New Economics Papers
on Experimental Economics
Issue of 2014‒06‒22
eighteen papers chosen by

  1. Social preferences in the online laboratory: a randomized experiment By Jérôme Hergueux; Nicolas Jacquemet
  2. An Experimental Study on the Effect of Ambiguity in a Coordination Game By David Kelsey; Sara le Roux
  3. Giving is a question of time: Response times and contributions to a real world public good By Lohse, Johannes; Goeschl, Timo; Diederich , Johannes
  4. Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information By Nicolas Jacquemet; Adam Zylbersztejn
  5. A Cold Shower for the Hot Hand Fallacy By Joshua B. Miller; Adam Sanjurjo
  6. Are we more wearful than greedy? Outbounding the incentives to defect in cooperation dilemmas By Mantilla, Cesar
  7. Thanks but No Thanks: A New Policy to Reduce Land Conflict By Martin Dufwenberg; Gunnar Köhlin; Peter Martinsson; Haileselassie Medhin
  8. Saving More to Borrow Less: Experimental Evidence from Access to Formal Savings Accounts in Chile By Felipe Kast; Dina Pomeranz
  9. Quality healthcare and health insurance retention: Evidence from a randomized experiment in the Kolkata slums: By Delavallade, Clara
  10. Encouraging health insurance for the informal sector : a cluster randomized trial By Wagstaff, Adam; Nguyen, Ha Thi Hong; Dao, Huyen; Balesd, Sarah
  11. Sensitive survey questions: Measuring attitudes regarding female circumcision through a list experiment By De Cao, Elisabetta; Lutz, Clemens
  12. An experimental approach to generational heterogeneity By Marianna Baggio; Luigi Mittone
  13. Seasonal Credit Constraints and Agricultural Labor Supply: Evidence from Zambia By Günther Fink; B. Kelsey Jack; Felix Masiye
  14. Individual Search and Social Networks By Sanjeev Goyal; Stephanie Rosenkranz; Utz Weitzel; Vincent Buskens
  15. Ignorance and bias in collective decision:Theory and experiments By Alexander Elvitar; Andrei Gomberg; César Martinelli; Thomas R. Palfrey
  16. Are Smarter People Better Samaritans? Effect of Cognitive Abilities on Pro-Social Behaviors By Luis Aranda; Martin Siyaranamual
  17. The impact of cash and food transfers: Evidence from a randomized intervention in Niger: By Hoddinott, John F.; Sandström, Susanna; Upton, Joanna
  18. Plans as conditional strategies: A concept enabling cooperation in the Prisoners' Dilemma? By Dilger, Alexander

  1. By: Jérôme Hergueux (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris - Institut d'Études Politiques [IEP] - Paris - PRES Sorbonne Paris Cité - Fondation Nationale des Sciences Politiques [FNSP]); Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II)
    Abstract: Internet is a very attractive technology for the implementation of experiments, both in order to obtain larger and more diverse samples and as a field of economic research in its own right. This paper reports on an experiment performed both online and in the laboratory, designed to strengthen the internal validity of decisions elicited over the Internet. We use the same subject pool, the same monetary stakes and the same decision interface, and control the assignment of subjects between the Internet and a traditional university laboratory. We apply the comparison to the elicitation of social preferences in a Public Good game, a dictator game, an ultimatum bargaining game and a trust game, coupled with an elicitation of risk aversion. This comparison concludes in favor of the reliability of behaviors elicited through the Internet. We moreover find a strong overall parallelism in the preferences elicited in the two settings. The paper also reports some quantitative differences in the point estimates, which always go in the direction of more other-regarding decisions from online subjects. This observation challenges either the predictions of social distance theory or the generally assumed increased social distance in internet interactions.
    Keywords: Social experiment ; Field experiment ; Internet Methodology ; Randomized assignment
    Date: 2014
  2. By: David Kelsey (Department of Economics, University of Exeter); Sara le Roux (Department of Economics, Oxford Brookes University)
    Abstract: We report an experimental test of the influence of ambiguity on behaviour in a coordination game. We study the behaviour of subjects in the presence of ambiguity and attempt to determine whether they prefer to choose an ambiguity safe option. We fi?nd that this strategy, which is not played in either Nash equilibrium or iterated dominance equilibrium, is indeed chosen quite frequently. This provides evidence that ambiguity aversion infl?uences behaviour in games. While the behaviour of the Row Player is consistent with randomising between her strategies, the Column Player shows a marked preference for avoiding ambiguity and choosing his ambiguity-safe strategy.
    Keywords: Ambiguity; Choquet expected utility; coordination game; Ellsberg urn, experimental economics.
    JEL: C72 C91 D03 D81
    Date: 2014
  3. By: Lohse, Johannes; Goeschl, Timo; Diederich , Johannes
    Abstract: Recent experimental research has examined whether contributions to public goods can be traced back to intuitive or deliberative decision-making, using response times in public good games in order to identify the specific decision process at work. In light of conflicting results, this paper reports on an analysis of response time data from an online experiment in which over 3400 subjects from the general population decided whether to contribute to a real world public good. The between-subjects evidence confirms a strong positive link between contributing and deliberation and between free-riding and intuition. The average response time of contributors is 40 percent higher than that of free-riders. A within-subject analysis reveals that for a given individual, contributing significantly increases and free-riding significantly decreases the amount of deliberation required.
    Keywords: Public Goods; Cooperation; Dual Process Theories; Response Times; Climate Change; Online Experiment
    Date: 2014–06–16
  4. By: Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II); Adam Zylbersztejn (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: We experimentally study an asymmetric coordination game with two Nash equilibria: one is Pareto-efficient, the other is Pareto-inefficient and involves a weakly dominated strategy. We assess whether information about the interaction partner helps eliminate the imperfect equilibrium. Our treatments involve three information-enhancing mechanisms: repetition and two kinds of individual signals: messages from partner or observation of his past choices. Repetition-based learning increases the frequencies of the most efficient outcome and the most costly strategic mismatch. Moreover, it is superseded by individual signals. Like previous empirical studies, we find that signals provide a screening of partners' intentions that reduces the frequency of coordination failures. Unlike these studies, we find that the transmission of information between partners, either via messages or observation, does not suffice to significantly increase the overall efficiency of outcomes. This happens mostly because information does not restrain the choice of the dominated action by senders.
    Keywords: coordination game; communication; cheap-talk; observation
    Date: 2013–07
  5. By: Joshua B. Miller; Adam Sanjurjo
    Abstract: The hot hand fallacy has long been considered a massive and widespread cognitive illusion with important economic consequences. While the canonical domain of the fallacy is basketball, which continues to provide its strongest and most readily generalizable supporting evidence, the fallacy has been considered as a candidate explanation for various economic and financial anomalies. We demonstrate, in its canonical domain, that belief in the hot hand cannot be considered a fallacy. Our identification approach is to design a controlled shooting field experiment and develop statistical measures that together have superior identifying power over previous studies. We find substantial evidence of the hot hand, both in our study and in all extant controlled shooting studies, including the seminal study. In light of this discovery, we reexamine the evidence for the hot hand fallacy in other domains and reevaluate whether the hot hand fallacy is an economically meaningful cognitive illusion. JEL Classification Numbers: C12; C14; C91; C93; D03. Keywords: Hot Hand Fallacy; Hot Hand Effect.
    Date: 2014
  6. By: Mantilla, Cesar
    Abstract: Previous studies analyzing the impact of payoffs' cardinality in cooperation dilemmas have concluded that the additional benefits of defecting against a cooperator (the greed dimension) are more salient than the additional costs of cooperating against a defector (the fear dimension). We conduct an experiment to show that when the costs of cooperation exceed its gains, this pattern is reversed. The larger impact of fear over greed on the likelihood to defect is robust to random rematching and to repeated matching, and is mostly driven by a relative rather than an absolute perception of the incentives to cooperate across different dilemmas.
    JEL: C91 D03
    Date: 2014–04
  7. By: Martin Dufwenberg; Gunnar Köhlin; Peter Martinsson; Haileselassie Medhin
    Abstract: Land conflicts in developing countries are costly. An important policy goal is to create respect for borders. This often involves mandatory, expensive interventions. We propose a new policy design, which in theory promotes neighborly relations at low cost. A salient feature is the option to by-pass regulation through consensus. The key idea combines the insight that social preferences transform social dilemmas into coordination problems with the logic of forward induction. As a first, low-cost pass at empirical evaluation, we conduct an experiment among farmers in the Ethiopian highlands, a region exhibiting features typical of countries where borders are often disputed. Our results suggest that a low-cost land delimitation based on neighborly recognition of borders could deliver a desired low-conflict situation if accompanied by an optional higher cost demarcation process. Keywords: Conflict, land-conflict game, social preferences, forward induction, Ethiopia, experiment, land reform JEL codes: C78; C93; D63; Q15
    Date: 2014
  8. By: Felipe Kast (Centro de Estudios Horizontal); Dina Pomeranz (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: Poverty is often characterized not only by low and unstable income, but also by heavy debt burdens. We find that reducing barriers to saving through access to free savings accounts decreases participants' short-term debt by about 20%. In addition, participants who experience an economic shock have less need to reduce consumption, and subjective well-being improves significantly. Precautionary savings and credit therefore act as substitutes in providing self-insurance, and participants prefer borrowing less when a free formal savings account is available. Take-up patterns suggest that requests by others for participants to share their resources may be a key obstacle to saving.
    JEL: D14 D91 G22 O16
    Date: 2013–07
  9. By: Delavallade, Clara
    Abstract: This paper examines an innovative approach to access to and demand for quality health care from the poor. Using data from a field experiment in India, I examine the impact of high-quality care experiences in the form of a free medical consultation with a qualified nongovernmental organization doctor, randomly offered by a health insurance provider to a subset of its enrollees.
    Keywords: health care, Poverty, Insurance, health insurance, trust, insurance retention, micro health insurance, insurance demand,
    Date: 2014
  10. By: Wagstaff, Adam; Nguyen, Ha Thi Hong; Dao, Huyen; Balesd, Sarah
    Abstract: Subsidized voluntary enrollment in government-run health insurance schemes is often proposed as a way of increasing coverage among informal sector workers and their families. This paper reports the results of a cluster randomized control trial in which 3,000 households in 20 communes in Vietnam were randomly assigned at baseline to a control group or one of three treatments: an information leaflet about Vietnam’s government-run scheme and the benefits of health insurance; a voucher entitling eligible household members to 25 percent off their annual premium; and both. The four groups were balanced at baseline. In the control group, 6.3 percent (82/1296) of individuals were enrolled in the endline, compared with 6.3 percent (79/1257), 7.2 percent (96/1327), and 7.0 percent (87/1245) in the information, subsidy, and combined intervention groups; the adjusted odds ratios were 0.94, 1.12, and 1.15, respectively. Only among those reporting poor health were any significant intervention effects found, and only for the combined intervention: an enrollment rate of 16.3 percent (33/202) compared with 8.3 percent (18/218) in the control group, and an adjusted odds ratio of 2.50. The results suggest limited opportunities to raise voluntary health insurance enrollment through information campaigns and subsidies, and that these interventions exacerbate adverse selection.
    Keywords: Health Monitoring&Evaluation,Health Economics&Finance,Health Systems Development&Reform,Health Law,Housing&Human Habitats
    Date: 2014–06–01
  11. By: De Cao, Elisabetta; Lutz, Clemens (Groningen University)
    Abstract: A list experiment is designed to measure the attitudes among women toward Female Genital Mutilation (FGM) by using new data collected in Ethiopia. The results of multivariate regression methods recently developed for the list experiments show that educated women are less in favor of FGM compared to the uneducated ones (6% versus 47%). Using the results of a direct question about FGM support, we show that the social desirability bias is the greatest among uneducated women. In particular, uneducated women that are targeted by a NGO intervention have a stronger incentive to reveal a biased answer.
    Date: 2014
  12. By: Marianna Baggio; Luigi Mittone
    Abstract: The development and use of long-lived public goods involves more than one demographic generation, leaving the classic literature on voluntary provisions partially unfit to explain complex phenomena such as welfare systems, climate policies and major infrastructure projects. This paper proposes a model that explains how equilibrium is reached in a context where heterogeneity is linked to seniority and strategic interaction is finitely repeated. Within this model the case of financial aid schemes for economic development is explained using a redistribution rule that benefits the younger players, as a compensation for their inexperience. Experimental evidence shows that subjects who belong to low or middling marginal per capita return types are negatively affected by heterogeneity, whereas groups benefit from the presence of experienced subjects.
    Date: 2014
  13. By: Günther Fink; B. Kelsey Jack; Felix Masiye
    Abstract: Small-scale farming remains the primary source of income for a majority of the population in developing countries. While most farmers primarily work on their own fields, off-farm labor is common among small-scale farmers. A growing literature suggests that off-farm labor is not the result of optimal labor allocation, but is instead driven by households’ inability to cover short-term consumption needs with savings or credit. We conduct a field experiment in rural Zambia to investigate the relationship between credit availability and rural labor supply. We find that providing households with access to credit during the growing season substantially alters the allocation of household labor, with households in villages randomly selected for a loan program selling on average 25 percent less off-farm labor. We also find that increased credit availability is associated with higher consumption and increases in local farming wages. Our results suggest that a substantial fraction of rural labor supply is driven by short-term constraints, and that access to credit markets may improve the efficiency of labor allocation overall.
    JEL: J22 O16 Q12
    Date: 2014–06
  14. By: Sanjeev Goyal (Faculty of Economics and Christ's College, University of Cambridge); Stephanie Rosenkranz (Department of Economics, Utrecht University); Utz Weitzel (Department of Economics, Radboud University Nijmegen); Vincent Buskens (Department of Sociology, Utrecht University)
    Abstract: The explosion in online social networks motivates an enquiry into their structure and their welfare effects. A central feature of these networks is information sharing: online social networks lower the cost of getting information from others. These lower costs affect the attractiveness of individual search vis-a-vis a reliance on social networks. The paper reports the findings of an experiment on these effects. Our experiment shows that online networks can have large effects. Information acquisition is more dispersed and it is accompanied by denser social networks. Aggregate investment in information acquisition falls, but information available to individuals remains stable, due to increased networking. The overall effect is a significant increase in individual utility and aggregate welfare.
    Keywords: Social networks
    JEL: D83 D85
    Date: 2014–04
  15. By: Alexander Elvitar (Centro de Investigación y Docencia Económicas, (CIDE)); Andrei Gomberg (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM)); César Martinelli (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM)); Thomas R. Palfrey (California Institute of Technology)
    Abstract: We consider a committee with common interests. Committee members do not know which of two alternatives is the best, but each member may acquire privately a costly signal before casting a vote under either majority or unanimity rule. In the lab, as predicted by Bayesian equilibrium, voters are more likely to acquire information under majority rule, and attempt to counter the bias built in favor of one alternative under unanimity rule. As opposed to Bayesian equilibrium predictions, however, some committee members vote for either alternative when uninformed. Moreover, uninformed voting is correlated with a lower disposition to acquire information. We show that an equilibrium model of subjective prior beliefs may account for this correlation, and provides a good fit for the observed patterns of behavior both in terms of rational ignorance and biases.
    Keywords: Condorcet jury theorem, rational ignorance, homemade priors
    JEL: D72 D83
    Date: 2014
  16. By: Luis Aranda (Department of Economics, University Of Venice Cà Foscari); Martin Siyaranamual (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This study investigates the link between cognitive abilities and civic engagement of older Europeans (aged 50+), using waves two and three of the SHARE dataset. An instrumental variable approach is employed in an attempt to disentangle possible endogeneity issues arising between cognition and pro-social behaviors. In so doing, cognitive abilities are instrumented with the number of books in the respondent’s place of residence during childhood. The results advocate for the existence of a causal relationship running from cognition in old age to community engagement. Though contradicting standard theoretical predictions, this empirical finding is in line with mainline experimental results showing how participants with higher cognitive abilities tend to be less risk averse, and thus more willing to opt for a payoff-dominant action in a stag hunt game context more often.
    Keywords: Cognitive ability; civic engagement; instrumental variables; risk aversion; we-rationality.
    JEL: D03 D64 D71
    Date: 2014
  17. By: Hoddinott, John F.; Sandström, Susanna; Upton, Joanna
    Abstract: There is little rigorous evidence on the comparative impacts of cash and food transfers on food security and food-related outcomes. We assess the relative impacts of receiving cash versus food transfers using a randomized design. Drawing on data collected in eastern Niger, we find that households randomized to receive a food basket experienced larger, positive impacts on measures of food consumption and diet quality than those receiving the cash transfer.
    Keywords: food security, social policies, Nutrition, cash transfers, social protection, social safety nets,
    Date: 2014
  18. By: Dilger, Alexander
    Abstract: In traditional game theory, strategies are equivalent with actions and mixed strategies are the only extension. As a new extension, strategies are interpreted as plans. Although most plans are not very interesting (like doing a certain action), some conditional plans are. For example, they enable cooperation in the Prisoners' Dilemma. -- In der traditionellen Spieltheorie sind Strategien äquivalent mit Handlungen und gemischte Strategien die einzige Erweiterung dazu. Als eine neue Erweiterung werden Strategien als Pläne interpretiert. Obgleich die meisten Pläne nicht sehr interessant sind (wie eine bestimmte Handlung zu tun), sind manche bedingten Pläne es doch. So können sie beispielsweise Kooperation im Gefangenendilemma ermöglichen.
    JEL: C72 C70 D83
    Date: 2014

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