nep-exp New Economics Papers
on Experimental Economics
Issue of 2015‒08‒07
25 papers chosen by

  1. How can environmental information align consumer behaviour with attitude? Evidence from a field experiment By Vlaeminck, Pieter; Jiang, Ting; Vranken, Liesbet
  2. "Thou shalt not leech" Are digital pirates conditional cooperators? By Wojciech Hardy; Michal Krawczyk; Joanna Tyrowicz
  3. Informal low-cost methods for increasing enrollment of environmentally sensitive lands in farmland conservation programs: An experimental study By Banerjee, Simanti; Shortle, James S.
  4. Was Sandmo Right? Experimental Evidence on Attitudes to Price Risk and Uncertainty By Lee, Yu Na; Bellemare, Marc F.; Just, David R.
  5. An Experimental Approach to Testing the Competitive Storage Model By Pfuderer, Simone
  6. Information Networks and Their Role in Threshold Public Goods Games: An Experimental Study By Kreitmair, Ursula W.; Banerjee, Simanti; Walker, James M.
  7. Hiring and Escalation Bias in Subjective Performance Evaluations: A Laboratory Experiment By Andrej Angelowski; Jordi Brandts; Carles Solà
  8. When best-replies are not in equilibrium: Understanding cooperative behaviour By Irenaeus Wolff
  9. Mislabelling in Collective Labels: an experimental analysis By Bonroy, Olivier; Garapin, Alexis; Hamilton, Stephen F.; Souza Monteiro, Diogo M.
  10. Testing commitment cost in food choices: a non-hypothetical choice experiment approach By Bazzani, Claudia; Caputo, Vincenzina; Nayga, Rodolfo M.; Canavari, Maurizio
  11. Getting a Leg Up or Pulling it Down? Interpersonal Comparisons and Destructive Actions: Experimental Evidence from Bolivia By Zeballos, Eliana
  12. Women and Men are Different but Equal: Observations of Learning Behavior in Auctions By Zhang, Yu Yvette; Nayga, Rodolfo M. Jr.; Depositario, Dinah Pura T
  13. Food waste: The role of date labels, package size, and product category By Wilson, Norbert L.W.; Rickard, Bradley J.; Saputo, Rachel; Ho, Shuay-Tsyr
  14. Hispanic Job-Seekers outside the fields: are they discriminated? By Lopez Barrera, Emiliano; Murguia, Juan M.
  15. Marshallian versus Walrasian Stability Revisited: An Experimental Study in Kenya By Junyi Shen; Ken-Ichi Shimomura; Takehiko Yamato; Michiharu Masui; Tokinao Ohtaka; Kiyotaka Takahashi
  16. Off the reservation: Pushing the bounds of rationality in experimental auctions By Chavez, Daniel; Palma, Marco
  17. Validating consistency of non-hypothetical experimental auction data: application of the adding-up test in a multi-unit setting. By Elbakidze, Levan; Nayga, Rodolfo
  18. Does meditation lead to more selfish or pro-social behaviors in a trust game? By Di Bartolomeo Giovanni; Stefano Papa
  19. Market Design for New Leaders By Menezes, Flavio
  20. How Markets Alleviate the Excessive Choice Effect: A Field Experiment on Craft Beer Choice By Malone, Trey; Lusk, Jayson L.
  21. Consumer willingness to pay for nano-packaged food products: evidence from experimental auctions and visual processing data By Katare, Bhagyashree
  22. Noisy Information Signals and Endogenous Preferences for Labeled Attributes By Liaukonyte, Jura; Streletskaya, Nadia; Kaiser, Harry M.
  23. Effect of branding Gulf oysters on consumers willingness to pay By Acquah, Sarah; Petrolia, Daniel
  24. Nudges in Exercise Commitment Contracts: A Randomized Trial By Jay Bhattacharya; Alan M. Garber; Jeremy D. Goldhaber-Fiebert
  25. "Psychic vs. Economic Barriers to Vaccine Take-up: Evidence from a Field Experiment in Nigeria" By Ryoko Sato; Yoshito Takasaki

  1. By: Vlaeminck, Pieter; Jiang, Ting; Vranken, Liesbet
    Abstract: Using an incentive compatible field experiment, we investigate whether consumer attitudes translate into more corresponding environmentally friendly behaviour when one of the substantial barriers towards environmental food sustainability, i.e. low effectiveness of information provision, is removed. We develop multi-criteria environmental information cards and test their effectiveness in delivering and communicating information through an on-line choice experiment. The environmental information card that was found to be most effective in communicating information is then used in an experimental market and appears to have the potential to effectively steer consumers towards more environmentally friendly food purchases. When consumers shop in the experimental market with the most effective environmental information card installed, switching behaviour towards more environmentally friendly food products is observed. In addition, effective environmental information cards have the ability to increase the overall environmental friendliness of consumers’ food baskets. These findings highlight the potential for policy makers to enlarge the environmentally friendly consumer segment through the provision of easy-to-interpret and standardized environmental information.
    Keywords: Food Experimental Economics, Field Experiment, Environmental Information Provision, Consumer Behaviour, Agricultural and Food Policy, Environmental Economics and Policy, Institutional and Behavioral Economics, C93, D12, Q18, Q56, Q57,
    Date: 2014
  2. By: Wojciech Hardy (Faculty of Economic Sciences, University of Warsaw); Michal Krawczyk (Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland)
    Abstract: In this project we investigate willingness to share and download cultural content by implementing a novel "piracy game" modelled after standard public good games. Subjects' decisions have real consequence, as they are rewarded with individual "transfer" on a file-sharing service. We find that willingness to share depends positively on the sharing by others. Interestingly, however, this tendency does not seem to be associated with reciprocity or other-regarding social preferences. We employ several measures of sharing - from self-reporting to experimental - and incorporate to the analysis other factors which may explain the autonomous willingness to share, irrespective of the group effects. We find that conditional cooperation in content sharing is fairly prevalent, but unrelated to personality traits, attitude towards risk, attitude towards the other, marginal valuation, as well as socio-demographic characteristics.
    Keywords: digital piracy, Big Five, public goods, laboratory experiment
    JEL: C92 D63
    Date: 2015
  3. By: Banerjee, Simanti; Shortle, James S.
    Abstract: In this paper we study the role of informal low-cost interventions such as providing information about behavior of one’s peer group, as a mechanism to improve the performance of farmland conservation programs. We focus on a specific policy that has high ecological significance because of its emphasis on spatially coordinated land uses – the Agglomeration Bonus. Prior research has indicated that strategic uncertainty within the economic environment of the Agglomeration Bonus (resembling a coordination game with multiple payoff ranked Nash Equilibria) can lead to coordination failure and limited spatial coordination on the payoff efficient strategy (that corresponds to the land use with higher ecosystem benefits). High levels of strategic uncertainty can be a result of large community sizes where landowners’ actions are interdependent, limited information about others’ behavior and conservative payoffs that may make coordination riskier and less attractive. In this context, we consider a laboratory experiment in which we reduce participants’ strategic uncertainty by varying the amount of information available to them. In control sessions, groups of 12 individuals (arranged on a circular local network on which every individual has 2 strategic neighbors) participate in an Agglomeration Bonus game and receive payoffs and information about both their neighbors’ actions. In the treatment sessions, in addition to this information, subjects are also informed about the choices of all members of the group (including their own and their strategic neighbors’ actions). Additionally, we reduce the group size from 12 to 8 subjects to further decrease game strategic uncertainty. Our results indicate that more information in smaller groups significantly improves the likelihood of making the efficient choice. However, repeated interaction leads to a reduction in the likelihood of choosing the efficient action unless both neighbors make the same choice. Analysis of group level spatial patterns indicate no significant treatment effect with increase in instances of coordination failure over time. Thus our treatment implementation while successful in increasing the likelihood of efficient choices, does not ensure that these choices are by adjacent individuals which is necessary for environmental successes. Thus, informal mechanisms that involve providing information about one’s social peers is not expected to improve policy performance even if individuals interact with each other in smaller groups. Additional mechanisms are needed to maintain the positive effect of information and incentivize spatially contiguous efficient land use choices in the long run.
    Keywords: Agglomeration Bonus, Ecosystem Services, Information, Local Networks, Spatial Coordination, Strategic Uncertainty, Environmental Economics and Policy, Institutional and Behavioral Economics, Land Economics/Use, Q57, Q24, D83, D85, C72, C91, C92,
    Date: 2015
  4. By: Lee, Yu Na; Bellemare, Marc F.; Just, David R.
    Abstract: In his seminal 1971 article, Sandmo showed that when faced with an uncertain output price, a risk-averse firm manager would hedge by producing less than he would have when faced with a certain output price. We take Sandmo’s prediction, among other things, to the lab. We study in turn the effects of price risk (i.e., uncertain prices whose distribution is known) and price ambiguity (i.e., uncertain prices whose distribution is not known, but whose range is known) while controlling for our subjects’ income risk preferences. Our experimental protocol closely mimics Sandmo’s theoretical model. For price risk, we use a two-stage randomization strategy aimed first at studying the effect of price uncertainty relative to price certainty, and then the effect of increases in price uncertainty conditional on there being price uncertainty. For price ambiguity, we use the same randomization strategy to study the effect of price ambiguity relative to price certainty while preventing our subjects from guessing the shape of the price distribution. For price risk, we find that, in stark contradiction to Sandmo’s theoretical result, the presence of price uncertainty causes subjects to produce more than they do under price certainty, but that increases in price uncertainty makes them decrease their production monotonically. For price ambiguity, results are mixed and depend on whether the portion of the experiment aimed at eliciting our subjects’ income risk aversion is played before or after the price uncertainty game. Lastly, we use our price risk data to study the problem structurally, in order to get at preference heterogeneity, and find that our structural results are consistent with our reduced-form results.
    Keywords: Risk and Uncertainty, Price Risk, Price Ambiguity, Experimental Economics, Institutional and Behavioral Economics, Risk and Uncertainty,
    Date: 2015–05–27
  5. By: Pfuderer, Simone
    Abstract: A new approach to testing the competitive storage model is introduced. A relatively simple model is taken to the experimental laboratory. Market outcomes in the experiment deviate from the predictions of the competitive storage model in a number of ways. Average storage and the variability of storage are below the levels predicted by the competitive storage model. The resulting price series, therefore, tend to be more variable than would be the case if stockholders behaved according to the competitive storage model. In addition, the predicted relationship between availability and storage is non-linear but is linear in the experiment.
    Keywords: Demand and Price Analysis, Marketing,
    Date: 2015–04
  6. By: Kreitmair, Ursula W.; Banerjee, Simanti; Walker, James M.
    Abstract: In this study, we employ laboratory economic experiments to explore the role information networks play in the collective provision of threshold or provision point public goods. Threshold public goods are those for which a target or threshold level of funds must be raised to make provision possible or economically viable. Many public goods exhibit this characteristic as they may only be provided in discrete quantities. Thresholds or provision points are particularly relevant to environmental public goods, given non-linear ecological processes. In a broader context, the study of contribution behavior for threshold public goods also provides valuable insights into fundraising activities of both national and local profit and not-for-profit agencies, which typically involve provision points. On the basis of a 2x2 full factorial treatment design we test the following hypotheses: 1) Given LOW endowments, localized information will be less effective than full contribution information in meeting the provision point. 2) Given HIGH endowments local information will be as effective as full information to meet the threshold contribution level. 3) In cases where the threshold is met, group members are more likely to make identical contributions in the COMPLETE treatments than in the LOCAL treatments.
    Keywords: Experimental Economics, Behavioral Economics, Networks, Information, Environmental Economics and Policy, Institutional and Behavioral Economics, Public Economics,
    Date: 2015
  7. By: Andrej Angelowski; Jordi Brandts; Carles Solà
    Abstract: In many organizations the measurement of job performance can not rely on easily quantifiable information. In such cases, supervising managers often use subjective performance evaluations. We use laboratory experiments to study whether the way employees are assigned to a manager affects managers’ and co-employees’ subjective evaluations of employees. Employees can either be hired by the manager, explicitly not hired by him and nevertheless assigned to him or exogenously assigned to him. We present data from four different treatments. For all four treatments we find escalation bias by managers. Managers exhibit a positive bias towards those employees they have hired or a negative one towards those they have explicitly not hired. For three treatments we find that managers’ and employees’ biases are connected. Exogenously assigned employees are biased in favor of employees hired by the manager and against those explicitly not hired.
    Keywords: escalation bias, hiring, performance evaluations, experiments
    JEL: C92 D83 J63
    Date: 2015–07
  8. By: Irenaeus Wolff
    Abstract: In many social situations, human behaviour differs from the Nash-equilibrium under selfish payoff-maximisation. Numerous social-preference models have been proposed, virtually all of them relying on the Nash-equilibrium concept. This paper determines the Nash-equilibrium sets that result given experiment participants’ elicited preferences, and tests the various aspects of a ‘revealed-preference Nash-equilibrium’ by inducing common knowledge of preferences, using a publicgood situation as an example. The data show that in a three-player public-good situation, multiple equilibria should be expected relatively often (in a third of the cases). Second, most participants’ individual behaviour is in accordance with aspects of Nash equilibrium: most people best-respond to their beliefs, choose equilibrium actions, and consider beliefs that correspond to an equilibrium. However, many participants predict others’ behaviour poorly, which also entails that behaviour rarely is in equilibrium. This points to models like level-k as potential components for better social-preference theories. The experimental findings are obtained using experienced participants and robust to giving participants the option to look up the set of equilibria of their game, and to reducing the number of players to two.
    Keywords: Public good, social dilemma, Nash-equilibrium, rational beliefs, conditional cooperation, social preferences
    Date: 2015
  9. By: Bonroy, Olivier; Garapin, Alexis; Hamilton, Stephen F.; Souza Monteiro, Diogo M.
    Keywords: label, public policy, collective action game, experimental economics, agricultural economics., Agribusiness, Agricultural and Food Policy, Industrial Organization, Research Methods/ Statistical Methods, Risk and Uncertainty, C72, C92, Q18,
    Date: 2015–05
  10. By: Bazzani, Claudia; Caputo, Vincenzina; Nayga, Rodolfo M.; Canavari, Maurizio
    Abstract: Choice experiments (CE) are one of the most popular preference elicitation mechanisms used by applied economists. In CEs, respondents are normally asked to make choices at the moment they are asked to do so. They are also based on the assumption that the decision maker has access to and makes use of all relevant information concerning the good of interest when making their choices. However, real world choices are usually made in a dynamic context where individuals have the option to delay or reserve a transaction due to, among others, uncertainty about the product. So committing a decision at the present under conditions of uncertainty for the value of the good might have a cost (i.e., commitment cost). In this paper, we test commitment cost theory in a non-hypothetical choice experiment. Specifically, we test the possibility that gaining information about the product either at the present or in the future and the possibility of reversing the transaction in the future can influence choice behavior and WTP estimates. Our results partially support the Commitment Cost theory, suggesting that the construction of a dynamic decision context (i.e., reversibility of transaction) is important in choice experimental designs.
    Keywords: Commitment Cost, Dynamic settings, Uncertainty, Real Choice Experiment, WTP, Agricultural and Food Policy, Institutional and Behavioral Economics, Marketing,
    Date: 2015–05–25
  11. By: Zeballos, Eliana
    Abstract: Accumulating research has shown that individuals’ welfare is affected not only by the absolute amount of resources at their command but also, by their relative position vis-a-vis others. Individuals' concerns about their relative positions may influence individuals’ choices and affect their behavior. For example, upward interpersonal comparisons may spur individuals to reduce consumption gaps by increasing effort or investment to "catch-up" or by "pulling-down" others through destructive actions. "Pulling down" other more successful individuals may have both direct and indirect detrimental effects on productivity and efficiency. On one hand, welfare is reduced directly as the other’s output is destroyed and one’s resources are consumed. In addition, the threat of destructive actions may lead to lower levels of effort and investment. In order to empirically examine how interpersonal comparisons affect effort levels, the prevalence of destructive actions, and how the threat of destructive actions affect effort levels; I designed a set of behavioral games that build on the two-stage "money burning" game. I introduce a simple effort task in the first stage. Specifically, earnings depend on the number of beans individuals separate from a container full of beans and rice. The experimental games were carried out in Bolivia among 285 dairy farmers. I find that when destructive actions are not allowed, positional concerns matter for the bottom half of the earnings distribution. When rankings were revealed to the participants, those below the group mean earnings increased their effort by 7.5%. When I allow for destructive actions, 55% of people are willing to forego higher own-consumption in order to "destroy" others’ output; 58% were victims to destructive action and lost on average 34% of their earnings. There is an asymmetry in direction of destruction, 98.3% of the highest earners suffered some destruction, while only 23.7% of the lowest earners were victims to destruction actions. Finally, the threat of destructive actions reduced highest earners’ effort by 6%.
    Keywords: Interpersonal comparisons Destructive behavior Envy, Institutional and Behavioral Economics, International Development, D01 D03 D63,
    Date: 2015–07
  12. By: Zhang, Yu Yvette; Nayga, Rodolfo M. Jr.; Depositario, Dinah Pura T
    Abstract: We examined gender differences in bidding and learning behavior in Second Price Auctions (SPAs). Although bidding one’s true value is a weakly dominant strategy in SPAs, overbidding has been common and persistent in laboratory SPAs, i.e., bidding above one’s value. In our study, we found that inexperienced women overbid more than inexperienced men when they were provided with endowment money in the auctions. However, when participants were asked to bid using their own money, women became more cautious, bidding lower and closer to the optimal strategy (true value) even without experiences, while inexperienced men still overbid significantly deviating from the optimal strategy. As men gained more experiences, they learned from costly overbidding and eventually lowered their bids to the same level as those of women’s bids. In conclusion, we found that although women and men initially behaved differently in SPAs, both genders would eventually bid according to the optimal strategy and obtain the same outcome given sufficient learning experiences.
    Keywords: Gender, Learning, Auctions, Overbidding, Experiments, Institutional and Behavioral Economics, A1, C91, D44, D83, J16,
    Date: 2015
  13. By: Wilson, Norbert L.W.; Rickard, Bradley J.; Saputo, Rachel; Ho, Shuay-Tsyr
    Abstract: The presence of food waste, and ways to reduce food waste, has generated significant debate among industry stakeholders, policy makers, and consumer groups in the United States and elsewhere. Many have argued that the variety of date labels used by food manufacturers leads to confusion about food quality and food safety among consumers. Here we develop a laboratory experiment with treatments that expose subjects to different date labels (Sell by, Best by, Use by, and Fresh by) for six food products; we include both small and large-sized ready-to-eat cereal, salad greens, and yogurt. Our results show that, holding other observed factors constant, that date labels do influence subjects’ value of food waste. We find that subjects will waste food across all date labels, but that the value of waste is greatest in the “Use by” treatment, the date label suggestive of food safety, and lowest for the “Sell by” treatment. Two-way ANOVA tests provide evidence that subjects respond differentially to date labels by product. Pair-wise comparison indicate that the “Sell by” treatment generates a waste value that is different than other date labels. We see subjects have different values of waste depending on date label and product. The value of waste for cereal is more responsive to “Fresh by”; for salad, the value of waste is more responsive to all date labels except for “Fresh by”; for yogurt, subjects adjusted their value of waste the most to the “Sell by” treatment. Date labels influence food waste despite the limited information provided by the labels.
    Keywords: Consumer preferences, Date labels, Experimental economics, Food quality, Food safety, Public policy analysis, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Q13, Q18,
    Date: 2015
  14. By: Lopez Barrera, Emiliano; Murguia, Juan M.
    Abstract: We investigate wage settings in an experimental labor market to measure the effect of otherwise unobservable labor market characteristics on Hispanic job-seekers’ employment and wages. Agricultural and non-agricultural labor markets were simulated by controlling the student’s answer in a questionnaire about whether he or she is working or plans to work on a farm or rural county after graduation. This paper presents evidence supporting the existence of differences in discrimination on urban and rural markets. Average predicted productvity for Hispanic males in rural market was higher than in urban labor maket, suggesting that Hispanics male job-seekers are predicted to fit better in rural activities which may imply an invisible barrier that prevents their mobility from rural to urban labor market.
    Keywords: immigration, rural labor market, discrimination, Hispanics, experimental economics, Labor and Human Capital, J710, Q10,
    Date: 2015–05
  15. By: Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan, and School of Economics, Shanghai University, China); Ken-Ichi Shimomura (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Takehiko Yamato (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology); Michiharu Masui (Department of Business Administration, Ishinomaki Senshu University); Tokinao Ohtaka (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology); Kiyotaka Takahashi (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology)
    Abstract: We study dynamics in pit market trading by a laboratory experiment. Our exchange economy model contains two types of consumers and two kinds of commodities, and three competitive equilibria exist. The two equilibria with the lowest, and the highest relative prices are beneficial for one type of the consumers, and the intermediate price gives an equitable allocation. The theory of Walrasian tatonnement dynamics predicts that relative prices diverge from the intermediate equilibrium towards the lowest equilibrium or the highest equilibrium depending on initial prices. On the other hand, Marshallian quantity adjustment process leads the total supplied volume to the intermediate equilibrium only regardless of initial states. In order to examine how robust the equilibrium selection is, we conducted a manual experiment of pit market trading with different combinations of ethnicities of subjects in Kenya. Our result shows strong support for the convergence to the intermediate equilibrium, which is unstable in Walrasian tatonnement dynamics and is stable in Marshallian quantity adjustment process.
    Date: 2015–07
  16. By: Chavez, Daniel; Palma, Marco
    Abstract: The use of experimental economics in valuation of market and non-market goods has grown considerably over the past few years. The ability of experimental auctions (EAs) to reveal consumer preferences and their malleability have been greatly praised by researchers across the profession. Because of the high cost of conducting EAs, researchers have a vested interest in extracting as much information as possible from the research sample, usually presenting multiple products or product alternatives to participants. In the last decade large amounts of work has been done to improve the methodology and design of EAs. However, choosing how many products or product alternatives to use has no clear guideline. Findings of this study support a “choice overload” phenomenon even with a relatively small number of products used for auction. Mean willingness to pay was found to be a decreasing function of the number of alternatives presented to participants. A heteroscedastic error variance scaler was estimated and it was found to be a decreasing function of the number of alternatives presented, implying more variance across responses as the number of alternatives increases.
    Keywords: Choice Overload, Experimental Economics, Heteroscedastic Error Variance, Willingness to Pay, Institutional and Behavioral Economics, Research Methods/ Statistical Methods, C91, C18,
    Date: 2015
  17. By: Elbakidze, Levan; Nayga, Rodolfo
    Keywords: Institutional and Behavioral Economics,
    Date: 2015–07
  18. By: Di Bartolomeo Giovanni; Stefano Papa
    Date: 2015–05
  19. By: Menezes, Flavio
    Abstract: In this article we explore some of the theoretical developments over the last 40 years which led to the emergence of the field of market design. This new field has had a substantive impact on policy, especially after the highly successful auctions of the mobile telephony licences in the mid-1990s in the US. The auctions replaced an inefficient allocation system where licences were allocated to applicants via a lottery and subsequently sold for large windfalls. These auctions raised substantial amount of revenue for the US government and were adopted worldwide, including in Australia. First, I provide a brief history of market design in cases where monetary payments can be used as the basis to allocate goods and services. This history starts with the game theoretical foundations of non-cooperative behaviour – as typically the interests of different individuals are in conflict, for example, when buying or selling goods and services – and then moves on to mechanism design and auction theory and practice. Second, I will review a very large experiment in Brazil where markets were created to avoid electricity rationing in 2001. The choice of this example is not inconsequential. It is meant to illustrate that such an approach to public policy can be successful even in developing countries with weaker institutions. I will then provide some concluding comments.
    Keywords: Auction theory, game theory, market design, Public Economics, D47, C7, D44,
    Date: 2013–09
  20. By: Malone, Trey; Lusk, Jayson L.
    Abstract: Research in psychology suggests that, somewhat paradoxically, providing consumers more choice can reduce the likelihood of making a purchase, producing the so-called excessive choice effect (ECE). To the extent the ECE exists, firms have an incentive to alleviate the effect through a variety of consumer-focused institutions that lower search costs. This study determines the effectiveness of three consumer-focused institutions on the excessive choice effect in a field experiment focused on beer sales in a restaurant. We manipulate the number of options on the menu (6 vs. 12) in addition to the use of search cost lowering consumer-focused institutions (a control, a menu, a menu with a special prominently displayed, a menu with local options prominently highlighted, and a menu with beer advocate scores). Although we find that consumers tend to be more likely to order beer when presented 6 rather than 12 options, the differences are often not significant depending which data are used and how it is analyzed. Highlighting specials or listing beer rankings have an effect on consumer choices, and have the potential to decrease the excessive choice effect. The experiment also suggests including a special is the most effective way to increase sales of a product category, but not the specific product itself.
    Keywords: excessive choice, informal institutions, field experiment, craft beer, Institutional and Behavioral Economics, Marketing, C93 D03 D12 Q00 Q13,
    Date: 2015
  21. By: Katare, Bhagyashree
    Abstract: Using eye-tracking technology and experimental auctions, this paper evaluates the impact of information from various sources on consumers’ willingness to pay (WTP) for nano-packaged food products with varying shelf-lives. Information about the risks and benefits of nanotechnology in food processing from various sources was presented to consumers and consumers’ eyes were tracked and the time they spent on viewing the information was recorded. Double hurdle models estimation results show that the specific information about nanotechnology from various sources has a negative effect on the probability of consumer submitting positive bids for the nano-packaged products. Conditional on participants’ willingness to submit positive bids, general and specific information about nanotechnology had a positive effect on participants’ WTP for nano-packaged salads and apple sauce which are products with a relatively shorter shelf-life. The eye-tracking data in the analysis showed the proportion of the normalized time viewing the information from private industry significantly increased the WTP conditional on participants submitting a positive bid for apple sauce as compared with the proportion of normalized time viewing the information from environmental protection groups.
    Keywords: Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,
    Date: 2013–10
  22. By: Liaukonyte, Jura; Streletskaya, Nadia; Kaiser, Harry M.
    Abstract: Consumer preferences for labeled products are often assumed to be exogenous to the presence of labels. However, the label itself (and not the information on the label) can be interpreted as a noisy warning signal. We measure the impact of “Contains” labels and additional information about the labeled ingredients, treating preferences for labeled characteristics as endogenous. We find that for organic food shoppers, the “Contains” label absent additional information serves as a noisy warning signal leading them to overestimate the riskiness of consuming the product. Provision of additional information mitigates the large negative signaling effect of the label
    Keywords: Demand Shifts and Rotations, Experimental Economics, Labeling, Signaling effect, Willingness-to-Pay, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, L13, C21, M31, Q13, Q18,
    Date: 2015
  23. By: Acquah, Sarah; Petrolia, Daniel
    Abstract: Using a choice experiment this study found that raw oyster consumers are more likely to buy oysters harvested from their region over those harvested outside the region. Consumers are more likely to buy wild-caught oysters over cultivated oysters. Non-Gulf consumers are more likely to buy medium or large size oysters over small size.
    Keywords: branding, choice experiment, marketing, oyster attributes, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2014
  24. By: Jay Bhattacharya; Alan M. Garber; Jeremy D. Goldhaber-Fiebert
    Abstract: We consider the welfare consequences of nudges and other behavioral economic devices to encourage exercise habit formation. We analyze a randomized trial of nudged exercise commitment contracts in the context of a time-inconsistent intertemporal utility maximization model of the demand for exercise. The trial follows more than 4,000 people seeking to make exercise commitments. Each person was randomly nudged towards making longer (20 weeks) or shorter (8 weeks) exercise commitment contracts. Our empirical analysis shows that people who are interested in exercise commitment contracts choose longer contracts when nudged to do so, and are then more likely to meet their pre-stated exercise goals. People are also more likely to enroll in a subsequent commitment contract after the original expires if they receive a nudge for a longer duration initial contract. Our theoretical analysis of the welfare implications of these effects shows conditions under which nudges can reduce utility even when they succeed in the goal of promoting habitual exercise.
    JEL: D6 I1 I12
    Date: 2015–07
  25. By: Ryoko Sato (Global Asia Institute, National University of Singapore); Yoshito Takasaki (Faculty of Economics, The University of Tokyo)
    Abstract: The paper concerns small-area estimation in the Fay-Herriot type area-level model with random dispersions, which models the case that the sampling errors change from area to area. The resulting Bayes estimator shrinks both means and variances, but needs numerical computation to provide the estimates. In this paper, an approximated empirical Bayes (AEB) estimator with a closed form is suggested. The model parameters are estimated via the moment method, and the mean squared error of the AEB is estimated via the single parametric bootstrap method. The benchmarked estimator and a second-order unbiased estimator of the mean squared error are also derived. --
    Date: 2015–07

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