nep-exp New Economics Papers
on Experimental Economics
Issue of 2015‒12‒08
seventeen papers chosen by

  1. BMI is not related to altruism, fairness, trust or reciprocity: Experimental evidence from the field and the lab By Brañas-Garza, Pablo; Espín, Antonio M.; Lenkei, Balint
  2. Selective Recognition: How to Recognize Donors to Increase Charitable Giving By Anya Samek; Roman M. Sheremeta
  3. The Effect of Peer Observation on Consumption Choices: Experimental Evidence By Antonia Grohmann; Sahra Sakha
  4. How Transparency Kills Information Aggregation : Theory and Experiment By Fehrler, Sebastian; Hughes, Niall
  5. Going Green : Framing Effects in a Dynamic Coordination Game By Gerlagh, Reyer; van der Heijden, Eline
  6. Reducing prejudice through actual and imagined contact: A field experiment with Malawian shopkeepers and Chinese immigrants By Gu, Jun; Mueller, Annika; Nielsen, Ingrid; Shachat, Jason; Smyth, Russell
  7. The Double-Channeled Effects of Experience on Individual Investment Decisions: Experimental Evidence By Peiran Jiao
  8. Status and the Demand for Visible Goods: Experimental Evidence on Conspicuous Consumption By Clingingsmith, David; Sheremeta, Roman
  9. Does Confidence Predict Out-of-Domain Effort? By Prokudina, Elena; Renneboog, Luc; Tobler, Philippe
  10. Privacy, Trust and Social Network Formation By Alexia Gaudeul; Caterina Giannetti
  11. Confidence Biases and Learning among Intuitive Bayesians By Louis Levy-Garboua; Muniza Askari; Marco Gazel
  12. Cognitive Reflection Test: Whom, how, when By Pablo Brañas-Garza; Praveen Kujal; Balint Lenkei
  13. Providing Advice to Job Seekers at Low Cost: An Experimental Study on On-Line Advice By Belot, Michèle; Kircher, Philipp; Muller, Paul
  14. Policy evaluation, randomized controlled trials, and external validity: A systematic review By Peters, Jörg; Langbein, Jörg; Roberts, Gareth
  15. Is there a valuation gap? The case of interval valuations By Bayrak, Oben K.; Kriström, Bengt
  16. The Tragedy of Corruption. Corruption as a social dilemma By Ye-Feng Chen; Shu-Guang Jiang; Marie Claire Villeval
  17. Nudging farmers to sign agri-environmental contracts: the effects of a collective bonus By Laure Kuhfuss; Raphaële Préget; Sophie Thoyer; Nick Hanley

  1. By: Brañas-Garza, Pablo; Espín, Antonio M.; Lenkei, Balint
    Abstract: Over the past few decades obesity has become one of the largest public policy concerns among the adult population in the developed world. Obesity and overweight are hypothesized to affect individuals’ sociability through a number of channels, including discrimination and low self-esteem. However, whether these effects translate into differential behavioural patterns in social interactions remains unknown. In two large-scale economic experiments, we explore the relationship between Body Mass Index (BMI) and social behaviour, using three paradigmatic economic games: the dictator, ultimatum, and trust games. Our first experiment employs a representative sample of a Spanish city's population (N=753), while the second employs a sample of university students from the same city (N=618). Measures of altruism, fairness/equality, trust and reciprocity are obtained from participants’ experimental decisions. Using a variety of regression specifications and control variables, our results suggest that BMI does not exert an effect on any of these social preferences. Some implications of these findings are discussed.
    Keywords: BMI; ultimatum game; dictator game; trust game; economic experiments; obesity; social preferences
    JEL: I12
    Date: 2015
  2. By: Anya Samek (Center for Economic and Social Research, University of Southern California); Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University)
    Abstract: Recognizing donors by revealing their identities is important for increasing charitable giving. We conducted a field experiment to examine how different recognition methods impact giving, and found that all forms of recognition that we examined had a positive impact on increasing donations, whereby recognizing only highest donors (positive recognition) and recognizing only lowest donors (negative recognition) had the most pronounced effect. We argue that selective recognition (both positive and negative) creates tournament-like incentives. Recognizing the highest donors activates the desire to seek a positive prize of prestige, thus increasing the proportion of donors who contribute large amounts. Recognizing the lowest donors activates the desire to avoid a negative prize of shame, thus decreasing the proportion of donors who do not contribute or contribute very little. Therefore, selective recognition is an effective tool that can be used in the field by charities to increase donations.
    Keywords: charity donations, recognition, information, experiments
    JEL: C93 D64
    Date: 2015
  3. By: Antonia Grohmann; Sahra Sakha
    Abstract: This paper investigates the impact of peer observation on the consumption decisions of rural households in Thailand using a lab-in-the-field experiment. We find that those groups that observe each other show lower within group standard deviation in their decisions. Thus, we find evidence for conformity. Further, we find that individual's consumption choice is influenced by the group choice controlling for large number of individual, household, and village characteristics. We find that unfamiliarity of the product is counteracted by peer effects. Finally, we find evidence of treatment heterogeneity with regards to cognitive ability and village size.
    Keywords: Consumption, Peer Effects, Conformity
    JEL: D12 C21 C92
    Date: 2015
  4. By: Fehrler, Sebastian (University of Konstanz and IZA); Hughes, Niall (University of Warwick)
    Abstract: We investigate the potential of transparency to influence committee decisionmaking.We present a model in which career concerned committee members receive private information of different type-dependent accuracy, deliberate and vote. We study three levels of transparency under which career concerns are predicted to affect behavior differently, and test the model’s key predictions in a laboratory experiment.The model’s predictions are largely borne out - transparency negatively affects information aggregation at the deliberation and voting stages, leading to sharply different committee error rates than under secrecy. This occurs despite subjects revealing more information under transparency than theory predicts.
    Keywords: Committee Decision-Making ; Deliberation ; Transparency ; Career Concerns ; Information Aggregation ; Experiments ; Voting ; Strategic Communication JEL Classification Numbers: C92 ; D71 ; D83
    Date: 2015
  5. By: Gerlagh, Reyer (Tilburg University, Center For Economic Research); van der Heijden, Eline (Tilburg University, Center For Economic Research)
    Abstract: We experimentally study decision-making in a novel dynamic coordination game. The game captures features of a transition between externality networks. Groups consisting of three subjects start in a stable benchmark equilibrium with network externality. Over seven rounds, they can transit to an alternative stable equilibrium based on the other network. The alternative network has higher payoffs, but the transition is slow and costly. Coordination is required to implement the transition while minimizing costs.<br/>In the experiment, the game is repeated five times, which enables groups to learn to coordinate over time. We compare a neutral language treatment with a ‘green framing’ treatment, in which meaningful context is added to the instructions. We find the green framing to significantly increase the number of profitable transitions, but also to inhibit the learning from past experiences, and thus it reduces coherence of strategies. Consequently, payoffs in both treatments are similar even though the green framing results in twice as many transitions.<br/>In the context of environmental policy, the experiment suggests general support for ‘going green’, but we also find evidence for anchoring of beliefs by green framing; proponents and opponents stick to their initial strategies.
    Keywords: cost of transition; lab experiment; dynamic stag hunt game; framing
    JEL: C73 C92 O44
    Date: 2015
  6. By: Gu, Jun; Mueller, Annika; Nielsen, Ingrid; Shachat, Jason; Smyth, Russell
    Abstract: We examine the ability of intergroup contact to ameliorate the effect of in-group bias on economic outcomes. Specifically, we employ randomized experiments to test whether actual and imagined contact is effective in reducing prejudice between indigenous Malawian shopkeepers (in-group), and their Chinese immigrant counterparts (out-group), and test the stability of these changes over time. We find differing results with actual contact. Local Malawians´ attitude towards Chinese migrants did not improve, but their willingness to spend time did. In contrast, actual contact spurred improvement in the Chinese migrants´ attitude toward local Malawians, but did not increase their willingness to spend time with them. These effects persisted over a time period of at least ten days. Imagined contact had no impact on Malawians´ attitude or behavioral intention with respect to Chinese migrants
    Keywords: Chinese migrants in Africa,actual contact,imagined contact,prejudice,field experiment
    JEL: C93 J15
    Date: 2015
  7. By: Peiran Jiao
    Abstract: Abstract: Investors in the financial markets typically have access to both descriptive information of assets, from brochures, financial analysts, reports, etc., and own experience.However, little is known about the role of experience in investment decisions. This paper investigates this issue by experimentally testing the effects of experience in aninvestment task with choice feedback and varying levels of descriptive information. We document the double-channeled effects of experience: when elicited beliefs were controlledfor, participants significantly relied on experience regardless of the descriptions, behaving consistently with the law of effect; additionally, beliefs were also distorted by experience, in that participants were more optimistic about assets from which they gained, and pessimistic about previously unowned assets. In a calibration exercise, reinforcement learning significantly added predictive power to expected utility models.
    Keywords: Description, Experience, Investment Decision, Belief Distortion.
    JEL: C91 D03 D83 G11
    Date: 2015–11–18
  8. By: Clingingsmith, David; Sheremeta, Roman
    Abstract: Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare.
    Keywords: status, conspicuous consumption, experiment
    JEL: C91 D03
    Date: 2015–12–04
  9. By: Prokudina, Elena (Tilburg University, Center For Economic Research); Renneboog, Luc (Tilburg University, Center For Economic Research); Tobler, Philippe (Tilburg University, Center For Economic Research)
    Abstract: Predicting worker’s effort is important in many different areas, but is often difficult. Using a laboratory experiment, we test the hypothesis that confidence, i.e. the person-specific beliefs about her abilities, can be used as a generic proxy to predict future effort provision. We measure confidence in the domain of financial knowledge in three different ways (self-assessed knowledge, probability-based confidence, and incentive-compatible confidence) and find a positive relation with actual effort provision in an unrelated domain. Additional analysis shows that the findings are independent of a person’s traits such as gender, age, and nationality.
    Keywords: real-effor task; financial literacy; overconfidence
    JEL: G11 J22
    Date: 2015
  10. By: Alexia Gaudeul (Department of Economics, Georg-August-Universität Göttingen); Caterina Giannetti (Jena Graduate School Human Behaviour in Social and Economic Change)
    Abstract: We study in the laboratory the impact of private information revelation on the selection of partners when forming individual networks. Our experiment combines a "network game" and a "public-good game". In the network game, individuals decide with whom to form a link with, while in the public-good game they decide whether or not to contribute. The variations in our treatments allow us to identify the effect of revealing one's name on the probability of link formation. Our main result suggests that privacy mechanisms affect partner selection and the consequent structure of the network: when individuals reveal their real name, their individual networks are smaller but their profits are higher. This indicates that the privacy costs of revealing personal information are compensated by more productive links.
    Keywords: privacy, social networks, public goods, trust
    JEL: D12 D85
    Date: 2015–12–01
  11. By: Louis Levy-Garboua; Muniza Askari; Marco Gazel
    Abstract: We design a double-or-quits game to compare the speed of learning one’s specific ability with the speed of rising confidence as the task gets increasingly difficult. We find that people on average learn to be overconfident faster than they learn their true ability and we present a simple Bayesian model of confidence which integrates these facts. We show that limited discrimination of objective differences, myopia, and uncertainty about one’s true ability to perform a task in isolation can be responsible for large and robust confidence biases, namely the hard-easy effect, the Dunning-Kruger effect, conservative learning from experience and the overprecision phenomenon (without underprecision) if subjects act as Bayesian learners. Moreover, these biases are likely to persist since the Bayesian aggregation of past information consolidates the accumulation of errors and the perception of contrarian illusory signals generates conservatism and under-reaction to events. Taken together, these two features may explain why intuitive Bayesians make systematically wrong predictions of their own performance.
    Keywords: confidence biases, Bayesian learning, double or quits experimental game, hard-easy effect, Dunning-Kruger effect, illusory signals,
    JEL: C11 C91 D03
    Date: 2015–11–30
  12. By: Pablo Brañas-Garza (Middlesex University London); Praveen Kujal (Middlesex University London); Balint Lenkei (Middlesex University London)
    Abstract: We report the results of a meta-study of 118 Cognitive Reflection Test studies comprising of 44,558 participants across 21 countries. There is a negative correlation between being female and the overall, and individual, correct answers to CRT questions. Taking the test at the end of an experiment negatively impacts performance. Monetary incentives do not impact performance. Overall students perform better compared to non-student samples. Exposure to CRT over the years may impact outcomes, however, the effect is driven by online studies. We obtain mixed evidence on whether the sequence of questions matters. Finally, we find that computerized tests marginally improve results.
    Keywords: CRT, Experiments, Gender, Incentives, Glucose and Cognition
    Date: 2015
  13. By: Belot, Michèle; Kircher, Philipp; Muller, Paul
    Abstract: Helping job seekers to identify suitable jobs is a key challenge for policy makers. We develop and evaluate experimentally a novel tool that provides tailored advice at low cost and thereby redesigns the process through which job seekers search for jobs. We invited 300 job seekers to our computer facilities for 12 consecutive weekly sessions. They searched for real jobs using our web interface. After 3 weeks, we introduced a manipulation of the interface for half of the sample: instead of relying on their own search criteria, we displayed relevant other occupations to them and the jobs that were available in these occupations. These suggestions were based on background information and readily available labor market data. We recorded search behavior on our site but also surveyed participants every week on their other search activities, applications and job interviews. We find that these suggestions broaden the set of jobs considered by the average participant. More importantly, we find that they are invited to significantly more job interviews. These effects are predominantly driven by job seekers who searched relatively narrowly initially and who have been unemployed for a few months.
    Keywords: occupational broadness; online job search; search design
    JEL: C93 D83 J62
    Date: 2015–11
  14. By: Peters, Jörg; Langbein, Jörg; Roberts, Gareth
    Abstract: When properly implemented, Randomized Controlled Trials (RCT) can achieve a high degree of internal validity. Yet, if an RCT is to inform policy interventions that extend beyond the experimental population, it is critical to establish external validity. In this paper, we first present a theoretical framework of external validity and identify the potential hazards that compromise generalizing results beyond the studied population, namely Hawthorne effects, general equilibrium effects, specific sample problems, and special care in the provision of the randomized treatment. Second, we reviewed all RCTs published in leading economic journals between 2009 and 2014 and scrutinized the way they deal with external validity. Based on a set of objective indicators, we find that many published RCTs do not discuss hazards to external validity and do not provide the information that is necessary to assess potential problems. Apparently, external validity is not an important matter of concern during the peer review process. To conclude, we call for a more systematic approach to report the results of RCTs, including external validity dimensions.
    Abstract: Randomisierte kontrollierte Studien (RCTs) weisen bei sorgfältiger Implementierung ein hohes Maß an interner Validität auf. Sobald jedoch die Ergebnisse eines RCT auch auf andere Politikinterventionen verallgemeinert werden soll, bekommt die so genannte externe Validität eine zentrale Bedeutung. Dieses Papier stellt in einem ersten Schritt einen theoretischen Rahmen zur Betrachtung von externer Validität vor. Dabei werden potenzielle Probleme identifiziert, die die Generalisierung von Ergebnissen aus RCTs über die eigentliche Stichprobe hinaus beeinträchtigen können. Wir unterscheiden zwischen Hawthorne Effekten, generellen Gleichgewichtseffekten, Problemen spezifischer Stichproben und der Randomisierung geschuldeten Besonderheiten im Treatment. In einem weiteren Schritt untersuchen wir im Rahmen eines Systematic Reviews alle RCTs, die zwischen 2009 und 2014 in den führenden ökonomischen Fachzeitschriften publiziert wurden, auf ihren Umgang mit externer Validität. Unter Zuhilfenahme ausschließlich objektiver Indikatoren stellen wir fest, dass viele der publizierten Papiere weder die Probleme externer Validität diskutieren noch die notwendigen Informationen zur Abschätzung dieser durch den Leser bereitstellen. Externe Validität scheint demnach während des Peer-Review-Verfahrens von untergeordneter Bedeutung zu sein. Wir plädieren deshalb für ein Berichtswesen bei der Publikation von RCTs, das den verschiedenen Dimensionen externer Validität Rechnung trägt.
    Keywords: systematic review,internal validity,external validity,randomized controlled trials
    JEL: C83 C93
    Date: 2015
  15. By: Bayrak, Oben K. (CERE and the Department of Forest Economics, SLU); Kriström, Bengt (CERE and the Department of Forest Economics, SLU)
    Abstract: We extend the literature on the willingness-to-pay/willingness-to-accept (WTP/WTA) disparity by testing two hypotheses, distilled from the literature. We also introduce a modified mechanism for eliciting the subjective valuation range if the individual cannot articulate the subjective value as a precise amount confidently. Our key finding is that the disparity disappears under the intervals treatment, suggesting that response format is important, given that earlier experimental studies invariably uses point values (i.e. open ended questions about WTP/WTA). Moreover, for the risky prospect we observe that from their admissible range the buyers state the lower bound as their WTP whereas sellers state the upper bound as their WTA. We conclude that this type of behavior can to some extent explain the observed disparity at least for the risky prospects.
    Keywords: Valuation Gap; Imprecise Preferences; Interval Valuation; Willingness to Pay and Accept Disparity; Endowment Effect
    JEL: C90 Q50
    Date: 2015–11–26
  16. By: Ye-Feng Chen (College of Economics, Zhejiang University, China); Shu-Guang Jiang (Centre for Economic Research, Shandong University, China); Marie Claire Villeval (Université de Lyon, F-69007, France; CNRS, GATE Lyon St Etienne, 93, Chemin des Mouilles, F-69130, Ecully, France; Université Lyon 2, Lyon, F-69007, France)
    Abstract: We investigate corruption as a social dilemma by means of a bribery game in which a risk of collective failure is introduced when the number of public officials accepting a bribe from firms reaches a certain threshold. We show that, despite the social risk, the pursuit of individual interest prevails and leads to the elimination of honest officials over time. Reducing the size of the groups while increasing the probability of collective failure diminishes the public officials’ corruptibility but is not sufficient to eliminate the tragedy of corruption altogether.
    Keywords: Corruption, bribing, social dilemma, collective failure, coordination, experiment
    JEL: C92 D73 H41
    Date: 2015
  17. By: Laure Kuhfuss (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, UM1 - Université Montpellier 1); Raphaële Préget (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique); Sophie Thoyer (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, Montpellier SupAgro - Centre International d'Etudes Supérieures Agronomiques); Nick Hanley (University of St Andrews)
    Abstract: Using a choice experiment, this paper shows that the introduction of a conditional collective bonus in an agri-environmental scheme (AES) can improve farmers’ participation and increase land enrolment for lower overall budgetary costs. This monetary bonus is paid per hectare of enrolled land in addition to the usual agri-environmental payment if a given threshold is reached in terms of farmers’ participation in the region or catchment of interest. Using a choice experiment, we estimate the preferences of wine growers in the South of France for such a bonus. We show that it contributes to increased expectations of farmers on others’ participation, therefore changing the pro-environmental social norm and initiating group dynamics towards the adoption of less pesticide- intensive farming practices over time.
    Keywords: behaviour,choice experiment,collective incentive,payment for environmental services,social norm,agri-environmental schemes
    Date: 2015

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