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on Experimental Economics |
| By: | Stephen V. Burks (Division of Social Science, University of Minnesota, Institute for the Study of Labor, Centre for Decision Research and Experimental Economics (CeDEx), University of Nottingham); Daniele Nosenzo (Department of Economics, University of Nottingham.); Jon Anderson (Division of Science and Mathematics, University of Minnesota); Matthew Bombyk (Innovations for Poverty Action); Derek Ganzhorn (Northwestern University School of Law); Lorenz Goette (Institute for the Study of Labor, Department of Economics, University of Minnesota); Aldo Rustichini (Northwestern University School of Law, University of Bonn, Institute for Applied Microeconomics) |
| Abstract: | We measure a specific form of other-regarding behavior, costly cooperation with an anonymous other, among 645 subjects at a trucker training program in the Midwestern US. Using a sequential, strategic form of the Prisoners’ Dilemma, we categorize subjects as: Free Rider, Conditional Cooperator, and Unconditional Cooperator. We observe the subjects on the job for up to two years afterwards in two naturally-occurring choices—whether to send two types of satellite uplink messages from their trucks. The first identifies trailers requiring repair, which benefits fellow drivers, while the second benefits the experimenters by giving them some followup data. Because of the specific nature of the technology and job conditions (which we carefully review) each of these otherwise situationally similar field decisions represents an act of costly cooperation towards an anonymous other in a setting that does not admit of repeated-game or reputation-effect explanations. We find that individual differences in costly cooperation observed in the lab do predict individual differences in the field in the first choice but not the second. We suggest that this difference is linked to the difference in the social identities of the beneficiaries (fellow drivers versus experimenters), and we conjecture that whether or not individual variations in pro-sociality generalize across settings (whether in the lab or field) may depend in part on this specific contextual factor: whether the social identities, and the relevant prescriptions (or norms) linked to them that are salient for subjects (as in Akerlof and Kranton (2000); (2010)), are appropriately parallel. |
| Keywords: | experiments; generalizability; external validity; parallelism; social identity; otherregarding behavior; costly cooperation, social preferences; prisoners’ dilemma; trucker; truckload |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2015-21&r=exp |
| By: | Margherita Comola; Marcel Fafchamps |
| Abstract: | We design a laboratory experiment to investigate bilateral link formation in a setting where payoffs are pair-specific. Our link formation rule is decentralized and players can make link offers and counter-offers, as in a Beckerian marriage market. The game is designed in such a way that a stable equilibrium configuration exists and does not depend on conditions such as initial configuration or order of move. We test whether the theoretical equilibrium is obtained under experimental conditions, and which individual motivations and decision-making techniques lead players to depart from myopic best response. We find that players are remarkably good at attaining a stable equilibrium configuration, which happens in 86% of the games. Results show that complete information speeds up the game via self-censoring, and that sub-optimal choices are mostly driven by over-thinking behavior and reluctance to accept to link with players who have been disloyal earlier in the game. |
| JEL: | D03 D49 O17 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21758&r=exp |
| By: | Tianshu Sun; Guodong (Gordon) Gao; Ginger Zhe Jin |
| Abstract: | While much research has examined the role of technology in moderating online user connections, how IT motivates offline interactions among users is much less understood. Using a randomized field experiment involving 80,000 participants, we study how mobile messaging can leverage recipients’ social ties to encourage blood donation. There are three main findings: first, both behavior intervention (in the form of reminder message) and economic reward (in the form of individual or group reward) increase donations, but only the messages with group reward are effective in motivating more donors to donate with their friend(s); second, group reward tends to attract different types of donors, especially those who are traditionally less active in online social setting; and third, across all treatments, message recipients donate a greater amount of blood if their friends are present. Structural estimation further suggests that rewarding group donors is four times more cost-effective than rewarding individual donors. Based on the structural estimates, we perform policy simulations on the optimal design of mobile messaging. The method of combining structural model and randomized field experiment opens new frontiers for research on leveraging IT to mobilize a user’s social network for social good. |
| JEL: | D8 I18 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21704&r=exp |
| By: | Avner Ben-Ner; John A. List; Louis Putterman; Anya Samek |
| Abstract: | An active area of research within the social sciences concerns the underlying motivation for sharing scarce resources and engaging in other pro-social actions. We develop a theoretical framework that sheds light on the developmental origins of social preferences by providing mechanisms through which parents transmit preferences for generosity to their children. Then, we conduct a field experiment with nearly 150 3-5 year old children and their parents, measuring (1) whether child and parent generosity is correlated, (2) whether children are influenced by their parents when making sharing decisions and (3) whether parents model generosity to children. We observe no correlation of independently measured parent and child sharing decisions at this young age. Yet, we find that apart from those choosing an equal allocation of resources between themselves and another child, children adjust their behaviors to narrow the gap with their parent’s or other adult’s choice. We find that fathers, and parents of initially generous children, increase their sharing when informed that their child will be shown their choice. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2015-12&r=exp |
| By: | Sauter, Philipp; Hermann, Daniel; Mußhoff, Oliver |
| Abstract: | Many economic decision situations of foresters and farmers are characterized by risk. Thereby, the individual risk attitude is of particular interest for understanding decision behaviour and, thus, is fundamental for valuable policy recommendations. The literature provides various methods to measure risk attitude, however, their respective suitability has not been sufficiently tested. Furthermore, existing analyses focus mostly on students and the field of resource economics for farmers. However, there is a lack of knowledge regarding the risk attitude of foresters and how it compares to farmers and students' attitudes. Therefore, we investigate to what extent results are comparable across different methods and whether the risk attitude of foresters differs from that of farmers and forestry students. To analyse this issue, we conduct an incentivized online experiment using the Holt and Laury (HL) task, the Eckel and Grossman (EG) task and a self-assessment (SA) questionnaire. As a result, SA values do not correlate with the HL values, but the EG values correlate with the HL values across all groups, although, risk-aversion coefficients differ. According to the HL task and the EG task, we reveal higher risk aversion for foresters in comparison to farmers, while forestry students do not differ from foresters. |
| Keywords: | risk attitude,foresters,farmers,Holt and Laury task,Eckel and Grossman task,self-assessment of risk attitude |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:daredp:1514&r=exp |
| By: | Sieber, Susann; Schmidt, Tobias |
| Abstract: | In this paper, we analyse the recording behaviour of German consumers in a one week diary on their point-of-sales expenditures. We are particularly interested in the effect of a behavioural experiment, eliciting respondents' risk preferences, on their recording behaviour. In the experiment, run shortly before the consumers start to fill in the diary, the consumers have the choice between receiving a sure payment of 10 euro and participating in a game. If they opt for playing the game they roll a die and either win 20 euro or nothing. We ask whether respondents' recording behaviour differs depending on whether individuals who do roll the die lose or win. We argue that winners may attach a more positive feeling to the survey than losers and therefore exhibit more commitment to the diary, e.g. by reporting better quality data. Beyond providing evidence on the effect of conducting up-front experiments in representative surveys our results also contribute to the literature on incentives. For participants who roll the die, the experiment can be seen as a tool to randomly assign an incentive to respondents. Our results indicate that the outcome of the game has an impact on the quantity of transactions recorded, but does not affect other aspects of data quality. It also has a negligible impact on substantive measures like the cash share. |
| Keywords: | incentives,risk experiments,payment diary,data quality |
| JEL: | C83 D12 E41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:432015&r=exp |
| By: | B. Douglas Bernheim (Stanford University); Christine L. Exley (Harvard Business School, Negotiation, Organizations & Markets Unit) |
| Abstract: | Some theories of conformity hold that social equilibrium either standardizes inferences or promotes a shared understanding of conventions and norms among individuals with fixed heterogeneous preferences (belief mechanisms). Others depict tastes as fluid and hence subject to social influences (preference mechanisms). Belief mechanisms dominate discussions of conformity within economics, but preference mechanisms receive significant attention in other social sciences. This paper seeks to determine whether conformity is attributable to belief mechanisms or preference mechanisms by exploiting their distinctive implications for the process of convergence. Laboratory experiments suggest that economists have focused too narrowly on explanations for conformity involving belief mechanisms. |
| Keywords: | conformity, norms, image motivation, prosocial behavior, |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:16-070&r=exp |
| By: | Lars Ivar Oppedal Berge; Kjetil Bjorvatn; Simon Galle; Edward Miguel; Daniel N. Posner; Bertil Tungodden; Kelly Zhang |
| Abstract: | Ethnic divisions have been shown to adversely affect economic performance and political stability, especially in Africa, but the underlying reasons remain contested, with multiple mechanisms potentially playing a role. We utilize lab experiments to isolate the role of one such mechanism—ethnic preferences—which have been central in both theory and in the conventional wisdom about the impact of ethnic differences. We employ an unusually rich research design, collecting multiple rounds of experimental data with a large sample of 1,300 subjects in Nairobi; employing within-lab priming conditions; and utilizing both standard and novel experimental measures, including implicit association tests. The econometric approach was pre-specified in a registered pre-analysis plan. Most of our tests yield no evidence of coethnic bias. The results run strongly against the common presumption of extensive ethnic bias among ordinary Kenyans, and suggest that other mechanisms may be more important in explaining the negative association between ethnic diversity and economic and political outcomes. |
| JEL: | C90 H41 O43 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21715&r=exp |
| By: | Dan Levin (Ohio State University); James Peck (Ohio State University); Asen Ivanov (Queen Mary University of London) |
| Abstract: | Through a series of decision tasks involving colored cards, we provide separate measures of Bayesian updating and non-probabilistic reasoning skills. We apply these measures to (and are the first to study) a common-value Dutch auction. This format is more salient than the strategically equivalent first-price auction and silent Dutch formats in hinting that one should condition one's estimate of the value on having the highest bid. Both Bayesian updating skills and non-probabilistic reasoning skills are shown to help subjects correct for the winner's curse, as does the saliency of the active-clock Dutch format. |
| Keywords: | Bayesian updating, Non-probabilistic reasoning, Dutch auction |
| JEL: | D4 D7 D8 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp776&r=exp |
| By: | Bruno Deffains; Romain Espinosa; Christian Thoeni |
| Abstract: | We explore the impact of the self-serving bias on the supply and demand for redistribution. We present results from an experiment in which participants decide on redistribution after performing a real effort task. Dependent on individual performance, participants are divided into two groups, successful and unsuccessful. Participants' success is exogenously determined, because they are randomly assigned to either a hard or easy task. However, because participants are not told which task they were assigned to, there is ambiguity as to whether success or failure should be attributed to internal or external factors. Participants take two redistribution decisions. First, they choose a supply of redistribution in a situation where no personal interests are at stake. Second, they choose a redistributive system behind a veil of ignorance. Our results confirm and expand previous findings on the self-serving bias: successful participants are more likely to attribute their success to their effort rather than luck, and they opt for less redistribution. Unsuccessful participants tend to attribute their failure to external factors and opt for more redistribution. We demonstrate that the self-serving bias contributes to a polarization of the views on redistribution. |
| Keywords: | Redistribution, self-serving bias, experimental, veil of ignorance, polarization |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2015-22&r=exp |
| By: | Daniele Nosenzo (Department of Economics, University of Nottingham.); Fabio Tufano (Department of Economics, University of Nottingham.) |
| Abstract: | We study the effects of voluntary participation on cooperation in collective action problems. Voluntary participation may foster cooperation through an entry mechanism, which leads to assortative selection of interaction partners, or an exit mechanism, whereby the opportunity to leave the partnership can be used as a threat against free-riders. We examine the effectiveness of these mechanisms in a one-shot public goods experiment. Voluntary participation has a positive effect on provision only through the exit mechanism. Assortative selection of interaction partners seems to play a minor role in our setting, whereas the threat of costly exit is a powerful force to discipline free-riding. |
| Keywords: | public goods; cooperation; voluntary participation; exit; entry; experiment |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2015-20&r=exp |
| By: | Da Silva, Sergio; Matsushita, Raul; De Carvalho, Mateus |
| Abstract: | There is neuroscientific evidence that people consider future versions of themselves as other people. As a result, intertemporal choice should refer to the interaction between multiple selves. We combine this notion of multiple selves in delay discounting with the approach for other-regarding preferences known as Social Value Orientation. The Social Value Orientation is a psychologically richer framework that generalizes the economic assumption of narrow self-interest. People are assumed to vary in their motivations toward resource allocation between them and the others. When making such allocation decisions they may still be individualistic, but can also be competitive, prosocial, or even altruistic. We apply an experimental measure of impatience to a sample of 437 undergraduates, measure their Social Value Orientation, and collect selected demographic variables: gender, age, handedness, parenthood, religiousness, and current emotional state. We find prosocial participants to be more patient. Those who care for the others in the present also take better care of themselves in the future. We also find a participant’s age and handedness to matter for his or her Social Value Orientation. |
| Keywords: | Other-Regarding Preferences, Social Value Orientation, Multiple Selves, Intertemporal Choice, Impatience |
| JEL: | D03 D64 D91 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68452&r=exp |
| By: | David Cesarini; Erik Lindqvist; Matthew J. Notowidigdo; Robert Östling |
| Abstract: | We study the effect of wealth on labor supply using the randomized assignment of monetary prizes in a large sample of Swedish lottery players. We find winning a lottery prize modestly reduces labor earnings, with the reduction being immediate, persistent, and similar by age, education, and sex. A calibrated dynamic model of individual labor supply implies an average lifetime marginal propensity to earn out of unearned income of -0.11, and labor-supply elasticities in the lower range of previously reported estimates. The earnings response is stronger for winners than their spouses, which is inconsistent with unitary household labor supply models. |
| JEL: | J22 J26 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21762&r=exp |
| By: | Da Silva, Sergio; Matsushita, Raul; Seifert, Guilherme; De Carvalho, Mateus |
| Abstract: | We administrate the cognitive reflection test devised by Frederick to a sample of 483 undergraduates and discriminate the sample to consider selected demographic characteristics. For the sake of robustness, we take two extra versions that present cues for removing the automatic (but wrong) answers suggested by the test. We find a participant’s gender and religious attitude to matter for the test performance on the three versions. Males score significantly higher than females, and so do atheists of either gender. While the former result replicates a previous finding that is now reasonably well established, the latter is new. The fact that atheists score higher agrees with the literature showing that belief is an automatic manifestation of the mind and its default mode. Disbelieving seems to require deliberative cognitive ability. Such results are verified by an extra sample of 81 participants using Google Docs questionnaires via the Internet. |
| Keywords: | Cognitive Reflection, Religiosity, Atheism, Cognitive Psychology |
| JEL: | Y80 Z12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68451&r=exp |
| By: | EENDEBAK, Pieter T.; SCHOEN, Eric D. |
| Abstract: | We study the design of two-level screening experiments with N runs and n factors large enough to estimate a model with all the main effects and all the two-factor interactions, while yet an eect hierarchy assumption suggests that main effect estimation should be given more prominence than the estimation of two-factor interactions. Orthogonal arrays (OAs) favor main eect estimation. However, complete enumeration becomes infeasible for cases relevant for practitioners. We develop a partial enumeration procedure for these cases and we establish upper bounds on the D-efficiency of arrays that have not been generated by the partial enumeration. We propose an optimal design procedure that favors main effect estimation as well. Designs created with this procedure have smaller D-efficiencies than D-optimal designs, but standard errors for main effects are improved. Generated OAs for 7{10 factors and 32{72 runs are smaller or have a higher D-efficiency than the smallest OAs from the literature. Designs obtained with the new optimal design procedure or strength-3 OAs (which have main eects that are not correlated with two-factor interactions) are recommended under effect hierarchy. D-optimal designs are recommended if this assumption is not likely to hold. |
| Keywords: | Coordinate exchange, D-efficiency, Optimal design, Orthogonal array, Partial enumeration |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2015019&r=exp |