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on Experimental Economics |
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Issue of 2016‒02‒17
forty-four papers chosen by |
| By: | Falk, Armin (University of Bonn); Becker, Anke (University of Bonn); Dohmen, Thomas (University of Bonn); Huffman, David B. (University of Pittsburgh); Sunde, Uwe (University of Munich) |
| Abstract: | This paper presents an experimentally validated survey module to measure six key economic preferences – risk aversion, discounting, trust, altruism, positive and negative reciprocity – in a reliable, parsimonious and cost-effective way. The survey instruments included in the module were the best predictors of preferences revealed in incentivized choice experiments. We also offer a streamlined version of the module that has been optimized and piloted for applications where time efficiency and simplicity are paramount, such as international telephone surveys. |
| Keywords: | survey validation, experiment, preference measurement |
| JEL: | C81 C83 C90 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9674&r=exp |
| By: | Falk, Armin; Szech, Nora |
| Abstract: | As was recognized by Bentham, skillfulness is an important source of pleasure. Humans like achievement and to excel in tasks relevant to them. This paper provides controlled experimental evidence that striving for pleasures of skill can have negative moral consequences and causally reduce moral values. In the study, subjects perform an IQ-test. They know that each correctly solved question not only increases test performance but also the likelihood of moral transgression. In terms of self-image, this creates a trade-off between signaling excellence and immoral disposition. We contrast performance in the IQ-test to test scores in an otherwise identical test, which is, however, framed as a simple questionnaire with arguably lower self-relevance. We find that subjects perform significantly better in the IQ-test condition, and thus become more willing to support morally problematic consequences. Willingness to reduce test performance in order to behave more morally is significantly less pronounced in the IQ versus the more neutral context. The findings provide controlled and causal evidence that the desire to succeed in a challenging, self-relevant task has the potential to seduce subjects into immoral behaviors and to significantly decrease values attached to moral outcomes. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016301&r=exp |
| By: | Altmann, Steffen; Falk, Armin; Heidhues, Paul; Jayaraman, Rajshri |
| Abstract: | We study how website defaults aff ect consumer behavior in the domain of charitable giving. In a field experiment that was conducted on a large platform for making charitable donations over the web, we exogenously vary the default options in two distinct choice dimensions. The first pertains to the primary donation decision, namely, how much to contribute to the charitable cause. The second relates to an "add-on" decision of how much to contribute to supporting the online platform itself. We find a strong impact of defaults on individual behavior: in each of our treatments, the modal positive contributions in both choice dimensions invariably correspond to the speci ed default amounts. Defaults, nevertheless, have no impact on aggregate donations. This is because defaults in the donation domain induce some people to donate more and others to donate less than they otherwise would have. In contrast, higher defaults in the secondary choice dimension unambiguously induce higher contributions to the online platform. |
| JEL: | C93 D03 D64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113098&r=exp |
| By: | Dickinson, David L. (Appalachian State University); McElroy, Todd (Florida Gulf Coast University) |
| Abstract: | Simple bargaining games are the foundation of more complex social interactions necessary for healthy relationships and well‐functioning societies. Neuroscience research has shown that high‐level deliberative thinking processes are necessary for social‐decision making - it seems cognitively less demanding to be greedy or to mistrust. In this paper, our focus is on how commonly‐experienced adverse sleep states, which are known to harm deliberative thinking, impact outcomes in the classic simple bargaining games (ultimatum, dictator, and trust games). Specifically, we experimentally manipulate sleep states of 184 young‐adult subjects who took part in a 3 week experimental protocol. Subjects were administered each game twice: once after a full week of sleep restriction and once after a full week of well‐rested sleep levels. Subjects were also randomly assigned to early morning (7:30 am) or later evening (10:00 pm) sessions to manipulate the optimality of the time‐of‐day of the decisions. We find a robust result of increased greed, reduced trust, and reduced trustworthiness following sleep restriction, after controlling for demographics and session indicators. We find no significant direct impact of circadian timing on decisions for these tasks. However, the mediating variable for these sleep manipulation effects is subjective sleepiness, and both sleep restriction and suboptimal circadian timing significantly increase self‐reported sleepiness. These results are consistent with the hypothesis that increased sleepiness reduces the relative input of deliberate thinking in social interactions. |
| Keywords: | sleep, time-of-day, ultimatum, dictator, trust, bargaining |
| JEL: | C7 C9 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9673&r=exp |
| By: | Morath, Florian; Herbst, Luisa; Konrad, Kai A. |
| Abstract: | We study the role of an imbalance in fighting strengths when players bargain in the shadow of conflict. Our experimental results suggest: In a simple bargaining game with an exogenous mediation proposal, the likelihood of conflict is independent of the balance of power. If bargaining involves endogenous demand choices, however, the likelihood of conflict is higher if power is more imbalanced. Even though endogenous bargaining outcomes reflect the players' unequal fighting strengths, strategic uncertainty causes outcomes to be most efficient when power is balanced. In turn, the importance of exogenous mediation proposals depends on the balance of power. |
| JEL: | C78 D72 D74 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112837&r=exp |
| By: | Schumacher, Heiner; Kemper, Niels |
| Abstract: | We conducted a field experiment with real-life tenants in Ethiopia to test the incentive effects of fixed-wage, sharecropping, fixed-rent, and ownership contracts. The experimental task resembles a common process in agricultural production. The sharecropping contract is essentially a piece-rate scheme framed as a profit sharing agreement. The sharecropping output was about 11 percent smaller than the fixed-rent output. Surprisingly, it is statistically indistinguishable from the fixed-wage output, despite substantial piece rates. This effect is driven by real-life sharecroppers. Their sharecropping output was significantly smaller than that of non-sharecroppers, and in one region, it was even 10 percent lower than sharecroppers fixed-wage output. Based on qualitative interviews and historical accounts, we argue that our subjects dislike sharecropping contracts because of the unfair profit sharing and the controversial allocation of the land. The contractual performance may therefore depend on the perceived fairness of the incentive scheme. |
| JEL: | C93 J30 N50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112860&r=exp |
| By: | Grohmann, Antonia Charlotte; Sakha, Sahra |
| Abstract: | This paper uses a clean experiment to investigate the impact of peer observation on the consumption decisions of rural households in Thailand. We find that those groups that observe each other show lower within group standard deviation in their decisions. At the same time, we also find that individual choice is influenced by group choice. We find that unfamiliarity with product is counteracted by peer effects. Those in a group that have higher cognitive ability are able to resist peer temptation. |
| JEL: | D12 C21 D85 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113084&r=exp |
| By: | Wenzel, Tobias; Normann, Hans-Theo |
| Abstract: | We explore how competition affects firms obfuscation strategies in laboratory experiments. Firms sell a base good and an add-on product. The price of the add-on may be shrouded and, if so, myopic consumers pay too much. Shrouding is an equilibrium but an unshrouding equilibrium coexists. In our experiments, competition matters in that only duopolistic markets are frequently shrouded whereas fourfirm markets are not. With repeated interaction, shrouding rates do not increase. However, the opportunities to shroud facilitate tacit collusion on the base good price for the duopolies: the unshrouding equilibrium serves as a credible punishment if deviations occur. |
| JEL: | L40 L41 C90 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113149&r=exp |
| By: | Gerhardt, Holger (University of Bonn); Schildberg-Hörisch, Hannah (University of Bonn); Willrodt, Jana (University of Bonn) |
| Abstract: | A core prediction of recent "dual-self" models is that a person's risk attitudes depend on her current level of self-control. While these models have received a lot of attention, empirical studies tailored to testing their core prediction are lacking. Using two prominent models, we derive precise hypotheses for choices between risky monetary payoffs in a state of low self-control, compared to regular self-control; in particular, lower levels of self-control should induce stronger risk aversion for stakes within a particular range. We test the hypotheses in a lab experiment with a large number of subjects (N = 308), using a well-established self-control depletion task and measuring risk attitudes via finely graduated choice lists. While independent manipulation checks document the effectiveness of our depletion task, we do not find any evidence for increased risk aversion after self-control depletion. Our findings have important implications for the future modeling of decision making under risk. |
| Keywords: | risk attitudes, self-control, ego depletion, dual-self models, experiment |
| JEL: | D03 D81 C91 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9613&r=exp |
| By: | Gächter, Simon (University of Nottingham); Gerhards, Leonie (University of Hamburg); Nosenzo, Daniele (University of Nottingham) |
| Abstract: | A burgeoning literature in economics has started examining the role of social norms in explaining economic behavior. Surprisingly, the vast majority of this literature has studied social norms in asocial decision settings, where individuals are observed to act in isolation from each other. In this paper we use a large-scale dictator game experiment (N = 850) to show that the presence of "peers" in the decision setting faced by an individual can have a profound influence on the individual's perception of the decision situation and its underlying norms of sharing, as elicited in an incentive compatible way. However, we find limited evidence that this influence of peers in normative considerations translates into a corresponding effect in actual behavior. Partly, this is due to substantial heterogeneity in the extent to which dictators in our sample are willing to comply with norms of fair sharing. |
| Keywords: | social norms, norm compliance, peer effects, fair sharing, dictator game, framing, experiments |
| JEL: | A13 C92 D03 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9615&r=exp |
| By: | Herr, Annika; Normann, Hans-Theo |
| Abstract: | An allocation rule that prioritizes registered donors increases the willingness to register for organ donation, as laboratory experiments show. In public opinion, however, this priority rule faces repugnance. We explore the discrepancy by implementing a vote on the rule in a donation experiment, and we also elicit opinion poll-like views. We find that two-thirds of the participants voted for the priority rule in the experiment. When asked about real-world implementation, participants of the donation experiment were more likely to support the rule than non-participants. We further confirm previous research in that the priority rule increases donation rates. Beyond that, we find that medical school students donate more often than participants from other fields. |
| JEL: | C90 I18 I10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113133&r=exp |
| By: | Rincke, Johannes; Boyer, Pierre; Dwenger, Nadja |
| Abstract: | This paper studies how imposing norms on contribution behavior affects individuals' intrinsic motivation. We consider an urban area in Germany where the Catholic Church collects a local church levy as a charitable donation, despite the fact that the levy is legally a tax. In cooperation with the church, we design a natural randomized field experiment with letter treatments informing individuals that the church levy is in fact a tax. Guided by a simple theoretical model, we use baseline contribution behavior to measure individuals' intrinsic motivation and demonstrate that treatment effects differ strongly across motivational types. Among weakly intrinsically motivated individuals, communicating the existence of a legal norm results in a significant crowd-out of intrinsic motivation. In contrast, strongly intrinsically motivated individuals do not show any treatment response. We cross-validate our findings using alternative motivational measures derived from an extensive post-treatment survey. |
| JEL: | C93 D03 H26 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112951&r=exp |
| By: | Wiens, Marcus; Johannemann, Kirsten; Morasch, Karl; Hofmann, Martin |
| Abstract: | In dieser experimentellen Studie untersuchen wir das kooperative Verhalten von Offizieren (bzw. Offiziersanwärtern) der Bundeswehr. Dabei betrachten wir ihre Interaktionen sowohl untereinander als auch gegenüber zivilen Probanden. Unsere Kernhypothesen sind, dass sich die angehenden Offiziere aufgrund ihrer stark auf Gemeinschaftssinn ausgerichteten Ausbildung (Kameradschaft) und einem auf gesellschaftliche Verantwortung hin orientierten Selbstverständnis (Sozialkapital) sowohl untereinander als auch gegenüber den zivilen Probanden kooperativer verhalten als eine rein zivile Vergleichsgruppe. Wir ziehen hierfür mit dem Diktatorspiel, dem Ultimatumspiel sowie dem Investitionsspiel drei etablierte Standardexperimente heran, mit denen sich jeweils bestimmte Facetten (pro)sozialer bzw. kooperativer Motivation messen und voneinander unterscheiden lassen. Im Experiment verhalten sich Soldaten im Durchschnitt signifikant altruistischer, kooperativer, vertrauensvoller und vertrauenswürdiger. Dies gilt in den meisten Fällen nicht nur für das Verhalten unter Soldaten sondern auch von Soldaten gegenüber Zivilisten. |
| Abstract: | In this experimental study we examine the behavior of Bundeswehr officers and officer candidates regarding their willingness to cooperate. Due to the military training which focuses on comradeship and reliable teamwork even under extreme conditions, we expect a strong bond between soldiers and therefore more cooperation among them. Furthermore there are additional norms for soldiers that explicitly call for social responsibility and an appropriate behavior relative to civilians. For that reason we also expect more altruism and trust of soldiers compared to pure civilian groups. To explore these issues in an experimental setting, the subjects had to play the dictator game, the ultimatum game, and the trust game. These three established experiments allow us to measure and distinguish between different aspects of social and cooperative motivation. We find that soldiers are on average more altruistic, more cooperative, and more trusting as well as more trustworthy. These results do not only hold for the interaction among soldiers but in most cases also with regard to the behavior of soldiers towards civilians. |
| Keywords: | Experiment,Game Theory,Fairness,Trust,Reputation,Professional Norms,Military,In-Group Favoritism,Dictator game,Ultimatum game,Trust game |
| JEL: | C72 C78 C91 D01 D63 D64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ubwwpe:20152&r=exp |
| By: | Grimm, Veronika; Feicht, Robert; Rau, Holger; Stephan, Gesine |
| Abstract: | We conduct multi-person one-shot ultimatum games that reflect important aspects of collective bargaining. In all treatments a proposer has to divide a pie among herself and six recipients that are divided into two groups of three. The proposer cannot discriminate among, but across group members. Acceptance decisions are taken by a committee of three representatives from one or both groups. In a 2x2 design we vary (i) representation in the decision committee (one vs. both groups) and (ii) the decision rule (unanimity vs. majority voting). We find that (i) representation of a group in the committee is crucial for receiving a significant share, (ii), proposals are more balanced if both groups have veto power (iii) acceptance rates are only high when the environment gives a clear idea of what an appropriate proposal is. Non--binding communication reduces rejection rates and proposer shares. |
| JEL: | C92 C78 C91 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112939&r=exp |
| By: | Balakrishnan, Uttara (University of Maryland); Haushofer, Johannes (Princeton University); Jakiela, Pamela (University of Maryland) |
| Abstract: | Empirically observed intertemporal choices about money have long been thought to exhibit present bias, i.e. higher short-term compared to long-term discount rates. Recently, this view has been called into question on both empirical and theoretical grounds, and a spate of recent findings suggest that present bias for money is minimal or non-existent when one allows for curvature in the utility function and transaction costs are tightly controlled. However, an alternative interpretation of many of these findings is that, in the interest of equalizing transaction costs across earlier and later payments, small delays were introduced between the time of the experiment and the soonest payment. We conduct a laboratory experiment in Kenya in which we elicit time and risk preference parameters from 291 participants, using convex time budgets and tightly controlling for transaction costs. We make the soonest payments truly immediate, using the Kenyan mobile money system M-Pesa to make real-time transfers to subjects' phones. We find strong evidence of present bias, with estimates of the present bias parameter ranging from 0.901 to 0.937. This result suggests that present bias for money does in fact exist, but only for truly immediate payments. |
| Keywords: | discount rate, present bias, experiment, mobile money |
| JEL: | C91 D90 O12 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9653&r=exp |
| By: | Stracke, Rudi; Kerschbamer, Rudolf; Sunde, Uwe |
| Abstract: | This paper investigates whether the timing of rewards affects behavior in multi-stage contests. Abstracting from discounting, theory predicts that it is irrelevant for behavior whether agents are immediately rewarded for succeeding on a particular stage, or whether the reward is delayed until the interaction on the subsequent stage is decided. When testing this prediction using a two-stage contest in lab experiments, we fnd that stage-2 efforts are identical in immediate and delayed reward treatments, while stage-1 effort is significantly lower if rewards are immediate. This difference can be explained by the salience of continuation values, which is strongly affected by the timing of rewards. |
| JEL: | C72 M52 J33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113092&r=exp |
| By: | Slonim, Robert (University of Sydney); Wang, Carmen (Harvard Business School) |
| Abstract: | Volunteer supply is widespread, yet without a price inefficiencies occur due to suppliers' inability to coordinate with each other and with demand. For these contexts, we propose a market clearinghouse mechanism that improves efficiency if supply is altruistically provided. The mechanism, a registry, combines aggregate demand information with supplier's willingness to help, and invites volunteers to help only when excess demand occurs. We experimentally study three registries that include stochastic high-stakes demand and heterogeneous supplier costs. We find that all three registries improve efficiency dramatically; they eliminate unneeded costly help when demand is unexpectedly low and significantly increase supply (reduce shortages) otherwise. Further, two registries that invite exactly one registry member to help for each person needing help, rather than the third registry that continues asking members to help until someone helps, result in fewer people joining the registry, but those who join are more likely to help. |
| Keywords: | market design, laboratory experiments, volunteering, public goods provision |
| JEL: | D64 C93 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9650&r=exp |
| By: | Czura, Kristina; Dequiedt, Vianney |
| Abstract: | Agricultural insurance does not only affect investment decisions in agriculture but also in a secondary, unrelated income earning activity that can serve as a risk mitigation and risk coping strategy, such as livestock farming. The value of insurance may depend on the market environment in the investment market for livestock: with complete livestock markets, agricultural insurance may be less valuable; with seasonal livestock markets and non-flexible decision making environments, agricultural insurance becomes more valuable. Using data from a lab-in-the-field experiment with agricultural decision makers in rural Senegal we study the effects of agricultural insurance on investments in livestock with complete and seasonal livestock markets. In general, insurance increases investment in livestock farming. There is a widespread willingness to pay for insurance but it does not react to the size of the insurance coverage. The value of insurance is higher in inflexible investment decisions indicating that insurance is more valuable in non-flexible decision making environments, such as incomplete and seasonal markets. |
| JEL: | C93 O16 O12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112993&r=exp |
| By: | Baert, Stijn (Ghent University); Vujić, Sunčica (University of Antwerp) |
| Abstract: | We investigate whether, why and when prosocial engagement has a causal effect on individual employment opportunities. To this end, a field experiment is conducted in which volunteering activities are randomly assigned to fictitious job applications sent to genuine vacancies. We find that volunteers get one third more interview invitations than non‐volunteers. The volunteering premium is higher for females but invariant with respect to the number of engagements and the private versus public or nonprofit orientation of the job posting firm. As a result, our findings are consistent with the idea that prosocial workers sort themselves into non‐commercial sectors. |
| Keywords: | prosocial behaviour, volunteering, labour market, gender gaps, statistical discrimination, sorting, experiments |
| JEL: | C93 D64 J24 J71 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9649&r=exp |
| By: | Sandner, Malte |
| Abstract: | This paper presents the results of a randomized study of a home visiting program implemented in Germany for first-time mothers on welfare. A major goal of the program is to increase the participants economic self-sufficiency. I use administrative data from the Federal Employment Agency and detailed telephone surveys to examine the effects of the intervention. The findings reveal that the intervention does not affect maternal employment or school attendance but unintentionally increases subsequent births. The program s effect on fertility can be explained by higher maternal life satisfaction and well-being in the treatment group which led to fewer abortions compared with the control group. These results are in contrast to those of previous studies from the United States, where home visiting programs increased employment and decreased fertility. |
| JEL: | J13 J12 J18 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113029&r=exp |
| By: | Jacobs, Martin; Requate, Till |
| Abstract: | This study is the first to investigate the effect of demand rationing in experimental Bertrand-Edgeworth markets with fixed exogenous capacities. It is found that prices and profits are significantly higher under proportional than under efficient demand rationing. Moreover, the amount of capacity available to each firm is varied. In accordance with earlier studies, prices and profits are significantly higher when capacities are lower. Those effects accord qualitatively with the Nash equilibrium predictions of the corresponding stage games. However, the Nash equilibrium concept does poorly at quantitative predictions. Prices are significantly higher than the Nash prediction in all treatments, irrespective of whether the Nash equilibrium is in mixed or in pure strategies. Profits are higher than the Nash prediction with high capacities, but may converge to the equilibrium prediction in the long run with low capacities. The data of individual price choices feature dynamic patterns that can potentially be explained by both Edgeworth price cycles and imitation of the price set by the competitor. |
| Keywords: | Bertrand-Edgeworth,demand rationing,Edgeworth cycles,oligopoly,laboratory experiment |
| JEL: | C72 C90 D43 L13 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201603&r=exp |
| By: | Bohne, Albrecht; Alexandra, Avdeenko; Frölich, Markus; Kemper, Niels |
| Abstract: | Limited attention may play a role in explaining the inability to reach savings goals (Karlan, McConnell, Mullainathan and Zinman, forthcoming). Presuming that attention is a scarce resource and important for the pursuit of saving plans, limits to attention in inter-temporal consumption and saving decisions may cause savers not to reach their savings goals. In turn, constant feedback on the savings performance may help to reach savings goals in the presence of limited attention. In this presentation we will draw on a simple experiment to test whether the visual representation of savings balances stimulates savings behavior and helps individuals reach their savings goals. Doing so, we randomly offer transparent and non-transparent moneyboxes as a complementary savings device to current and former clients of a microfinance organization in Ethiopia. We test whether the visual representation of saving balances via transparent money boxes increases savings and helps microfinance clients reach their savings goals. While this is our working hypothesis, we also test whether the visual representation of saving balances via transparent money boxes decreases savings (i.e. because of a higher temptation to spend money that can be seen, or because it is more difficult to hide savings from others). The hypotheses are currently under investigation as the final phase of the data-collection was completed in February 2015. |
| JEL: | D12 D91 O12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112915&r=exp |
| By: | Doerrenberg, Philipp (ZEW Mannheim); Duncan, Denvil (Indiana University); Loeffler, Max (ZEW Mannheim) |
| Abstract: | The standard labor-supply literature typically assumes that the labor supply response to wage increases is the same as that for equivalent wage decreases. However, evidence from the behavioral-economics literature suggests that people are loss averse and thus perceive losses differently than gains. This behavioral insight may imply that workers respond differently to wage increases than to wage decreases. We estimate the effect of wage increases and decreases on labor supply using a randomized field experiment with workers on Amazon's Mechanical Turk. The results provide evidence that wage increases have smaller effects than wage decreases, suggesting that the labor-supply response to wage changes is asymmetric. This finding is especially strong on the extensive margin where the elasticity for a wage decrease is twice that for a wage increase. These findings suggest that a reference-dependent utility function that incorporates loss aversion is the most appropriate way to model labor supply. |
| Keywords: | labor supply, loss aversion, labor supply elasticities, w.r.t. wages |
| JEL: | J22 J31 D03 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9683&r=exp |
| By: | Mechtel, Mario; Bäker, Agnes |
| Abstract: | Recent research has shown that the presence of peers can increase individual output both in the lab and the field. As a new explanation for higher individual output levels, we test whether peer settings are particularly prone to cheating even if peer settings do not provide additional monetary benefits of cheating. Participants in our real effort experiment had the opportunity to cheat when declaring their output levels. Although cheating did not have different monetary consequences when working alone than when working in the presence of a peer, we find that cheating on task performance is a more severe problem in peer settings. Our results potentially have far-reaching repercussions regarding organizational design in the context of group settings where principals are not fully able to observe agents' output levels. |
| JEL: | M50 J20 D20 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113093&r=exp |
| By: | Normann, Hans-Theo; Möllers, Claudia; Snyder, Christopher M. |
| Abstract: | When an upstream monopolist supplies several competing downstream firms, it may fail to monopolize the market because of opportunistic behavior towards the downstream firms. We analyze this well-known commitment problem in an experiment where we extend previous research by allowing for communication. In one treatment, the upstream firm can bilaterally talk to either of two downstream firms. In a second treatment, all three firms talk together. We find that the treatment with bilateral communication leads to fewer rejections of offers and higher joint profits than a baseline treatment without communication, but output is still above the monopoly benchmark. Only the treatment where all three firms can communicate leads to complete monopolization. Such communication effectively works as a vertical restraint and should be regarding as potentially anticompetitive. |
| JEL: | L12 L42 C90 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112842&r=exp |
| By: | Lergetporer, Philipp; Angerer, Silvia; Glätzle-Rützler, Daniela; Sutter, Matthias |
| Abstract: | While discrimination and its economic implications have been studied in many different societies and based on a multitude of attributes like ethnicity, religion, gender, or language, the development of such behavior in children is still poorly understood. Here we present experimental evidence from a bilingual city in Northern Italy on whether the language spoken by a partner in a prisoner s dilemma game affects behavior. We examine how discrimination based on language develops in practically all six- to eleven-year old primary school children in the city. We find that cooperation increases with age and that both in-group favoritism and out-group discrimination emerge as children get older. |
| JEL: | C93 D03 D64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112843&r=exp |
| By: | Paloyo, Alfredo R. (University of Wollongong); Rogan, Sally (University of Wollongong); Siminski, Peter (University of Wollongong) |
| Abstract: | While randomized controlled trials (RCTs) are the "gold standard" for impact evaluation, they face numerous practical barriers to implementation. In some circumstances, a randomized-encouragement design (RED) is a viable alternative, but applications are surprisingly rare. We discuss the strengths and challenges of RED and apply it to evaluate a mature Supplemental Instruction (SI) or PASS (Peer Assisted Study Session) program at an Australian university. A randomly selected subgroup of students from first-year courses (𝑁 = 6954) was offered large incentives (worth AUD 55,000) to attend PASS, which increased attendance by an estimated 0.47 hours each. This first-stage (inducement) effect did not vary with the size of the incentive and was larger (0.89) for students from disadvantaged backgrounds. Instrumental variable estimates suggest that one hour of PASS improved grades by 0.065 standard deviations, which is consistent with the non-experimental literature. However, this estimate is not statistically significant, reflecting limited statistical power. The estimated effect is largest for students in their first semester at university. |
| Keywords: | Australia, randomized-encouragement design, student outcomes, peer-assisted study session, supplemental instruction, selection bias |
| JEL: | C93 I21 I23 I24 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9696&r=exp |
| By: | Lohse, Johannes |
| Abstract: | Will individuals contribute to a public good, even if doing so imposes a negative externality on an outsider? This paper describes the results of an experiment in which decision makers could contribute to a real public good, while (part of) the contribution costs were passed on to another participant. Decision makers with social preferences thus faced lower contribution cost but had to take into account additional costs imposed on an outsider. Such trade-offs are pervasive in many public good decisions, in which those who decide about provision, those who finance provision and those who benefit from it are different actors. My findings suggest that decision makers, at large, ignored adverse effects imposed on another participant. When varying both the distribution of initial endowments and the fraction of costs passed on to the outsider, I find that decision makers only refrain from contributing if the outsider has to pay for a disproportionate share or the full provision costs. This finding is best explained by advantageous inequity aversion. |
| JEL: | H41 C92 H23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113151&r=exp |
| By: | Rockenbach, Bettina; Pigors, Mark |
| Abstract: | We investigate the emergence of socially responsible (SR) production through consumer decisions. Our experimental treatments vary market competitiveness and consumers information on social responsibility in production. We show that irrespective of consumers information SR production reduces monopolistic supplier s profit and is therefore unlikely to emerge. With supplier competition, SR production positively influences consumers buying decisions and suppliers offering SR products achieve significantly higher profits, as long their price is not too high. Our results yield valuable insights into the possibilities and limitations of promoting SR production through consumer behavior, and provide evidence for positive effects of competition on moral behavior. |
| JEL: | M14 C91 A13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113139&r=exp |
| By: | Schmitt, Norma; Beblo, Miriam; Beninger, Denis; Schröder, Melanie |
| Abstract: | This paper identifies a woman's self-confidence to boost her competition willingness independently from the gender-mix of the competitor's group. We conduct an incentive compatible online choice experiment with 883 non-standard subjects, 442 of them female, with competition-free and competition-involving choice sets that ruled inter alia the gender-related composition of the competitors group. Our framed field experimental setting demonstrates that indeed the participating women are more eager to engage in same-gender than in mixed-gender competition. However, if a woman is revealed to be self-confident, she is more engaged in competition even against a mixed-gender group with gender-differences in competition disappearing. Our interpretation is twofold: On the one hand, we confirm a woman's competition ability, whereas on the other, we must admit that this is driven by the strength of her self-concept. |
| JEL: | C93 D83 J16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113145&r=exp |
| By: | Lang, Harald; Konrad, Kai A.; Morath, Florian |
| Abstract: | Learning that others earn more may reduce individual well-being but can also be informative about the own income prospects. This paper provides experimental evidence that separates direct effects of income comparisons on well-being and informational effects from observing changes in the income of others. In an environment of uncertainty about the own income we find that both the direct comparison effects and the informational effects are asymmetric. Individual beliefs about the own income are adjusted downwards when observing that others are likely to earn less but do not change significantly when observing that others are likely to earn more. Individual satisfaction decreases when observing that others are likely to earn more but does not change significantly when observing that others are likely to earn less. Overall, individuals are more reactive to bad news than to good news . |
| JEL: | C91 D31 D84 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113017&r=exp |
| By: | Nystad Handberg , Øyvind (School of Economics and Business, Norwegian University of Life Sciences); Angelsen, Arild (School of Economics and Business, Norwegian University of Life Sciences) |
| Abstract: | How do different levels of individual payments for environmental services (PES) affect intrinsic and social motivations for forest conservation? Does introducing low levels of PES crowd out these motivations? This paper presents findings from framed field experiments (FFE) conducted with local forest users in Tanzania. The payoff structure represents a common-pool resource situation; participants’ payoffs depend on the number of trees harvested, and aggregate over-harvesting can harm future harvest. Four levels of individual PES are tested in a between-group design: no (0%), low (20%), medium (60%) and full (100%) PES, where the level is relative to the harvest value. We observe lower than theoretically predicted harvest rates at no, low and medium PES, while the opposite is true at full PES. Low PES has a weak negative effect on harvest rates among certain subgroups, while medium and full PES give strong reductions in harvest rates (c. -43% and -75%). The results suggest that low PES has little impact on local forest use in Tanzania and has on aggregate a neutral effect on intrinsic and social motivations. Increasing payments has a negative, but diminishing effect on harvest rates. |
| Keywords: | Field experiment; PES; REDD; crowding-out; forest management; Tanzania |
| JEL: | C93 Q23 |
| Date: | 2016–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsseb:2016_002&r=exp |
| By: | Chuah, Swee Hoon (RMIT University); Gächter, Simon (University of Nottingham); Hoffmann, Robert (RMIT University); Tan, Jonathan H. W. (University of Nottingham) |
| Abstract: | We propose that religion impacts trust and trustworthiness in ways that depend on how individuals are socially identified and connected. Religiosity and religious affiliation may serve as markers for statistical discrimination. Further, affiliation to the same religion may enhance group identity, or affiliation irrespective of creed may lend social identity, and in turn induce taste-based discrimination. Religiosity may also relate to general prejudice. We test these hypotheses across three culturally diverse countries. Participants' willingness to discriminate, beliefs of how trustworthy or trusting others are, as well as actual trust and trustworthiness are measured incentive compatibly. We find that interpersonal similarity in religiosity and affiliation promote trust through beliefs of reciprocity. Religious participants also believe that those belonging to some faith are trustworthier, but invest more trust only in those of the same religion – religiosity amplifies this effect. Across non-religious categories, whereas more religious participants are more willing to discriminate, less religious participants are as likely to display group biases. |
| Keywords: | religiosity, connectedness, discrimination, trust, experiment |
| JEL: | C72 C91 J16 Z12 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9616&r=exp |
| By: | Heinrich, Timo; Brosig-Koch, Jeannette |
| Abstract: | This study explores the effects of communication and its interaction with reputation information. Our focus is on buyer-determined procurement auctions with moral hazard in which buyers can select a bidder based on prices and all other information available. The results of our controlled laboratory experiment demonstrate that in contrast to reputation information communication only slightly increases market efficiency. If reputation information is available, communication has no additional efficiency effect. Buyers' choice of a bidder is influenced by both, reputation information and the content of communication. Specifically, buyers prefer bidders with a good reputation and bidders who promise them a specific profit. If this kind of promise is infeasible as it is often the case in real auctions, buyers prefer bidders whose argu-ments reduce social distance. Unspecific promises have no significant effect. Using a unique set of field data, we compare observed buyer choices with those in the field and find a choice pattern that is consistent with our lab data. High reputation bidders and bidders reducing social distance by initiating communication through additional channels are more likely to be selected as auction winners. |
| JEL: | C91 D83 D44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112892&r=exp |
| By: | Herber, Stefanie |
| Abstract: | If information asymmetries prevent talented students of non-academic backgrounds from applying for merit-based aid, the full potential of qualified youth will not be unfolded and social selectivity is likely to corroborate. This paper analyzes whether information asymmetries exist and decrease students' likelihood to apply for merit-based scholarships. In a randomized field experiment, I exposed more than 5,000 German students either to general information on federally funded scholarships or additionally to tailored information on details of the application process, conveyed by a similar role model. The role model treatment did significantly increase non-academic and male students' application probabilities for federally funded merit-based scholarships. Providing only general information on the scholarship system triggered participants' own information search for alternative funding sources and increased application rates for other, not federally funded scholarships. |
| JEL: | I22 I24 D83 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113058&r=exp |
| By: | Casari, Marco (University of Bologna); Zhang, Jingjing (University of Technology, Sydney); Jackson, Christine (Purdue University) |
| Abstract: | It is still an open question when groups perform better than individuals in intellective tasks. We report that in an Acquiring a Company game, what prevailed when there was disagreement among group members was the median proposal and not the best proposal. This aggregation rule explains why groups underperformed with respect to a "truth wins" benchmark and why they performed better than individuals deciding in isolation in a simple version of the task but worse in the more difficult version. Implications are drawn on when to employ groups rather than individuals in decision making. |
| Keywords: | winner's curse, group decision making, communication, risky shift, herd behavior |
| JEL: | C91 C92 D03 D81 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9614&r=exp |
| By: | Mertins, Vanessa; Jeworrek, Sabrina |
| Abstract: | Economic theory suggests that agents care for the outcomes they produce. This paper studies the conditions under which a pro-social mission of a job affects workers motivation to perform well. In particular, we investigate whether it makes a difference if workers actively decide upon doing a mission-oriented job or are exogenously assigned. We find that a pro-social mission itself affects only a small group of workers in a positive way whereas self-selection into a mission-oriented job leads to a highly significant overall performance boost. |
| JEL: | C93 J33 M55 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112930&r=exp |
| By: | Schwerter, Frederik |
| Abstract: | We test whether social reference points impact individual risk taking. In a laboratory experiment, decision makers observe the earnings of a peer subject before making a risky choice. We exogenously manipulate the peer earnings across two treatments. We find a significant treatment effect on risk taking: decision makers vary their risk taking in order to surpass or stay ahead of their peer. Our findings are consistent with a social-comparison-based, reference-dependent preference model that formalizes relative concerns via social loss aversion. Additionally, we relate our findings to the impact of private reference points on risk taking. |
| JEL: | C91 D03 D81 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112889&r=exp |
| By: | Arni, Patrick (IZA) |
| Abstract: | Empirically, not much is known about the mechanisms how labor market programs like job search assistance and training operate to support finding a job. This paper provides novel evidence to open the "blackbox": it causally links the program interventions to the dynamics of search behavior, beliefs and non-cognitive skills. The study is based on a unique combination of a randomized field experiment with detailed register data and a panel of repeated surveys. The tested coaching program, focused on older job seekers, turns out to increase the job finding of participants by 9 percentage points (72% vs. 63% in the control group). The treatment effect is driven by a reduction of reservation wages and an increase in search efficiency. Moreover, I find short-run effects on motivation, self-confidence and beliefs. The job seekers overestimate their chances slightly less with respect to job interviews and salaries. Overall, the focus on realistic expectations and on search strategy appears to be important for program success. The experiment shows that evaluation designs which directly assess behavior can provide a fruitful base for targeted policy design. |
| Keywords: | field experiment, labor market policy, older workers, reservation wages, job search behavior, non-cognitive skills, biased beliefs, dynamic treatment effects, unemployment insurance |
| JEL: | J64 J65 J68 J14 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9617&r=exp |
| By: | Werner, Peter; Khalmetski, Kiryl; Ockenfels, Axel |
| Abstract: | People do not only feel guilt from not living up to others expectations (Battigalli and Dufwenberg (2007)), but may also like to exceed them. We propose a model that generalizes the guilt aversion model to capture the possibility of positive surprises when making gifts. A model extension allows decision makers to care about others' attribution of intentions behind surprises. We test the model in two dictator game experiments. Experiment 1 shows a strong causal effect of recipients expectations on dictators transfers. Moreover, in line with our model, the correlation between transfers and expectations can be both, positive and negative, obscuring the effect in the aggregate. Experiment 2 shows that dictators care about what recipients know about the intentions behind surprises. |
| JEL: | C91 D64 D84 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113006&r=exp |
| By: | Jacobs, Martin; Requate, Till |
| Abstract: | Price competition with increasing marginal costs, though relevant for many markets, appears as an under-researched field in the experimental oligopoly literature. We provide results from an experiment that varies the number of firms as well as the demand rationing and matching schemes in Bertrand-Edgeworth markets with increasing marginal costs and voluntary trading. We find that prices and profits are substantially higher in duopoly than in triopoly and with proportional compared to efficient demand rationing. The matching rule has little effect on prices and profits. Nash equilibrium predictions do not capture observed behavior. Neither the mixed-strategy Nash equilibria of the underlying one-shot game nor, for the fixed matching condition, the symmetric stationary outcome pure-strategy Nash equilibria of the infinitely repeated game are supported by the data. In contrast to results from related experiments, behavior is largely more competitive than predicted by Nash equilibrium theory. Individual pricing decisions can predominantly be explained by either myopic best responses (Edgeworth cycles) or simple imitative behavior, where the complexity of the decision situation plays a crucial role in which behavioral pattern applies. |
| Keywords: | Bertrand-Edgeworth,demand rationing,increasing marginal costs,Edgeworth cycles,oligopoly,laboratory experiment |
| JEL: | C72 C90 D43 L13 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201601&r=exp |
| By: | Metzger, Laura |
| Abstract: | The question if private donors care about aid effectiveness when they donate to an international charity has received little attention in the literature on private charitable giving as well as in development microeconomics. This discussion is important, because a considerable share of foreign aid stems from private sources. Thus, individual donors can have an important influence on increasing social welfare by directing their funds to more effective organizations. We conducted a laboratory experiment to investigate if private donors want information about the exact Impact of their donation to an international charity before they donate, and how much they care about aid impact compared to other information: namely, information about administrations costs, and the recipient type benefiting from their donation. Our main results are the following. First, the demand was lowest for information about aid effectiveness, and highest for information about the recipient type. Second, donation levels were not significantly affected by differences in aid effectiveness, but were significantly affected by differences in administration costs, and recipient types. Participants in the administrations costs group used the additional information to punish the less preferred NGO by decreasing their transfers to zero. Participants in the recipient type group used the additional information to reward the preferred recipient type with higher-thanaverage transfers. |
| JEL: | D64 L31 O12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112835&r=exp |
| By: | Adena, Maja; Huck, Steffen |
| Abstract: | In this paper, we present evidence from a large-scale natural experiment in which different fundraising schemes are tested and compared: lead donor, standard linear matching (1:1), and an alternative matching scheme in which the matching amount goes to another project. The lead donor treatment, in comparison to other treatments, generates high average donations but relatively low participation rate. In the case of the standard linear matching scheme (1:1) we find, similarly to Huck and Rasul (2011), a crowding-out effect, which reduces significantly the average donation given. However, in our case, the traditional linear matching scheme (1:1) increases significantly the participation rate such that the overall return per mail-out is also higher. The alternative matching scheme increases significantly the response rate without generating the above crowding out effect. |
| JEL: | C93 D12 D64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113209&r=exp |
| By: | Koch, Christian; Müller, Cornelius |
| Abstract: | Many countries grant exemption from legal prosecution under certain conditions, allowing for voluntary disclosures regarding tax evasion. It has been claimed that tax amnesties are most successful when they are accompanied by an increase in compliance efforts because amnesties then help tax evaders to adjust to the new circumstances. At the same time, time-limited amnesties are often repeated or in some countries even permanent amnesty laws exist. When tax amnesties are, however, anticipated, they can serve as an insurance against a rise in the detection probability, potentially leading to less and not more tax compliance. We test the relevance of this insurance effect in an experimental tax game and find that the overall tax compliance actually decreases by about 9 percent because of this effect. |
| JEL: | C91 H26 H24 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112991&r=exp |