nep-exp New Economics Papers
on Experimental Economics
Issue of 2015‒01‒03
33 papers chosen by
Daniel Houser
George Mason University

  1. Using artefactual field and lab experiments to investigate how fee-for-service and capitation affect medical service provision By Brosig-Koch , Jeannette; Hennig-Schmidt , Heike; Kairies-Schwarz, Nadja; Wiesen, Daniel
  2. The long-term impact of matching and rebate subsidies when public goods are impure: Field experimental evidence from the carbon offsetting market By Kesternich, Martin; Löschel, Andreas; Römer, Daniel
  3. Tradeoffs between Self-interest and Other-Regarding Preferences Cause Willpower Depletion By Hanna Fromell; Daniele Nosenzo; Trudy Owens
  4. Endogenous Preferences and Conformity: Evidence from a Laboratory Experiment By Sergio Beraldo; Valerio Filoso; Marco Stimolo
  5. Effects of Retirement and Lifetime Earnings Profile on Health Investment By Hernán Bejarano; Hillard Kaplan; Stephen Rassenti
  6. The Effect of Perceived Regional Accents on Individual Economic Behavior: A Lab Experiment on Linguistic Performance, Cognitive Ratings and Economic Decisions By Heblich, Stephan; Lameli, Alfred; Riener, Gerhard
  7. Money talks: Paying physicians for performance By Keser, Claudia; Peterle, Emmanuel; Schnitzler, Cornelius
  8. Auction Mechanisms and Bidder Collusion: Bribes, Signals and Selection By Aniol Llorente-Saguer; Ro’i Zultan
  9. Network Monitoring and Punishment in Public Goods Experiments By Luke Boosey; R. Mark Isaac
  10. Privacy concerns, voluntary disclosure of information, and unraveling: An experiment By Benndorf, Volker; Kübler, Dorothea; Normann, Hans-Theo
  11. Tools, Fertilizer or Cash? Exchange Asymmetries in Productive Assets By Holden, Stein; Bezu, Sosina
  12. Fundamental Value Trajectories and Trader Characteristics in an Asset Market Experiment By Breaban, A.; Noussair, C.N.
  13. Cooperation among Strangers in the Presence of Defectors: An Experimental Study By Luciana Cecilia Moscoso Boedo; Lucia Quesada; Marcela Tarazona
  14. Estimating the impact of microcredit on those who take it up: Evidence from a randomized experiment in Morocco By Crépon, Bruno; Devoto, Florencia; Duflo, Esther; Parienté, William
  15. Knowing that you matter, matters! The interplay of meaning, monetary incentives, and worker recognition By Kosfeld, Michael; Neckermann, Susanne; Yang, Xiaolan
  16. The Future in Mind: Aspirations and Forward-Looking Behaviour in Rural Ethiopia By Bernard, Tanguy; Dercon, Stefan; Orkin, Kate; Taffesse, Alemayehu
  17. Vitamin A Deficiency and Training to Farmers: Evidence from a Field Experiment in Mozambique By Rute Caeiro; Pedro C. Vicente
  18. Seasonal Credit Constraints and Agricultural Labor Supply: Evidence from Zambia By Fink, Günther; Jack, Kelsey; Masiye, Felix
  19. (Measured) Profit is Not Welfare: Evidence from an Experiment on Bundling Microcredit and Insurance By Banerjee, Abhijit; Duflo, Esther; Hornbeck, Richard
  20. Unintended Effects of Anonymous Resumes By Behaghel, Luc; Crépon, Bruno; Le Barbanchon, Thomas
  21. Judicial Error and Cooperation By Thomas Markussen; Louis Putterman; Jean-Robert Tyran
  22. Economists: cheaters with altruistic instincts By Muñoz-Izquierdo, Nora; Gil-Gómez de Liaño, Beatriz; Rin-Sánchez, Francisco Daniel; Pascual-Ezama, David
  23. Self-Regulatory Organizations Under the Shadow Of Governmental Oversight: An Experimental Investigation By Silvester Van Koten; Andreas Ortmann
  24. What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka By Michael Callen; Suresh De Mel; Craig McIntosh; Christopher Woodruff
  25. Social Comparison and Risk Taking Behavior By Astrid Gamba; Elena Manzoni; Luca Stanca
  26. How does contract design affect the uptake of microcredit among the ultra-poor? : experimental evidence from the river islands of Northern Bangladesh By Takahashi, Kazushi; Shonchoy, Abu S.; Ito, Seiro; Kurosaki, Takashi
  27. What Kind of Teachers Are Schools Looking For? Evidence from a Randomized Field Experiment By Hinrichs, Peter
  28. Punishment and Reward Institutions with Harmed Minorities By Sagi Dekel; Sven Fischer; Ro’i Zultan
  29. 2D:4D Digit Ratio Predicts Delay of Gratification in Preschoolers By Da Silva, Sergio; Moreira, Bruno; Da Costa Jr, Newton
  30. Profit with Purpose? A Theory of Social Enterprise with Experimental Evidence By Timothy Besley; Maitreesh Ghatak
  31. Identifying Social Norms Using Coordination Games: Spectators vs. Stakeholders By Hande Erkut; Daniele Nosenzo; Martin Sefton
  32. Nudges and Learning: Evidence from Informational Interventions for Low-Income Taxpayers By Dayanand S. Manoli; Nicholas Turner
  33. Hope and commitment. Lessons from a randomize control trial in a shanty town. By Marianne Bernatzky; Alejandro Cid

  1. By: Brosig-Koch , Jeannette (Faculty of Economics and Business Administration); Hennig-Schmidt , Heike (Department of Health Management and Health Economics); Kairies-Schwarz, Nadja (Faculty of Economics and Business Administration); Wiesen, Daniel (Department of Health Management and Health Economics)
    Abstract: We analyze how physicians, medical students, and non-medical students respond to nancial incentives from fee-for-service and capitation. We employ a series of artefactual eld and conventional lab experiments framed in a physician decision-making context. Physicians, participating in the eld, and medical and non-medical students, participating in lab experiments, respond to the incentives in a consistent way: Signi - cantly more medical services are provided under fee-for-service compared to capitation. Our ndings are robust regarding subjects' gender, age, and personality traits.
    Keywords: artefactual field Experiment; laboratory experiment; fee-for-service; capitation; physician behavior
    JEL: C91 I11
    Date: 2014–11–26
  2. By: Kesternich, Martin; Löschel, Andreas; Römer, Daniel
    Abstract: In this paper, we investigate both short- and long-term impacts of financial stimuli on public goods provision when contributions are tied to individual harm-related behavior. We conduct a large-scaled field experiment to examine voluntary contributions to a carbon offsetting program during the online purchase of a bus ticket. We systematically vary the individual payoff structure by introducing different matching grants (1/3:1, 1:1, 3:1) and price rebates (r-25%, r-50%, r-75%). Our results show that price rebates are more effective than matching schemes in raising participation rates while matching grants induce higher contributions to the offsetting program. We suspect differences in the personal responsibility for the compensated emissions to drive this result. Analyzing repeated bookings, we find decreasing treatment effects for returning customers except for the case of 1:1 matching grants. The equal matching scheme is also the only intervention that increases net contributions of customers compared to the control group.
    Keywords: voluntary carbon offsets,randomized field experiment,public goods,rebate subsidy,matching subsidy
    JEL: H41 C93 D03 L92
    Date: 2014
  3. By: Hanna Fromell (University of Nottingham, School of Economics); Daniele Nosenzo (University of Nottingham, School of Economics); Trudy Owens (University of Nottingham, School of Economics)
    Abstract: In this paper we show that making choices that involve conflicts between self-interest and otherregarding concerns may deplete cognitive resources and willpower and thus reduce individuals' ability to exert self-control. In a lab experiment we use a series of modified dictator games to manipulate whether subjects are exposed to tradeoffs between their self-interest and the interest of others: in a Conflict treatment the option that maximizes the dictator's payoff always minimizes the recipient's payoff, whereas in the NoConflict treatment dictator’s and recipient’s payoffs are aligned. We then measure how decision-making in the dictator games affects subjects’ performance in a subsequent and unrelated task that requires exertion of willpower. We find that subjects in the Conflict treatment perform significantly worse than those in NoConflict. This effect is particularly marked for dictators who experienced a stronger conflict during the dictator games.
    Keywords: other-regarding preferences; willpower; self-control; depletion; dictator game; Stroop task.
  4. By: Sergio Beraldo (Università di Napoli Federico II and CSEF); Valerio Filoso (Università di Napoli Federico II); Marco Stimolo (Università di Napoli Federico II and Università di Salerno)
    Abstract: We repeatedly elicited individuals? Willingness to Accept (WTA) evaluations for an auctioned bad in an experimental setting in which truthful revelation is the (weakly) dominant strategy. We investigate whether the observation of supposedly irrelevant signals (the market price, the asks at either the bottom or the top of the distribution of asks) affect the elicited values. Our experimental sample was made up of 162 subjects partitioned in 18 independent markets characterized by different informational conditions. Our analysis provide two main findings. First, individuals? WTA evaluations are remarkably driven by a strong although unexpected tendency to conform to the asks either at the bottom or the top of the distribution by a factor of 44-66%. Second, although a clear tendency to adapt one?s own ask to the market price (Shaping effect) emerges when no other information is being provided, the provision of information about the actual behavior of well identified (groups of) individuals more than halves its magnitude, suggesting that this effect may also qualify as a peculiar case of conformity. We conjecture that in the context at hand conformity emerges as an adaptive response to a problem of preferences imprecision. Our results are identified by means of a methodology not yet employed in the field, which helps in distinguishing between the dynamic and the asymptotic features of preference formation in the presence of either adaptive or rational expectations. The overall evidence suggests a decisive role for market interactions in the definition of preferences.
    Keywords: Endogenous preferences, Shaping effect, Conformity, Experimental Vickrey auction
    JEL: C91 C92 D44
    Date: 2014–12–01
  5. By: Hernán Bejarano (Economic Science Institute, Chapman University, Orange, CA); Hillard Kaplan (Economic Science Institute, Chapman University, Orange, CA and University of New Mexico, Albuquerque, NM); Stephen Rassenti (Economic Science Institute, Chapman University, Orange, CA)
    Abstract: We report the results of experiments where in each period of her lifetime the subject must choose how to allocate real earned income between health investment and life enjoyment in each period of a nine-period life in order to maximize aggregate life enjoyment. The key dynamic optimization challenge of the experiment to subjects derives from the fact that investments in health affect future income, but detract from current consumption. Our experimental results show that subjects were successful at reproducing the qualitative predictions of the theoretical model, investing more in health in the absence of retirement and with increasing income profiles. However, we did observe a systematic bias in health investments, being less than optimal in early periods and greater than optimal in late periods of life. We also found a significant effect due to social groupings. These results highlight the potential of lab experiments as a method to study health decisions and understand their determinants.
    Keywords: experimental economics, behavioral economics, health economics, dynamic programming
    Date: 2014
  6. By: Heblich, Stephan (University of Bristol); Lameli, Alfred (University of Marburg); Riener, Gerhard (Düsseldorf Institute for Competition Economics (DICE))
    Abstract: Does it matter if you speak with a regional accent? Speaking immediately reveals something of one's own social and cultural identity, be it consciously or unconsciously. Perceiving accents involves not only reconstructing such imprints but also augmenting them with particular attitudes and stereotypes. Even though we know much about attitudes and stereotypes that are transmitted by, e.g. skin color, names or physical attractiveness, we do not yet have satisfactory answers how accent perception affects human behavior. How do people act in economically relevant contexts when they are confronted with regional accents? This paper reports a laboratory experiment where we address this question. Participants in our experiment conduct cognitive tests where they can choose to either cooperate or compete with a randomly matched male opponent identified only via his rendering of a standardized text in either a regional accent or standard accent. We find a strong connection between the linguistic performance and the cognitive rating of the opponent. When matched with an opponent who speaks the accent of the participant's home region – the in-group opponent –, individuals tend to cooperate significantly more often. By contrast, they are more likely to compete when matched with an accent speaker from outside their home region, the out-group opponent. Our findings demonstrate, firstly, that the perception of an out-group accent leads not only to social discrimination but also influences economic decisions. Secondly, they suggest that this economic behavior is not necessarily attributable to the perception of a regional accent per se, but rather to the social rating of linguistic distance and the in-group/out-group perception it evokes.
    Keywords: discrimination, accent, in-group/out-group, lab experiment
    JEL: C90 J70 Z10
    Date: 2014–11
  7. By: Keser, Claudia; Peterle, Emmanuel; Schnitzler, Cornelius
    Abstract: Pay-for-performance attempts to tie physician payment to quality of care. In a controlled laboratory experiment, we investigate the effect of pay-for-performance on physician provision behavior and patient benefit. For that purpose, we compare a traditional fee-for-service payment system to a hybrid system that blends fee-for-service and pay-for-performance incentives. Physicians are found to respond to pay-for-performance incentives. Approximately 89 percent of the participants qualify for a pay-for-performance bonus payment in the experiment. It follows that a patient treated under the hybrid payment system is significantly more likely to receive optimal treatment than a similar fee-for-service patient. Pay-for-performance generally tends to alleviate over- and under-provision of medical treatment relative to fee-for-service. Irrespective of the payment system, we observe unethical treatment behavior, i.e., the provision of medical services with zero benefit to the patient.
    Keywords: experimental economics,physician remuneration,pay-for-performance (P4P)
    Date: 2014
  8. By: Aniol Llorente-Saguer (Queen Mary University of London); Ro’i Zultan (Ben-Gurion University)
    Abstract: The theoretical literature on collusion in auctions suggests that the first-price mechanism can deter the formation of bidding rings. In equilibrium, collusive negotiations are either successful or are avoided altogether, hence such analysis neglects the effects of failed collusion attempts. In such contingencies, information revealed in the negotiation process is likely to affect the bidding behavior in first-price (but not second-price) auctions. We test experimentally a setup in which collusion is possible, but negotiations often break down and information is revealed in an asymmetric way. The existing theoretical analysis of our setup predicts that the first-price mechanism deters collusion. In contrast, we find the same level of collusion in first-price and second-price auctions. Furthermore, failed collusion attempts distort the bidding behavior in the ensuing auction, leading to loss of efficiency and eliminating the revenue dominance typically observed in firstprice auctions.
    Keywords: Auctions, Collusion, Bribes, Experiment
    JEL: C72 C91 D44
    Date: 2014–12
  9. By: Luke Boosey (Department of Economics, Florida State University); R. Mark Isaac (Department of Economics, Florida State University)
    Abstract: We report experimental findings on the impact of network structure on decentralized monitoring and punishment in public goods games. In the environment we study, individuals can only directly monitor and punish their immediate neighbors in an exogenously determined network. We examine contributions and punishment decisions in a Complete network, a Circle network, and an Asymmetric network. Average contributions are lower in the Asymmetric network, although this result is driven entirely by the player who faces only one potential punisher. We also examine whether asymmetry in the network leads some punishers to discriminate between their potential targets. After controlling for targets' contribution decisions, we find limited support for this hypothesis. However, the data indicate that some punishers may be deterred from issuing discriminatory punishment by undermonitored targets who retaliate against previous punishment more often than others. Thus, we identify an additional complication of asymmetry in the network - that it may facilitate more targeted revenge by under-monitored players.
    Keywords: networks, public goods, punishment, revenge
    JEL: C72 C91 C92 H41
    Date: 2014–12
  10. By: Benndorf, Volker; Kübler, Dorothea; Normann, Hans-Theo
    Abstract: We study the voluntary revelation of private information in a labor-market experiment where workers can reveal their productivity at a cost. While rational revelation improves a worker's payoff, it imposes a negative externality on others and may trigger further revelation. Such unraveling can be observed frequently in our data although less often than predicted. Equilibrium play is more likely when subjects are predicted to conceal their productivity than when they should reveal. This tendency of under-revelation, especially of low-productivity workers, is consistent with the level-k model. A loaded frame where the private information concerns the workers' health status leads to less revelation than a neutral frame.
    Keywords: information revelation,level-k reasoning,privacy
    JEL: C72 C90 C91
    Date: 2014
  11. By: Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: We used a field experiment to investigate exchange asymmetries in productive assets among poor rural respondents in Ethiopia. Farmers were randomly allocated two types of productive assets or cash, with a choice to keep the productive asset (cash) or exchange it for cash (productive asset). To introduce productive asset variation, a durable asset (farm tool) and a short-term input (fertilizer) were randomly allocated and combined with a random amount of cash. Loss aversion was proxied with a separate experiment and was used to assess the importance of endowment effect theory to explain exchange asymmetries. A greater exchange asymmetry was found for the more popular tool than for fertilizer. Loss aversion could explain a small but significant part of the exchange asymmetry in tools, but experience did not reduce the exchange asymmetry. Compared to the female respondents, the male respondents exhibited greater exchange asymmetries and more non-linear price responses with declining elasticities as prices increased. Key words: exchange asymmetry, endowment effect, loss aversion, factor markets, productive assets, input demand elasticities, field experiment. JEL codes:
    Keywords: exchange asymmetry; endowment effect; loss aversion; factor markets; productive assets; input demand elasticities; field experiment.
    JEL: D03 D51 O13 Q12
    Date: 2014–12–03
  12. By: Breaban, A.; Noussair, C.N. (Tilburg University, Center For Economic Research)
    Abstract: Abstract: We report results from an asset market experiment, in which we investigate how the time path of the fundamental value trajectory affects the level of adherence to fundamentals. In contrast to previous experiments with long-lived assets, there is a phase in which fundamental values are constant before the onset of a trend. The trend is either increasing or decreasing, depending on the treatment. We compare the level of mispricing between the decreasing and increasing fundamental value trajectories. Before the market begins, risk aversion, loss aversion, and cognitive reflection protocols are administered to traders. We find evidence for closer adherence to fundamental values when the trajectory follows a decreasing, than when it has an increasing, trend. Greater average risk aversion on the part of traders in the market predicts lower market prices. The greater the level of loss aversion of the trader cohort, the lower the quantity traded. The greater the average cognitive reflection test score, the smaller the differences between market prices and fundamental values. The variation between groups in risk aversion, loss aversion, and CRT score, explains an additional 44% and 18% of the cohort-level variation in price level and mispricing, respectively, compared to a model including only treatment, experience level, and subject pool.
    Keywords: Bubble; Experiment; Risk Aversion; Loss Aversion; Cognitive Reflection
    JEL: C9 G12
    Date: 2014
  13. By: Luciana Cecilia Moscoso Boedo (Division of Economics, CIDE); Lucia Quesada; Marcela Tarazona
    Abstract: Does the rotten apple spoils his companions? This is the question we analyze in the context of a repeated population game with behavioral types. Our experimental results show that the inclusion of a non-cooperative player in an anonymous community makes cooperation much more difficult to sustain but that individuals still manage to trust some of the permanent players of society. The rotten apple lowers the quality of the companions, but is not able to completely spoil them.
    Keywords: Population games, anonymous random matching, social norms.
    JEL: C71 C93
    Date: 2013–11
  14. By: Crépon, Bruno; Devoto, Florencia; Duflo, Esther; Parienté, William
    Abstract: This paper reports the results from a randomized evaluation of a microcredit program introduced in rural areas of Morocco starting in 2006 by Al Amana, the country’s largest microfinance institution. Al Amana was the only MFI operating in the study areas during the evaluation period. Thirteen percent of the households in treatment villages took a loan, and none in control villages. Among households identified as more likely to borrow based on ex-ante characteristics, microcredit access led to a significant rise in investment in assets used for self-employment activities (mainly animal husbandry and agriculture), and an increase in profit. But this increase in profit was offset by a reduction in income from casual labor, so overall there was no gain in measured income or consumption. We find suggestive evidence that these results are mainly driven by effects on borrowers, rather than by externalities on households that do not borrow. This implies that among those who chose to borrow, microcredit had large, albeit very heterogeneous, impacts on assets and profits from self-employment activities, but small impact on consumption: we can reject an increase in consumption of more than 10% among borrowers, two years after initial rollout.
    Keywords: Microcredit; Microfinance
    JEL: D21 G21 O16
    Date: 2014–05
  15. By: Kosfeld, Michael; Neckermann, Susanne; Yang, Xiaolan
    Abstract: We manipulate workers' perceived meaning of a job in a field experiment. Half of the workers are informed that their job is important, the other half are told that their job is of no relevance. Results show that workers exert more effort when meaning is high, corroborating previous findings on the relationship between meaning and work effort. We then compare the effect of meaning to the effect of monetary incentives and of worker recognition via symbolic awards. We also look at interaction effects. While meaning outperforms monetary incentives, the latter have a robust positive effect on performance that is independent of meaning. In contrast, meaning and recognition have largely similar effects but interact negatively. Our results are in line with image-reward theory (Bénabou and Tirole 2006) and suggest that meaning and worker recognition operate via the same channel, namely image seeking.
    Keywords: meaning,monetary incentives,worker recognition,field experiment
    JEL: C93 J33 M12 M52
    Date: 2014
  16. By: Bernard, Tanguy; Dercon, Stefan; Orkin, Kate; Taffesse, Alemayehu
    Abstract: Poor people often do not make investments, even when returns are high. One possible explanation is that they have low aspirations and form mental models of their future opportunities which ignore some options for investment. This paper reports on a field experiment to test this hypothesis in rural Ethiopia. Individuals were randomly invited to watch documentaries about people from similar communities who had succeeded in agriculture or business, without help from government or NGOs. A placebo group watched an Ethiopian entertainment programme and a control group were simply surveyed. In addition, the number of people invited was varied by village to assess the importance of peer effects in formation of aspirations. Six months after screening, aspirations had improved among treated individuals and did not change in the placebo or control groups. Treatment effects were larger for those with higher pre-treatment aspirations. We also find treatment effects on savings, use of credit, children's school enrolment and spending on children’s schooling, suggesting that changes in aspirations can translate into changes in a range of forward-looking behaviours. There are also treatment effects on measures from psychology and sociology, including locus of control, which theory predicts should behave in similar ways to aspirations. Most effects are robust to corrections for multiple testing. Peer effects results in further impact on educational spending and induce more work and less leisure. The result that a one-hour documentary shown six months earlier induces actual behavioural change suggests a challenging, promising avenue for further research and poverty-related interventions.
    JEL: D02 I31
    Date: 2014–10
  17. By: Rute Caeiro; Pedro C. Vicente
    Abstract: Vitamin A deficiency is a widespread public health problem in Sub-Saharan Africa. This paper analyzes the impact of a food-based intervention to fight vitamin A deficiency using orange-fleshed sweet potato (OFSP). We conducted a randomized evaluation of OFSP-related training to female farmers in Mozambique, in which the treatment group was taught basic concepts of nutrition, and OFSP-planting and cooking skills. We found encouraging evidence of changes in behavior and attitudes towards OFSP consumption and planting, and considerable increases in nutrition-related knowledge, as well as knowledge on cooking and planting OFSP. JEL codes: O12, O13, O33, I15
    Keywords: Vitamin A, Orange-fleshed Sweet Potato, Mozambique, Randomized Evaluation
    Date: 2013
  18. By: Fink, Günther (Harvard School of Public Health); Jack, Kelsey (Tufts University); Masiye, Felix (University of Zambia)
    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.
    Keywords: agriculture, credit, seasonality, income smoothing
    JEL: J43 O13 O16
    Date: 2014–11
  19. By: Banerjee, Abhijit; Duflo, Esther; Hornbeck, Richard
    Abstract: We investigate the puzzle of microfinance: that loans generate large measured returns for businesses, yet loan take-up is low and the businesses often close. We analyze a randomized trial that bundled microfinance loans with a cheap health insurance policy. Requiring clients to purchase insurance substantially lowered loan renewal. The insurance was useless, due to administrative failures, but reduced loan renewal negatively impacted clients’ businesses. Clients' decision to incur substantial business losses, rather than pay modest insurance premiums, implies the substantial financial gains from microfinance loans are dissipated by unmeasured costs and provide little net value to microfinance clients.
    Keywords: development; health insurance; microcredit; microenterprises; microfinance; revealed preference; welfare
    JEL: O12 O16 O19
    Date: 2014–09
  20. By: Behaghel, Luc; Crépon, Bruno; Le Barbanchon, Thomas
    Abstract: We evaluate an experimental program in which the French public employment service anonymized resumes for firms that were hiring. Firms were free to participate or not; participating firms were then randomly assigned to receive either anonymous resumes or name-bearing ones. We find that participating firms become less likely to interview and hire minority candidates when receiving anonymous resumes. We show how these unexpected results can be explained by the self-selection of firms into the program and by the fact that anonymization prevents the attenuation of negative signals when the candidate belongs to a minority.
    Keywords: anonymous applications; discrimination; randomized experiments
    JEL: J71 J78
    Date: 2014–10
  21. By: Thomas Markussen (Department of Economics, Copenhagen University); Louis Putterman (Department of Economics, Brown University, Providence, USA); Jean-Robert Tyran (Department of Economics, Copenhagen University)
    Abstract: Cooperation can be induced by an authority with the power to mete out sanctions for free riders, but law enforcement is prone to error. This paper experimentally analyzes preferences for and consequences of errors in formal sanctions against free riders in a public goods game. With type I errors, even full contributors to the public good may be punished. With type II errors, free riders may go unpunished. We find that judicial error undermines cooperation and that the effects of type I and II errors are symmetric. To investigate their relative (dis-)like for error, we let subjects choose what type of error to prevent. By use of an incentive-compatible mechanism, we find that subjects prefer type II over type I errors. We find that the strength of this preference is fully in line with a motive to maximize income and does not indicate any additional psychological or fairness bias against type I errors.
    Keywords: Public goods, sanctions, type I errors, type II errors, willingness to pay
    JEL: H41 K4 C92
    Date: 2014–11–24
  22. By: Muñoz-Izquierdo, Nora; Gil-Gómez de Liaño, Beatriz; Rin-Sánchez, Francisco Daniel; Pascual-Ezama, David
    Abstract: Based on an experiment conducted with undergraduate students from three different majors (business economics, psychology and engineering), we study the relationship between honesty and altruism. We asked participants to toss a coin with a black and a white side. Participants won a chocolate if they reported the white outcome, whereas no gift was given if they reported black. It was done privately, so they could decide whether or not to cheat. Reporting the prize-losing side (that is, being honest when losing) could result in 3 effects, depending on the 3 conditions run: (i) no penalty, (ii) paying a penalty, or (iii) paying a penalty with an altruistic end (a donation to a non-profit organization). The amount of penalty was decided by each participant and the payment was also done in private. Although we cannot detect dishonesty on an individual level, we use statistical inference to determine cheating behavior. We find suggestive evidence that economics is significantly the most dishonest major when no penalty is involved. With economists in the lead, the results also indicate that all majors cheat if a penalty is requested. Surprisingly, when altruism plays a role, economists tend to have the most altruistic behavior, followed by psychologists. However, altruism does not reduce engineers' propensity to lie. No significant differences are found regarding gender.
    Keywords: Cheating, altruism, penalty, donation
    JEL: A12 D03 D64
    Date: 2014–12–05
  23. By: Silvester Van Koten; Andreas Ortmann
    Abstract: Self-regulatory organizations (SROs) can be found in education, healthcare, and other not-for-profit sectors as well as in the accounting, financial, and legal professions. DeMarzo et al. (2005) show theoretically that SROs can create monopoly market power for their affiliated agents, but that governmental oversight, even if less efficient than oversight by the SRO, can largely offset the market power. We provide an experimental test of this conjecture. For carefully rationalized parameterizations and implementation details, we find that the predictions of DeMarzo et al. (2005) are borne out.
    Keywords: experimental economics; self-regulatory organizations, governmental oversight;
    JEL: C90 L44 G18 G28
    Date: 2014–11
  24. By: Michael Callen; Suresh De Mel; Craig McIntosh; Christopher Woodruff
    Abstract: When households increase their deposits in formal bank savings accounts, what is the source of the money? We combine high-frequency surveys with an experiment in which a Sri Lankan bank used mobile Point-of-Service (POS) terminals to collect deposits directly from households each week. In this context, the headwaters of formal savings are to be found in sacrificed leisure time: households work more, and work more on the wage market when savings options improve. These results suggest that the labor allocation channel is an important mechanism linking savings opportunities to income.
    JEL: D14 G21 O16
    Date: 2014–12
  25. By: Astrid Gamba (Department of Economics, Management and Statistics, University of Milan-Bicocca); Elena Manzoni (Department of Economics, Management and Statistics, University of Milan-Bicocca); Luca Stanca (Department of Economics, Management and Statistics, University of Milan-Bicocca)
    Abstract: This paper studies the effects of social comparison on risk taking be- havior. In our framework, decision makers evaluate the consequences of their choices as changes with respect to both their own and their peers' conditions. We test experimentally whether different positions in the social ranking determine different risk attitudes. Subjects interact in a simulated workplace environment, where they receive possibly different wages as compensation for effort and then undertake a risky decision that may give them an extra gain. We find that social comparison matters for risk attitudes. In addition, risk aversion decreases with the size of social gains. As a consequence, subjects are less risk averse in social loss than in small social gain, whereas their risk attitudes do not differ between social loss and large social gain.
    Keywords: Social comparison, risk aversion, interdependent preferences, reference point
    Date: 2014–11–25
  26. By: Takahashi, Kazushi; Shonchoy, Abu S.; Ito, Seiro; Kurosaki, Takashi
    Abstract: Despite the professed claims of microcredit alleviating poverty, little is known about what kind of credit contract is suitable for extremely poor households, also called the ultra-poor. To fill this knowledge gap, we initiated a field experiment in the river islands of northern Bangladesh, where a substantial portion of dwellers could be categorized as ultra-poor due to cyclic floods. We randomly offered four types of loans to such dwellers: regular small cash loans with one-year maturity, large cash loans with three-year maturity both with and without a one-year grace period, and in-kind livestock loans with three-year maturity and a one-year grace period. We compared uptake rates as well as the determinants of uptake and found that the uptake rate is the lowest for the regular contract, followed by the in-kind contract. Contrary to prior belief, we also found that the microcredit demand by the ultra-poor is not necessarily small, and in particular the ultra-poor are significantly more likely to join a microcredit program than the moderately poor if a grace period with longer maturity is attached to a large amount of credit, irrespective of whether the credit is provided in cash or in kind. This paper provides evidence that a typical microcredit contract with one-year maturity and without a grace period is not attractive to the ultra-poor. Microfinance institutions may need to design better credit contracts to address the poor's needs.
    Keywords: Bangladesh, Microfinance, Poverty, Microcredit, Uptake, Ultra-poor, Program design
    JEL: D12 G21 O12 O16
    Date: 2014–11
  27. By: Hinrichs, Peter (Federal Reserve Bank of Cleveland)
    Abstract: Teacher quality is a pressing public policy concern, yet there is little evidence on what types of teachers schools actually prefer to hire. This paper reports the results of an experiment that involved sending schools fictitious resumes with randomly-chosen characteristics in an attempt to determine what characteristics schools value when hiring new teachers. The results of the study suggest that an applicant’s academic background has little impact on the likelihood of success at private and charter schools, although public schools respond more favorably to candidates from more selective colleges. Additionally, private schools demonstrate a slight preference for female candidates, and all three sectors demonstrate a preference for in-state candidates.
    Keywords: resume audit studies; teacher labor markets
    JEL: I21 J45
    Date: 2014–12–10
  28. By: Sagi Dekel (BGU); Sven Fischer (Max Planck Institute of Economics, Germany); Ro’i Zultan (BGU)
    Keywords: public goods, punishment, reward, externalities.
    JEL: C72 C91 H41
    Date: 2014
  29. By: Da Silva, Sergio; Moreira, Bruno; Da Costa Jr, Newton
    Abstract: We replicate the Stanford marshmallow experiment with a sample of 141 preschoolers and find a correlation between lack of self-control and 2D:4D digit ratio. Children with low 2D:4D digit ratio are less likely to delay gratification. Low 2D:4D digit ratio may indicate high fetal testosterone. If this hypothesis is true, our finding means high fetal testosterone children are less likely to delay gratification.
    Keywords: 2D:4D digit ratio; Delay of gratification; Children; Intertemporal choice
    JEL: D90
    Date: 2014–12–09
  30. By: Timothy Besley; Maitreesh Ghatak
    Abstract: When social benefits cannot be measured, a hybrid organization which selects managers based on motivation can be used to balance profi…ts with a social purpose. This paper develops a model of social enterprise based on selection of citizen-managers with this goal in mind. It develops the implications of matching between founders and managers based on their preferences for the mission. The main trade-offs suggested by the theory are tested experimentally and these are used to calibrate a matching outcome. This makes precise the parameter range in which social enterprises based on selection will be observed in a market setting; we show that they achieve gains in proficiency of around 10% over non-pro…fit enterprise.
    Keywords: Social enterprise, motivated agents, non-profits
    Date: 2013–11
  31. By: Hande Erkut (Department of Economics, Maastricht University); Daniele Nosenzo (University of Nottingham, School of Economics); Martin Sefton (University of Nottingham, School of Economics)
    Abstract: We investigate social norms for dictator game giving using a recently proposed norm-elicitation procedure (Krupka and Weber, 2013). We elicit norms separately from dictator, recipient, and disinterested third party respondents and find that elicited norms are stable and insensitive to the role of the respondent. The results support the use of this procedure as a method for measuring social norms.
    Keywords: social norms; dictator games
  32. By: Dayanand S. Manoli; Nicholas Turner
    Abstract: Do informational interventions create one-time nudges or permanent changes in behavior? We study how taxpayers respond to informational interventions that alert them of their eligibility for the Earned Income Tax Credit using population-level administrative tax data. The empirical analysis is based on a natural experiment in 2005, a randomized experiment in 2009, and quasi-random audits between 2006 and 2009. The evidence from each of these settings indicates that the informational interventions cause economically significant increases in EITC take-up in the short-term, but there are little to no long-term increases in EITC take-up.
    JEL: H24 H31
    Date: 2014–11
  33. By: Marianne Bernatzky; Alejandro Cid
    Abstract: This paper documents the impact of an after-school program called Apoyo Escolar, sited in the most vulnerable neighborhood of a developing country. The outcomes of interest are academic achievement, behavior in the classroom and grade repetition. We designed a field experiment exploiting the existence of oversubscription to the program. We found a novel result that should guide policy design for vulnerable children: increasing time spent in safe, supervised settings does not guarantee academic success. The after-school program is effective in improving academic performance when children have committed parents. This finding is crucial for policy because it is not be enough to merely take children off of the streets, parents’ commitment is needed. Interestingly, results show that students’ performance at school is highly correlated with parents’ educational expectations. This correlation fosters future research that may be designed specifically to explore the causal impact of expectations on educational attainment among disadvantaged children.
    Keywords: After-school program; Poverty; Education; Impact evaluation; Family
    Date: 2014

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