nep-exp New Economics Papers
on Experimental Economics
Issue of 2014‒03‒22
29 papers chosen by
Daniel Houser
George Mason University

  1. Legitimacy, Communication and Leadership in the Turnaround Game By Jordi Brandts; David J. Cooper; Roberto A. Weber
  2. Social norms or low-cost heuristics? An experimental investigation of imitative behavior By Simona Cicognani; Luigi Mittone
  3. Endogenous Preferences and Conformity: Evidence From a Pilot Experiment By Sergio Beraldo; Valerio Filoso; Marco Stimolo
  4. PQ Strategies in Monopolistic Competition: Some Insights from the Lab By Tiziana Assenza; Jakob Grazzini; Cars Hommes; Domenico Massaro
  5. An experimental study on social anchoring By Meub, Lukas; Proeger, Till
  6. Dynamic Repeated Random Dictatorship and Gender Discrimination By Dittrich, Dennis Alexis Valin; Büchner, Susanne; Kulesz, Micaela Maria
  7. Gender and the Labor Market: What Have We Learned from Filed and Lab Experiments? By Ghazala Azmat; Barbara Petrongolo
  8. Fairness and Persuasion. How Stakeholder Communication Affects Impartial Decision Making By Marco Kleine; Pascal Langenbach; Lilia Zhurakhovska
  9. Can't Touch This! Similarity And The Willingness to Keep "Dirty Money" By David Johnson; Sebastian Goerg; Jonathan Rogers
  10. Donations, Risk Attitudes and Time Preferences: A Study on Altruism in Primary School Children By Angerer, Silvia; Glätzle-Rützler, Daniela; Lergetporer, Philipp; Sutter, Matthias
  11. Strategic coordination in forecasting: An experimental study By Bizer, Kilian; Meub, Lukas; Proeger, Till; Spiwoks, Markus
  12. Other-regarding behavior under collective action By Katerina Sherstyuk; Nori Tarui; Melinda Podor Wengrin; Jay Viloria; Tatsuyoshi Saijo
  13. Fair and unfair punishers coexist in the Ultimatum Game By Pablo Branas-Garza; Antonio M. Espin; Benedikt Herrmann
  14. Luck, Choice and Responsibility. An experimental study of fairness views. By Möllerström, Johanna; Reme, Bjørn-Atle; Sørensen, Erik Ø.
  15. Expressing Emotion and Fairness Crowding-out in an Ultimatum Game with Incomplete Information By Chen, Josie I; Kamei, Kenju
  16. Hiring and Escalation Bias in Subjective Performance Evaluations: A Laboratory Experiment By Andrej Angelovski; Jordi Brandts; Carles Sola
  17. Recreating the South Sea Bubble: Lessons from an Experiment in Financial History By Giovanni Giusti; Charles Noussair; Hans-Joachim Voth
  18. Author gender affects the rating of academic articles: Evidence from an incentivized, deception-free laboratory experiment. By Michał Krawczyk; Magdalena Smyk
  19. Industry structure and collusion with uniform yardstick competition: theory and experiments By Mulder, Machiel; Haan, Marco A.; Dijkstra, Peter T.
  20. Trust and Cheating in Sri Lanka: The Role of Experimentally-Induced Emotions about Tsunami. By Conzo, Pierluigi
  21. A Penny for Your Thoughts:A Survey of Methods for Eliciting Beliefs. By Karl Schlag; James Tremewan; Joel van der Weele
  22. On Uneven Expected Earnings in the Lab By Jade Wong; Andreas Ortmann
  23. Self Control and Intertemporal Choice: Evidence from Glucose and Depletion Interventions By Michael A. Kuhn; Peter Kuhn; Marie Claire Villeval
  24. Professional norms and physician behavior: homo oeconomicus or homo hippocraticus? By Kesternich, Iris; Schumacher, Heiner; Winter, Joachim
  25. Do Sympathy Biases Induce Charitable Giving? The Persuasive Effects of Advertising Content By K. Sudhir; Subroto Roy; Mathew Cherian
  26. Older Sisters and Younger Brothers: The Impact of Siblings on Preference for Competition By Hiroko Okudaira; Yusuke Kinari; Noriko Mizutani; Fumio Ohtake; Akira Kawaguchi
  27. Testing the Endowment Effect for Default Rules By Isabel Marcin; Andreas Nicklisch
  28. The impact of vocational training for the unemployed : experimental evidence from Turkey By Hirshleifer, Sarojini; McKenzie, David; Almeida, Rita; Ridao-Cano, Cristobal
  29. Competence versus Trustworthiness: What Do Voters Care About? By Fabio Galeotti; Daniel John Zizzo

  1. By: Jordi Brandts; David J. Cooper; Roberto A. Weber
    Abstract: We study the effectiveness of leaders for inducing coordinated organizational change to a more efficient equilibrium, i.e., a turnaround. We compare communication from leaders to incentive increases and also compare the effectiveness of randomly selected and elected leaders. While all interventions yield shifts to more efficient equilibria, communication from leaders has a greater effect than incentives. Moreover, leaders who are elected by followers are significantly better at improving their group’s outcome than randomly selected ones. The improved effectiveness of elected leaders results from sending more performance-relevant messages. Our results are evidence that the way in which leaders are selected affects their legitimacy and the degree to which they influence followers. Finally, we observed that a combination of factors— incentive increases and elected leaders—yield near universal turnarounds to full efficiency.
    Keywords: leadership, job selection, coordination failure, experiments, communication
    JEL: C72 C92 D83
    Date: 2014–03
  2. By: Simona Cicognani; Luigi Mittone
    Abstract: This paper extends choice theory by allowing for the interaction between cognitive costs and social norms. We experimentally investigate the role of imitation when participants face a task which is costly in cognitive terms. We identify two main reasons for imitative behavior. First, individuals belonging to a community might want to conform to others to obey to social norms. Second, individuals might be boundedly rational and consider imitation as a decisional device when comparing alternatives is cognitively demanding. In order to disentangle the two effects, we devise a laboratory experiment with a novel experimental task in which we model the choice of different alternatives through high or low cognitive costs and feedback information provided to subjects. Our results provide evidence for imitative behavior only through the channel of beliefs regarding others’ performance. We also find a temporal pattern in the distribution of choices, both in the high-cost and low-cost cognitive conditions, that may represent another cognitive shortcut.
    Keywords: Social Norms, Cognitive Costs, Laboratory Experiments
    JEL: C92 D81 Z13
    Date: 2014
  3. By: Sergio Beraldo (Department of Economics, University of Napoli, Italy); Valerio Filoso (Department of Law, University of Napoli, Italy); Marco Stimolo (Department of Law, University of Napoli, Italy)
    Abstract: Conformity behavior, i.e., the agreement between an individual’s choices and the prevailing behavior of a reference group, is a commonly observed phenomenon. Though some types of social interactions may give raise to specific incentives to adopt either a majoritarian or a contrarian behavior, we want to investigate whether the same behavioral pattern emerges even when no economic motivator is present. To accomplish this task, we employ an experimental Vickrey median price auction designed to provide incentives to reveal individual preferences truthfully. Whereas we feed the control group with just the median price, we give out additional information on other players’ bids for those in the treated groups. These informations are designed to provide hints at revising individual bids. Our main results point to a strong tendency of the individuals to adapt their behavior to those of the individuals which can be observed. Moreover, although a clear shaping effect (a regression toward the median price) does emerge for the control group, the provision of information about the actual behavior of a sample of the relevant group is able to minimize or neutralize the shaping effect. Specifically, we find that players adjust to a divergence between their bids and the average bid of a reference group by a factor of 47.4%—87.3%. These figures point to a relevant role for conformity in group behavior.
    Keywords: Endogenous preferences, shaping effect, social conformity, Vickrey auction
    JEL: C91 C92 D44
    Date: 2014–03
  4. By: Tiziana Assenza (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore and CeNDEF, Amsterdam School of Economics, University of Amsterdam); Jakob Grazzini (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Cars Hommes (CeNDEF,Amsterdam School of Economics, University of Amsterdam and Tinbergen Institute); Domenico Massaro (CeNDEF, Amsterdam School of Economics, University of Amsterdam and Tinbergen)
    Abstract: We present results from 50-rounds experimental markets in which firms decide repeatedly both on price and quantity of a perishable good. The experiment is designed to study the price-quantity setting behavior of subjects acting as firms in monopolistic competition. In the implemented treatments subjects are asked to make both production and pricing decisions given different information sets. We investigate how subjects decide on prices and quantities in response to signals from the firms' internal conditions, i.e., individual profits, excess demand, and excess supply, and the market environment, i.e., aggregate price level. We find persistent heterogeneity in individual behavior, with about 46% of market followers, 28% profit-adjusters and 26% demand adjusters. Nevertheless, prices and quantities tend to converge to the monopolistically competitive equilibrium and we find that subjects' behavior is well described by learning heuristics.
    Keywords: Laboratory Experiments, Price-Quantity Competition, Monopolistically Competitive markets.
    Date: 2014–03
  5. By: Meub, Lukas; Proeger, Till
    Abstract: The anchoring-and-adjustment heuristic has been studied in numerous experimental settings and is increasingly drawn upon to explain systematically biased decisions in economic areas as diverse as auctions, real estate pricing, sports betting and forecasting. In these cases, anchors result from publicly observable and aggregated decisions of other market participants. However, experimental studies have neglected this social dimension by focusing on external, experimenter-provided anchors in purely individualistic settings. We present a novel experimental design with a socially derived anchor, monetary incentives for unbiased decisions and feedback on performance to more accurately implement market conditions. Despite these factors, we find robust effects for the social anchor, an increased bias for higher cognitive load, and only weak learning effects. Finally, a comparison to a neutral, external anchor shows that the social context increases the bias, which we ascribe to conformity pressure. Our results support the assumption that anchoring remains a valid explanation for systematically biased decisions within market contexts. --
    Keywords: anchoring,conformity,heuristics and biases,incentives,laboratory experiment
    JEL: C9 D8
    Date: 2014
  6. By: Dittrich, Dennis Alexis Valin; Büchner, Susanne; Kulesz, Micaela Maria
    Abstract: To reduce the cognitive experimenter demand effect we embed a dictator game in a more complex decision environment, a dynamic household savings decision problem, thus rendering the dictator decision to share some endowment less salient. We then use this game in a laboratory experiment to investigate gender specific allocation behaviour and discrimination. We observe that dictators treat females nicer than males independent of their own gender. Participants are not aware of their discriminating behaviour.
    Keywords: repeated dictator game; altruistic preferences; gender discrimination
    JEL: C73 C91 D91
    Date: 2014–02–07
  7. By: Ghazala Azmat; Barbara Petrongolo
    Abstract: We discuss the contribution of the experimental literature to the understanding of both traditional and previously unexplored dimensions of gender differences and discuss their bearings on labor market outcomes. Experiments have offered new findings on gender discrimination, and while they have identified a bias against hiring women in some labor market segments, the discrimination detected in field experiments is less pervasive than that implied by the regression approach. Experiments have also offered new insights into gender differences in preferences: to gain less from negotiation, women appear to have lower preferences than men for risk and competition and may be more sensitive to social cues. These gender differences in preferences also have implications in group settings, whereby the gender composition of a group affects team decisions and performance. Most of the evidence on gender traits comes from the lab, and key open questions remain as to the source of gender preferences—nature versus nurture, or their interaction—and their role, if any, in the workplace.
    Keywords: Gender, field experiments, lab experiments, discrimination, gender preferences
    JEL: J16 J24 J71 C91 C92 C93
    Date: 2014–03
  8. By: Marco Kleine (Max Planck Institute for Research on Collective Goods, Bonn); Pascal Langenbach (Max Planck Institute for Research on Collective Goods, Bonn); Lilia Zhurakhovska (University of Erlangen-Nuremberg & Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We study experimentally whether and to what extent impartial decision makers are influenced by stakeholders’ fairness opinions in an allocation decision. The setting allows for different focal fairness rules to be considered. We compare communication treatments, in which one of the stakeholders states his or her opinion prior to the allocation decision, to a baseline without communication opportunities. We find that stakeholders who state their opinion in the communication treatments are allocated significantly less money than their counterparts in the baseline. Asymmetric reactions to the statements appear to be the driving force behind this result: impartial decision makers deviate from their initial fairness judgment and follow stakeholders’ opinions only if the requests are moderate; they largely ignore high monetary claims. Our results contribute to understanding the underlying processes that may affect the decisions of judges, juries, arbitrators, referees, or other impartial decision makers in interaction with stakeholders.
    Keywords: fairness, Norms, Communication, impartial decision maker, laboratory experiment, influence, persuasion
    JEL: D63 D02 K40 C91 D03
    Date: 2014–03
  9. By: David Johnson (University of Calgary); Sebastian Goerg; Jonathan Rogers
    Abstract: Traditionally, allocations by dictators in Dictator Games (gifts) have been explained by aspects of altruism, reciprocity, and fairness. However, this assumes the gift to be desirable to the dictators and responder. Giving may also be driven by the source of the endowment. We examine this by using three sources to generate the endowment in a Dictator Game:(1) undergraduate students, (2) Amazon Mechanical Turk workers, and (3) users of a racially/ethnically charged web forum. This endowment is provided to subjects in a traditional laboratory experiment. We find dictator similarity with the source of the endowment influences their allocation decision; the more similar subjects feel to the source the more of the endowment they keep. Our results suggest that decisions can be strongly in influenced by the provider of income shocks.
    Keywords: Experiment; Inequality; Approval
    JEL: C78 C91 C99 D31 D64 D74
    Date: 2014–03–20
  10. By: Angerer, Silvia (University of Innsbruck); Glätzle-Rützler, Daniela (University of Innsbruck); Lergetporer, Philipp (University of Innsbruck); Sutter, Matthias (European University Institute)
    Abstract: We study with a sample of 1,070 primary school children, aged seven to eleven years, how altruism in a donation experiment is related to children's risk attitudes and intertemporal choices. Examining such a relationship is motivated by theories of reciprocal altruism that provide a cornerstone to understand human social behavior. We find that higher risk tolerance and patience in intertemporal choice increase, in general, the level of donations, albeit the effects are non-linear. We confirm earlier results that altruism increases with age during childhood and that girls are more altruistic than boys. Having older brothers makes subjects less altruistic.
    Keywords: altruism, donations, risk attitudes, intertemporal choices, experiment, children
    JEL: C91 D03 D63 D64
    Date: 2014–03
  11. By: Bizer, Kilian; Meub, Lukas; Proeger, Till; Spiwoks, Markus
    Abstract: Reputational herding has been considered as a driving force behind economic and financial forecasts clustered around consensus values. Strategic coordination can consequently explain poor performances of prediction markets as resulting from the distinct incentives that forecasters face. While this notion has been considered theoretically and empirically, the underlying behavioral working mechanisms have not yet been described. We thus put forth an exploratory experiment on the emergence and robustness of coordination in a forecasting setting implementing contradictory incentives for accurate forecasts and coordination. Forecasts are shown to be inaccurate and biased toward current values. This in turn has subjects aiming at coordination benefits. Predominantly, coordination is achieved through the risk-dominant equilibrium as the game proceeds. Once established, coordination is fairly stable and adds to overall welfare. Our results support the assumption of rational herding as a driving force for predictions of poor accuracy that are systematically biased towards focal points. --
    Keywords: coordination,incentives,laboratory experiment,reputational herding,sunspot equilibrium
    JEL: C90 D03 D83 G17
    Date: 2014
  12. By: Katerina Sherstyuk (Department of Economics, University of Hawaii at Manoa); Nori Tarui (Department of Economics, University of Hawaii at Manoa); Melinda Podor Wengrin (University of Hawaii at Manoa); Jay Viloria (California Institute of Technology); Tatsuyoshi Saijo (Kochi University of Technology)
    Abstract: In many collective action settings, such as decisions on public education or climate change mitigation, actions of a group have welfare consequences for themselves as well as their followers. We conduct laboratory experiments with two-stage predecessor-follower prisoners' dilemma and coordination games with dynamic externalities to study whether concerns for the followers' welfare affect the predecessors' behavior. We find that predecessors often give up own payoffs to avoid imposing negative externalities on the followers, but not to generate positive externalities for the followers. A concern for the followers aligned with own group payoff maximization motive helps to resolve socialdilemma and coordination problems; yet, a conffict in motives greatly exacerbates both free-riding and coordination on the payoff-inferior equilibrium. We also find strong evidence of social learning: the followers tend to blindly mimic their own predecessor, but act opposite to their match's predecessor, no matter whether these actions are welfare-improving or not.
    Keywords: economic experiments; other-regarding behavior; collective action
    JEL: C90 C73
    Date: 2014–03
  13. By: Pablo Branas-Garza (Business School, Middlesex University London); Antonio M. Espin (GLOBE,Universidad de Granada; Departamento de Teoría e Historia Económica, Universidad de Granada); Benedikt Herrmann (Behavioural Economics Team, Institute for Health and Consumer Protection, Joint Research Centre, European Commission)
    Abstract: Fairness norms are crucial in understanding the emergence and enforcement of large-scale cooperation in human societies. The most widely applied framework in the study of human fairness is the Ultimatum Game (UG). In the UG, a proposer suggests how to split a sum of money with a responder. If the responder rejects the proposer’s offer, both players get nothing. Rejection of unfair offers is considered to be a form of punishment implemented by fair-minded individuals, who are willing to sacrifice their own resources in order to impose the fairness norm. However, an alternative interpretation is equally plausible: punishers might actually be using rejections in a competitive, spiteful fashion as a means to increase their relative standing. This hypothesis is in line with recent evidence demonstrating that “prosocial” and “antisocial” punishers coexist in other experimental games. Using two large-scale experiments, we explore the nature of UG punishers by analyzing their behavior in a Dictator Game. In both studies, we confirm the coexistence of two entirely different sub-populations: prosocial punishers, who behave fairly as dictators, and spiteful (antisocial) punishers, who are totally unfair. Such a result is fundamental for research on the foundations of punishment behavior employing the UG. We discuss how focusing only on the fairness-oriented part of human behavior might give rise to misleading conclusions regarding the evolution of cooperation and the behavioral underpinnings of stable social systems.
    Date: 2014–01
  14. By: Möllerström, Johanna (Harvard University); Reme, Bjørn-Atle (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We conduct a laboratory experiment where third-party spectators can redistribute resources between two agents, thereby offsetting the consequences of controllable and uncontrollable luck. Some spectators go to the limits and equalize all or no inequalities, but many follow an interior allocation rule previously unaccounted for by the fairness views in the literature. These interior allocators regard an agent’s choice as more important than the cause of her low income and do not always compensate bad uncontrollable luck. Instead, they condition such compensation on the agent’s decision regarding controllable luck exposure, even though the two types of luck are independent.
    Keywords: Fairness; responsibility; option luck; brute luck; experimen.
    JEL: C91 D63 D81 H23
    Date: 2014–03–07
  15. By: Chen, Josie I; Kamei, Kenju
    Abstract: Recent experimental research has shown that when rating systems are available, buyers are more generous in accepting unfair offers made by sellers. It has also shown that sellers make fairer decisions when they are rated, while some studies show that they are little affected by the rating systems. These studies are conducted under complete information settings. However, asymmetric information about the values of traded commodities between sellers and buyers may change their perception of fairness and thus may change sellers’ decisions. We conduct ultimatum game experiments in which only the sellers are informed of the size of pies. We find that when rating systems are available to the buyers, the buyers become more amenable to potentially unfair offers. We also find that sellers attempt to sell the commodity at higher prices, taking advantage of the buyers’ openness to potentially unfair offers, contrary to the past studies with complete information.
    Keywords: Experiments, Ultimatum Game, Incomplete Information, Emotion, Rating, Social Approval, Social Disapproval
    JEL: C91 D03 D82 M21
    Date: 2014–03–13
  16. By: Andrej Angelovski (Department of Business Economics,Universitat Autonoma de Barcelona); Jordi Brandts (Department of Business Economics,Universitat Autonoma de Barcelona; Institutd'AnalisiEconomica(CSIC); Barcelona GSE); Carles Sola (Department of Business Economics,Universitat Autonoma de Barcelona)
    Abstract: In many organizations the measurement of job performance can not rely on easily quantifiable information. In such cases, supervising managers often use subjective performance evaluations. We use laboratory experiments to study whether the way employees are assigned to a manager affects managers’ and co-employees’ subjective evaluations of employees. Employees can either be hired by the manager, explicitly not hired by him and nevertheless assigned to him or exogenously assigned to him. We present data from three different treatments. For all three we find escalation bias both by managers and by co-employees. Managers exhibit a positive bias towards those employees they have hired or a negative one towards those they have explicitly not hired. Managers’ and employees’ biases are connected. Exogenously assigned employees are biased in favor of employees hired by the manager and against those explicitly not hired.
    Date: 2014–03
  17. By: Giovanni Giusti; Charles Noussair; Hans-Joachim Voth
    Abstract: Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt?for?equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company’s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debtequity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.
    Keywords: Financial bubbles, experiments, South Sea bubble, risk-shifting, government debt, equity issuance
    JEL: G01 G12 G14 N23 C92
    Date: 2014–03
  18. By: Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw); Magdalena Smyk (Faculty of Economic Sciences, University of Warsaw)
    Abstract: In this study we sought to verify the hypothesis that a researcher’s gender affects evaluation of his or her work, especially in fields in which women are a small minority. To this end we asked a sample of economics majors to rate papers written by mixed-gender couples, indicating that they were (co-) authored by a “female economist”, “male economist”, “young female economist” or “young male economist”. While the age factor played no role, female authors received lower ratings. This effect was independent of the subject's gender.
    Keywords: women in science, laboratory experiment, gender bias
    JEL: C91 J16
    Date: 2014
  19. By: Mulder, Machiel; Haan, Marco A.; Dijkstra, Peter T. (Groningen University)
    Abstract: We study cartel stability in an industry that is subject to uniform yardstick regulation. In a theoretical model, we show that the number of symmetric firms does not affect collusion. In a laboratory experiment, however, we do find an effect. If anything, increasing the number of firms facilitates collusion. Our theory suggests that an increase in heterogeneity increases the regulated price if firms do not collude, but also makes collusion harder, rendering the net effect ambiguous. Our experiment suggests that the effect of collusion is stronger.
    Date: 2014
  20. By: Conzo, Pierluigi (University of Turin)
    Abstract: Through a field experiment in Sri Lanka I analyze the role of experimentally-induced memories of 2004 tsunami on behavior in a trust game in which personal notions of cheating are elicited. Micro-finance borrowers were randomly assigned to a treatment (control) group consisting in watching a video about the calamity before feel cheated; in a survey they selected whether the video mostly reminded about solidarity, looting or the calamity experience. Results suggest a differential impact of emotional stimuli induced by the video-treatment on trustors’ definition of cheating and trustees’ intentional cheating. Among the treated, the probability trustors define cheating as a non-negative return on investment (i.e. receive no more than what invested) and trustees satisfy trustor’s cheating notion (i.e. return at least what makes him/her not feel cheated) is higher when recalling solidarity than when looting and/or the calamity. As expected, there are no significant emotional effects of the video on control group’s behavior. If the trust game replicates real investment decisions, identifying the channels through which emotional memories of a past shock affect behavior offer important insights on what hinders socio-economic transactions within post-disaster areas.
    Date: 2014–03
  21. By: Karl Schlag; James Tremewan; Joel van der Weele
    Abstract: Incentivized methods for eliciting subjective probabilities in economic experiments present the subject with risky choices or bets that encourage truthful reporting. We discuss the most prominent elicitation methods and their underlying assumptions, provide theoretical comparisons, and propose some extensions to the standard framework. In addition, we survey the empirical literature on the performance of these elicitation methods in actual experiments, considering also practical issues of implementation such as order efects, hedging, and diferent ways of presenting probabilities and payment schemes to experimental subjects. We end with some thoughts on the merits of using incentives for belief elicitation and some guidelines for implementation.
    JEL: C83 C91 D83
    Date: 2014–01
  22. By: Jade Wong (Australian School of Business, the University of New South Wales); Andreas Ortmann (School of Economics, Australian School of Business, the University of New South WalesAuthor-Name: Craig Freedman)
    Abstract: We discuss ways to cope with uneven expected lab earnings that are the likely results of role assignments. We identify three problems associated with uneven earnings in the lab: of social preferences, of low marginal return for effort, and of perceived deception. Mining the opinions of respondents from the Economic Science Association’s (ESA) discussion list, the literature, and drawing on our own experience, we present five responses experimenters can use to mitigate the three problems. We discuss the merits and drawbacks of each strategy.
    Keywords: uneven expected lab earnings; social preferences; preferences
    JEL: B41 C91 C92
    Date: 2014–01
  23. By: Michael A. Kuhn (Department of Economics, University of California - University of California, San Diego); Peter Kuhn (Department of Economics, University of California - University of California, Santa Barbara); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I)
    Abstract: Recent developments in economic theory model intertemporal choice decisions as problems of restraining one's natural impulse to consume today. We use interventions that have been shown in the psychology literature to affect impulse control to examine whether this is indeed the case for laboratory elicitations of time preference. In other words, is savings behavior affected by manipulations of willpower? Our results are mixed, with one widely used willpower-reducing intervention increasing subjects' savings, and with evidence of a substantial placebo effects with respect to another intervention based on sugared beverage consumption. Since all our treatment effects -which are substantial in magnitude- are driven by increases in the intertemporal substitution elasticity (i.e. greater sensitivity to high prices), we suspect that the primary mechanism behind them is an increase in subjects' attention to the decision, rather than their ability to resist the temptation to get money sooner.
    Keywords: Time preferences ; self-control ; depletion ; sucrose ; experiment
    Date: 2014
  24. By: Kesternich, Iris; Schumacher, Heiner; Winter, Joachim
    Abstract: Physicians' treatment decisions determine the level of health care spending to a large extent. The analysis of physician agency describes how doctors trade off their own and their patients' benefits, with a third party (such as the collective of insured individuals or the taxpayers) bearing the costs. Professional norms are viewed as restraining physicians' self-interest and as introducing altruism towards the patient. We present a controlled experiment that analyzes the impact of professional norms on prospective physicians' trade-offs between her own profits, the patients' benefits, and the payers' expenses for medical care. We find that professional norms derived from the Hippocratic tradition shift weight to the patient in the physician's decisions while decreasing his self-interest and efficiency concerns.
    Keywords: social preferences; allocation of medical resources; professional norms
    JEL: A13 I19 C72 C91
    Date: 2014–03–13
  25. By: K. Sudhir (Cowles Foundation and Yale School of Management); Subroto Roy (Dept. of Marketing, University of New Haven); Mathew Cherian (HelpAge India)
    Abstract: We randomize advertising content motivated by the psychology literature on sympathy generation and framing effects in mailings to about 185,000 prospective new donors in India. We find significant impact on the number of donors and amounts donated consistent with sympathy biases such as the "identifiable victim," "in-group" and "reference dependence." A monthly reframing of the ask amount increases donors and amount donated relative to daily reframing. A second experiment targeted to past donors, finds that the effect of sympathy bias on giving is smaller in percentage terms but statistically and economically highly significant in terms of the magnitude of additional dollars raised. Methodologically, the paper complements the work of behavioral scholars by adopting an empirical researchers' lens of measuring relative effect sizes and economic relevance of multiple behavioral theoretical constructs in the sympathy bias and charity domain within one field setting. This can provide guidance to managers on which behavioral theories are most managerially and economically relevant when developing advertising content.
    Keywords: Charitable giving, Sympathy biases, Identified victim effect, Non-profit marketing, Advertising, Behavioral economics
    JEL: L31 M37 M31 C99
    Date: 2014–03
  26. By: Hiroko Okudaira; Yusuke Kinari; Noriko Mizutani; Fumio Ohtake; Akira Kawaguchi
    Abstract: Studies in psychology have long argued the possibility that sibling structure, such as birth order and the gender of siblings, shapes onefs feminine and masculine personality traits, such as a preference for competition. In light of recent developments in the economics literature on the gender gap, this implies that familial environment could explain why some women do opt for competition, while the vast majority of women do not and, thus, are underrepresented on the career ladder. By conducting a controlled experiment on Japanese high school students, this study quantifies the impact of sibling structure on onefs preference for competition, and examines whether a long-debated sibling hypothesis in psychology is supported from the viewpoint of experimental economics. Consistent with the hypothesis, our results reveal that men with older sisters were significantly less likely to enter a competitive environment compared with only sons. This effect is comparable in size to the effect of being female on the decision to compete. Our study also found moderate evidence that women with younger brothers were more likely to compete than only daughters.
    Date: 2014–03
  27. By: Isabel Marcin (Max Planck Institute for Research on Collective Goods, Bonn); Andreas Nicklisch (University of Hamburg, School of Business, Economics and Social Science & Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: This paper explores potential endowment effects of contractual default rules. For this purpose, we analyze the Hadley liability default clause in a model of bilateral bargaining of lotteries against safe options. The liability default clause determines the right for the safe payoff option. We test the model in series of laboratory experiments. The results reveal a substantial willingness-to-accept to willingness-to-pay gap for the right to change lotteries against safe options. Even if we apply the incentive compatible Becker-DeGroot-Marschak value elicitation mechanism, there is a significant gap indicating a robust endowment effect caused by default rules. Differences of expected values of the lotteries and the safe options consistently decrease the gaps. Implications for applications of default rules in the law are discussed.
    Keywords: lotteries, Default rules, Endowment effect
    JEL: K00 C91 K12
    Date: 2014–01
  28. By: Hirshleifer, Sarojini; McKenzie, David; Almeida, Rita; Ridao-Cano, Cristobal
    Abstract: A randomized experiment is used to evaluate a large-scale, active labor market policy: Turkey's vocational training programs for the unemployed. A detailed follow-up survey of a large sample with low attrition enables precise estimation of treatment impacts and their heterogeneity. The average impact of training on employment is positive, but close to zero and statistically insignificant, which is much lower than either program officials or applicants expected. Over the first year after training, the paper finds that training had statistically significant effects on the quality of employment and that the positive impacts are stronger when training is offered by private providers. However, longer-term administrative data show that after three years these effects have also dissipated.
    Keywords: Labor Markets,Labor Policies,Access&Equity in Basic Education,Primary Education,Education For All
    Date: 2014–03–01
  29. By: Fabio Galeotti (University of East Anglia); Daniel John Zizzo (University of East Anglia)
    Abstract: Appointing public officials is an important feature of modern democracies. Citizens are periodically asked to select amongst different candidates whom they want to appoint as public officials in central or local governments. There may be a trade-off on the extent to which candidates are seen as competent versus the extent to which they are seen as trustworthy. In our experiment, we ask voters to select a public official, on the competence and trustworthiness of which their final payoffs depend. We measure the competence of candidates in a real effort task and their trustworthiness in a trust game, and provide this information to voters when they make their voting decision. By looking at cases where there is a competence-trustworthiness trade-off, we can then measure the extent to which competence and trustworthiness matter in electoral decisions. We find that, in general, most voters tend to select the candidate rationally, based on who provides the highest expected profit irrespectively of trustworthiness and competence, but there is a bias towards caring about trustworthiness when the difference in expected profits between the two candidates is small enough.
    Date: 2014–03

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