New Economics Papers
on Experimental Economics
Issue of 2013‒11‒22
fifteen papers chosen by

  1. Equilibrium Selection under Limited Control - An Experimental Study of the Network Hawk-Dove Game By Siegfried Berninghaus; Stephan Schosser; Bodo Vogt
  2. Support for Public Provision with Top-Up and Opt-Out: A Controlled Laboratory Experiment By Neil Buckley; Katherine Cuff; Jeremiah Hurley; Stuart Mestelman; Stephanie Thomas; David Cameron
  3. Alternating or Compensating? An Experiment on the Repeated Sequential Best Shot Game By Lisa Bruttel; Werner Güth
  4. The Informational and signaling impacts of labels: Experimental evidence from India on GM foods By Bharat Ramaswami; Sangeeta Bansal; Sujoy Chakravarty
  5. Manipulating reliance on intuition reduces risk and ambiguity aversion By Butler, Jeffrey V.; Guiso, Luigi; Jappelli, Tullio
  6. Transfer Incentives for High-Performing Teachers: Final Results from a Multisite Randomized Experiment. By Steven Glazerman; Al Protik; Bing-ru Teh; Julie Bruch; Jeffrey Max
  7. Reducing Moral Hazard in Employment Relationships: Experimental Evidence on Managerial Control and Performance Pay By C. Kirabo Jackson; Henry S. Schneider
  8. Isolating Warm Glow in Charitable Auction Giving By Kyriaki Remoundou; Andreas C. Drichoutis; Phoebe Koundouri
  9. Women quitters in exit competitions: Reliable indicators of women's risk aversion? By Hanley, Aoife; Schmidt, Eike-Christian
  10. Second-Degree Moral Hazard in a Real-World Credence Goods Market By Balafoutas, Loukas; Kerschbamer, Rudolf; Sutter, Matthias
  11. Dishonesty and Selection into Public Service By Rema Hanna; Shing-Yi Wang
  12. An Experimental Investigation of the Impacts of Persuasion and Information Acquisition on Non-Use Values for Climate Change Adaptation By Tanya O’Garra; Susanna Mourato
  13. A randomized, controlled study of a rural sanitation behavior change program in Madhya Pradesh, India By Patil, Sumeet R.; Arnold, Benjamin F.; Salvatore, Alicia; Briceno, Bertha; Colford, Jr., John M.; Gertler, Paul J.
  14. Exploring beliefs about bottled water and intentions to reduce consumption: The dualeffect of social norm activation and persuasive information By Sander Van Der Linden
  15. Breaking the dilemma between robustness and generativeness: a comparative experiment on the use of new design software at the design-gap By Pierre-Antoine Arrighi; Pascal Le Masson; Benoît Weil

  1. By: Siegfried Berninghaus (Karlsruhe Institute of Technology, Institute of Economics); Stephan Schosser (University of Magdeburg, Department of Economics); Bodo Vogt (University of Magdeburg, Department of Economics)
    Abstract: For games of simultaneous action selection and network formation, game-theoretic behavior and experimental observations are not in line: While theory typically predicts inefficient outcomes for (anti-)coordination games, experiments show that subjects tend to play efficient (non Nash) strategy profiles. A reason for this discrepancy is the tendency to model corresponding games as one-shot and derive predictions. In this paper, we calculate the equilibria for a finitely repeated version of the Hawk-Dove game with endogenous network formation and show that the repetition leads to additional equilibria, namely the efficient ones played by human subjects. We confirm our results by an experimental study. In addition, we show both theoretically and experimentally that the equilibria reached crucially depend on the order in which subjects adjust their strategy. Subjects only reach efficient outcomes if they first adapt their action and then their network. If they choose their network first, they do not reach efficient outcomes.
    Keywords: Network games, Hawk/Dove games, finitely repeated game
    JEL: D85 C72 C73 C92
    Date: 2013–11–13
  2. By: Neil Buckley; Katherine Cuff; Jeremiah Hurley; Stuart Mestelman; Stephanie Thomas; David Cameron
    Abstract: We empirically test the predictions of political economy models regarding public support for a publicly provided private good financed with proportional income taxes when individuals can purchase the good privately and either continue to consume public provision ('top-up') or forego public provision ('opt-out'). Our laboratory results confirm the predicted majority-preferred tax rate in the mixed financing with top-up treatment, but find significantly higher rates than predicted in the mixed financing with opt-out treatment. Using non-parametric regression analysis, we also explore the relationship between individuals' top-up and opt-out decisions and both their income levels and the implemented tax rates.
    Keywords: publicly provided private good, mixed financing, voting experiment
    JEL: H42 H44 C91 D78
    Date: 2013–11
  3. By: Lisa Bruttel (Department of Economics, University of Konstanz, Germany); Werner Güth (Max Planck Institute of Economics, Jena, Germany)
    Abstract: In the two-person sequential best shot game, first player 1 contributes to a public good and then player 2 is informed about this choice before contributing. The payoff from the public good is the same for both players and depends only on the maximal contribution. Efficient voluntary cooperation in the repeated best shot game therefore requires that only one player should contribute in a given round. To provide better chances for such cooperation, we enrich the sequential best shot base game by a third stage allowing the party with the lower contribution to transfer some of its periodic gain to the other party. Participants easily establish cooperation in the finitely repeated game. When cooperation evolves, it mostly takes the form of 'labor division,' with one participant constantly contributing and the other constantly compensating. However, in a treatment in which compensation is not possible, (more or less symmetric) alternating occurs frequently and turns out to be almost as efficient as labor division.
    Keywords: best shot game, coordination, transfer, experiment
    JEL: C71 C73 C91
    Date: 2013–10–31
  4. By: Bharat Ramaswami (Indian Statistical Institute, New Delhi); Sangeeta Bansal (Centre for International Trade and Development, JNU, New Delhi); Sujoy Chakravarty (Centre for Economic Studies and Planning, JNU, New Delhi)
    Abstract: Much of the debate between the European and U.S. positions about labeling of genetically modified foods has been whether consumers perceive labels as a source of information or a signal to change behavior. In this paper, we provide an experimental framework for examining these roles of information and signaling. While previous studies have focused on the impact of labels on consumer behavior, our interest is also what happens prior to the expression of aversion to GM-labeled foods. In particular, the experiment design allows the researcher to estimate a lower bound of the informational impact of labels on GM food aversion. The other novel feature of this paper is that unlike earlier studies, it uses subjects from a developing country.
    Keywords: Genetically modified foods; experimental methods; informational impact of labels; signaling impact of labels
    JEL: C9 Q13 Q16 Q18 L15
    Date: 2013–01
  5. By: Butler, Jeffrey V.; Guiso, Luigi; Jappelli, Tullio
    Abstract: Prior research suggests that those who rely on intuition rather than effortful reasoning when making decisions are less averse to risk and ambiguity. The evidence is largely correlational, however, leaving open the question of the direction of causality. In this paper, we present experimental evidence of causation running from reliance on intuition to risk and ambiguity preferences. We directly manipulate participants' predilection to rely on intuition and find that enhancing reliance on intuition lowers the probability of being ambiguity averse by 30 percentage points and increases risk tolerance by about 30 percent in the experimental sub-population where we would a priori expect the manipulation to be successful (males). --
    Keywords: Risk Aversion,Ambiguity Aversion,Decision Theory,Dual Systems,Intuitive Thinking
    JEL: D81 D83
    Date: 2013
  6. By: Steven Glazerman; Al Protik; Bing-ru Teh; Julie Bruch; Jeffrey Max
    Keywords: transfer incentives, randomized controlled trial, teacher effectiveness, value added
    JEL: I
    Date: 2013–11–30
  7. By: C. Kirabo Jackson; Henry S. Schneider
    Abstract: Moral hazard is endemic to employment relationships and firms often use performance pay and managerial control to address this problem. While performance pay has received much empirical attention, managerial control has not. We analyze data from a managerial-control field experiment in which an auto-repair firm provided detailed checklists to mechanics and monitored their use. Revenue was 20 percent higher under the experiment. We compare this effect to that of quasi-experimental increases in mechanic commission rates. The managerial-control effect is equivalent to that of a 10 percent commission increase. We find evidence of complementarities between the two, suggesting benefits from an all-of-the-above approach. We also find evidence of incentive gaming under performance pay.
    JEL: D0 D82 D86 H0 J0 J33 J41
    Date: 2013–11
  8. By: Kyriaki Remoundou; Andreas C. Drichoutis; Phoebe Koundouri
    Abstract: We use a novel experimental design to isolate warm glow and measure its extent in an auction that contributes the revenues by highest bidders to a charity. A sample of consumers bid to upgrade an agricultural product from a river basin that is not in good ecological status. Charitable donations are crowed-out, one to one, by a reduction in the experimenters’ contribution to the charity allowing warm glow to be isolated. Results suggest that subjects do not bid higher in the charitable auction compared to the standard auction (control) treatment therefore providing no evidence of warm glow motivations behind giving.
    Date: 2013–09
  9. By: Hanley, Aoife; Schmidt, Eike-Christian
    Abstract: Information from television game shows has recently been used to measure women's risk aversion. Researchers have abstracted from this evidence to explain the underrepresentation of women at senior levels in politics, business and management. But how reliable is this type of data? Using data for 483 male and female participants in a simulation of the TV game show 'Deal or no Deal', we find that women on average exit 0.45 rounds earlier than men, confirming the higher risk aversion for women. We also find that if we were to select women with comparable earnings and education to men, being female is less of an obstacle towards risk-taking behaviour than in the absence of these controls. Specifically, women would now be seen to exit 0.12 rounds earlier, rather than 0.45 rounds earlier. Experiments need to be mindful of controlling for these background factors when assessing the nexus between risk-taking and gender. --
    Date: 2013
  10. By: Balafoutas, Loukas (University of Innsbruck); Kerschbamer, Rudolf (University of Innsbruck); Sutter, Matthias (European University Institute)
    Abstract: Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply side in a market to react to anticipated moral hazard on the demand side by increasing the extent or the price of the service. In the market for taxi rides, our moral hazard manipulation consists of some passengers explicitly stating that their expenses will be reimbursed by their employer. This has an economically important and statistically significant positive effect on the likelihood of overcharging, with passengers in that treatment being about 13% more likely to pay higher-than-justified prices for a given ride. This indicates that second-degree moral hazard may have a substantial impact on service provision in a credence goods market.
    Keywords: natural field experiment, credence goods, asymmetric information, moral hazard, overcharging, overtreatment, taxi
    JEL: C93 D82
    Date: 2013–11
  11. By: Rema Hanna; Shing-Yi Wang
    Abstract: In this paper, we demonstrate that university students who cheat on a simple task in a laboratory setting are more likely to state a preference for entering public service. Importantly, we also show that cheating on this task is predictive of corrupt behavior by real government workers, implying that this measure captures a meaningful propensity towards corruption. Students who demonstrate lower levels of prosocial preferences in the laboratory games are also more likely to prefer to enter the government, while outcomes on explicit, two-player games to measure cheating and attitudinal measures of corruption do not systematically predict job preferences. We find that a screening process that chooses the highest ability applicants would not alter the average propensity for corruption among the applicant pool. Our findings imply that differential selection into government may contribute, in part, to corruption. They also emphasize that screening characteristics other than ability may be useful in reducing corruption, but caution that more explicit measures may offer little predictive power.
    JEL: H1 J2 O1
    Date: 2013–11
  12. By: Tanya O’Garra; Susanna Mourato
    Abstract: Focusing on the estimation of WTP for climate change adaptation projects in vulnerable areas around the world, this study explores the divergence between economic non-use values produced using a standard CV survey approach, and those produced using a persuasive’ CV survey in which most sources of informational bias are systematically exploited to maximise expressed WTP. We interact the persuasion analysis with a cross-cutting treatment involving optional information access. It is proposed that allowing respondents to voluntarily access added information emulates rather more closely consumer pre-purchase behaviour in the market. We examine information acquisition using two treatments: a pre-set default option (the default is “no added information wanted”) versus an “active decision” option (“would you like added information?”). The interactions produce an eight-cell experimental design. We find that, contrary to expectations, the persuasion treatment has a negative influence on WTP. We also find that persuasive information appears to dissuade respondents from accessing added information when this is offered as an opt-in default. Effort spent accessing added information has a strong influence on WTP but the sign on the coefficient varies depending on how the information was offered to respondents.
    Date: 2013–08
  13. By: Patil, Sumeet R.; Arnold, Benjamin F.; Salvatore, Alicia; Briceno, Bertha; Colford, Jr., John M.; Gertler, Paul J.
    Abstract: Poor sanitation and open defecation are thought to be a major cause of diarrhea and intestinal parasite infections among young children. In 1999, India launched the Total Sanitation Campaign with the goal of achieving universal toilet coverage in rural India by 2012. This paper reports on a cluster-randomized, controlled trial that was conducted in 80 rural villages in Madhya Pradesh to measure the effect of the program on toilet access, sanitation behavior, and child health outcomes. The study analyzed a random sample of 3,039 households and 5,206 children under five years of age. Field staff collected baseline measures of sanitation conditions, behavior, and child health, and re-visited households 21 months later. The analysis finds that implementation of the program activities was slower than the original timeline (only 35 percent of villages were triggered more than six months before the follow-up survey). Nevertheless, the Total Sanitation Campaign successfully increased toilet coverage by 19 percent in intervention villages compared with control villages (41 percent v. 22 percent), while reported open defecation decreased by 10 percent among adults (74 percent v. 84 percent). The intervention also led to some improvements in water quality and protozoan infection, but consistent improvements were not observed across multiple child health outcomes (diarrhea, helminth infections, child growth). However, the exposure period was likely to have been too short to result in any benefit of the sanitation interventions on child health. Given the large improvements in toilet construction documented, an additional follow-up survey with a longer period of exposure would yield valuable information on the effects of improved sanitation conditions on health outcomes.
    Keywords: Health Monitoring&Evaluation,Housing&Human Habitats,Hygiene Promotion and Social Marketing,Urban Water Supply and Sanitation,Town Water Supply and Sanitation
    Date: 2013–11–01
  14. By: Sander Van Der Linden
    Abstract: Mass consumption of bottled water is contributing to a multitude of environmental problems, including; water wastage, pollution and climate change. The aim of this study is to advance a social-psychological understanding of how to effectively reduce bottled water consumption. An online survey experiment was conducted among students of a Dutch public university to examine outcome-beliefs about drinking less bottled water while subsequently testing three strategies for behavioural change. Respondents (n= 454) were randomly allocated to four different conditions (an information-only, social norm-only, a combination of both or a control group). It was hypothesized that the combination (i.e., norm-induced information provision) would be most persuasive and elicits the greatest change in intention. Results were consistent with this hypothesis. Findings also show that while beliefs about health, taste, water quality, lifestyle, the environment and perceived alternatives are all correlated with bottled water consumption, belief strength varies significantly based on rate of consumption.
    Date: 2013–09
  15. By: Pierre-Antoine Arrighi (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Pascal Le Masson (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Benoît Weil (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: Are creative designers doomed to loose in creativity when integrated in NPD processes? While a lot of studies point the necessity to achieve both creativity and feasibility, it remains hard to make more than a frustrating trade off. Still a new generation of design software have recently been proposed to better integrate industrial designers in engineering design processes. Based on a comparative experiment, we show that some of these tools enable to break the dilemma between creativity and robustness. Focusing on the design gap, a sample of 6 industrial designers was asked to design from a handmade rough sketch a 3D-digital object integrated in a CAD software suite. We compare the performance in term of gain or loss of originality and robustness (measured by 5 independent experts) between the uses of two representative digital design tools. It appears that the use of one of the software significantly increased simultaneously to Generativeness and Robustness of a design. It confirms that it is possible to ground creativity on constraint and show the possibility of new design processes characterized by their capacity to avoid loss in Originality and to improve what we call an "acquired creativity" all along the design process.
    Keywords: Industrial design; CAD; Creativity
    Date: 2013

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