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on Experimental Economics |
| By: | Dominiak, Adam; Duersch, Peter |
| Abstract: | Traditionally, real experiments testing subjective expected utility theory take for granted that subjects view the Ellsberg task as a one-person decision problem. We challenge this view: Instead of seeing the Ellsberg task as a one-person decision problem, it can be perceived as a two-player game. One player chooses among the bets. The second player determines the distribution of balls in the Ellsberg urn. The Nash equilibrium predictions of this game depend on the payoff of the second player, with the game ranging from a zero-sum one to a coordination game. Meanwhile, the predictions by ambiguity aversion models remain unchanged. Both situations are implemented experimentally and yield different results, in line with the game-theoretic prediction. Additionally, the standard scenario (without explicit mention of how the distribution is determined) leads to results similar to the zero-sum game, suggesting that subjects view the standard Ellsberg experiment as a game against the experimenter. |
| Keywords: | Ellsberg task; experiment; zero-sum game; coordination game; ambiguity; uncertainty averse preferences |
| Date: | 2015–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0592&r=exp |
| By: | Sule Alan (University of Essex); Teodora Boneva (University of Cambridge); Seda Ertac (Koc University) |
| Abstract: | We show that grit, a non-cognitive skill that has been shown to be highly predictive of achievement, is malleable in the childhood period and can be fostered in the classroom environment. Our evidence comes from an evaluation of a randomized educational intervention implemented in elementary schools in Istanbul. Outcomes are measured via a novel incentivized real effort task and actual school grades on core subjects. We find that treated students are 1) more likely to choose to undertake a more challenging and more rewarding task against an easier but less rewarding alternative, 2) less likely to give up after failure, 3) more likely to exert effort to accumulate task-specific ability, and consequently, 4) more likely to succeed and collect higher payoffs. The intervention also has a significant impact on school grades: We find that treated students are about 3 percentage points more likely to receive top grades in core academic subjects. |
| Keywords: | non-cognitive skills, grit, perseverance, field experiments, randomized interventions |
| JEL: | C91 C93 D03 I28 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2015-009&r=exp |
| By: | Thomas Buser (University of Amsterdam, the Netherlands); Anna Dreber (Stockholm School of Economics, Sweden); Johanna Mollerstrom (George Mason University, United States) |
| Abstract: | Women are often less willing than men to compete, even in tasks where there is no gender gap in performance. Also, many people experience competitive contexts as stressful and previous research has documented that men and women sometimes react differently to acute stressors. We use two laboratory experiments to investigate whether factors related to stress can help explain the gender gap in competitiveness. Experiment 1 studies whether stress responses (measured with salivary cortisol and through self-assessment) to taking part in a mandatory competition predict individual willingness to participate in a voluntary competition. We find that while the mandatory competition does increase stress levels, there is no gender difference in this reaction. Cortisol response does not predict willingness to compete for men but is positively and significantly correlated with choosing to enter the voluntary competition for women. In Experiment 2 we exogenously induce stress using the cold-pressor task. We find no causal effect of stress on competitiveness for the sample as a whole and only tentative evidence of a positive effect for women. In summary, even though there are some gender differences in the relation between stress responses and the decision to enter a competition or not, these cannot explain the general gender gap in willingness to compete that is generally found in the literature and which we replicate. |
| Keywords: | gender; competitiveness; stress; cortisol; lab experiment |
| JEL: | C91 D03 J16 J24 J33 |
| Date: | 2015–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20150059&r=exp |
| By: | Anett John (née Hofmann) |
| Abstract: | Recent literature promotes commitment products as a new remedy for overcoming self-control problems and savings constraints. Committing to a welfare-improving contract requires knowledge about one's preferences, including biases and inconsistencies. If agents are imperfectly informed about their preferences, they may choose ill-suited commitment contracts. I designed a regular-instalment commitment savings product, intended to improve on pure withdrawal-restriction products by mimicking the fixed-instalment nature of loan repayment contracts. I conduct a randomised experiment in the Philippines, where individuals from a general low-income population were randomly offered to take up the product. Individuals chose the stakes of the contract (in the form of a default penalty) themselves. The result is that a majority appears to choose a harmful contract: While the intent-to-treat effect on bank savings for individuals assigned to the treatment group is four times that of a withdrawal-restriction product (offered as a control treatment), 55 percent of clients default on their savings contract. The explanation most strongly supported by the data is that the chosen stakes were too low (the commitment was too weak) to overcome clients' self-control problems. Moreover, both take-up and default are negatively predicted by measures of sophisticated hyperbolic discounting, suggesting that those who are fully aware of their bias realise the commitment is too weak for them, and avoid the product. The study suggests that research on new commitment products should carefully consider the risk of adverse welfare effects, particularly for naïve and partially sophisticated hyperbolic discounters. |
| Keywords: | commitment savings, hyperbolic discounting, partial sophistication, regular instalments, Philippines. |
| JEL: | D03 D14 O12 O16 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:055&r=exp |
| By: | Laurent Vilanova (Université de Lyon, F-69007, France; Université Lyon 2, Coactis); Nadège Marchand (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon Saint-Etienne, Ecully, F-69130, France; Université Lyon 2, Lyon, F-69007, France); Walid Hichri (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon Saint-Etienne, Ecully, F-69130, France; Université Lyon 2, Lyon, F-69007, France) |
| Abstract: | We test in the laboratory how entrepreneurs’ skill perceptions influence the design of financing and advising contracts. Our theoretical framework proposes that selfconfident entrepreneurs prefer issuing debt whereas low self-confident ones prefer equity which induces strong investor assistance. The prevalence of overconfidence makes investors more reluctant to accept debt offers and constrains self-confident entrepreneurs to finance through mixed securities. Experimental results show that self-confident entrepreneurs issue more debt-like securities and receive less assistance. We also show that entrepreneurs learn not to offer pure debt and that initial ignorance of their own skills reinforces entrepreneurs’ ability to learn through risky choices. |
| Keywords: | Entrepreneurs, investment decision, learning, overconfidence, venture capital |
| JEL: | C72 C92 D83 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1513&r=exp |
| By: | Anett John (née Hofmann) |
| Abstract: | Empirical evidence suggests that there is a high demand for informal savings mechanisms even though these often feature negative returns - such as deposit collectors, ROSCAs, microloans, and informal borrowing. This paper argues that individuals may face even higher negative returns to saving at home due to hyperbolic discounting and claims on savings by relatives. I outline a model that shows why hyperbolic discounters cannot reach their welfare-maximising level of savings, and why a commitment savings product with fixed period contributions can increase their achievable savings level. Using a novel dataset obtained from a small microfinance institution in Bangladesh, the paper then presents some first empirical evidence on the effects of a commitment savings product with fixed regular instalments. I find that the introduction of the regular saver product was associated with an increase in individuals' savings contributions of 180 percent after a periods of five months. The paper concludes that the provision of commitment savings products with fixed contributions may reduce savings constraints and increase individuals' welfare, providing a substitute for costly informal mechanisms. However, since the data originates from a field study with self-selection problems rather than a randomized controlled experiment, further studies are needed to confirm this effect. |
| Keywords: | commitment savings, hyperbolic discounting, Bangladesh |
| JEL: | D14 O11 O16 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:051&r=exp |
| By: | Jonathan de Quidt |
| Abstract: | Empirically, labor contracts that financially penalize failure induce higher effort provision than economically identical contracts presented as paying a bonus for success, an effect attributed to loss aversion. This is puzzling, as penalties are infrequently used in practice. The most obvious explanation is selection: loss averse agents are unwilling to accept such contracts. I formalize this intuition, then run an experiment to test it. Surprisingly, I find that workers were 25 percent more likely to accept penalty contracts, with no evidence of adverse or advantageous selection. Consistent with the existing literature, penalty contracts also increased performance on the job by 0.2 standard deviations. I outline extensions to the basic theory that are consistent with the main results, but argue that more research is needed on the long-term effects of penalty contracts if we want to understand why firms seem unwilling to use them. |
| Keywords: | loss aversion, reference points, framing, selection, Mechanical Turk |
| JEL: | D03 J41 D86 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:052&r=exp |
| By: | Nicolas Houy (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon Saint-Etienne, Ecully, F-69130, France; Université Lyon 2, Lyon, F-69007, France); François Le Grand (EMLyon Business School, Écully, F-69130, France) |
| Abstract: | We test in the laboratory how entrepreneurs’ skill perceptions influence the design of financing and advising contracts. Our theoretical framework proposes that selfconfident entrepreneurs prefer issuing debt whereas low self-confident ones prefer equity which induces strong investor assistance. The prevalence of overconfidence makes investors more reluctant to accept debt offers and constrains self-confident entrepreneurs to finance through mixed securities. Experimental results show that self-confident entrepreneurs issue more debt-like securities and receive less assistance. We also show that entrepreneurs learn not to offer pure debt and that initial ignorance of their own skills reinforces entrepreneurs’ ability to learn through risky choices. |
| Keywords: | Network revenue management, Monte-Carlo simulations, randomized linear programming |
| JEL: | C44 C63 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1514&r=exp |
| By: | Christopher Blattman; Julian C. Jamison; Margaret Sheridan |
| Abstract: | We show self control and self image are malleable in adults, and that investments in them reduce crime and violence. We recruited criminally-engaged Liberian men and randomized half to eight weeks of group cognitive behavioral therapy, teaching self control skills and a noncriminal self-image. We also randomized $200 grants. Cash raised incomes and reduced crime in the short-run but effects dissipated within a year. Therapy increased self control and noncriminal values, and acts of crime and violence fell 20--50%. Therapy's impacts lasted at least a year when followed by cash, likely because cash reinforced behavioral changes via prolonged practice. |
| JEL: | D03 J22 K42 O12 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21204&r=exp |
| By: | Nava Ashraf; Oriana Bandiera; Scott Lee |
| Abstract: | We study how career incentives affect who selects into public health jobs and, through selection, their performance while in service. We collaborate with the Government of Zambia to experimentally vary the salience of career vs. social benefits of a newly created health worker position when recruiting agents nationally. We follow the entire first cohort from application to performance in the field and measure impacts at every stage. We find that making career incentives salient attracts more qualified applicants with stronger career ambitions without displacing pro-social preferences, which are high in both treatments. Health workers attracted by career incentives are more effective at delivering health services and are equally likely to remain in their posts over the course of 18 months. Career incentives, far from selecting the "wrong" types, attract talented workers who deliver health services effectively. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:054&r=exp |
| By: | Buckert, Magdalena; Schwieren, Christiane; Kudielka, Brigitte M.; Fiebach , Christian J. |
| Abstract: | Competition is ubiquitous in economic life. Yet, negative consequences of competitive environments have been reported and everyday experience suggests that competitive situations can be very stressful. It is, however, an open question whether or not economic competitions in the laboratory indeed elicit physiological stress reactions. Our study examined the subjectively perceived stress and the physiological changes induced by a well-established economic laboratory competition paradigm (first used in Niederle and Vesterlund 2007) in a mixed-gender sample of 105 healthy participants. A mental arithmetic task was performed first under a piece rate (i.e., non-competitive) payment scheme and afterwards under a tournament condition. In a third round, participants decided how to be paid (i.e., piece rate or tournament). Our results indicate that compared to a control group, which performed only the non-competitive condition, the competitive game condition indeed elicited subjective and physiological reactions that are indicative of mild stress. Furthermore, reactions that are thought to reflect an active coping style were related to the self-selection into competition in the third round of the game. We speculate that real-life economic competitions might be even stronger stressors and the way how people cope with this kind of stress might be related to competitiveness in real-life economic contexts. |
| Keywords: | competition; decision making; stress; heart rate; testosterone; economic tournament |
| Date: | 2015–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0593&r=exp |
| By: | Darragh Flannery (Department of Economics, University of Limerick); John Considine (Department of Economics, University College Cork); Brendan Kennelly (School of Business and Economics, National University of Ireland, Galway) |
| Abstract: | With the growth of online assignment tools across many courses in higher education, questions remain as to the impact of such tools on student learning and engagement. In this paper we present an experiment that attempts to measure these effects, as well as a survey aimed at gauging student preferences for traditional or online assignment formats. The results of this experiment comparing online assignments with paper assignments are mixed. Students that complete paper assignments get a higher mark. However, students are more likely to complete an online assignment. These conflicting advantages require the educator to make trade-off when determining the assignment format to use. When in doubt the educator might consider using technology as the results of a student survey presented in this paper revealed that the students preferred the online assignments – a result in line with the literature. While the evidence is not conclusive it would appear that the reason for the preference is the ease with which they can complete the assignments. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lim:wpaper:072013&r=exp |
| By: | Mamta Sharma; Gagandeep Kaur |
| Abstract: | Music therapy is increasingly used in sports for enhancing sport performance. It provides a mean of improving mental strength among sportspersons. The purpose of this study is to enhance intrinsic motivation, physical self-efficacy and performance of female football players through music therapy. For this purpose, twenty two female football players, in the age group of 21-26 were screened on the basis of their scores on Sport Motivation Scale and Physical Self-Efficacy Scale. Then, they were randomly assigned to experimental and control groups. The experimental group was given music therapy intervention for fifteen days. After intervention period, same scales were re-administered. In order to analyze the statistical data, t-test was applied. The results have shown that experimental group was significantly higher on intrinsic motivation and physical self-efficacy in comparison to control group. A football match was arranged between both groups at the end of study. The experimental group won the match by 4-2. The present research implies that music therapy can be highly effective in increasing psychological strength of sports persons. Key words: music, intrinsic motivation, physical selfefficacy, performance, female, football players |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2015-03-02&r=exp |
| By: | G. K. Reddy; Sony Kumari |
| Abstract: | The effectiveness of short term yoga practice on cognitive function and attitude towards violence in school children (n = 100) was examined. The participants were divided into two groups -Yoga and Control group. Yoga group was given 10 days yoga intervention programme for one hour every day. Results indicated that yoga intervention contributed significant result in cognitive function and no significant result in ATV (attitude towards violence) in school children. Key words: School children, cognitive function, attitude towards violence, yoga |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2015-03-05&r=exp |
| By: | Suchitra S. Patil; H. R. Nagendra |
| Abstract: | The study comprised to comprehend the effect of Yoga Personality Development Camp on the trigunas in children. The study was pre-post design with control group . 200 children (100 children in each group), aged 8-12 yrs, selected from a residential camp at Prashanti kutiram Jigani ( Yoga group) and Jayagopal Garodia Rasrtothana school. Experimental group children practiced Integral Yoga module including Asanas, pranayama, nadanusandhana, chanting, and games.Control group children were under daily rutine . Sushruta Child personality inventory was administered before and after 10 days. Mann-Whitney U test and Wilcoxon Signed Ranks Test were applied. Sattva increased significantly, while Rajas and Tamas decreased significantly as compared to the control group. Yoga Personality Development camp has the significant effect on Sattva, Rajas and Tamas in Children. Key words: Yoga, Sattva, Rajas and Tamas |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2014-12-06&r=exp |