nep-exp New Economics Papers
on Experimental Economics
Issue of 2014‒10‒22
fourteen papers chosen by
Daniel Houser
George Mason University

  1. The More you Know: Information Effects in Job Application Rates by Gender in a Large Field Experiment By Laura Gee
  2. Internet piracy and book sales: a field experiment By Wojciech Hardy; Michał Krawczyk; Joanna Tyrowicz
  3. A Shared Sense of Responsibility: Money versus effort contributions in the voluntary provision of public goods By Jared C. Carbone; Robert S. Gazzale
  4. Housework share between partners: Experimental evidence on gender identity By Katrin Auspurg; Maria Iacovou; Cheti Nicoletti
  5. Incentives and Children's Dietary Choices: A Field Experiment in Primary Schools By Michele Below; Jonathan James; Patrick Nolen
  6. Repeated Interactions vs. Social Ties: Quantifying the Economic Value of Trust, Forgiveness, and Reputation Using a Field Experiment By Ravi Bapna; Liangfei Qiu; Sarah Rice
  7. Corruption in Committees: An Experimental Study of Information Aggregation through Voting By Rebecca Morton; Jean-Robert Tyran
  8. The Miracle of Microfinance Revisited: Evidence from Propensity Score Matching By Inna Cintina; Inessa Love
  9. Social norms, morals and self-interest as determinants of pro-environment behaviour By Mikolaj Czajkowski; Nick Hanley; Karine Nyborg
  10. Time Discounting and Credit Market Access in a Large Scale Cash Transfer Program By Sudhanshu Handa; Bruno Martorano; Carolyn Halpern; Audrey Pettifor; Harsha Thirumurthy
  11. Are Information Disclosure Mandates Effective? Evidence from the Credit Card Market By Alan Elizondo; Enrique Seira
  12. Handle with Care: How Online Social Network Providers’ Privacy Policies Impact Users’ Information Sharing Behavior By Gerlach, Jin; Widjaja, Thomas; Buxmann, Peter
  13. A Model of Modeling By Itzhak Gilboa; Andrew Postlewaite; Larry Samuelson; David Schmeidler
  14. Handling treatment changes in randomized trials By Ian White

  1. By: Laura Gee
    Abstract: This paper presents the results from a field experiment which varies the amount of information seen by two million job seekers when viewing 100,000 job postings on a large online job posting website. The information seen is the true number of people who previously started an application. This intervention increases the likelihood a person will start/finish an application by 2-5%, representing a potential increase of thousands of applications per day. Beyond increasing applications, the treatment also changes the makeup of the applicant pool by increasing the number of women who apply.Firms in industries like high tech and finance that are highly represented on this job posting website, may be particularly interested in this low cost, light touch intervention to increase the number of female applicants.
  2. By: Wojciech Hardy (Faculty of Economic Sciences, University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw)
    Abstract: We report the results of an experimental study analyzing the effects of Internet piracy on book sales. We conducted a year-long controlled large-scale field experiment with pre-treatment pair matching. Half of the book titles received experimental treatment, in which a specialized agency would immediately remove any unauthorized copy appearing on the Internet. For the other half we merely registered such occurrences, but no countermeasures were taken. For all the titles we obtained print and e-book sales statistics from the publishers. We find that removal of unauthorized copies was an effective method of curbing piracy, but this had no bearing on legal sales.
    Keywords: digital piracy, e-books, field experiment
    JEL: C93 D12 K42 L82 O34
    Date: 2014
  3. By: Jared C. Carbone (Division of Economics and Business, Colorado School of Mines); Robert S. Gazzale (University of Toronto)
    Abstract: A frequently cited argument against the use of market-based instruments to provide public goods is that they diminish our sense of responsibility to be good citizens. In this paper, we report on the results of a laboratory experiment designed to explore the idea that this distrust stems from the ability of some members of society to contribute to the public good with money instead of time or effort even when the level of total contributions is held constant. In our experiments, subjects complete lab tasks as a contribution to a public good--carbon emission reductions. We look at how the number of lab tasks completed by subjects changes when their peers take advantage of an offer to buy out, i.e., contribute money in lieu of effort. We find that on average subjects reduce the number of completed tasks when their peers buy out. However, the aggregate result masks significant heterogeneity across individual responses. Those who choose not to buy out despite its expected profitability have no response to the treatment while those for whom it would not be profitable to buy out register large reductions in effort contributions. The magnitude of these responses is increasing in the share of the group that accepts the buyout offer, suggesting that it is the act of peers buying out rather than the simple introduction of monetary incentives that is the source of the effect.
    Keywords: experimental economics, public goods, effort contributions, environment, climate change
    JEL: C90 C91 H41 Q54
    Date: 2014–09
  4. By: Katrin Auspurg; Maria Iacovou; Cheti Nicoletti
    Abstract: Using an experimental design, we investigate the reasons behind the gendered division of housework within couples. In particular, we assess whether the fact that women do more housework may beexplained by differences in preferences deriving from differences in gender identity between men and women. We find little evidence of any systematic gender differences in the preference for housework, suggesting that the reasons for the gendered division of housework lie elsewhere.
    Keywords: Gender, housework, unpaid work, division of labor, experiment
    JEL: J16 J22 C35
    Date: 2014–10
  5. By: Michele Below; Jonathan James; Patrick Nolen
    Abstract: We conduct a field experiment in 31 primary schools in England to test the effectiveness of different temporary incentive schemes, a standard individual based incentive scheme and a competitive scheme, on increasing the choice and consumption of healthy items at lunchtime. The individual scheme has a weak positive effect that masks significantly differential effects by age whereas all students respond positively to the competitive scheme.For our sample of interest, the competivie scheme increases choice of healthy items by 33% and consumption of healthy items by 48%, twice and three times as much as ain the individual incentive scheme, respectively. The positive effects generally carry over to the week immediately following the treatment but we find little evidence of any effects six months later. Our results show that incentives can work, at least temporarily, to increase healthy eating but that there are large differences in effectiveness between schemes. Furthermore it is important to analyse things at the individual level as average effects appear to be masking significant heterogeneous effects that are predicted by the health literature.
    Date: 2014–09–05
  6. By: Ravi Bapna (Carlson School of Business, University of Minnesota); Liangfei Qiu (Warrington College of Business Administration, University of Florida); Sarah Rice (Mays School of Business, Texas A&M University)
    Abstract: The growing importance of online social networks makes it interesting to ask whether extant social capital can substitute for trust built through repeated interactions. It also provides fertile ground for researchers seeking to gain a deeper understanding of fundamental constructs of human behavior, such as trust, forgiveness, and their linkage to social ties. In both contexts, a challenge in the literature on repeated interactions and social ties is the econometric task of accounting for endogenous social ties. The reality, and possible confound, is that repeated interactions may create a context in which social ties can emerge as the outcome of a sustained social relationship. To address the challenge of endogenous social ties, we design a field experiment that uses data from the Facebook API to measure social ties that connect our subjects, and find that the level of trust and forgiveness, and the effect of forgiveness on deterring future defections, crucially depend on the presence of social ties.
    Keywords: Trust; Forgiveness; Social Ties; Repeated Games
    JEL: C93 C73 D85
    Date: 2014–09
  7. By: Rebecca Morton (Department of Politics, New York University); Jean-Robert Tyran (Department of Economics, Copenhagen University)
    Abstract: We investigate experimentally the effects of corrupt experts on information aggregation in committees. We find that non-experts are significantly less likely to delegate through abstention when there is a probability that experts are corrupt. Such decreased abstention, when the probability of corrupt experts is low, actually increases information efficiency in committee decision-making. However, if the probability of corrupt experts is large, the effect is not sufficient to offset the mechanical effect of decreased information efficiency due to corrupt experts. Our results demonstrate that the norm of “letting the expert decide” in committee voting is influenced by the probability of corrupt experts, and that influence can have, to a limited extent, a positive effect on information efficiency.
    Keywords: Information aggregation, Voting, Asymmetric information, Swing voter's curse
    JEL: C92 D71 D72 D81 D82
    Date: 2014–09–07
  8. By: Inna Cintina (University of Hawai‘i at Manoa); Inessa Love (University of Hawai‘i at Manoa)
    Abstract: We provide new evidence on the effectiveness of microfinance intervention for poverty alleviation. We apply the Propensity Score Matching (PSM) method to data collected in a recent randomized control trial (RCT) in India by Banerjee et al. (2014). The PSM method allows us to answer an additional set of questions not answered by the original study. First, we explore the characteristics of MFI borrowers relative to two comparison groups: those without any loans and those with other types of loans, predominantly from family and friends and money lenders. Second, we compare the impact on expenditures of MFI borrowers relative to these two comparison groups. We find that microfinance borrowers have higher expenditures in a number of categories, notably durables, house repairs, health, festivals and temptation goods. The differences are stronger relative to those without any loans. Our results suggest that microfinance can make a larger difference for households previously excluded from other credit sources. However, some of the increased expenditures are unlikely to lead to long-term benefits and there is no significant difference in total expenditures. We also present suggestive evidence of negative spillovers, i.e. non-participants reducing some categories of expenditures, while MFI participants "pick up the tab."
    Date: 2014–09
  9. By: Mikolaj Czajkowski (University of Warsaw, Faculty of Economic Sciences, Poland); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews); Karine Nyborg (University of Oslo, Department of Economics, Norway)
    Abstract: This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self- and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. Using a latent class model, we distinguish three types of individual who are described as duty-orientated recyclers, budget recyclers and homo oeconomicus. These groups vary in their preferences for how frequently waste is collected, and the number of categories into which household waste must be recycled. Our results have implications for the design of future policies aimed at improving participation in recycling schemes.
    JEL: D22 F18 Q41 Q52
    Date: 2014–08
  10. By: Sudhanshu Handa; Bruno Martorano; Carolyn Halpern; Audrey Pettifor; Harsha Thirumurthy
    Abstract: Time preference, the weight that individuals give to future over current consumption, is a characteristic that is thought to influence decision-making in almost every sphere of life, including personal finances, diet, exercise, sexual behavior and the environment. In this article we provide evidence on whether a national poverty alleviation program in Kenya can affect inter-temporal decisions. We administered a preferences module as part of a large-scale impact evaluation of the Kenyan Government’s Cash Transfer for Orphans and Vulnerable Children. Four years into the program we find that individuals randomized to the treatment group are only marginally more likely to wait for future money. However among the poorest households for whom the value of transfer is still relatively large we find significant program effects on the propensity to wait. We also find strong program effects among those who have access to credit markets and are thus less liquidity constrained to begin with, though the program itself does not improve access to credit. The results demonstrate a unique and potentially powerful way in which large-scale unconditional cash transfers can contribute to economic development in Africa. And the external validity of the results is likely high given the similarity of the Kenyan program to other national programs in the region.
    Keywords: Time preference, credit constraints, cash transfers, Kenya
    Date: 2014
  11. By: Alan Elizondo; Enrique Seira
    Abstract: Consumer protection in financial markets in the form of information disclosure is high on governments agendas, despite the fact that the empirical evidence on its effectiveness is scarce. To measure the impact of Truth-in-Lending-Act-type disclosures on default and indebtedness, as well as of debiasing warning messages and social comparison information, we implement a randomized control trial in the credit card market for a large population of indebted cardholders. We find that providing salient interest rate disclosures has no effect, while social comparisons and debiasing messages have only a odest effect. Other types of disclosures discussed in the paper could have larger effects.
    Keywords: Credit cards, information disclosure, truth in lending, Mexico.
    JEL: D12 D14 D83 G02 G21 G28
    Date: 2014–08
  12. By: Gerlach, Jin; Widjaja, Thomas; Buxmann, Peter
    Abstract: Privacy policies determine online social network providers’ options to monetize user data. However, these statements also intrude on users’ privacy and, thus, might reduce their willingness to disclose personal information, which in turn limits the data available for monetization. Given these conflicting interests, we conducted an experimental survey to investigate the relationship between privacy policies and users’ reactions. We show that users’ privacy risk perceptions mediate the effect that changes in policies’ monetization options have on users’ willingness to disclose information. Our findings emphasize privacy policies as a delicate managerial concept for companies relying on data monetization.
    Date: 2014–09–22
  13. By: Itzhak Gilboa (HEC, Paris, and Tel-Aviv University); Andrew Postlewaite (Department of Economics, University of Pennsylvania); Larry Samuelson (Department of Economics,Yale University); David Schmeidler (The InterDisciplinary Center in Herzliya, and TAU)
    Abstract: We propose a formal model of scientific modeling, geared to applications of decision theory and game theory. The model highlights the freedom that modelers have in conceptualizing social phenomena using general paradigms in these fields. It may shed some light on the distinctions between (i) refutation of a theory and a paradigm, (ii) notions of rationality, (iii) modes of application of decision models, and (iv) roles of economics as an academic discipline. Moreover, the model suggests that all four distinctions have some common features that are captured by the model.
    Keywords: Methodology, Models, Economic Modeling
    JEL: B40 B41
    Date: 2014–09–13
  14. By: Ian White (MRC Biostatistics Unit, Cambridge)
    Abstract: Treatment changes in randomized trials are common: for example, in a trial evaluating psychotherapy, individuals allocated to psychotherapy may attend only partially or not at all; or in a trial evaluating a drug treatment, individuals allocated to no drug treatment may nevertheless receive the treatment. The issue is especially important in drug trials for late stage cancer where control group members typically receive the active treatment on disease progression. This talk focuses on time-to-event outcomes. In some cases, it is important to estimate the effect of the treatment if some or all of these treatment changes had not occurred: for example, for a health economic model exploring whether a drug should be available on the NHS, we would need to compare survival of a treated group with survival of a completely untreated group. Twelve years ago, I published strbee, which implements in Stata the rank-preserving structural failure time model (RPSFTM) of Robins and Tsiatis (1991). This is a model that infers a comparison of the randomized groups if they had had different treatment experiences; estimation is based only on comparisons of randomized groups. Over the intervening years, the RPSFTM has been increasingly (though not widely) used, and various problems have been identified. First, it assumes treatment benefit is the same whenever treatment is received, and a sensitivity analysis to address possible departures from this assumption is needed. Second, the method's power is low and declines as follow-up extends: later times that contribute little information are given the same weight as earlier times. Third, a wider range of estimation procedures is required. I will review the RPSFTM method and its alternatives in a Stata context, and I will describe an update of strbee which addresses the above issues.
    Date: 2014–09–28

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