nep-exp New Economics Papers
on Experimental Economics
Issue of 2015‒12‒12
ten papers chosen by
Daniel Houser
George Mason University

  1. Religious fragmentation, social identity and rent-seeking: Evidence from an artefactual field experiment in India By Surajeet Chakravarty; Miguel A. Fonseca; Sudeep Ghosh; Sugata Marjit
  2. An experimental study of sorting in group contests By Philip Brookins; John P. Lightle; Dmitry Ryvkin
  3. Status and the Demand for Visible Goods: Experimental Evidence on Conspicuous Consumption By David Clingingsmith; Roman M. Sheremeta
  4. Can Early Intervention Improve Maternal Well-being? Evidence from a Randomized Controlled Trial By Orla Doyle; Liam Delaney; Christine O'Farrelly; Nick Fitzpatrick; Michael Daly
  5. Higher Intelligence Groups Have Higher Cooperation Rates in the Repeated Prisoner's Dilemma By Proto, Eugenio; Rustichini, Aldo; Sofianos, Andis
  6. Don't Blame the Messenger: A Field Experiment on Delivery Methods for Increasing Tax Compliance By Daniel Ortega; Carlos Scartascini
  7. Early intervention and child physical health: Evidence from a Dublin-based randomized controlled trial By Orla Doyle; Nick Fitzpatrick; Judy Lovett; Caroline Rawdon
  8. Nudging the Self-employed into Contributing to Social Security: Evidence from a Nationwide Quasi Experiment in Brazil By Juan Miguel Villa; Danilo Fernandes; Mariano Bosch
  9. Demand for Secondhand Goods and Consumers' Preference in Developing Countries: An analysis using the field experimental data of Vietnamese consumers By HIGASHIDA Keisaku; Nguyen Ngoc MAI
  10. Neural Mechanisms of the Postdecisional Spreading-of-Alternatives Effect: Eeg Study By Marco Colosio; Anna Shestakova; Vadim Nikulin; Anna Shpektor; Vasily Klucharev

  1. By: Surajeet Chakravarty (Department of Economics, University of Exeter); Miguel A. Fonseca (Department of Economics, University of Exeter); Sudeep Ghosh (Hong Kong Polytechnic University); Sugata Marjit (DCenter for Studies in the Social Sciences, Calcutta)
    Abstract: We examine the impact of religious identity and village-level religious fragmentation on rent seeking behavior. We report on a series of two-player Tullock contest experiments conducted on a sample of 516 Hindu and Muslim participants in rural West Bengal, India. Our treatments are the identity of the two players and the degree of religious fragmentation in the village where subjects reside. We find no statistically significant differences in rent seeking behavior across different villages. We also do not find any significant differences in behavior as a function of players' identities. This is in contrast to evidence from the same sample which recorded significant differences in cooperation levels in prisoners' dilemma and stag hunt games. We attribute this to the fact that social identity may have a more powerful effect on cooperation than on confl ict.
    Keywords: Social Identity, Social Fragmentation, Artefactual Field Experiment, Rent Seeking.
    JEL: C93 D03 H41
    Date: 2015
  2. By: Philip Brookins (Department of Economics, Florida State University); John P. Lightle (Department of Economics, Virginia Commonwealth University); Dmitry Ryvkin (Department of Economics, Florida State University)
    Abstract: We experimentally explore the effects of sorting and communication in lottery contests between groups of heterogeneous players whose within-group efforts are perfect complements. Subjects are assigned a type -- A, B, C or D -- that determines their cost of effort, with A having the lowest cost and D the highest cost, and are then assigned to one of the two two-player groups competing in the contest. Theory predicts that aggregate contest output increases in the variation in abilities between groups, i.e., the output is maximized by the most unbalanced sorting of players into groups -- (A,B) vs. (C,D) -- and minimized by the most balanced sorting -- (A,D) vs. (B,C). That is, the equilibrium prediction goes against the "competitive balance" heuristic. In the absence of communication, this prediction is directionally confirmed, although the effect is not statistically significant. In the presence of within-group communication, however, we find that total output is 33% higher under the balanced sorting as compared to the unbalanced sorting -- a reversal of the prediction, but in line with the heuristic. This result is driven by an increase in output by (B,C) groups under the balanced sorting and a strong decrease in output by the underdog (C,D) groups under the unbalanced sorting, relative to no communication. These results are at odds with previous studies that find that within-group communication always increases output, and suggest that the effect of communication depends strongly on the configuration of heterogeneity between and within groups. Competitive balance is confirmed as a robust sorting heuristic for sustaining competition and high effort provision in group contests.
    Keywords: group contest, sorting, complementarity, heterogeneous players, experiment
    JEL: C72 C91 D72 M54
    Date: 2015–12
  3. By: David Clingingsmith (Weatherhead School of Management, Case Western Reserve University); Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University)
    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
  4. By: Orla Doyle (University College Dublin); Liam Delaney (Behavioural Science Centre, Stirling Management School, Stirling University); Christine O'Farrelly (Centre for Mental Health, Imperial College London); Nick Fitzpatrick (UCD Geary Institute for Public Policy, University College Dublin); Michael Daly (Behavioural Science Centre, Stirling Management School, Stirling University)
    Abstract: This study estimates the effect of a targeted policy intervention on global and experienced measures of maternal well-being. Participants from a disadvantaged community are randomly assigned during pregnancy to an intensive home visiting parenting program or a control group. The intervention has no impact on global well-being as measured by life satisfaction and parenting stress or experienced negative affect using episodic reports derived from the Day Reconstruction Method (DRM). Treatment effects are observed on measures of experienced positive affect from the DRM and a measure of mood yesterday. This suggests that early intervention may produce some improvements in experienced well-being.
    Keywords: well-being, randomized controlled trial, early intervention
    JEL: C12 C93 I39 J13 I00
    Date: 2015–12
  5. By: Proto, Eugenio (Department of Economics, University of Warwick); Rustichini, Aldo (Department of Economics, University of Minnesota); Sofianos, Andis (Department of Economics, University of Warwick)
    Abstract: Intelligence affects the social outcomes of groups. A systematic study of the link is provided in an experiment where two groups of subjects with different levels of intelligence, but otherwise similar, play a repeated prisoner's dilemma. Initial cooperation rates are similar, but increase in the groups with higher intelligence to reach almost full cooperation, while they decline in the groups with lower intelligence. Cooperation of higher intelligence subjects is payo sensitive and not automatic: in a treatment with lower continuation probability there is no difference between different intelligence groups.
    Keywords: Repeated Prisoner's Dilemma, Cooperation, Intelligence JEL Classification: C73, C91, C92, B83
    Date: 2015
  6. By: Daniel Ortega; Carlos Scartascini
    Abstract: There is an ample literature on the determinants of tax compliance. Several field experiments have evaluated the effect and comparative relevance of sending deterrence and moral suasion messages to taxpayers. The effect of different delivery mechanisms, however, has not been evaluated so far. This study conducts a field experiment in Colombia that varies the way the National Tax Agency contacts taxpayers on payments due for income, value added, and wealth taxes. More than 20,000 taxpayers were randomly assigned to a control or one of three delivery mechanisms (letter, email, and personal visit by a tax inspector). Results indicate large and highly significant effects, as well as sizable differences across delivery methods. A personal visit by a tax inspector is more effective than a physical letter or an email, conditional on delivery, but email tends to reach its target more often. Improving the quality of taxpayer contact information can significantly improve the collection of delinquencies.
    Keywords: Taxation, Development Banks, Tax evasion, Tax compliance, Tax compliance, Field experiments, Delivery methods, Optimal enforcement strategies, Public policy, IDB-WP-627
    Date: 2015–11
  7. By: Orla Doyle (University College Dublin); Nick Fitzpatrick (UCD Geary Institute for Public Policy, University College Dublin); Judy Lovett (UCD Geary Institute for Public Policy, University College Dublin); Caroline Rawdon (UCD School of Psychology, University College Dublin)
    Abstract: This article investigates the impact of an early intervention program, which experimentally modifies the parenting and home environment of disadvantaged families, on child physical health in the first 3 years of life. We recruited and randomized 233 (115 intervention, 118 control) pregnant women from a socioeconomically disadvantaged community in Dublin, Ireland into an intervention or control group. The treatment includes regular home visits commencing antenatally and an additional parenting course commencing at 2 years. Maternal reports of child health are assessed at 6, 12, 18, 24, and 36 months. Treatment effects are estimated using permutation testing to account for small sample size, inverse probability weighting to account for differential attrition, and both the stepdown procedure and an indices approach to account for multiple hypothesis testing. Following adjustment for multiple testing and attrition, we observe a positive and statistically significant main treatment effect for wheezing/asthma. The intervention group are 15.5 percentage points (pp) less likely to require medical attention for wheezing/asthma compared to the control group. Subgroup analysis reveals more statistically significant adjusted treatment effects for boys than girls regarding fewer health problems (d = 0.63), accidents (23.9 pp), and chest infections (22.8 – 37.9 pp). Our results suggest that a community-based home visiting program may have favorable impacts on early health conditions.
    Keywords: randomized controlled trial, home visiting, child physical health, early intervention
    JEL: C12 C93 J13 I14
    Date: 2015–12
  8. By: Juan Miguel Villa; Danilo Fernandes; Mariano Bosch
    Abstract: This paper studies the first large scale effort by the Brazilian government to increase the social security compliance of self-employed workers using behavioral interventions. In 2014, the Brazilian Ministry of Social Security gradually delivered by postal mail a booklet reminding nearly 3 million self-employed workers their obligation to contribute to social security. We find that, sending the booklet increased payments by 15 percent and compliance rates by 7 percentage points. This increase is concentrated around the month the booklet was delivered and disappears three months after the intervention, a pattern known as action and backsliding. The relatively brief increase in payments outweighs the cost of sending the booklet by at least a factor of 2. Our results suggest that active behavioral interventions could be used as policy instruments that are orders of magnitude more cost-effective than subsides to increase social security contributions in developing countries, particularly for the self-employed.
    Keywords: Pension funds, Tax evasion, Social Security, Social Security, Employability
    Date: 2015–11
  9. By: HIGASHIDA Keisaku; Nguyen Ngoc MAI
    Abstract: Using the data from a series of field experiments that were carried out in in Hanoi, Thai Ping, and Thai Hong in Vietnam, we examined the relationship between consumers' preference for secondhand products and consumers' and products' attributes. In particular, we extracted their risk, time, and social cooperative preferences through the experiments. In addition, we surveyed their personal attributes and conducted a type of conjoint questionnaire about motorbikes and fridges. Regarding product attributes, we focused on the age, brand, size, quality labeling, origin, and so on. We found that product attributes influence consumer utility as expected. For example, the Honda brand positively influences consumer utility. Moreover, we obtained several important results about the relationship between personal attributes and demand, in particular, about preference for secondhand products. For example, consumers who are more far-sighted and/or older have stronger preference for secondhand goods compared with the less far-sighted and/or younger consumers; the older and/or male consumers have stronger preference for Japanese brands as compared with the younger and/or female consumers. It is also possible that environmental consciousness affects the preference for secondhand products. We also provide policy implications on quality certification and international trade of secondhand goods.
    Date: 2015–12
  10. By: Marco Colosio (National Research University Higher School of Economics); Anna Shestakova (National Research University Higher School of Economics); Vadim Nikulin (National Research University Higher School of Economics); Anna Shpektor (National Research University Higher School of Economics); Vasily Klucharev (National Research University Higher School of Economics)
    Abstract: Cognitive dissonance theory suggests that our preferences are modulated by the mere act of choosing. According to the cognitive dissonance theory, a choice between two similarly valued alternatives creates a psychological tension (cognitive dissonance) that is reduced by a post-decisional re-evaluation of the alternatives – the post-decisional spreading-of-alternatives effect – the chosen item being later evaluated more positively and the rejected item more negatively. Previous neuroimaging studies indicated a central role of the medial prefrontal cortex in cognitive dissonance. In this work, we used electroencephalography to investigate a similarity of neural mechanisms underlying postdecisional preference change and general performance monitoring mechanisms. Our study demonstrates that decisions, associated with stronger cognitive dissonance, trigger a stronger negative fronto-central evoked response similar to the error-related negativity (ERN). Furthermore, the amplitude of ERN correlated with the post-decisional spreading-of-alternatives effect. ERN has been previously associated with incorrect responses and a general performance monitoring mechanism. Thus, our results suggest that cognitive dissonance can be reflected in the activity of the medial prefrontal cortex as a part of the general performance-monitoring circuitry
    Keywords: cognitive dissonance, ERN, brain, spread of alternatives, Eriksen Flanker task
    JEL: Z
    Date: 2015

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