willingness-to-pay; dementia; altruism
    JEL: C93 D03 I10
    Date: 2013

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