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on Experimental Economics |
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Issue of 2015‒01‒19
twenty-two papers chosen by |
| By: | Castillo, Marco (George Mason University); Dickinson, David L. (Appalachian State University); Petrie, Ragan (George Mason University) |
| Abstract: | We investigate the consistency and stability of individual risk preferences by manipulating cognitive resources. Participants are randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time (circadian mismatched) and choose allocations between two risky assets (using the Choi et al., 2007, design). Consistency of behavior of circadian matched and mismatched subjects is statistically the same, however mismatched subjects tend to take more risks. We conclude that, consistent with several theories, preferences are rational yet can change depending on state-level cognitive resources. |
| Keywords: | sleep, risky preference, choice consistency |
| JEL: | C91 D81 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8709&r=exp |
| By: | Buckert, Magdalena; Oechssler, Jörg; Schwieren, Christiane |
| Abstract: | Imitating the best strategy from the previous period has been shown to be an important heuristic, in particular in relatively complex environments. In this experiment we test whether subjects are more likely to use imitation if they are under stress. Subjects play a repeated Cournot oligopoly. Treatments are time pressure within the task and distractions through a second task (a Stroop-task) that has to be performed as well and influences payment. We measure stress levels through salivary cortisol and heart rate. Our main findings are that time pressure and distraction can indeed raise physiological stress levels of subjects within our task. More importantly from an economic perspective, we can also observe a corresponding behavioral change that is indicative of imitation. |
| Keywords: | stress,cortisol,heart rate,imitation,experiment |
| JEL: | C91 C72 D74 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2014309&r=exp |
| By: | Kritikos, Alexander S. (University of Potsdam, DIW Berlin); Tan, Jonathan H. W. (University of Nottingham) |
| Abstract: | This paper experimentally investigates the nature of image concerns in gift giving. For this, we test variants of dictator and impunity games where the influences of social preferences on behavior are kept constant across all games. Givers maximize material payoffs by pretending to be fair when receivers do not know the actual surplus size, implying that portraying an outward appearance of norm compliance matters more than actual compliance. In impunity games, receivers can reject gifts with no payoff consequence to givers. In the face of receivers' feedback, some givers ensure positive feedback by donating more while some avoid negative feedback by not giving at all. Removing feedback reduces the incentive to give altogether. Differing behavior in the four games implies that social confirmation plays a crucial role in the transmission of image concerns in giving. |
| Keywords: | dictator game, impunity game, experiment, image, social confirmation |
| JEL: | C78 C92 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8739&r=exp |
| By: | Bütler, Monika (University of St. Gallen); Deuchert, Eva (University of St. Gallen); Lechner, Michael (University of St. Gallen); Staubli, Stefan (University of Calgary); Thiemann, Petra (University of Southern California) |
| Abstract: | Disability insurance (DI) beneficiaries lose part of their benefits if their earnings exceed certain thresholds (“cash-cliffs”). This implicit taxation is considered the prime reason for low DI outflow. We analyse a conditional cash program that incentivises work related reductions of disability benefits in Switzerland. 4,000 randomly selected DI recipients receive an offer to claim up to CHF 72,000 (USD 71,000) if they expand work hours and reduce benefits. Initial reactions to the program announcement, measured by call-back rates, are modest; individuals at cash-cliffs react more frequently. By the end of the field phase, the take-up rate amounts to only 0.5%. |
| Keywords: | disability insurance, field experiment, financial incentive, return-to-work |
| JEL: | H55 J14 C93 D04 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8715&r=exp |
| By: | Claudia Keser; Andreas Markstädter; Martin Schmidt |
| Abstract: | In a public-good experiment with heterogeneous endowments, we investigate if and how the contribution level as well as the previously observed “fair-share” rule of equal contributions relative to one’s endowment (Hofmeyr et al., 2007; Keser et al., 2014) may be influenced by minimum-contribution requirements. We consider three different schedules: FixMin, requiring the same absolute contributions, RelMin, requiring the same relative contributions, and ProgMin, requiring minimum contributions that progressively increase with the endowment. We find that minimum contributions exert norm-giving character and may lead to an increase in average group contributions. This is especially true for the progressive schedule. On the individual level, this schedule leads to higher relative contributions by the wealthier players and thus violates the “fair-share” norm. On the group level, it leads to the highest contribution level and the lowest inequality in total profits as measured by the Gini index. <P> |
| Keywords: | Experimental economics, public goods, heterogeneous endowments, mandatory minimum contributions, norms, |
| JEL: | C92 D63 H41 |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-47&r=exp |
| By: | Stefano Caria; Marcel Fafchamps |
| Abstract: | We play a one-shot public good game in rural India between farmers connected by an exogenous star network. Contributions by the centre of the star reach more players and have a larger impact on aggregate payoffs than contributions by the spoke players. Yet, we find that the centre player contributes just as much as the average of the spokes. We elicit expectations about the decisions of the centre player and, in randomly selected sessions, we disclose the average expectation of the farmers in the network. Farmers match the disclosed values frequently and do so more often when the monetary cost of making a contribution is reduced. However, disclosure is not associated with higher contributions. Our results support the predictions of a model of other-regarding preferences where players care about the expectations of others. This model is helpful to understand barriers to improvement in pro-social behaviour when groups expect low pro-sociality. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-33&r=exp |
| By: | Shahzeen Z. Attari; Gautam Gowrisankaran; Troy Simpson; Sabine M. Marx |
| Abstract: | There is limited evidence of behavioral changes resulting from electricity information feedback. Using a randomized control trial from a New York apartment building, we study long-term effects of information feedback from “Modlet” in-home devices, which provide near-real-time plug-level information. We find a 12–23% decrease in electricity use for treatment apartments, concentrated among individuals reporting higher willingness-to-pay for an energy monitoring system. Decrease in overall electricity use is similar among treatment apartments which received Modlets and those which declined Modlets, and does not specifically occur for outlets with Modlets. This decrease may be due to a Hawthorne or salience effect. |
| JEL: | D03 D12 L94 Q30 Q40 Q54 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20809&r=exp |
| By: | Erkal, Nisvan (University of Melbourne); Wu, Steven Y. (Purdue University); Roe, Brian E. (Ohio State University) |
| Abstract: | We develop a model of strategic contractual incompleteness that identifies conditions under which principals might omit even costlessly verifiable terms. We then use experiments to test comparative statics predictions of the model. While it is well known that verifiability imperfections can limit complete contracting, researchers know less about how the degree of imperfection affects endogenous incompleteness, particularly with repeat trading. In our baseline treatment with perfect verifiability, subjects overwhelmingly used complete contracts to conduct trades, achieving nearly first best outcomes. In our partial verifiability treatment with a reduced set of verifiable performance levels, the results reversed and parties relied heavily on incomplete contracts that omitted even costlessly verifiable terms. However, the efficacy of incomplete contracts in outperforming available complete contracts depends critically on the continuation probability of repeat trading. With a small continuation probability, incomplete contracts did no better than complete contracts while exposing parties to considerable strategic uncertainty. |
| Keywords: | incomplete contract, relational contract, endogenous incompleteness, informal incentives, experimental economics |
| JEL: | C73 C91 D86 J41 L14 L24 M52 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8704&r=exp |
| By: | De Paola, Maria (University of Calabria); Gioia, Francesca (University of Edinburgh) |
| Abstract: | We investigate whether and how time pressure affects performance. We conducted a field experiment in which students from an Italian University are proposed to choose between two exam schemes: a standard scheme without time pressure and an alternative scheme consisting of two written intermediate tests, one of which to be taken under time pressure. Both exam schemes consist of a verbal and a numerical part, each carrying half of the total marks. Students deciding to sustain the alternative exam are randomly assigned to a "time pressure" and a "no time pressure" group. Students performing under time pressure at the first test perform in absence of time pressure at the second test and vice versa. We find that being exposed to time pressure exerts a negative and statistically significant impact on students' performance both at the verbal and at the numerical task. The effect is driven by a strong negative impact on females' performance, while there is no statistically significant effect on males. Gender differences in handling time pressure are relevant only when dealing with the verbal task. Using data on students' expectations, we also find that the effect produced by time pressure on performance was correctly perceived by students. Female students expect a lower grade when working under time pressure, while males do not. |
| Keywords: | time pressure, time constraints, gender differences, student performance |
| JEL: | C93 D03 I23 J71 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8708&r=exp |
| By: | Alexander N. Tatarko (National Research University Higher School of Economics) |
| Abstract: | This article presents the results of study dedicated to the interrelation of trust, cooperative behavior and the size of the winning prize in the multi-way decision modified prisoners’ dilemma. The experiment was organized using a specially designed computer program. The study involved six groups of participants and each group consisted of 7 players. The experiment consisted of a series of 15 rounds and included preliminary and final testing. The study found that cooperative behavior within the members in the group had fallen during 11 rounds, but there was a tendency to improve it. The trust level of an individual and his/her choice of cooperative strategy in the first series of the experiment are interrelated. Generalized trust is a rather stable construct, but it does not remain unchanged with an actual reduction of cooperative behavior. |
| Keywords: | trust, cooperative behavior, prisoners’ dilemma, economic psychology |
| JEL: | D03 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:22psy2014&r=exp |
| By: | Armin Falk; Fabian Kosse; Ingo Menrath; Pablo Emilio Verde; Johannes Siegrist |
| Abstract: | This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative field data. In a simple principal-agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents' heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control and has been shown to predict coronary heart diseases in the long-run. Using three measures of perceived unfairness our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using data from a large representative data set. The analysis includes cross-sectional and dynamic panel estimations. Complementary to our experimental findings we find a strong and highly significant negative association between health outcomes, in particular cardiovascular health, and the perception of unfair pay. |
| Keywords: | Fairness, social preferences, inequality, heart rate variability, health, experiments, SOEP |
| JEL: | D91 D03 D63 I14 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp715&r=exp |
| By: | 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. |
| Date: | 2014–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0412&r=exp |
| By: | Susanne James-Burdumy |
| Keywords: | Playworks, Physical Activity, Recess , RCT, Randomized Controlled Trial |
| JEL: | I |
| Date: | 2014–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:ceddf2959fb441c1ae0d745aa243e161&r=exp |
| By: | Jun Gu; Ingrid Nielsen; Jason Shachat; Russell Smyth; Yujia Peng |
| Abstract: | A large body of literature attests to the growing social divide between urban residents and rural-urban migrants in China’s cities. This study uses a randomised experiment to test the effect of intergroup contact on attitudes between a group of urban adolescents and a group of rural-urban migrant adolescents. Results showed that intergroup contact in the form of a fun and cooperative puzzle task significantly reduced negative attitudes toward the other group. Implications for desegregated schooling and their broader societal implications in China are discussed. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2014-28&r=exp |
| By: | Harin, Alexander |
| Abstract: | A need for experiments on the certainty effect near the certainty (near the probability p = 1) is stated in this paper. The need supported by the Aczél–Luce question whether Prelec’s weighting function W(p) is equal to 1 at p = 1, by the purely mathematical restrictions and the “certain–uncertain” inconsistency of the random–lottery incentive experiments. The results of the experiments of the certainty effect near the certainty show that Prelec’s (probability) weighting function can be discontinuous at the probability p = 1. There is a need for new experiments at probabilities which are closer to p=1, e.g., at probabilities p=.99 and p=.999. |
| Keywords: | utility; prospect theory; certainty effect; experiment; Prelec; probability weighting function; |
| JEL: | C1 C9 C91 D8 D81 |
| Date: | 2014–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61026&r=exp |
| By: | Esther Duflo; Pascaline Dupas; Michael Kremer |
| Abstract: | A seven-year randomized evaluation suggests education subsidies reduce adolescent girls' dropout, pregnancy, and marriage but not sexually transmitted infection (STI). The government's HIV curriculum, which stresses abstinence until marriage, does not reduce pregnancy or STI. Both programs combined reduce STI more, but cut dropout and pregnancy less, than education subsidies alone. These results are inconsistent with a model of schooling and sexual behavior in which both pregnancy and STI are determined by one factor (unprotected sex), but consistent with a two-factor model in which choices between committed and casual relationships also affect these outcomes. |
| JEL: | I12 I25 I38 O12 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20784&r=exp |
| By: | Muriel Niederle |
| Abstract: | This paper summarizes research on gender differences in economic settings. I discuss gender differences in attitudes toward competition, altruism and the closely related issue of cooperation, and risk preferences. While gender differences in competition are large and robust, the results are much more mixed and more nuanced concerning altruism or cooperative tendencies. Surprisingly, the results are also quite mixed when concerning gender differences in risk attitudes. I discuss the external validity of laboratory results in the field. More importantly, however, I emphasize research investigating the external relevance of laboratory findings. That is, to what extent can gender differences in the aforementioned psychological attributes account for observed gender differences in economic outcomes including education and labor market outcomes as well as voting behavior. |
| JEL: | C9 J0 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20788&r=exp |
| By: | Svetlana Bankovskaya (National Research University Higher School of Economics) |
| Abstract: | The paper is based on the outcomes and inferences from the experiment with urban heterotopia found on the Manezhnaya square in Moscow. The main point of the experimental design (ethnomethodological in its intent) is to explore in vivo the heterotopical properties of the urban environment as the condition of this environment’s creativity and its interaction with the mobile actors. Creativity of the urban environment was interpreted as a particular kind of spatial order accumulating in counterfinal effects of collective behavior in the unique constellation --“heterotopia”. The flaneur was chosen as the most appropriate actor displaying the properties of an object and that of a receptive mobile interactant. The object of the experiment was the fragment of the metropolitan environment which combines the logic of the urban social organization (embodied in its concrete place) and the paralogy of the counterfinality of the mobilities inside this particular environment.Two modes of interaction were provoked in the experiment: first, intended, but unpurposive action observed by the passage through the ambiances of the specific fragment of the city by the flaneur, and focusing on his affective states during these actions (the affective profile of the place thus was achieved); and second, observing and mapping the flaneur’s movements as a purposive interaction with the same fragment of the environment, but in the form of derive (observation of the movement by the means of movement). The end of the observation in movement was to focus on the flaneur’s movements and to depict his route through the observable details of the spatial/social order of the environment. |
| Keywords: | urban history, history of sociology, new urbanism, heterotopias, creative environment, counterfinality, psychogeography, flaneurism, derive |
| JEL: | Z |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:70hum2014&r=exp |
| By: | John Deke Mike Puma |
| Keywords: | Randomized Controlled Trials, Education |
| JEL: | I |
| Date: | 2013–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:98d6a1ea5f8942058bceb81ab905c928&r=exp |
| By: | Steven Glazerman; Ali Protik; Bing-ru Teh; Julie Bruch; Jeffrey Max |
| Abstract: | Many education policy experts have raised concerns that disadvantaged students do not have the same access to highly effective teachers as other students. To address this issue, IES sponsored an evaluation of an intervention known to study participants as the Talent Transfer Initiative (TTI). TTI offered a financial incentive to the teachers with the highest scores year after year on value-added measures (estimates of their ability to raise test scores, after accounting for differences between students) if they would transfer to a low-achieving school in the same district and remain there for at least two years. About 22 percent of the selected teachers applied for the transfer, and 5 percent (81 teachers) ultimately transferred. These teachers filled 88 percent of the targeted teaching vacancies in low-performing schools. |
| Keywords: | TTI, Teacher Transfer Incentives, High-Performing Schools, Multisite Randomized Experiment |
| JEL: | I |
| Date: | 2013–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:a8d81403a6db46109728c3e8a4228473&r=exp |
| By: | McElroy, Todd (Florida Gulf Coast University); Dickinson, David L. (Appalachian State University); Stroh, Nathan (Appalachian State University) |
| Abstract: | In the current study we explore whether enriching the brain's supply of glucose will improve the quality and speed of decision making. Prior research shows that glucose enrichment supports cognition and more recent research has shown it can improve decision making on some tasks. To test our hypothesis we used a standardized decision inventory and measured response times. The findings show that supplemental glucose improves decision making but only in complex decision tasks. The findings also show that enrichment leads to faster decision response times across decision types. |
| Keywords: | glucose, response time, A-DMC, thinking, experiments |
| JEL: | C91 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8710&r=exp |
| By: | Bruhin, Adrian (University of Lausanne); Götte, Lorenz (University of Lausanne); Haenni, Simon (University of Lausanne); Jiang, Lingqing (University of Lausanne) |
| Abstract: | Spillovers of prosocial motivation are crucial for the formation of social capital. They facilitate interactions among individuals and create social multipliers that amplify the effects of policy interventions. We conducted a large-scale intervention study among dyads of blood donors to investigate whether social ties lead to motivational spillovers in the decision to donate. The intervention is a randomized phone call making donors aware of a current shortage of their blood type and serving us as an instrument for identifying motivational spillovers. About 40% of a donor's motivation spills over to the other donor, creating a significant social multiplier of 1.78. |
| Keywords: | social interaction, social ties, prosocial motivation, blood donation, bivariate probit |
| JEL: | D03 C31 C36 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8738&r=exp |