New Economics Papers
on Experimental Economics
Issue of 2013‒08‒10
eleven papers chosen by

  1. Carry a big stick, or no stick at all An experimental analysis of trust and capacity of punishment By Vicente Calabuig; Enrique Fatas; Gonzalo Olcina; Ismael Rodriguez-Lara
  2. Trust and Trustworthiness Under The Prospect Theory and Quasi-Hyperbolic Preferences: A Field Experiment in Vietnam By Quang NGUYEN; Marie Claire VILLEVAL; Hui XU
  3. Do short-term laboratory experiments provide valid descriptions of long-term economic interactions? A study of Cournot markets By Normann, Hans-Theo; Requate, Till; Waichman, Israel
  4. Stochastic Asymmetric Blotto Games: Theory and Experimental Evidence By John Duffy; Alexander Matros
  5. Intertemporal Choice Shifts in Households: Do they occur and are they good? By Carlsson, Fredrik; Yang, Xiaojun
  6. Changing Eating Habits – A Field Experiment in Primary Schools. By Michèle Belot (University of Edinburgh), Jonathan James (University of Bath) and Patrick Nolen (University of Essex)
  7. Decision time and steps of reasoning in a competitive market entry game By Florian Lindner
  8. Using elicitation mechanisms to estimate the demand for nutritious maize: Evidence from experiments in rural Ghana By Banerji, A.; Chowdhury, Shyamal K.; de Groote, Hugo; Meenakshi, Jonnalagadda V.; Haleegoah, Joyce; Ewoo, Manfred
  9. The Self-Image Signaling Roles of Voice in Decision-Making By Qiyan ONG; Yohanes Eko RIYANTO; Walter E. THESEIRA; Steven M. SHEFFRIN
  10. HOT or Not: Driver Elasticity to Price on the MnPASS HOT Lanes By Michael Janson; David Levinson
  11. Econometric Mediation Analyses: Identifying the Sources of Treatment Effects from Experimentally Estimated Production Technologies with Unmeasured and Mismeasured Inputs By James J. Heckman; Rodrigo Pinto

  1. By: Vicente Calabuig (ERICES, Universidad de Valencia); Enrique Fatas (University of East Anglia); Gonzalo Olcina (ERICES, Universidad de Valencia); Ismael Rodriguez-Lara (ERICES, Universidad de Valencia)
    Abstract: We investigate the effect of punishment in a trust game with endowment heterogeneity in which the investor may punish the allocator at a cost. Our results indicate that the effect of the punishment crucially depends on the investor’s capacity of punishment, that is measured in our experiment by the proportion of the allocator’s payoffs that the investor can destroy. We find that punishment fosters trust when the capacity of punishment is high (i.e., when the cost of punishing is relatively low). Otherwise, punishment fails to promote trusting behavior, crowding out intrinsic motivation to trust. Trustworthiness is higher with punishment than without punishment, except if investors have a high capacity of punishment
    Keywords: Trust game, punishment, crowding-out, intrinsic and extrinsic motivation, experimental economics
    JEL: C91 D02 D03 D69
    Date: 2013–08
  2. By: Quang NGUYEN (Division of Economics, Nanyang Technological University, Singapore 637332, Singapore); Marie Claire VILLEVAL (University of Lyon, F-69007, France; CNRS, GATE, 93, ChemindesMouilles, F-69130, Ecully, France; IZA, Bonn, Germany); Hui XU (University of Lyon, F-69007, France; CNRS, GATE, 93, ChemindesMouilles, F-69130, Ecully, France. Beijing Normal University,19 XinjiekouWai Street, Beijing 100875, P. R. China.)
    Abstract: This study incorporates risk, time, and social preferences. We conduct a field experiment in Vietnamese villages and estimate the effect of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences parameters on trust and trustworthiness. We find that both probability sensitivity and risk aversion are not related to trust. Yet, more risk averse and less present biased participants are found to be trustworthier. People with longer exposure to a collectivist economy tend to have a lower level of trust and trustworthiness.
    Keywords: Trust, Trustworthiness, Cumulative Prospect Theory, Risk preferences, Time preferences, Quasi–hyperbolic preferences, Vietnam, Field experiment
    JEL: C91 C93 D81 D90
    Date: 2013–01
  3. By: Normann, Hans-Theo; Requate, Till; Waichman, Israel
    Abstract: One key problem regarding the external validity of laboratory experiments is their duration: while economic interactions out in the field are often lengthy processes, typical lab experiments only last for an hour or two. To address this problem for the case of both symmetric and asymmetric Cournot duopoly, we conduct internet treatments lasting more than a month. Subjects make the same number of decisions as in the short-term counterparts, but they decide once a day. We compare these treatments to corresponding standard laboratory treatments and also to short-term internet treatments lasting one hour. We do not observe differences in behavior between the short- and long-term in the symmetric treatments, and only a small difference in the asymmetric treatments. We overall conclude that behavior is not considerably different between the short- and long-term. --
    Keywords: internet experiment,Cournot oligopoly,long-term interactions,methodology,internet vs. laboratory experiment
    JEL: L13 C93 C72 D43 D21
    Date: 2013
  4. By: John Duffy; Alexander Matros
    Abstract: We consider a model where two players compete for n items having different common values in a Blotto game. Players have to decide how to allocate their budgets across all n items. The winner of each item is determined stochastically using a lottery mechanism. We analyze two payoff objectives: (i) players aim to maximize their total expected payoff and (ii) players maximize the probability of winning a majority value of all n items. We develop some new theoretical results for the majority rule case and show that the majority rule objective results in qualitatively different equilibrium behavior than the total expected payoff objective. We report the results of an experiment where the two payoff mechanisms are compared and we find strong support for the theoretical predictions.
    Keywords: Colonel Blotto game, Contests, Resource Allocation, Lotteries, Electoral College, Game Theory, Political Theory, Experimental Economics
    JEL: C72 C73 C92 D72 D74
    Date: 2013–08
  5. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Yang, Xiaojun (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We examine whether and to what extent joint choices are more or less patient and time-consistent than individual choices in households. We use data from an artefactual field experiment where both individual and joint time preferences were elicited. We find a substantial shift from individual to joint household decisions. Interestingly, joint decisions do not only generate beneficial shifts, i.e., patient and time-consistent shifts. On the contrary, a majority of the observed shifts are impatient and time-inconsistent shifts. A number of observable characteristics are significantly correlated with these shifts in preferences from individual decisions to joint decisions.
    Keywords: individual decisions; joint decisions; patience; time-consistency; choice shifts; rural China
    JEL: C91 C92 C93 D10
    Date: 2013–07–31
  6. By: Michèle Belot (University of Edinburgh), Jonathan James (University of Bath) and Patrick Nolen (University of Essex)
    Abstract: We conduct a field experiment in 31 primary schools in England to test whether incentives to eat fruit and vegetables help children develop healthier habits. The intervention consists of rewarding children with stickers and little gifts for a period of four weeks for choosing a portion of fruit and vegetables at lunch. We compare the effects of two incentive schemes (competition and piece rate) on choices and consumption over the course of the intervention as well as once the incentives are removed and six months later. We find that the intervention had positive effects, but the effects vary substantially according to age and gender. However, we find little evidence of sustained long term effects, except for the children from poorer socio-economic backgrounds.
    Keywords: Incentives, Health, Habits, Child nutrition, Field experiment.
    JEL: J13 I18 I28 H51 H52
    Date: 2013–08–02
  7. By: Florian Lindner
    Abstract: Entry decisions in market entry games usually depend on the belief about how many others are entering the market, the belief about the own rank in a real effort task, and subjects' risk preferences. In this paper I am able to replicate these basic results and examine two further dimensions: (i) the level of strategic sophistication, which has a positive impact on entry decisions, and (ii) the impact of time pressure, which has a (partly) negative influence on entry rates. Furthermore, when ranks are determined using a real effort task, differences in entry rates are explainable by higher competitiveness of males. Additionally, I show that individual characteristics are more important for the entry decision in more competitive environments.
    Keywords: Market entry game, Time pressure, Level-k reasoning, Risk, Competitiveness, Experiment
    JEL: C72 C91 D81
    Date: 2013–07
  8. By: Banerji, A.; Chowdhury, Shyamal K.; de Groote, Hugo; Meenakshi, Jonnalagadda V.; Haleegoah, Joyce; Ewoo, Manfred
    Abstract: In this paper we assess (a) consumers’ willingness to pay (WTP) for a recently developed variety of maize that is high in provitamin A in the context of a public health intervention and (b) the performance of three elicitation mechanisms in estimating WTP in a field experiment in Ghana. The mechanisms that we used for elicitation are the Becker-DeGroot-Marschak (BDM) mechanism, kth price auction, and choice experiment. The basic design of the experiment involved random allocation of consumers to one of three elicitation methods. This was augmented to include treatment arms to address the effect of (1) participation fees and (2) nutrition information on WTP.
    Keywords: Ghana, West Africa, Africa south of Sahara, Africa, Biofortification, maize, Provitamin A, Vitamin A, demand
    Date: 2013
  9. By: Qiyan ONG (Division of Economics, Nanyang Technological University, Singapore 637332, Singapore); Yohanes Eko RIYANTO (Division of Economics, Nanyang Technological University, Singapore 637332, Singapore); Walter E. THESEIRA (Division of Economics, Nanyang Technological University, Singapore 637332, Singapore); Steven M. SHEFFRIN (Murphy Institute, Department of Economics at Tulane University, 108 Tilton Hall, New Orleans, LA 70115)
    Abstract: Why are individuals willing to pay costs in order to express their voice in decision-making settings? Research suggests voice provides a strategic opportunity to improve outcomes, or the perceived fairness of outcomes. This paper proposes that people are willing to expend resources to express their views to learn about themselves through “self-image signaling.” We distinguish between these differing interpretations of voice through a modified ultimatum game where responders are assigned opportunities to bid for voice, either to the proposer or to a third party. Strikingly, 63% of responders are willing to pay on average 34% of their endowments for the opportunity for voice, even when their messages are sent to a third party and thus hold no strategic value. The act of expressing voice appears to change a responder’s willingness to accept offers, suggesting that voice’s effects on self-image could be as important as any strategic or communications function.
    Keywords: Voice, Self-image, Signaling
    JEL: D03 C91
    Date: 2013–03
  10. By: Michael Janson; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The Minnesota Department of Transportation (MnDOT) has added MnPASS High Occupancy Toll (HOT) lanes on two freeway corridors. While not the first HOT lanes in the country, the MnPASS lanes are the first implementation of road pricing in Minnesota and possess a dynamic pricing schedule. Tolls charged to single occupancy vehicles (SOVs) are adjusted every three minutes according to HOT lane vehicle density. Given the infancy of systems like MnPASS, questions remain about drivers’ responses to toll prices. Three field experiments were conducted on the corridors during which prices were changed. Data from the field experiments as well as two years of toll and traffic data were analyzed to measure driver responses to pricing changes. Driver elasticity to price was positive with magnitudes less than 1.0. This positive relationship between price and demand is in contrast with the previously held belief that raising the price would discourage demand. We hypothesize this is because drivers use price as a signal of time savings. In addition, drivers consistently paid between approximately $60-120 per hour of travel time savings, much higher than the average value of time. Reasoning for these results is discussed as well as the implications these results have on the pricing of HOT lanes.
    Keywords: transport economics, HOT Lanes, road pricing,
    JEL: O18 R48
    Date: 2013
  11. By: James J. Heckman (University of Chicago); Rodrigo Pinto (University of Chicago)
    Abstract: This paper presents an econometric mediation analysis. It considers identification of production functions and the sources of output effects (treatment effects) from experimental interventions when some inputs are mismeasured and others are entirely omitted.
    Keywords: Production Function, Mediation Analysis, Measurement Error, Missing Inputs
    JEL: D24 C21 C43 C38
    Date: 2013–08

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