|
on Experimental Economics |
|
Issue of 2015‒09‒26
29 papers chosen by |
| By: | Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); John List (Department of Economics, University of Chicago); Marco Piovesan (Department of Economics, University of Copenhagen); Anya Samek (Center for Economic and Social Research, University of Southern California); Joachim Winter (Department of Economics, University of Munich) |
| Abstract: | Acts of dishonesty permeate life. Understanding their origins, and what mechanisms help to attenuate such acts is an underexplored area of research. This study takes an economics approach to explore the propensity of individuals to act dishonestly across different contexts. We conduct an experiment that includes both parents and their young children as subjects, exploring the roles of moral cost and scrutiny on dishonest behavior. We find that the highest level of dishonesty occurs in settings where the parent acts alone and the dishonest act benefits the child. In this spirit, there is also an interesting, quite different, effect of children on parents’ behavior: parents act more honestly under the scrutiny of daughters than under the scrutiny of sons. This finding sheds new light on the origins of the widely documented gender differences in cheating behavior observed among adults, where a typical result is that females are more honest than males. Length: 48 |
| Keywords: | cheating, dishonesty, ethical judgment, social utility, field experiment |
| JEL: | C91 D63 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1054&r=all |
| By: | Andersson, Ola (Research Institute of Industrial Economics (IFN)); Miettinen, Topi (Hanken School of Economics); Hytönen, Kaisa (Aalto University); Johannesson, Magnus (Stockholm School of Economics); Stephan, Ute (Aston Business School) |
| Abstract: | We experimentally prime subjects subliminally prior to charity donation decisions by showing words that have connotations to prosocial values for a very short duration of time (17ms). Our main finding is that, compared to a baseline condition, the prosocial prime increases donations with about 10–17 percent among subjects with strong prosocial preferences. A similar effect is also found in our data when interacting the prime with the personality characteristic of BigFive agreeableness. We also contribute with providing an arguably better method for testing for "sublimity". The method reveals that some subjects are capable of recognizing some of the prime words, and the results are overall weaker when we control for this capacity. |
| Keywords: | Charity; Subliminal; Priming; Universalism; Values; Personality |
| JEL: | C91 D01 D03 |
| Date: | 2015–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1084&r=all |
| By: | Claudia Brunnlieb (Institute of Social Medicine and Health Economics, Otto-von-Guericke University Magdeburg); Stephan Schosser (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | We delineated the causal influence of vasopressin on behavior in an iterated Hawk-Dove game. While subjects treated with vasopressin tend to be more aggressive in response to group members who did not coordinate on equilibrium instantaneously, this effect vanishes as soon as the subjects reach an equilibrium. More than vasopressin, social preferences and trait anxiety of the subjects predict the observed behavior. |
| Keywords: | Hawk-Dove game, anti-coordination game, neuroeconomic experiment, vasopressin, psychological aspects |
| JEL: | C72 C92 D03 D87 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:150012&r=all |
| By: | Jeffrey V. Butler (Department of Economics, University of Nevada); Pierluigi Conzo (University of Turin, Campus Luigi Einaudi and CSEF, Dept of Economics and Statistics, University of Naples Federico II); Martin A. Leroch (Institute of Political Science, Johannes Gutenberg-Universitaet Mainz) |
| Abstract: | Third party (bystander) punishment is crucial for sustaining cooperative behavior. Through laboratory experiments we investigate the interaction between group identi- cation and a bystander's punishment preferences by inducing minimal groups and giving a bystander the opportunity to levy a xed amount of punishment on the perpetrator of an unfair act towards a defenseless victim. We elicit the bystander's valuation for punishment in four cases: when the perpetrator, the victim, both or neither are members of the bystander's group. For predictions, we construct three separate frameworks diering by whether the primary eect of group identity is to create an empathetic bond between in-group members or to aect the weights placed on others' money earnings (distributional social preferences). The frameworks yield starkly dierent ordinal predictions about the bystander's value for punishment across two cases: i) when the perpetrator and victim are both members of the bystander's group; ii) when only the victim is an in-group member. The empathetic bond framework predicts that punishment will be more highly valued in the latter case, while the distributional preferences frameworks suggest the opposite. Our data support the predictions of the rst. Finally, we conduct control sessions where groups are not induced and nd that bystanders tend to treat others as in-group members unless specically divided into distinct groups. |
| Keywords: | Identity, social norms, culture, cheating, in-group bias, punishment |
| JEL: | D74 Z1 |
| Date: | 2015–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1512&r=all |
| By: | Chetty, Raj; Saez, Emmanuel; Sándor, László |
| Abstract: | We evaluate policies to increase prosocial behavior using a field experiment with 1,500 referees at the Journal of Public Economics. We randomly assign referees to four groups: a control group with a six week deadline to submit a referee report, a group with a four week deadline, a cash incentive group rewarded with $100 for meeting the four week deadline, and a social incentive group in which referees were told that their turnaround times would be publicly posted. We obtain four sets of results. First, shorter deadlines reduce the time referees take to submit reports substantially. Second, cash incentives significantly improve speed, especially in the week before the deadline. Cash payments do not crowd out intrinsic motivation: after the cash treatment ends, referees who received cash incentives are no slower than those in the 4 week deadline group. Third, social incentives have smaller but significant effects on review times and are especially effective among tenured professors, who are less sensitive to deadlines and cash incentives. Fourth, all the treatments have little or no effect on agreement rates, quality of reports, or review times at other journals. We conclude that small changes in journals’ policies could substantially expedite peer review at little cost. More generally, price incentives, nudges, and social pressure are effective and complementary methods of increasing prosocial behavior. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:faseco:22803569&r=all |
| By: | Mason Ameri; Lisa Schur; Meera Adya; Scott Bentley; Patrick McKay; Douglas Kruse |
| Abstract: | People with disabilities have low employment and wage levels, and some studies suggest employer discrimination is a contributing factor. Following the method of Bertrand and Mullainathan (2003), new evidence is presented from a field experiment that sent applications in response to 6,016 advertised accounting positions from well-qualified fictional applicants, with one-third of cover letters disclosing that the applicant has a spinal cord injury, one-third disclosing the presence of Asperger’s Syndrome, and one-third not mentioning disability. These specific disabilities were chosen because they would not be expected to limit productivity in accounting, helping rule out productivity-based explanations for any differences in employer responses. Half of the resumes portrayed a novice accountant, and half portrayed an experienced one. The fictional applicants with disabilities received 26% fewer expressions of employer interest than those without disabilities, with little difference between the two types of disability. The disability gap was concentrated among more experienced applicants, and among private companies with fewer than 15 employees that are not covered by the ADA, although comparable state statutes cover about half of them. Comparisons above and below disability law coverage thresholds point to a possible positive effect of the ADA on employer responses to applicants with disabilities, but no clear effects of state laws. The overall pattern of findings is consistent with the idea that disability discrimination continues to impede employment prospects of people with disabilities, and more attention needs to be paid to employer behavior and the demand side of the labor market for people with disabilities. |
| JEL: | J14 J24 J71 J78 K39 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21560&r=all |
| By: | Kwiek, Maksymilian (University of Southampton); Marreiros, Helia (University of Southampton); Vlassopoulos, Michael (University of Southampton) |
| Abstract: | A conclave is a voting mechanism in which a committee selects an alternative by voting until a sufficient supermajority is reached. We study experimentally welfare properties of simple three-voter conclaves with privately known preferences over two outcomes and waiting costs. The resulting game is a form of multiplayer war of attrition. Our key finding is that, consistent with theoretical predictions, when voters are ex ante heterogeneous in terms of the intensity of their preferences the conclave leads to efficiency gains relative to simple majority voting. We also compare welfare properties of a static versus a dynamic version of a conclave. When social cost of waiting is taken into account, the dynamic conclave is superior in terms of welfare than its static version. |
| Keywords: | voting, supermajority, intensity of preferences, war of attrition |
| JEL: | C78 C92 D72 D74 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9336&r=all |
| By: | Nita Rudra; Sera Linardi |
| Abstract: | Can globalization change our willingness to redistribute to the poor? We propose the hypothesis that in developing countries, the 'glitter' of foreign direct investment (FDI) reduces public support for redistribution by creating perceptions of better employment opportunities for the poor. Initial evidence is derived from World Value Survey responses from developing economies. Delving deeper, a framed field experiment in India reveals foreign ownership of low-skilled firms reduces redistribution to the poor. We further find that rich conservatives drive this reduction. This analysis provides the first experimental evidence of the causal impact of globalization on redistribution, mediated by ideology and income. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00399&r=all |
| By: | Thanee Chaiwat (Faculty of Economics, Chulalongkorn University) |
| Abstract: | Crime is a big problem in every society. In economic aspect, Becker (1974) proposed that the decision on criminal activities depends on the probability to be caught and the degree of penalty. An agent would evaluate his net return before make his decision. However individual may perceive the probability to be caught different from the real known value. This paper employed Tedeschi (2007)’s Drug Market Game to run class experiments of 156 economics students of Chulalongkorn University (Bangkok) and Walailuk University (Nakon Si Thammarat) to observe how individual perceived the probability to be caught. This game divided the subjects into 3 types of buyers, including the addict, the casual, and the curious and 2 types of sellers, including the big supplier and the small supplier. The experimental game started with free market situation, following decriminalization. The police would be inserted into the game with various amounts to vary the caught factor, so both buyers and sellers seem to have reacted rationally. Later, the game proposed the chance to negotiate bribe before being caught under some proportion of the group of police. The results showed that individuals think for themselves and believe that they would be lucky that they can bribe even they know the probability to be caught and the proportion of good police. So they have reacted as same as in the free market situation. This is because individuals have lucky bias for themselves, and create supply in bribery market. So policy implication should concern this lucky bias to restrict bribery supply and reduce crime effectively. |
| Keywords: | Bribery, Experimental Economics, Behavioral Economics, Law and Economics |
| JEL: | K42 C91 D03 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2704790&r=all |
| By: | L. Becchetti; V. Pelligra; F. Salustri |
| Abstract: | We use the Vote-with-the-Wallet game (VWG) to model socially or environmentally responsible consumption, an increasingly relevant but still under-researched phenomenon. Based on a theoretical model outlining game equilibria and the parametric interval of the related multiplayer prisoners’ dilemma (PD) we evaluate with a controlled lab experiment players’ behavior in the game and test the effects of an ex post redistribution mechanism between defectors and cooperators. Our findings document that the redistribution mechanism interrupts cooperation decay and stabilizes the share of cooperators at a level significantly higher, even though inferior to the Nash equilibrium. |
| Keywords: | vote with the wallet, prisoner’s dilemma, lab experiment |
| JEL: | C72 C73 C91 M14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201512&r=all |
| By: | Henry, Emeric; Sonntag, Jan |
| Abstract: | It is now well documented that individuals, on average, change their behavior when their actions are observed by others. Yet, there is no systematic way of measuring this dimension of preferences at the individual level. In this paper, we propose a novel experimental game to measure the individual sensitivity to image concerns. We test it experimentally and provide several justifications for the validity of our measure. We find a large heterogeneity in the population: one third of the sample appears totally insensitive to perceptions by others, while one third appears strongly imaged concerned. Members of ethnic minorities seem to be more imaged concerned, in particular when observed by a member of other groups. We also show that more image concerned individuals tend to be less cooperative. Finally, we provide preliminary evidence suggesting that individuals do not only care about the absolute image they convey, but also about how far this image is from reality. |
| Keywords: | image concern; social norm |
| JEL: | D03 D64 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10831&r=all |
| By: | Anna Lou Abatayo (University of Hawaii at Manoa); John Lynham (University of Hawaii at Manoa); Katerina Sherstyuk (University of Hawaii at Manoa) |
| Abstract: | Communication is often critical for economic cooperation and enhancement of trust. Traditionally, direct face-to-face communication has been found to be more effective than any form of indirect, mediated communication. We study whether this is still the case given that many people routinely use texting and online social media to conduct economic transactions. In out laboratory experiment, groups of participants communicate either (i) face-to-face, (ii) through the most popular online social network – Facebook, or (iii) using text messaging, before participating in a public goods or a trust game. While people talk significantly more under traditional face-to-face, discussion through Facebook and text messages prove as effective as face-to-face communication in enhancing cooperation and increasing trust. For all three media, discussions that focus on the game of use more positive emotion words are correlated with enhanced trust. It appears that young American adults are now just as adept at communicating and reducing social distance online as they are in person. |
| Keywords: | communication technology; laboratory experiments; public good games; trust games |
| JEL: | C91 C92 D03 D71 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201513&r=all |
| By: | David Hugh-Jones (Department of Government, University of Essex); Martin A. Leroch (Institute of Political Science, Johannes Gutenberg-Universitaet Mainz) |
| Abstract: | Field studies of conflict report cycles of mutual revenge between groups, often linked to perceptions of intergroup injustice. Which motivations account for such behavior is, however, not clear. We test the hypothesis that people are predisposed to reciprocate against groups. In a laboratory experiment, subjects who were harmed by a partner’s uncooperative action reacted by harming other members of the partner’s group. This group reciprocity was only observed when one group was seen as unfairly advantaged. Our results support a behavioral mechanism leading from perceived injustice to intergroup conflict. We discuss the relevance of group reciprocity to political and economic phenomena including conflict, discrimination and team competition. |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1510&r=all |
| By: | Dutcher, E. Glenn (University of Central Missouri); Balafoutas, Loukas (University of Innsbruck); Lindner, Florian (University of Innsbruck); Ryvkin, Dmitry (Florida State University); Sutter, Matthias (University of Cologne) |
| Abstract: | We utilize a laboratory experiment to compare effort provision under optimal tournament contracts with different distributions of prizes which motivate agents to compete to be first, avoid being last, or both. We find that the combined tournament contract incorporating both incentives at the top and at the bottom induces the highest effort, especially in larger groups. Avoiding being last produces the lowest variance of effort and is more effective at motivating employees compared to competing for the top. |
| Keywords: | tournament, winner, loser, contract, experiment, learning |
| JEL: | M52 J33 J24 D24 C90 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9330&r=all |
| By: | Adam, Antonis; Drichoutis, Andreas C.; Georgoula, Maria; Kammas, Pantelis |
| Abstract: | Collective action problems, such as double parking behavior, are pervasive in everyday life. This paper presents the results from a field survey that was carried out at one of the main and busiest streets of the city of Ioannina in Greece, in order to investigate the effect of political ideology on double parking behavior. We find that individuals placing themselves either on the extreme Left or the extreme Right on a [0-10] political spectrum, are characterized by increased propensity of double parking behavior. Taking into account that both the extreme Left and the extreme Right Greek parties are strongly in favor of state intervention, our empirical findings could be read as follows. Subjects that believe in the superiority of state intervention rely heavier on incentives and constraints provided by the law and therefore in the absence of an effective monitoring mechanism they fail to internalize the social cost of their actions. In contrast, subjects that are in favor of decentralized market solutions, take into account the social impact of their actions even in the absence of a strong monitoring state mechanism. |
| Keywords: | Collective Action; Political Ideology; Political Behavior |
| JEL: | C93 H23 H41 |
| Date: | 2015–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66724&r=all |
| By: | Enrique Fatas (University of East Anglia); Antonio J. Morales (University of Malaga); Ainhoa Jaramillo-Gutierrez (University Jaume I of Castellon) |
| Abstract: | We offer theoretical and experimental evidence suggesting that social competition has a first order effect in low-information Cournot markets. Using data from a stylized laboratory experiment, we show that firms use average market profits as a reference point to assess their relative performance following a simple but powerful logic: earnings above the market reinforces their current choice; scoring below the market prompts dissatisfaction and experimentation with new quantities. This "win-stay, lose-shift" heuristics converges to the competitive outcome because the Walrasian quantity is the unique action that never yields profits below the average profits in the market. This prediction is neatly confirmed in the lab. Social competition leads to Walrasian quantities even when firms do not receive information about the most successful rival, and imitation is not possible. |
| Keywords: | experiments, Cournot competition, Walrasian convergence, social comparison |
| JEL: | C9 L13 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:15-15&r=all |
| By: | Stephan Schosser (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | Subjects in the loss domain tend to split payoffs equally when bargaining. The ultimatum game offers an ideal mechanism through which economists can investigate whether equal splits are the consequence of proposer generosity or due to their anticipation that the responders will reject lower offers. This paper experimentally compares ultimatum bargaining in a loss domain with that under gains. The results reveal that, although responders do not expect more in the loss domain, proposers do make higher offers. As such, proposers reach agreements more often in the loss domain than they do in the gains domain, and responders receive higher payoffs. |
| Keywords: | Ultimatum bargaining, losses, equal split, experimental economics |
| JEL: | C72 C92 D74 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:150009&r=all |
| By: | Koedijk, Kees; Noussair, Charles; Pownall, Rachel A J; Terzi, Ayse |
| Abstract: | It is well-established that reference points are a feature of decision making under risk. In this paper we report an experiment, in which we investigate which of three potential reference points: (1) a status quo payoff level, (2) the average expected earnings of peers, and (3) a stated expectation of the experimenter, best describes behavior in a decontextualized risky decision making task. We find heterogeneity among individuals in the reference points they employ. The status quo level is the modal reference point, followed by the experimenter's stated expectation of participant earnings, and in turn by the average expected earnings of peers. A sizeable share of individuals show multiple reference points simultaneously. Reference points can be affected by a change in the income level. |
| Keywords: | experiment; reference point |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10823&r=all |
| By: | Stephan Schosser (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Bodo Vogt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | This paper describes an experimental study involving the minimum effort game. In this game, each player faces a trade-off between risk and payoff. Within each group, half of the subjects were administered with vasopressin in nasal spray form while half received a placebo. We found that subjects who received vasopressin were more likely to play the minimally risky strategy in the group and less likely to focus on payoff levels than those who received the placebo. |
| Keywords: | minimum effort game; coordination game; neuroeconomic experiment; vasopressin |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:150011&r=all |
| By: | Cettolin E.; Riedl A.M. (GSBE) |
| Abstract: | The completeness axiom of choice has been questioned for long, and in response, theoretical models of decision making allowing for incomplete preferences have been developed. So far the theoretical accomplishments have however not been paired with empirical evidence on the actual existence of incomplete preferences. In this paper we provide empirical evidence in support of the existence of incomplete preferences due to multiple priors over an ambiguous event. We design experimental decision tasks where specific choice patterns are consistent with incomplete preferences under uncertainty but inconsistent with models assuming complete preferences. We find that approximately half of the subjects behave consistent with incomplete preferences due to multiple priors and that the observed behavioral pattern cannot be attributed to mistakes, probability weighting or regret aversion. In a robustness test we show that the observed behavior is robust to a prize variation in the ambiguous prospect and consistent with comparative statics predictions based on incomplete preferences under uncertainty. |
| Keywords: | Design of Experiments: Laboratory, Individual; Microeconomic Behavior: Underlying Principles; Criteria for Decision-Making under Risk and Uncertainty; |
| JEL: | C91 D01 D81 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2015016&r=all |
| By: | Jäckle, Annette; Pudney, Stephen |
| Abstract: | Disability research often uses survey questions asking whether respondents have a long-standing health problem, but longitudinal repetition of such questions produces implausibly high empirical transition rates into and out of ill-health. We exploit a repeated experiment in the Understanding Society Innovation Panel to identify reasons for these high transition rates, and to assess the common practice of using such questions to control who is asked further questions on difficulties with daily activities. Our results reveal ambiguity in the concept of a long-standing health problem and indicate significant biases in commonly used measures and multivariate analyses of health dynamics and disability. |
| Date: | 2015–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:ese:ukhlsp:2015-05&r=all |
| By: | Daniel Jones; Sera Linardi |
| Abstract: | An extensive literature on reputation signaling in prosocial settings has focused on an intrinsic desire for positive reputation. In our paper, we provide experimental evidence that some individuals are averse to both positive and negative reputation and will therefore respond to visibility by signaling that they are an "average altruism type" relative to their audience. We formalize our hypotheses about "wallflower" behavior in a theoretical model. Our experimental results show that instead of uniformly increasing contributions, visibility draws contributions towards the middle of others' contributions. As a result, visibility is associated with higher levels of giving only when in scenarios where others are giving a large amount. We also observe heterogeneity in reputation concerns wallflower behavior is particularly strong for women and can be observed in several different settings. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00400&r=all |
| By: | Chatman, Jennifer A.; Sherman, Eliot L.; Doerr, Bernadette M. |
| Abstract: | We advance social identity theory by hypothesizing that the content of demographic attributes on which members differ, and not just their distribution, influences the relationship between a group’s composition and its performance. We test this theoretical logic, using both laboratory and field data, by investigating groups with different distributions of members (from the same or different nations) and cultural orientations (individualistic or collectivistic). We hypothesize that, because a collectivistic orientation promotes group identification, a focus on collective goals, and a sense of being an interchangeable exemplar of the group, it also reduces the polarizing effects of demographic heterogeneity and improves group performance. Using an experimental design, we find that subjects primed with a collectivistic rather than an individualistic orientation see less distinction between nationally homogeneous and heterogeneous groups, and expect the group to be more successful. We also analyze archival data representing 5,460 Himalayan climbing expeditions and find that expeditions characterized by higher levels of national heterogeneity are more likely to reach the summit if more members hail from collectivistic rather than individualistic countries. Simultaneously considering the distribution and content of attributes on which members differ will accelerate the evolution of a comprehensive theory of social identity processes and consequences. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2015–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:qt7vq6w0gk&r=all |
| By: | Todd Kaplan, Bradley Ruffle (Wilfrid Laurier University) |
| Abstract: | Cooperation between two players often requires exactly one to take the available action, while the other acquiesces. If the decisions whether to pursue the action are made simultaneously, then neither or both may acquiesce leading to an inefficient outcome. However, inefficiency may be avoided if players move sequentially. We test experimentally whether two-stage versions of this entry-exit game enhance cooperation. In one version, players may wait in the first stage to see what their paired player did and then coordinate in the second stage. In another version, sequential decision-making is imposed by assigning one player to move in stage one and the other player in stage two. Although there are fewer cooperative decisions in the two-stage treatments, we show that subjects coordinate better on efficient cooperation and on avoiding both acquiescing. Consequently they achieve higher profits. Yet, the least cooperative pairs do worse in the two-stage games than their single-stage counterparts. They use the second stage not to facilitate coordination but to disguise their uncooperative play or to punish their opponents. |
| Keywords: | experimental economics, cooperation, efficiency, two-stage games, turn-taking. |
| JEL: | C90 Z13 |
| Date: | 2015–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:wlu:lcerpa:0095&r=all |
| By: | Luke Condra; Mohammad Isaqzadeh; Sera Linardi |
| Abstract: | We unpack the psychological influence of a Muslim cleric's power over the poor in an experiment in Afghanistan. The same cleric requests contributions for a hospital from day-laborers when dressed as a civilian and as a cleric. In Civilian condition, 50% contribute and 17% make large contributions; in Cleric condition, 83% contribute but large contributions fall. Through counterfactual simulations, we find that the clerical garb compels unmotivated subjects to contribute (selection), but causes those who initially were generous to reduce their contribution (crowding out). The backlash is present only among those with formal education but is counteracted when the cleric adds a recitation of Qur'anic verses. Overall, this suggests that education mediates whether people automatically associate religious authorities with the omnipresent. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00398&r=all |
| By: | Carpena,Fenella; Cole,Shawn A.; Shapiro,Jeremy; Zia,Bilal Husnain |
| Abstract: | This paper uses a large scale field experiment in India to study attitudinal, behavioral, and cognitive constraints that stymie the link between financial education and financial outcomes. The study complements financial education with (i) participant classroom motivation with pay for performance on a knowledge test, (ii) intensity of treatment with personalized financial counseling, and (iii) behavioral nudges with financial goal setting. The analysis finds no impact of pay for performance but significant effects of both counseling and goal setting on real financial outcomes. These results identify important complements to financial education that can bridge the gap between financial knowledge and financial behavior change. |
| Keywords: | Access to Finance,Curriculum&Instruction,Financial Literacy,Effective Schools and Teachers,Access&Equity in Basic Education |
| Date: | 2015–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7413&r=all |
| By: | Wolfgang Luhan (Ruhr University Bochum); Anders Poulsen (University of East Anglia); Michael Roos (Ruhr University Bochum) |
| Abstract: | We report experimental data from a bargaining situation where two decision makers tacitly make their decisions, and earn and cumulate their payoffs in real time. Examples include fishermen choosing fishing spots, interaction among neighbors who prefer not to talk, military conflict, and tacit duopoly. The data can be organized and explained in terms of focal properties of feasible payoffs, and the complexity of coordinating on the intertemporal behavior required to achieve these payoffs. Bargainers trade off payoff focality and coordination complexity, and behavior can be systematically inefficient. |
| Keywords: | bargaining, real time interaction, payoff focality, coordination complexity, bounded rationality |
| JEL: | C70 C72 C92 |
| Date: | 2015–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:15-11&r=all |
| By: | Schmid, Julia |
| Abstract: | One reason for firms to voluntarily increase their environmental or social production standards is to prevent consumers from lobbying for stricter mandatory standards. In this sense, voluntary overcompliance serves as a Greek gift, as consumers might be worse off in the end. Strategically, a Greek gift deteriorates the consumer's incentive for lobbying and, as such, might be unkind. In many experiments it was shown that unkind actions which decrease the other's payoff are punished by negative reciprocal behavior. This paper experimentally investigates whether negative reciprocity can also be observed if unkind behavior is not directed at payoffs but rather at a deterioration of strategic incentives. |
| Keywords: | experiments,voluntary agreements,overcompliance,learning,reciprocity |
| JEL: | C72 C92 D83 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2015206&r=all |
| By: | Bleemer, Zachary (University of California Berkeley); Zafar, Basit (Federal Reserve Bank of New York) |
| Abstract: | Despite a robust college premium, college attendance rates in the United States have remained stagnant and exhibit a substantial socioeconomic gradient. We focus on information gaps—specifically, incomplete information about college benefits and costs—as a potential explanation for these patterns. For this purpose, we conduct an information experiment about college returns and costs embedded within a representative survey of U.S. household heads. We show that, at the baseline, perceptions of college costs and benefits are severely and systematically biased: 75 percent of our respondents underestimate college returns (defined as the average earnings of a college graduate relative to a non-college worker in the population), while 61 percent report net public college costs that exceed actual net costs. There is also substantial heterogeneity in beliefs, with evidence of larger biases among lower-income and non-college households. We also elicit respondents’ intended likelihood of their pre-college-age children attending college, and the likelihood of respondents recommending college for a friend’s child, the two main behavioral outcomes of interest. Respondents are then randomly exposed to one of two information treatments, which respectively provide objective information about “college returns” and “college costs.” We find a significant impact on intended college attendance for individuals in the returns experiment: intended college attendance expectations increase by about 0.2 of the standard deviation in the baseline likelihood. Importantly, as a result of the college returns information intervention, gaps in intended college attendance by household income or parents’ education persist but decline by 20 to 30 percent. Notably, the effect of information persists in the medium-term, two months after the intervention. We find, however, no impact of the cost information treatment on college attendance expectations. |
| Keywords: | college enrollment; college returns and costs; information; subjective expectations |
| JEL: | D81 D83 D84 I21 I24 I28 |
| Date: | 2015–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:739&r=all |