|
on Experimental Economics |
| By: | E. Lance Howe (Department of Economics, University of Alaska Anchorage); James J. Murphy (Department of Economics, University of Alaska Anchorage; Institute of State Economy, Nankai University; Economic Science Institute, Chapman University); Drew Gerkey (Department of Anthropology, Oregon State University); Colin T. West (Department of Anthropology, University of North Carolina) |
| Abstract: | Integrating information from existing research, qualitative ethnographic interviews, and participant observation, we designed a field experiment that introduces idiosyncratic environmental risk and a voluntary sharing decision into a standard public goods game. Conducted with subsistence resource users in rural villages in remote Kamchatka Russia, we find evidence consistent with a model of indirect reciprocity and local social norms of helping the needy. When experiments allow participants to develop reputations, as is the case in most small-scale societies, we find that sharing is increasingly directed toward individuals experiencing hardship, good reputations increase aid, and risk-pooling becomes more effective. Our results highlight the importance of investigating social and ecological factors, beyond strategic risk, that affect the balance between independence and interdependence when developing and testing theories of cooperation. |
| Keywords: | experimental economics, field experiment, public goods, risk-pooling, resource sharing, team production |
| JEL: | D70 H41 D81 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ala:wpaper:2015-04&r=all |
| By: | E. Lance Howe (Department of Economics and Public Policy, University of Alaska Anchorage); James J. Murphy (Department of Economics and Public Policy, University of Alaska Anchorage and Institute of State Economy, Nankai University and Economic Science Institute, Chapman University); Drew Gerkey (Department of Anthropology, School of Language, Culture & Society, Oregon State University); Colin Thor West (Department of Anthropology, University of North Carolina) |
| Abstract: | Integrating information from existing research, qualitative ethnographic interviews, and 3 participant observation, we designed a field experiment that introduces idiosyncratic 4 environmental risk and a voluntary sharing decision into a standard public goods game. Conducted 5 with subsistence resource users in rural villages in remote Kamchatka Russia, we find evidence 6 consistent with a model of indirect reciprocity and local social norms of helping the needy. When 7 experiments allow participants to develop reputations, as is the case in most small-scale societies, 8 we find that sharing is increasingly directed toward individuals experiencing hardship, good 9 reputations increase aid, and risk-pooling becomes more effective. Our results highlight the 10 importance of investigating social and ecological factors, beyond strategic risk, that affect the 11 balance between independence and interdependence when developing and testing theories of 12 cooperation. |
| Keywords: | experimental economics, field experiment, public goods, risk-pooling, resource sharing, team production |
| JEL: | D70 H41 D81 C93 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:15-20&r=all |
| By: | Claudia M. Landeo (University of Alberta); Kathryn E. Spier (Harvard Law School and NBER) |
| Abstract: | This paper reports the results of an experiment on incentive contracts for teams. The agents, whose efforts are complementary, are rewarded according to a sharing rule chosen by the principal. Depending on the sharing rule, the agents confront endogenous prisoner's dilemma or stag-hunt environments. Our main findings are as follows. First, we demonstrate that ongoing interaction among team members positively affects the principal's payoff. Greater team cooperation is successfully induced with less generous sharing rules in infinitely-repeated environments. Second, we provide evidence of the positive effects of communication on team cooperation in the absence of ongoing team interaction. Fostering communication among team members does not significantly affect the principal's payoff, suggesting that agents' communication is an imperfect substitute for ongoing team interaction. Third, we show that offering low sharing rules can backfire. The agents are willing to engage in costly punishment (shirking) as retaliation for low offers from the principal. Our findings suggest that offering low sharing rules is perceived by the agents as unkind behavior and hence, triggers negative reciprocity. |
| Keywords: | Moral Hazard in Teams, Prisoner's Dilemma, Stag-Hunt Games, Infinitely-Repeated Games, Communication, Reciprocity, Laboratory Experiments |
| JEL: | C72 C90 D86 K10 L23 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2015-052&r=all |
| By: | Sharma Smriti |
| Abstract: | We conduct a lab experiment to assess whether gender of dictators and recipients, and distributional preferences affect allocations in a modified dictator game where both parties perform a cognitive task and the resulting pie to be split is the sum of bot |
| Keywords: | Advertising, Discrimination in employment, Equality and inequality, Women |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-062&r=all |
| By: | Mariana Blanco; Juan Camilo Cárdenas |
| Abstract: | At the end of a controlled experiment where research assistants were hired for coding news from online newspapers, the experimenter-employer asked a number of them to roll a die and report the result in order to be paid in cash an amount linear on the reported number from 1 to 6 that could go from 1.6 to 9.4 USD. Another (control) group of similar students, recruited in a similar manner, were also invited to perform the same die-roll task, but they had no prior labor relationship with the experimenter-employer. Our treatment group showed in average higher levels of honesty as their distribution of reported numbers was less skewed to the right, that is, the long-term labor relationship group was more likely to report numbers that are closer to the uniform (honest) distribution than our control, and than other reported numbers in this kind of experiments. We conjecture that the previous experimenter-subject relationship of the treatment group induced higher levels of honesty among the participants. One of the possible reasons is that the labor relationship created for the group of ”treatment” students included a series of shocks that involved the possibility of involuntary unemployment, bringing incentives for the students to signal honesty as a trait that could be valued in the labor market. This paper contributes to the growing literature on understanding the motives for honesty and cheating. |
| Keywords: | Honesty, Cheating, Labor relationships, Unemployment, Experiments |
| JEL: | D73 C93 D01 E24 J24 |
| Date: | 2015–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:013883&r=all |
| By: | Thomas Boyer-Kassem (Tilburg University); Sébastien Duchêne (Université Nice Sophia Antipolis; GREDEG-CNRS); Eric Guerci (Université Nice Sophia Antipolis; GREDEG-CNRS) |
| Abstract: | Human agents happen to judge that a conjunction of two terms is more probable than one of the terms, in contradiction with the rules of classical probabilities|this is the conjunction fallacy. One of the most discussed accounts of this fallacy is currently the quantum-like explanation, which relies on models exploiting the mathematics of quantum mechanics. The aim of this paper is to investigate the empirical adequacy of major such quantum-like models. We first argue that they can be tested in three different ways, in a question order effect configuration which is different from the traditional conjunction fallacy experiment. We then carry out our proposed experiment, with varied methodologies from experimental economics. The experimental results we get are at odds with the predictions of the quantum-like models. This strongly suggests that the quantum-like account of the conjunction fallacy fails. Future possible research paths are discussed. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2015-41&r=all |
| By: | Paul Johnson (Department of Economics and Public Policy, University of Alaska Anchorage); Qiujie Zheng (Department of Economics and Public Policy, University of Alaska Anchorage) |
| Abstract: | This paper describes a classroom experiment that demonstrates coordination and competition between traders in a network. Students test theoretical predictions concerning the emergence of equilibrium and the division of surplus between buyers and sellers. The experiment is appropriate for use in teaching intermediate microeconomics, industrial organization, transportation economics and game theory. |
| Keywords: | Experimental Economics, Classroom Experiment, Trading in Networks |
| JEL: | A22 B21 C92 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ala:wpaper:2015-03&r=all |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Sebastian Goerg (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | Donors may often not be sure whether a recipient really deserves their help. Does this uncertainty deter generosity? In an experiment we find that, to the contrary, under most specifications of uncertainty, dictators give more, compared with the donation the same dictator makes to a recipient they know to have the expected value of the endowment with certainty. They are particularly concerned about the possibility that a recipient leaves the lab with no payoff from the game. |
| Keywords: | Dictator Game, Uncertainty, Donation |
| JEL: | D81 C91 D03 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2015_15&r=all |
| By: | Koç, Emre (Tilburg University, School of Economics and Management) |
| Abstract: | In this thesis several different aspects of the standard economic theory (SET) are examined. One of the premises of the SET is that whether or not an agent has choice flexibility does not influence his behavior. In the first chapter of the thesis we design an experiment to test the validity of this claim. We find that subjects behave in a way that justifies their earlier choices and therefore, choice flexibility does affect behavior. <br/>The standard economic framework is commonly used to examine consumption behavior of individuals and households. According to the SET, consumption growth is unchanged when a worker loses his job or when an unemployed individual finds a job as long as the transition event is anticipated. In the second chapter of this thesis we test this particular prediction of the SET. We use self-reported expectations of individuals to measure how much they anticipate a given transition. We find that consumption behavior is compatible with the SET.<br/>Internal consistency of preferences is another important premise of the SET. In the third and fourth chapters, we are interested in the question of whether decision makers have inconsistent time preferences and if so whether they behave in a sophisticated manner. To investigate these issues we conduct a two-stage experiment, where choices made in the first stage could affect the choices that will be available to the subject in the second stage. We find that the majority of our subjects have inconsistent preferences and roughly half of them exhibit sophisticated behavior. In the fourth chapter we consider the roles of uncertainty and the decision makers’ preference for choice flexibility. We find that uncertainty plays an important role and our subjects tend to avoid making a choice in the second stage.<br/> |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:99d3bd3a-3df3-4994-971f-6d4d687988e8&r=all |
| By: | Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University) |
| Abstract: | Group contests are ubiquitous. Some examples include warfare between countries, competition between political parties, team-incentives within firms, group sports, and rent-seeking. In order to succeed, members of the same group have incentives to cooperate with each other by expending individual efforts. However, since effort is costly, each member also has an incentive to abstain from expending any effort and instead free-ride on the efforts of other members. Contest theory shows that the intensity of competition between groups and the amount of freeriding within groups depend on the group size, sharing rule, group impact function, contest success function, and heterogeneity of players. We review experimental studies testing these theoretical predictions. Almost all studies of behavior in group contests find significant overexpenditure of effort relative to the theory. We discuss potential explanations for such overexpenditure, including the utility of winning, bounded rationality, relative payoff maximization, parochial altruism, and social identity. Despite over-expenditure, most studies find support for the comparative statics predictions of the theory (with the exception of the “group size paradox”). Finally, studies show that there are effective mechanisms that can promote withingroup cooperation and conflict resolution mechanisms that can de-escalate and potentially eliminate between-group conflict. |
| Keywords: | groups, contests, experiments |
| JEL: | C7 C9 D7 H4 J4 K4 L2 M5 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:15-21&r=all |
| By: | Belot, Michèle (University of Edinburgh); James, Jonathan (University of Bath); Nolen, Patrick J. (University of Essex) |
| Abstract: | We conduct a field experiment in 31 primary schools in England to test the effectiveness of different temporary incentive schemes, an individual based incentive scheme and a competitive scheme, on increasing the choice and consumption of fruit and vegetables at lunchtime. The individual scheme has a weak positive effect whereas all pupils respond to positively to the competitive scheme. For our sample of interest, the competitive scheme increases choice of fruit and vegetables by 33% and consumption of fruit and vegetables by 48%, twice and three times as much as the individual incentive scheme, respectively. The positive effects generally carry over to the week immediately following the treatment but we find little evidence of any effects six months later. Our results show that incentives can work, at least temporarily, to increase healthy eating but there are large differences in effectiveness between schemes and across demographics such as age and gender. |
| Keywords: | incentives, health, habits, child nutrition, field experiments |
| JEL: | J13 I18 I28 H51 H52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9424&r=all |
| By: | Huck, Steffen; Szech, Nora; Wenner, Lukas M. |
| Abstract: | In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice - and perform stunningly well. Agents who are uninformed regarding their piece rate tend to outperform all others, even those who know that their piece rate is high. This also holds for enforced instead of self-selected information avoidance. All our findings can be captured by a model of optimally distorted expectations following Brunnermeier and Parker (2005). |
| Keywords: | Optimal Expectations,Belief Design,Performance,Real Effort Task,Coarse Incentive Structures,Workplace Incentives |
| JEL: | D83 D84 J31 M52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2015304r&r=all |
| By: | Fricke, Hans (University of St. Gallen); Frölich, Markus (University of Mannheim); Huber, Martin (University of Fribourg); Lechner, Michael (University of St. Gallen) |
| Abstract: | This paper proposes a nonparametric method for evaluating treatment effects in the presence of both treatment endogeneity and attrition/non-response bias, using two instrumental variables. Making use of a discrete instrument for the treatment and a continuous instrument for non-response/attrition, we identify the average treatment effect on compliers as well as the total population and suggest non- and semiparametric estimators. We apply the latter to a randomized experiment at a Swiss University in order to estimate the effect of gym training on students' self-assessed health. The treatment (gym training) and attrition are instrumented by randomized cash incentives paid out conditional on gym visits and by a cash lottery for participating in the follow-up survey, respectively. |
| Keywords: | endogeneity, attrition, local average treatment effect, weighting, instrument, experiment |
| JEL: | C14 C21 C23 C24 C26 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9428&r=all |
| By: | Florian Schneider; Martin Schonger |
| Abstract: | Most models of ambiguity aversion satisfy Anscombe-Aumann’s Monotonicity axiom. This paper proposes a test of Monotonicity, the Allais Horse Race. It is an adaptation of the Allais paradox to a setting with both subjective and objective uncertainty. Viewed as a thought experiment, the Allais Horse Race allows for introspective assessment of Monotonicity. Imple- menting it as an incentivized experiment, we find that the modal choice of subjects violates Monotonicity in a specific, intuitive way. Overall, we find that models of ambiguity aversion that satisfy Monotonicity cannot describe the behavior of about half of all subjects. |
| Keywords: | Ambiguity aversion, monotonicity, Anscombe-Aumann, Allais paradox, experiments |
| JEL: | D81 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:207&r=all |
| By: | Eric Guerci (Université Nice Sophia Antipolis; GREDEG-CNRS); Nobuyuki Hanaki (Université Nice Sophia Antipolis; GREDEG-CNRS; IUF); Naoki Watanabe (University of Tsukuba, Japan) |
| Abstract: | By employing binary committee choice problems, this paper investigates how varying or eliminating feedback about payoffs affects: (1) subjects' learning about the underlying relationship between their nominal voting weights and their expected payoffs in weighted voting games; and (2) the transfer of acquired learning from one committee choice problem to a similar but different problem. In the experiment, subjects choose to join one of two committees (weighted voting games) and obtain a payoff stochastically determined by a voting theory. We found that: (i) subjects learned to choose the committee that generates a higher expected payoff even without feedback about the payoffs they received; and (ii) there was statistically significant evidence of ``meaningful learning'' (transfer of learning) only for the treatment with no payoff-related feedback. This finding calls for re-thinking existing models of learning to incorporate some type of introspection. |
| Keywords: | Learning, voting game, experiment, two-armed bandit problem |
| JEL: | C79 C92 D72 D83 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2015-40&r=all |
| By: | Renate Buijze (Erasmus University Rotterdam (EUR) - Erasmus School of Law); Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Sigrid Hemels (Erasmus University Rotterdam (EUR) - Erasmus School of Law) |
| Abstract: | An increasing fraction of donations is channeled through donation intermediaries. These entities serve multiple purposes, one of which seems to be providing donors with greater certainty: that the donation reaches its intended goal, and that the donor may be sure to get a tax benefit. We interpret this function as insurance and test the option to insure donations in the lab. Our participants indeed have a positive willingness to pay for insurance against either risk. Yet the insurance option is only critical for their willingness to donate to a charity if the uncertainty affects the proper use of their donation. |
| Keywords: | Insurance, charity, Donation, donation intermediary |
| JEL: | D64 H25 D03 H31 D12 G22 K34 L31 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2015_16&r=all |
| By: | Vince Bourke (Economic Science Institute, Chapman University); David Porter (Economic Science Institute, Chapman University) |
| Abstract: | We conduct a series of experiments to examine the effects of the make and take fee structure currently used by equity exchanges in the U.S. We examine the effects of these fees on measures of market quality (allocative efficiency, trading volume, book depth, and the bid-ask spread). With the exception of increased book depth, we document no significant effects of make and take fees relative to a baseline case in which trading fees are assessed on both sides of a transaction. |
| Keywords: | make and take fees, double auction, experimental economics |
| JEL: | G2 G12 G14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:15-19&r=all |
| By: | Chia-Huei Wu; Jun Liu; Ho Kwong Kwan; Cynthia Lee |
| Abstract: | Why and when do employees respond to workplace ostracism by withholding their engagement in citizenship behavior? Beyond perspectives proposed in past studies, we offer a new account based on a social identity perspective and propose that workplace ostracism decreases citizenship behavior by undermining employees’ identification with the organization. We also theorize that perceived job mobility influences the extent to which employees identify with the organization when being ostracized. These hypotheses were examined in two time-lagged studies conducted in China. The proposed hypotheses were supported by results in Study 1, and findings were generally replicated in Study 2, where effects of other known mediators (i.e., organization-based self-esteem, job engagement, and felt obligation towards the organization) and moderators (i.e., collectivism, power distance, and future orientation) suggested by previous perspectives were controlled. Results of Study 2 provided further support of the hypothesized directional effect of workplace ostracism on citizenship behavior via organizational identification. Our studies support the identification perspective in understanding workplace ostracism and also strengthen the application of this perspective in understanding workplace aggression broadly. |
| Keywords: | workplace ostracism; organizational identification; citizenship behavior; job mobility |
| JEL: | J50 |
| Date: | 2015–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64006&r=all |
| By: | Elsayed, Ahmed (IZA); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Montizaan, Raymond (ROA, Maastricht University) |
| Abstract: | Using data from a stated preferences experiment in the Netherlands, we find that replacing full-time pension schemes with schemes that offer gradual retirement opportunities induce workers to retire one year later on average. Total life-time labour supply, however, decreases with 3.4 months because the positive effect of delayed retirement on labour supply is cancelled out by the reduction in working hours before full retirement. The impact of gradual retirement schemes is, however, heterogeneous across groups of workers. Workers with non-routine job tasks retire at a later age when they can gradually retire. Financial incentives, either in terms of changing pension income or the price of leisure, also affect the expected retirement age, but the impact of these financial incentives does not differ with the possibility of gradual retirement. Finally, we find that gradual retirement is not a preferred option among workers as the large majority still prefers full retirement. This especially holds for workers with a lower wage and those with higher life expectancy. |
| Keywords: | gradual retirement, labour supply, financial incentives |
| JEL: | J14 J26 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9430&r=all |
| By: | Goodspeed, Tyler |
| Abstract: | From 1735 to 1751, the Board of Trustees of the Province of Georgia imposed the only ban on slavery among the North American colonies. Exploiting the historical boundary between the 88 counties of Trustee Georgia and the 71 counties that were appended to the colony after 1751, I analyze the effects of this initial institutional difference on subsequent differences in slave dependence, land inequality, income, and poverty. I find that counties that had been covered by the initial Trustee ban subsequently had lower slave population density, fewer farms holding more than 10 slaves, and higher income and lower poverty rates today. I further find that while counties affected by the ban did not have significant differences in pre-Civil War land inequality, productivity, industrial development, or educational investment, their economic output was significantly more diversified and less reliant upon the production of cash crops. Finally, I demonstrate that controlling for pre-war output diversification significantly reduces the estimated relationship between Trusteeship and current income. Results therefore suggest that the effects of initial differences in labor institutions can persist even where those differences are not determined by geography, and that a primary channel of persistence is the path-dependence of early economic specialization. |
| Keywords: | institutions, slavery, inequality, development, history |
| JEL: | N0 O1 Q0 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67202&r=all |
| By: | Alexandr Akimov; Mirela Malin |
| Keywords: | Experimental learning, in-class games, role-playing, finance, swap |
| JEL: | G23 G32 A22 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:gri:fpaper:finance:201509&r=all |