|
on Experimental Economics |
|
Issue of 2016‒03‒06
eighteen papers chosen by |
| By: | Fochmann, Martin; Jahnke, Bjoern; Wagener, Andreas |
| Abstract: | Reliable institutions - i.e., institutions that live up to the norms that agents expect them to keep - foment cooperative behavior. We experimentally confirm this hypothesis in a public goods game with a salient norm that cooperation was socially demanded and corruption ought not to occur. When nevertheless corruption attempts came up, groups that were told that "the system" had fended off the attempts made considerably higher contributions to the public good than groups that only learned that the attempt did not affect their payoffs or that were not at all exposed to corruption. |
| Keywords: | Public goods, Experiment, Institutions |
| JEL: | H41 A13 C91 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-570&r=exp |
| By: | Alcalde, Pilar; Nagel, Juan |
| Abstract: | We study the causal effect of an active learning teaching method on grades. We designed a randomized experiment with students at an undergraduate business and economics program in Chile. Two groups were taught by the same professor: the control group used traditional lectures, while the treatment group used an active learning method. Treated students failed the class less but the effect was not significant. They also had significantly better grades at the end and during the semester. The treatment effect was larger for males and students with high application scores. The effect does not appear instantaneously, and appears to fade away at the end of the semester. Results suggest students allocate effort differently across both groups, and this interacts with the treatment effect. |
| Keywords: | Classroom experiments, course performance, peer instruction, innovation in teaching |
| JEL: | A20 C21 C90 |
| Date: | 2015–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68994&r=exp |
| By: | Alger, Ingela; Juarez, Laura; Juarez-Torres, Miriam; Miquel-Florensa, Josepa |
| Abstract: | How does informal risk sharing affect incentives to avoid risk? While moral hazard is expected under formal insurance, theory suggests that the incentive effects of informal risk sharing are ambiguous: internalization of the external effects of transfers on others may reduce or enhance incentives to avoid risk. To study this issue, which is particularly relevant for developing economies, we designed a novel real-effort lab experiment and conducted it in 16 small villages in rural Mexico. We fi nd that subjects internalize the effects of transfers enough for the presence of transfers to signi cantly increase e¤ort compared to autarky situations. |
| Keywords: | informal insurance, effort, moral hazard, free-riding effect, empathy effect |
| JEL: | C93 D64 O12 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:30163&r=exp |
| By: | Fehr, Dietmar (WZB - Social Science Research Center Berlin); Sutter, Matthias (University of Cologne) |
| Abstract: | Human communication in organizations often involves a large amount of gossiping about others. Here we study in an experiment whether gossip affects the efficiency of human interactions. We let subjects play a trust game. Third parties observe a trustee's behavior and can gossip about it by sending a message to the trustor with whom the observed trustee will be paired (for the first time) in the next round. While messages are non-verifiable and sometimes also incorrect, the possibility of gossip is highly efficiency-increasing compared to a situation without any gossip. In two further control treatments, we show that the mere fact of being observed by third parties cannot explain the efficiency-increasing effect of gossip, and that noisy gossip (where information transmission from third parties to trustors can fail) still increases efficiency, but less so than if information transmission is undisturbed. |
| Keywords: | gossip, communication, trust game, efficiency, experiment |
| JEL: | C72 C92 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9704&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:kitwps:78&r=exp |
| By: | Chantal Toledo |
| Abstract: | Using a randomized experiment conducted in 17 favelas (shantytowns) in Rio de Janeiro, Brazil, this paper investigates the interplay between three levels of monetary incentives and an environmental persuasion communication on the take-up of an energy-efficient lightbulb (a light-emitting diode or, LED). |
| Keywords: | Energy efficient technologies, Favelas, Non Monetary incentives |
| JEL: | F Z |
| Date: | 2016–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:2bb0d990cda64b03b9699491eae54785&r=exp |
| By: | Matías Busso; Julian P. Cristia; Sarah D. Humpage |
| Abstract: | Many families fail to vaccinate their children despite the supply of these services at no cost. This study tests whether personal reminders can increase demand for vaccination. A field experiment was conducted in rural Guatemala in which timely reminders were provided to families whose children were due for a vaccine. The six-month intervention increased the probability of vaccination completion by 2.2 percentage points among all children in treatment communities. Moreover, for children in treatment communities who were due to receive a vaccine, and whose parents were expected to be reminded about that due date, the probability of vaccination completion increased by 4.9 percentage points. The cost of an additional child with complete vaccination due to the intervention is estimated at about $7.50. |
| Keywords: | Community Development, Human health, Health Policy, Health Care, Poverty, Vaccination, Reminders, Field experiment, Guatemala |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:89357&r=exp |
| By: | Elena Molis (Department of Economic Theory and Economic History, University of Granada.); Levent Neysey (Kiel Institute for the World Economy); Raul Peña-Fernandez (University of Granada) |
| Abstract: | In a public goods game, it is usually assumed that people only consider their private returns when contributing to public goods. However, individuals in a same society may benefit from a public project differently. As a result, their willingness to contribute may vary. We experimentally analyze individuals contribution behavior in a repeated public goods game, where participants are categorized in two types, low or high, according with the returns they derive from the public good. In our design we consider different group formations, homogeneous and heterogeneous. All the members of a homogeneous group benefit from the public good equally, while in a heterogeneous group, the return levels are not equally distributed among the members. We show that the dif- ferences in contributions between the two types of players are larger in heterogeneously formed groups than the homogeneous ones, although the contribution differences are insignificant on ag- gregate level. These results underline the social aspect of public good provision and suggest that aggregation may misleadingly cover heterogeneities in the societies. |
| Keywords: | Public Goods, Heterogeneity, Group Effects, Marginal per Capita Returns |
| JEL: | C90 H41 D80 |
| Date: | 2016–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:16/02&r=exp |
| By: | Dimant, Eugen |
| Abstract: | Social interactions and the resulting peer effects loom large in both economic and social contexts. This is particularly true for the spillover of (un)ethical behavior in explaining how behavior and norms spread across individual people, neighborhoods, or even cultures. Although we understand and observe the outcomes of such contagion effects, little is known about the drivers and the underlying mechanisms, especially with respect to the role of social identity with one’s peers and the (un)ethicality of behavior one is exposed to. We use a variant of a give-or-take dictator game to shed light on these aspects in a con-trolled laboratory setting. Our experiment contributes to the existing literature in two ways: first, using a novel approach of inducing social identification with one’s peers in the lab, our design allows us to analyze the spillover-effects of (un)ethical behavior under varied levels of social identification. Second, we study whether contagion of ethical behavior differs from contagion of unethical behavior. Our results suggest that a) unethical behavior is more contagious, and b) social identification with one’s peers and not the (un)ethicality of observed behavior is the main driver of behavioral contagion. Our findings are particularly important from a policy perspective both in order to foster pro-social and mitigate deviant behavior. |
| Keywords: | Conformity, Behavioral Contagion, Peer effects, Social Identity, Unethical Behavior |
| JEL: | D03 D73 D81 |
| Date: | 2015–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68732&r=exp |
| By: | Schmidt, Ulrich; Friedl, Andreas; Lima de Miranda, Katharina |
| Abstract: | The present paper contributes to the controversy regarding gender differences in risk taking by investigating the impact of social comparison. Social comparison is formalized by integrating a social reference point into the model of Köszegi and Rabin. Drawing on previous results from evolutionary biology, we hypothesize that men (women) focus more on relative (absolute) income, i.e., the relative weight of social gain-loss utility is higher for men than for women. Our model predicts that risk taking is higher for correlated than for uncorrelated risks and that this effect is stronger for men than for women. These predictions are confirmed by a simple classroom experiment. We conclude that social comparison and the correlation of risks play an important role in the discussion of gender differences in risk taking. |
| Keywords: | risk taking,gender differences,correlation of risks,social reference point |
| JEL: | C91 D81 J16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2011&r=exp |
| By: | Yoshio Kamijo (School of Management, Kochi University of Technology); Hiroki Ozono (Faculty of Law, Economic and Humanities, Kagoshima University); Kazumi Shimizu (School of Political Science and Economics, Waseda University) |
| Abstract: | We examine three tools that can enhance coordination success in a repeated multiple choice coordination game. Gradualism means that the game starts as an easy coordination problem and moves gradually to a more difficult one. Endogeneity implies that a gradual increase in the upper limit of coordination occurs only if coordination with the Pareto superior equilibrium in a stage game is attained. Modification requires that when they fail coordination, the level of the next coordination game is adjusted to an easier one. We find from laboratory experiment that a mechanism that combines these three, termed herein the GEM, works well. |
| Keywords: | Coordination Failure, Minimum Effort Game, Experiment, Gradualism, Endogeneity, Modification |
| JEL: | C72 C91 C92 M54 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:wap:wpaper:1401&r=exp |
| By: | Pfajfar, Damjan (Board of Governors of the Federal Reserve System (U.S.)); Žakelj, Blaž (Universitat Pompeu Fabra) |
| Abstract: | Using laboratory experiments within a New Keynesian framework, we explore the interaction between the formation of inflation expectations and monetary policy design. The central question in this paper is how to design monetary policy when expectations formation is not perfectly rational. Instrumental rules that use actual rather than forecasted inflation produce lower inflation variability and reduce expectational cycles. A forward-looking Taylor rule where a reaction coefficient equals 4 produces lower inflation variability than rules with reaction coefficients of 1.5 and 1.35. Inflation variability produced with the latter two rules is not significantly different. Moreover, the forecasting rules chosen by subjects appear to vary systematically with the policy regime, with destabilizing mechanisms chosen more often when inflation control is weaker. |
| Keywords: | Inflation expectations; laboratory experiments; monetary policy design; New Keynesian model |
| JEL: | C91 C92 E37 E52 |
| Date: | 2015–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2015-45&r=exp |
| By: | Buyukboyaci, Muruvvet; Kucuksenel, Serkan |
| Abstract: | In this paper, we experimentally investigate the impact of costly indirect and direct messages on coordination levels in a stag-hunt game. We also compare the coordination rates with costly pre-play communication to the rates with costless pre-play communication. Three main insights emerge from our experiments. First, we find a significant decrease in message usage with message cost in both treatments and a higher decrease in the indirect-message treatment. Second, we find that although there is no significant effect of costless or costly indirect messages on the frequency of risky actions, both costless and costly direct messages significantly increase the frequency of risky actions. Third, while we find a significant increase in the coordination rate on the payoff-dominant equilibrium from costless indirect message treatment to costly indirect message treatment, this rate significantly decreases from costless direct message to costly direct message treatment. Our findings show that depending on the structure of messages, message cost may increase or decrease the coordination rates on the payoff-dominant equilibrium. |
| Keywords: | coordination, cheap talk, pre-play communication, risk information, costly messages |
| JEL: | C72 C91 |
| Date: | 2016–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69098&r=exp |
| By: | Wagner, N.; Rieger, M.; Bedi, A.S.; Hout, W. |
| Abstract: | Can the feminization of public services improve quality and lower corruption? The underlying logic of such efforts is the belief that women have higher ethical standards than men. To answer this question, we examine the links between gender and policing practice using data from twelve vignette cases assessed by 600 Ugandan police officers. Our empirical strategy is based on a randomized framing experiment, which is designed to isolate the effect of gender from institutional factors and social norms. We find that the gender of the police officer depicted in the cases and victim gender are not related to the judgment of police malpractice, nor to suggested disciplinary measures. However, respondent gender matters for the reporting of misconduct and the perception of the official institutional policy of the police. Men are stricter when assessing cases along these dimensions. The results indicate that simply feminizing the police force is unlikely to enhance service quality. |
| Keywords: | gender, discrimination, stereotyping, police, survey experiments, Uganda |
| JEL: | C90 J16 O12 |
| Date: | 2016–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriss:79808&r=exp |
| By: | Marc Höglinger; Ben Jann |
| Abstract: | Social desirability and the fear of negative consequences often deter a considerable share of survey respondents from responding truthfully to sensitive questions. Thus, resulting prevalence estimates are biased. Indirect techniques for surveying sensitive questions such as the Randomized Response Technique are intended to mitigate misreporting by providing complete concealment of individual answers. However, it is far from clear whether these indirect techniques actually produce more valid measurements than standard direct questioning. In order to evaluate the validity of different sensitive question techniques we carried out an online validation experiment at Amazon Mechanical Turk in which respondents' self-reports of norm-breaking behavior (cheating in dice games) were validated against observed behavior. This document describes the design of the validation experiment and provides details on the questionnaire, the different sensitive question technique implementations, the field work, and the resulting dataset. The appendix contains a codebook of the data and facsimiles of the questionnaire pages and other survey materials. |
| Keywords: | Online Survey, Amazon Mechanical Turk, Sensitive Questions, Randomized Response Technique, Crosswise Model, Dice Game, Validation |
| JEL: | C81 C83 |
| Date: | 2016–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:bss:wpaper:17&r=exp |
| By: | David Masclet (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal); Clemens Puppe (Department of Economics and Management - Karlsruhe Institute of Technology) |
| Abstract: | This special issue brings together a series of eight articles dealing with experiments on conflict and conflict resolution. The papers presented here originate from a workshop on experiments on conflict held in Rennes, France, in May 2012. The aim of the special issue is threefold: (i) investigating the main determinants of conflicts, (ii) measuring the consequences of conflicts in terms of social welfare losses, and (iii) presenting and discussing different mechanisms and institutions as well as their limitations to reduce and/or prevent conflicts. All papers included here—whether they address interpersonal, intra group or inter groups conflicts—share the same methodology, namely experimental economics. |
| Keywords: | conflict of interest, conflict resolution, experiments,Conflict, social welfare |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01238578&r=exp |
| By: | Horstmann, Niklas; Krämer, Jan; Schnurr, Daniel |
| Abstract: | We investigate the effects of alternative open access regimes on market performance. In particular, by means of an economic laboratory experiment we compare the market outcomes under unregulated wholesale competition, under a price-fixing rule (where firms must maintain their wholesale price for a fixed period of time), and under a margin squeeze rule (where the retail price of integrated firms must exceed their wholesale price). Our analysis suggests that wholesale and retail prices are substantially reduced by the introduction of a price-fixing rule at the upstream level compared to the unregulated scenario. In contrast, we do not find evidence that a margin squeeze regulation reduces retail market prices. In fact, while such a rule benefits the reselling firm by allowing for a viable profit margin, prices for consumers tend to be even higher than in the unregulated case. |
| Keywords: | Next Generation Access Networks,Access Regulation,Open Access,Upstream Competition,Experimental Economics,Margin Squeeze |
| JEL: | C92 L51 L90 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse15:127149&r=exp |
| By: | Frank van der Horst; Martina Eschelbach; Susann Sieber; Jelle Miedema |
| Abstract: | Counterfeit prevention is a major task for central banks, as it helps to maintain public confidence in the currency. It is often maintained that a high quality of the banknotes in circulation helps the public detect counterfeits. However, there has not been any scientific evidence in support of this assertion so far. The present study is a first attempt to fill this research gap. |
| Keywords: | banknotes; counterfeits; banknote quality; signal detection theory |
| JEL: | E40 E41 E50 E58 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:499&r=exp |