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on Experimental Economics |
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Issue of 2015‒07‒04
thirteen papers chosen by |
| By: | Urs Fischbacher; Simeon Schudy; Sabrina Teyssier |
| Abstract: | We investigate whether risk, time, environmental, and social preferences affect single family homeowners’ investments in energy efficient renovations and energy quality of their house using established experimental measures and questionnaires. We find that homeowners who report to be more risk taking are more likely to have renovated their house. Pro-environmental and future-oriented renovators, i.e. renovators with lower discount factors, live in homes with higher energy efficiency. Controlling for the energy efficiency of houses, we further find that energy consumption as measured by heating and energy costs are lower for future-oriented and pro-environmental individuals. Social preferences measured in a dictator and a generosity game play a mixed role for investments in energy efficiency and energy consumption. |
| Keywords: | Risk Preferences, Time Preferences, Environmental Preferences, Social Preferences, Energy Efficiency, Artefactual Field Experiment |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0095&r=exp |
| By: | Hélène Couprie; Elisabeth Cudeville; Catherine Sofer (Université de Cergy-Pontoise, THEMA) |
| Abstract: | Most household models assume that decisions taken inside the family are Pareto optimal. However, empirical studies cast doubts upon the efficiency assumption. The sharing of time among men and women between market work and household work is highly differentiated by gender. In this paper we examine whether couples deviate from efficiency in household production decisions, using an experimental design in which subjects are real couples. The aim of the experiment is to mimic the sharing of highly-gendered household tasks. We compare the sharing of gendered tasks to that of more neutral tasks. By measuring individual productivity in each task, we can see if couples tend to deviate from efficiency, and by how much in each case. As we show that they deviate more when sharing gendered tasks, we also explore why, looking at different possible explanations, and we find evidence of the impact of stereotypes on inefficiencies. |
| Keywords: | Stereotypes, social norms, household production, time allocation, experiment, production function, household behavior, intra-household decision-making. |
| JEL: | D13 J16 C92 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2015-06&r=exp |
| By: | Bernd Irlenbusch (University of Cologne); Janna Ter Meer (University of Cologne) |
| Abstract: | We experimentally study a frequently observed public good setting where accurate contribution feedback is not available and group members can send non-verifiable cheap talk messages about their contributions. As feedback, subjects receive only announced contributions or the announced or actual contribution with 50% probability. In this setting, we explore both information transmission and reception as well as the effectiveness of costly peer punishment. Overall, we find that cooperation breaks down in all announcement treatments except when actual contribution feedback is provided some of the time and punishment is available. We identify various constraints to full cooperation relative to the standard public good game. First, subjects make errors in adjusting their beliefs for the announcements of others and, on average, adjust their beliefs downward for a given announcement. Second, we find that significantly more punishment is assigned to high contributors compared to the standard public good game. Furthermore, punishment for low contributors appears to have a smaller disciplining effect. When actual contribution information is provided some of the time we find that these constraints are less severe compared to the setting where only announcements are available. |
| Keywords: | public goods, punishment, lying, credibility, communication |
| JEL: | C92 D03 H41 D02 |
| Date: | 2015–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cgr:cgsser:06-02&r=exp |
| By: | COMBRIS Pierre; SEABRA PINTO Alexandra; GIRAUD HERAUD Eric |
| Abstract: | We study the relative willingness-to-pay (WTP) of consumers according to the diversity of supply in a market and we show how the presence of substitutes for a given product leads to question the incentive mechanisms commonly used in experimental auctions. We propose a Surplus Comparison Mechanism (SCM) in order to yield WTP estimates which better take into account the choice set available to consumers. After showing the efficiency of this mechanism we test the SCM in a laboratory experiment, reconsidering WTP for food environmental certifications (Integrated Pest Management and Organic certification). It appears that WTPs are decreasing when more alternative certifications are offered to consumers. |
| Keywords: | Experimental Auctions, Willingness to pay, Consumers’ surplus, Choice alternatives, Food certification. |
| JEL: | C91 D44 Q51 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2015-20&r=exp |
| By: | Julian Conrads (University of Cologne); Tommaso Reggiani (University of Cologne); Rainer Michael Rilke (University of Cologne) |
| Abstract: | Ambiguity about the chances of winning represents a key aspect in lotteries. By means of a controlled field experiment, we exogenously vary the degree of ambiguity about the winning chances of lotteries organized to incentivize the contribution for a public good. In one people have been simply informed about the maximum number of potential participants (i.e., the number of lottery tickets released). In a second treatment this information has been omitted as in all traditional lotteries. Our general finding shows that simply reducing the degree of ambiguity of the lottery leads to a sizable and significant increase (67%) in the participation rate. This result is robust to alternative prize configurations. |
| Keywords: | ambiguity, lottery, field experiment |
| JEL: | C93 D03 D81 |
| Date: | 2015–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:cgr:cgsser:06-03&r=exp |
| By: | Asparouhova, Elena (University of Utah); Bossaerts, Peter (University of Utah and University of Melbourne); Roy, Nilanjan (City University of Hong Kong); Zame, William (University of California, Los Angeles) |
| Abstract: | The Lucas asset pricing model is studied here in a controlled setting. Participants could trade two long-lived securities in a continuous open-book system. The experimental design emulated the stationary, infinite-horizon setting of the model and incentivized participants to smooth consumption across periods. Consistent with the model, prices aligned with consumption betas, and they co-moved with aggregate dividends, more strongly so when risk premia were higher. Trading significantly increased consumption smoothing compared to autarky. Nevertheless, as in field markets, prices were excessively volatile. The noise corrupted traditional GMM tests. Choices displayed substantial heterogeneity: no subject was representative for pricing. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:314&r=exp |
| By: | Christopher Blattman; Eric P. Green; Julian C. Jamison; M. Christian Lehmann; Jeannie Annan |
| Abstract: | We show that extremely poor, war-affected women in northern Uganda have high returns to a package of $150 cash, five days of business skills training, and ongoing supervision. 16 months after grants, participants doubled their microenterprise ownership and incomes, mainly from petty trading. We also show these ultrapoor have too little social capital, but that group bonds, informal insurance, and cooperative activities could be induced and had positive returns. When the control group received cash and training 20 months later, we varied supervision, which represented half of the program costs. A year later, supervision increased business survival but not consumption. |
| JEL: | C93 D13 J24 O12 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21310&r=exp |
| By: | Celhay,Pablo A.; Gertler,Paul J.; Giovagnoli,Paula; Vermeersch,Christel M. J. |
| Abstract: | The adoption of new clinical practice patterns by medical care providers is often challenging, even when the patterns are believed to be efficacious and profitable. This paper uses a randomized field experiment to examine the effects of temporary financial incentives paid to medical care clinics for the initiation of prenatal care in the first trimester of pregnancy. The rate of early initiation of prenatal care was 34 percent higher in the treatment group than in the control group while the incentives were being paid, and this effect persisted at least 15 months and likely 24 months or more after the incentives ended. These results are consistent with a model where the incentives enable providers to address the fixed costs of overcoming organizational inertia in innovation, and suggest that temporary incentives may be effective at motivating improvements in long-run provider performance at a substantially lower cost than permanent incentives. |
| Keywords: | Disease Control&Prevention,Health Systems Development&Reform,Health Monitoring&Evaluation,Population Policies,Labor Policies |
| Date: | 2015–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7348&r=exp |
| By: | Abe, Naohito; Ueno, Yuko |
| Abstract: | Using the results of detailed random experiments, we find clear evidence of the effects of information provision on consumers’ inflation expectations. The responses of expectations to new information are nonlinear, including those of a sizable share of individuals who do not change their expectations. We document that the updates of consumers are quite heterogeneous, leading to a varied extent of revisions in the face of new information. One possible interpretation is the heterogeneity in consumers’ knowledge of inflation-related issues, as well as the difference in the content of the information. Consumers learn and update their expectations vis-à-vis future inflation based on new information, through a mechanism that is more complex than a simple learning model. |
| Keywords: | Inflation expectations, Information, Heterogeneous updating, Nonlinearity, Survey experiments |
| JEL: | E31 C81 D80 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rcesrs:dp15-5&r=exp |
| By: | Yann Algan (Département d'économie); Quoc-Anh Do (Département d'économie); Nicolò Dalvit (Departement d'Economie de Sciences Po, LIEPP); Alexis Le Chapelain (Département d'économie); Yves Zenou (Research Institute of Industrial Economics) |
| Abstract: | This paper shows how a public policy shapes convergence of beliefs through newly-formed social networks, with a focus on political opinion. We use a unique natural experiment that randomly assigns students into first-year groups at a French college that forms future top politicians. Pairs of students in the same group are much more likely to become friends. The randomized group membership serves as instrumental variable in a dyadic regression of differences in beliefs on friendship. We find that students’ political opinions converge particularly strongly between friends, reaching 11% of a standard deviation only after 6 months. Convergence is strongest among pairs least likely to become friends without the randomized exposure, or friends whose characteristics are the most different. While there is evidence of homophily in network formation, it does not seem to affect the estimates of convergence, except among very similar friends. The same strategy shows that a longer network distance implies slower convergence. |
| Keywords: | Political Beliefs; Peers; Social Networks; Convergence; Homophily; Belief Transmission; Learning; Diffusion; Natural Experiment |
| JEL: | C93 D72 Z13 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/78vacv4udu92eq3fec89svm9uv&r=exp |
| By: | Renfu Luo; Grant Miller; Scott Rozelle; Sean Sylvia; Marcos Vera-Hernández |
| Abstract: | A large literature examines performance pay for managers in the private sector, but little is known about performance pay for managers in public sector bureaucracies. In this paper, we study performance incentives rewarding school administrators for reducing anemia among their students. Randomly assigning 170 schools to three performance incentive levels and two orthogonal sizes of unconditional grants, we analyze performance pay and its complementarity with discretionary resources. We find that both large incentives and larger unconditional grants reduced anemia substantially, but incentives were more cost-effective. Performance incentives led administrators to innovate by working with parents, mitigating potentially offsetting compensatory behavior among households. Strikingly, we also find that larger unconditional grants completely crowded-out the effect of incentives. Our findings suggest that performance incentives can be effective in bureaucratic environments – but also that discretionary resources can fully crowd-out their effect. |
| JEL: | C93 H40 I12 M52 O15 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21302&r=exp |
| By: | Garance Genicot |
| Abstract: | This paper shows that when donors and recipients care about each other --two-sided altruism -- the presence of asymmetry of information about the donor's income leads very naturally to a signaling game. A donor who cares about the recipient's welfare has incentives to appear richer than he is when the recipient cares about him. Similarly, asymmetry of information regarding the donor's income generates a signaling game in the presence of two-sided altruism. These signaling games put upward pressure on transfers and this pressure increases with the altruism of the recipient. |
| JEL: | D64 F24 O15 O16 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21309&r=exp |
| By: | Sarah Jacobson (Williams College); Sahan Dissanayake (Colby College) |
| Abstract: | Some policies try to maximize net benefits by targeting different individuals to participate. This is difficult when costs and benefits of participation vary independently, as in land conservation. We share a classroom game that explores cases in which minimizing costs may not maximize benefits and vice versa. This game is a contextually rich pedagogical tool, putting students in the role of landowners who must decide whether to conserve land in different policy environments: flat conservation payments, agglomeration bonuses, and a conservation auction. Students learn about specific issues in land conservation, ecosystem services, preferences for non-money outcomes, and general issues in policymaking. The game is suited to classes in environmental, resource, agricultural, and policy economics, and more general classes in microeconomics and public policy. |
| Keywords: | classroom game, spatial agglomeration, conservation, land use, economic education |
| JEL: | A22 Q24 Q57 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2015-09&r=exp |