nep-exp New Economics Papers
on Experimental Economics
Issue of 2015‒07‒11
sixteen papers chosen by

  1. Richer (and Holier) than Thou? The Effect of Relative Income Improvements on Demand for Redistribution By Mounir Karadja; Johanna Mollerstrom; David Seim
  2. Helping consumers with a front-of-pack label: numbers or colours? Experimental comparison between Guideline Daily Amount and Traffic Light in a diet building exercice By Crosetto, P.; Muller, L.; Ruffieux, B.
  3. Exact P-values for Network Interference By Susan Athey; Dean Eckles; Guido W. Imbens
  4. Regression and kriging metamodels with their experimental designs in simulation : review By Kleijnen, J.P.C.
  5. The Predictive Validity of Information From Clinical Practice Lessons: Experimental Evidence From Argentina By Ganimian, A. J.
  6. Gender differences: evidence from field tournaments By de Sousa, José; Hollard, Guillaume
  7. The Effect of Savings Accounts on Interpersonal Financial Relationships: Evidence from a Field Experiment in Rural Kenya By Dupas, Pascaline; Keats, Anthony; Robinson, Jonathan
  8. Less is more: A Field Experiment on Matching By Guillen, Pablo.; Hakimov, Rustamdjan.
  9. Experimental Evidence on the Long-Term Impacts of a Youth Training Program By Ibarrarán, Pablo; Kluve, Jochen; Ripani, Laura; Rosas Shady, David
  10. Experimental evidence on the effects of innovation contests By Brueggemann, Julia; Meub, Lukas
  11. The Ambiguity Triangle: Uncovering Fundamental Patterns of Behavior Under Uncertainty By Burghart, Daniel R.; Epper, Thomas; Fehr, Ernst
  12. Us and Them: Experimental evidence on what creates efficiency in choices made by married couples. By Lopez Maria Claudia; Munro Alistair; Tarazona-Gomez Marcela
  13. The power of projection for powerless and powerful people By Claudia Toma; Vincent Yzerbyt; Olivier Corneille; Stéphanie Demoulin
  14. Train Commuters' Scheduling Preferences: Evidence from a Large-Scale Peak Avoidance Experiment By Stefanie Peer; Jasper Knockaert; Erik Verhoef
  15. Weight loss and sexual activity in adult obese individuals: Establishing a causal link By Reichert, Arndt R.; Tauchmann, Harald; Wübker, Ansgar
  16. Precommitments for Financial Self-Control:Evidence from Credit Card Borrowing† By Sung-Jin Cho; John Rust

  1. By: Mounir Karadja (Institute of International Economic Studies, Stockholm University); Johanna Mollerstrom (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); David Seim (Department of Economics, University of Toronto)
    Abstract: We study the extent to which people are misinformed about their relative position in the income distribution and the effects on preferences for redistribution of correcting faulty beliefs. We implement a tailor-made survey in Sweden and document that a vast majority of Swedes believe that they are poorer, relative to others, than they actually are. This is true across groups, but younger, poorer, less cognitively able and less educated individuals have perceptions that are further from reality. Using a second survey, we conduct an experiment by randomly informing a subsample about their true relative income position. Respondents who learn that they are richer than they thought demand less redistribution and increase their support for the Conservative Party. This result is entirely driven by prior right-of-center political preferences and not by altruism or moral values about redistribution. Moreover, the effect can be reconciled by people with political preferences to the right-of-center being more likely to view taxes as distortive and believe that it is personal effort rather than luck that is most influential for individual economic success. Length: 48
    Keywords: fairness, responsibility, option luck, brute luck, experiment
    JEL: C91 D63 D81 H23
    Date: 2014–10
  2. By: Crosetto, P.; Muller, L.; Ruffieux, B.
    Abstract: This paper contributes to the debate on front-of-pack nutritional labels. Because of their dissimilar formats, Guideline Daily Amount (GDA) and Traffic Light (TL) may trigger different responses among consumers. While GDA is comprehensive and cognitively demanding, information is coarser and more salient in TL. We implement an incentivized laboratory experiment to assess the relative performance of GDA and TL labelling schemes in assisting consumers to build a healthy daily diet. Participants must compose a daily diet, choosing from a finite set of products, and are paid a fixed cash amount only if the diet satisfies pre-determined nutritional goals. Goals correspond to the guideline daily amount values for different nutritional attributes, whose number varies from 1 (kcal) to 7 (kcal, fat, sugar, salt, fibre, vitamin C and calcium). Three different labels, GDA, TL and a combined GDATL are provided. Results show that GDA performs better than TL when subjects do not face time constraints. When time is limited however, TL and GDA have identical efficacy with 4 nutritional goals, and TL even outperforms GDA with 7 nutritional goals.
    JEL: D12 D18 C91 C93
    Date: 2015
  3. By: Susan Athey; Dean Eckles; Guido W. Imbens
    Abstract: We study the calculation of exact p-values for a large class of non-sharp null hypotheses about treatment effects in a setting with data from experiments involving members of a single connected network. The class includes null hypotheses that limit the effect of one unit's treatment status on another according to the distance between units; for example, the hypothesis might specify that the treatment status of immediate neighbors has no effect, or that units more than two edges away have no effect. We also consider hypotheses concerning the validity of sparsification of a network (for example based on the strength of ties) and hypotheses restricting heterogeneity in peer effects (so that, for example, only the number or fraction treated among neighboring units matters). Our general approach is to define an artificial experiment, such that the null hypothesis that was not sharp for the original experiment is sharp for the artificial experiment, and such that the randomization analysis for the artificial experiment is validated by the design of the original experiment.
    JEL: C01 C1
    Date: 2015–07
  4. By: Kleijnen, J.P.C. (Tilburg University, Center For Economic Research)
    Abstract: This article reviews the design and analysis of simulation experiments. It focusses on analysis via either low-order polynomial regression or Kriging (also known as Gaussian process) metamodels. The type of metamodel determines the design of the experiment, which determines the input combinations of the simulation experiment. For example, a …first-order polynomial metamodel requires a "resolution-III" design, whereas Kriging may use Latin hypercube sampling. Polynomials of fi…rst or second order require resolution III, IV, V, or "central composite" designs. Before applying either regression or Kriging, sequential bifurcation may be applied to screen a great many inputs. Optimization of the simulated system may use either a sequence of low-order polynomials known as response surface methodology (RSM) or Kriging models …tted through sequential designs including e¢ cient global optimization (EGO). The review includes robust optimization, which accounts for uncertain simulation inputs.
    Keywords: robustness and sensitivity; simulation; metamodel; design; regression; Kriging
    JEL: C0 C1 C9 C15 C44
    Date: 2015
  5. By: Ganimian, A. J.
    Abstract: A growing number of teacher preparation programs require trainees to practice teaching. Yet, there is almost no evidence on whether the performance of individuals during clinical practice lessons predicts how they fare once they enter the school system. We address this question by taking advantage of the fact that an alternative pathway into teaching in Argentina requires admitted applicants to complete two weeks of clinical practice. We collect information both during clinical practice and the school year. During clinical practice, we measure the performance of teaching trainees using classroom observations and student surveys. During the school year, we measure their performance using classroom observations, student surveys, and principal surveys. We find that the overall performance of trainees during clinical practice predicts their overall performance during the school year, but this prediction is only statistically under certain model specifications. The performance of these individuals during clinical practice predicts their ratings on classroom observations during the school year. This relationship remains statistically significant even when we account for how trainees fare on the application and selection processes of the alternative pathway. We also find that the performance of trainees on a brief demonstration lesson, delivered during the selection process, predicts their performance on classroom observations during the school year. The predictive effect is smaller than that of clinical practice lessons, but it raises the question of whether the additional effort required to collect information during clinical practice is worth the improved predictive validity.
    Date: 2015–01
  6. By: de Sousa, José; Hollard, Guillaume
    Abstract: Women are under-represented in top positions, such as in business or in politics. Traditional explanations, like differences in productivity and discrimination, are now complemented by psychological explanations based on lab experiments. We provide the first attempt to assess the comparative importance of psychological and traditional explanations in a natural field experiment, namely chess competitions. Controlling for discrimination and productivity, we find that women are suffering a systematic handicap when playing against men. This "psychological" effect is further amplified through the tournament structure, preventing women from reaching top positions in the chess hierarchy. The effect is only marginally smaller when we consider the most experienced individuals or the most women-friendly countries.
    Keywords: labor mobility; labor search; wage discrimination
    Date: 2015–05
  7. By: Dupas, Pascaline; Keats, Anthony; Robinson, Jonathan
    Abstract: The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. To study the effect of accounts on financial linkages, we provided free bank accounts to a random subset of 885 households. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers to spouses. Across households, we document positive spillovers: treatment households become less reliant on grown children and siblings living outside their village, and become more supportive of neighbors and friends within their village.
    Keywords: financial access; social insurance; spillovers
    JEL: C93 D14 G21 O16
    Date: 2015–07
  8. By: Guillen, Pablo.; Hakimov, Rustamdjan.
    Abstract: We run a field experiment to test the truth-telling rates of the theoretically strategy-proof Top Trading Cycles mechanism (TTC) under different information conditions. First, we asked first-year economics students enrolled in an introductory microeconomics unit about which topic, among three, they would most like to write an essay about. Most students chose the same favorite topic. Then we used TTC to distribute students equally across the three options. We ran three treatments varying the information the students received about the mechanism. In the first treatment students were given a description of the matching mechanism. In the second they received a description of the strategy-proofness of the mechanism without details of the mechanism. Finally, in the third they were given both pieces of information. We find a significant and positive effect of describing the strategy-proofness on truth-telling rates. ON the other hand, describing the matching mechanism has a significant and negative effect on truth-telling rates.
    Date: 2015–07
  9. By: Ibarrarán, Pablo (Inter-American Development Bank); Kluve, Jochen (Humboldt University Berlin, RWI); Ripani, Laura (Inter-American Development Bank); Rosas Shady, David (Inter-American Development Bank)
    Abstract: This paper presents the results of a randomized controlled trial on the long-term impacts of a youth training program. The empirical analysis estimates labor market impacts six years after the training – including long-term labor market trajectories of young people – and, to the best of our knowledge, is the first experimental long-term evaluation of a youth training program outside the US. We are able to track a representative sample of more than 3,200 youths at the six-year follow-up. Our empirical findings document significant impacts on the formality of employment, particularly for men, and impacts for both men and women in Santo Domingo, the capital of the Dominican Republic. The long-term analysis shows that these impacts are sustained and growing over time. There are no impacts on average employment, which is consistent with the low unemployment in countries with high informality and no unemployment insurance. Looking at the local labor market context, the analysis suggests that skills training programs work particularly well in more dynamic local contexts, where there is actual demand for the skills provided.
    Keywords: long-term, impact evaluation, randomized controlled trial, Dominican Republic, youth training, labor market outcomes
    JEL: J24 J64 O15 O17
    Date: 2015–06
  10. By: Brueggemann, Julia; Meub, Lukas
    Abstract: Economic research on innovation has long discussed which policy instruments best foster innovativeness in individuals and organizations. One of the instruments easily accessible to policy-makers is innovation contests; however, there is ambiguous empirical evidence concerning how such contests should be designed. Our experimental study provides evidence by analyzing the effects of two different innovation contests on subjects´ innovativeness: a prize for the aggregate innovativeness and a prize for the best innovation. We implement a creative real effort task simulating a sequential innovation process, whereby subjects determine royalty fees for their created products, which also serve as a measure of cooperation. We find that both contest conditions reduce the willingness to cooperate between subjects compared to a benchmark condition without an innovation contest. However, the total innovation activity is not influenced by introducing innovation contest schemes. From a policy perspective, the implementation of state-subsidized innovation contests in addition to the existing intellectual property rights system should be questioned.
    Keywords: innovation prizes,competition,laboratory experiment,real effort task,creativity,innovation policy
    JEL: C91 D89 O31
    Date: 2015
  11. By: Burghart, Daniel R. (University of Zurich); Epper, Thomas (University of St. Gallen); Fehr, Ernst (University of Zurich)
    Abstract: The probability triangle (also called the Marschak-Machina triangle) allows for compact and intuitive depictions of risk preferences. Here, we develop an analogous tool for choice under uncertainty – the ambiguity triangle – and show that indifference curves in this triangle capture preferences for unknown probabilities. In particular, the ambiguity triangle allows us to examine whether subjects adhere to the generalized axiom of revealed preference (GARP) and satisfy a non-parametric test for constant ambiguity attitudes. We find that more than 95% of subjects adhere to GARP and that about 60% satisfy our test for a constant ambiguity attitude. Yet, among these 60% of subjects there is substantial preference heterogeneity. We characterize this heterogeneity with finite-mixture estimates of a one-parameter extension of Expected Utility Theory wherein 48% of subjects are ambiguity averse, 22% are ambiguity seeking, and 30% are close to ambiguity neutral. The ambiguity triangle also highlights how variable ambiguity attitudes arise mainly because indifference curves are 'fanning-in' across the triangle. This fanning-in property implies that aversion to ambiguity increases as the likelihood of receiving a good outcome increases. We capture this behavior with a simple parametric model that also allows for finite mixture characterizations of preference heterogeneity for these subjects. We show that for a substantial share of these subjects (43%) their fanning-in is so strong that, although they are initially ambiguity seeking, they become strongly ambiguity averse as the likelihood of receiving a good outcome increases.
    Keywords: uncertainty, risk preferences
    JEL: D81 C91
    Date: 2015–06
  12. By: Lopez Maria Claudia (Department of Community Sustainability, Michigan State University, MI USA); Munro Alistair (GRIPS); Tarazona-Gomez Marcela (Oxford Policy Management, United Kingdom)
    Abstract: A recurring and puzzling pattern with experiments on intra-household behaviour is the common failure of couples to attain the cooperative solution. Using married couples from a low income area of Bogota, Colombia we conduct an experiment that raises the salience of the family vis-à-vis outsiders. In this experiment husbands and wives play a repeated voluntary contribution game. At the same time each participant plays an identical game with one stranger in the same session. When investments to the common pools are made from separate and non-fungible budgets, most subjects contribute more to the household pool than the stranger pool, but rarely contribute everything to the household even after repetition and opportunities for learning. Efficiency is not obtained. However, when subjects make contributions to the two games from a single budget many individuals converge rapidly on a strategy of investing everything in the household pool and contributing little to the pool with a stranger. Overall the amount invested in some pool rises. Our results are in line with games played with individuals in which in-group cooperation is higher when membership of the group is more salient. They suggest that strengthening family identity may raise intrahousehold cooperation, but at the expense of cooperation of interhousehold cooperation.
    Date: 2015–07
  13. By: Claudia Toma; Vincent Yzerbyt; Olivier Corneille; Stéphanie Demoulin
    Abstract: Previous research suggests competing hypotheses regarding the effect of power on social projection. The current research proposes that this effect depends on the characteristics to be projected, namely warmth and competence. In four studies, participants first rated themselves on a list of traits/preferences, they then performed a power manipulation task, and, finally, they rated a target person on the same list. Studies 1 and 2 found that high-power participants projected less than low-power participants on characteristics related to warmth. Studies 3 and 4 revealed an interaction between power and dimensions of judgment such that low-power participants projected less than high-power participants on competence whereas the reverse was found on warmth. The underlying cognitive and motivational mechanisms are discussed.
    Keywords: interpersonal projection; power; social distance; warmth; competence
    Date: 2015–07–03
  14. By: Stefanie Peer (VU University Amsterdam, the Netherlands, and Vienna University of Economics and Business, Vienna, Austria); Jasper Knockaert (VU University Amsterdam, the Netherlands); Erik Verhoef (VU University Amsterdam, the Netherlands)
    Abstract: We study the trip scheduling preferences of train commuters in a real-life setting. The underlying data have been collected during large-scale peak avoidance experiment conducted in the Netherlands, in which participants could earn monetary rewards for traveling outside peak hours. The experiment included ca. 1000 participants and lasted for about 6 months. Holders of an annual train pass were invited to join the experiment, and a customized smartphone app was used to measure the travel behavior of the participants. We find that compared to the pre-measurement, the relative share of peak trips decreased by 22% during the reward period, and by 10% during the post-measurement. By combining multiple complementary data sources, we are able to specify and estimate (MNL and panel latent class) departure time choice models. These yield plausible estimates for the monetary values that participants attach to reducing travel time, schedule delays, the number of transfers, crowdedness, and unreliability.
    Keywords: C25; C90; D01; D80; R41
    Date: 2015–07–06
  15. By: Reichert, Arndt R.; Tauchmann, Harald; Wübker, Ansgar
    Abstract: Obesity may not only be linked to undesirable health outcomes but also to limitations in sexual life. The present paper aims to assess whether there is a causal relationship between weight loss and sexual activity in adult obese individuals. To address the endogeneity of weight loss that is likely to result in biased estimation results, the analysis is based on data from a randomized field experiment. In this experiment financial weight-loss rewards were offered to a random subgroup of participants and can be used as exogenous source of weight variation in an instrumental variables approach. Estimation results indicate that for obese males loosing weight increases the probability for being involved in a sexual relationship. Conditional on having already lost some weight, a further reduction in obesity also increases the frequency of sexual intercourse.
    Keywords: obesity,sexual partnership,frequency of intercourse,randomized trial,weight-loss incentives
    JEL: I10 I18 J28 J65
    Date: 2015
  16. By: Sung-Jin Cho (Seoul National University); John Rust (Georgetown University)
    Abstract: We analyze a new data set on installment borrowing decisions of a sample of customers of a credit card company. In an attempt to increase its market share, the company more or less randomly offers its customers free installments, i.e. opportunities to finance credit card purchases via installment loans at a zero percent interest rate for durations up to twelve months. We exploit these offers as a quasi-random field experiment to better understand consumer demand for credit. Although there is considerable customer-level heterogeneity in installment usage, we show that the average take-up rate of free installment offers is low: customers choose them only 20% of time they are offered. Further, we provide evidence of pervasive precommitment behavior by individuals who do decide to take free installment offers. For example, we estimate that of the subset of 10 month free installment offers that are taken, only 18% are taken for the full 10 month term allowed under the offer. In the other 82% of these offers, customers precommit at the time of purchase to pay the balance in fewer than 10 installments. Thus, only 3.6% (18% × 20%) of all 10 month free installment offers are taken for the full 10 month duration. It is challenging to explain this behavior using standard expected utility models since there are no pre-payment penalties and the transactions costs involved in choosing these loans are small: rational customers should take every installment offer for the maximum allowed term when the interest rate is 0%. One explanation for this behavior is that consumers have financial self-control problems and resist the temptation to take interest-free loan offers. If they absolutely must borrow, most consumers choose repayment terms that are shorter than the maximum allowed term to avoid becoming excessively indebted.
    Date: 2015

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