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on Experimental Economics |
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Issue of 2016‒03‒10
fifteen papers chosen by |
| By: | Rehwald, Kai (Aarhus University); Rosholm, Michael (Aarhus University); Rouland, Benedicte (University of Nantes) |
| Abstract: | Using data from a large-scale randomized controlled trial conducted in Danish job centers, this paper investigates the effects of an intensification of mandatory return-to-work activities on the subsequent labor market outcomes for sick-listed workers. Using variations in local treatment strategies, both between job centers and between randomly assigned treatment and control groups within a given job center, we compare the relative effectiveness of alternative interventions. Our results show that the use of partial sick leave increases the length of time spent in regular employment and non-reliance on benefits, and also reduces the time spent in unemployment. Traditional active labor market programs and the use of paramedical care appear to have no effect at all, or even an adverse effect. |
| Keywords: | long-term sickness, vocational rehabilitation, treatment effects, randomized controlled trial |
| JEL: | J68 C93 I18 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9771&r=exp |
| By: | Salar Jahedi (RAND Corporation); Cary Deck (University of Arkansas, University of Alaska-Anchorage, Chapman University); Dan Ariely (Duke University) |
| Abstract: | Previous experiments have found that subjecting participants to cognitive load leads to poorer decision making, consistent with dual-system models of behavior. Rather than taxing the cognitive system, this paper reports the results of an experiment that takes a complementary approach: arousing the emotional system. The results indicate that exposure to arousing visual stimuli as compared to neutral images has a negligible impact on performance in arithmetic tasks, impatience, risk taking in the domain of losses, and snack choice although we nd that arousal modestly increases in risk-taking in the gains domain and increases susceptibility to anchoring e ects. We nd the ef- fect of arousal on decision making to be smaller and less consistent then the e ect of increased cognitive load for the same tasks. |
| Keywords: | Dual System, Sexual Arousal, Impatience, Risk Taking, Behavioral Economics |
| JEL: | C91 D03 D81 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-02&r=exp |
| By: | Marcela Ibanez (Georg-August University Göttingen); Juanita Vasquez (University of Göttingen) |
| Abstract: | This paper uses a framed field experiment to test the effect of persuasive communication as a strategy in the fight against drugs in Colombia. Our design varies the salience and the degree of informativeness of the messages that participants receive, while highlighting particular negative effects of growing coca in the community. We find that messages that make the relation of coca cultivation with violence salient are the most effective at reducing coca investments. Our results suggest that the main mechanism at play is attitudinal change rather than a change in beliefs. Interestingly, we find that exposure to persuasive messages translates into lower intentions to cultivate coca in the future. We conclude that interventions that aim at increasing “awareness” of the negative effects that coca has in the community are a promising policy instrument in the fight against drugs. |
| Keywords: | Field experiment; attitudinal change; communication campaigns; illegal behavior |
| JEL: | A13 G11 D03 D83 K42 Z13 |
| Date: | 2016–02–29 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:199&r=exp |
| By: | Burks, Stephen V. (University of Minnesota, Morris); Nosenzo, Daniele (University of Nottingham); Anderson, Jon E. (University of Minnesota, Morris); Bombyk, Matthew (Innovations for Poverty Action); Ganzhorn, Derek (Northwestern University); Götte, Lorenz (University of Bonn); Rustichini, Aldo (University of Minnesota) |
| 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 subjects' second-mover strategy in a sequential 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 follow-up 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, other-regarding behavior, costly cooperation, social preferences, prisoners' dilemma, trucker, truckload |
| JEL: | B4 C9 D03 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9767&r=exp |
| By: | Knowles, Stephen; Servátka, Maroš; Sullivan, Trudy |
| Abstract: | We conduct a field experiment to analyze the effect of deadline length on charitable tasks. Participants are invited to complete an online survey, with a donation going to charity if they do so. Participants are given either one week, one month or no deadline by which to respond. Completions are lower for the one month deadline, than for the other two treatments, consistent with the model of inattention developed in Taubinsky (2014) and also with the idea that not specifying a deadline conveys urgency. |
| Keywords: | charitable tasks; charitable giving; deadline; procrastination; inattention; field experiment |
| JEL: | C93 D64 |
| Date: | 2016–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69621&r=exp |
| By: | Nicolas Houy (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Jean-Philippe Nicolaï (ETH Zürich, Chair of Integrative Risk Management and Economics, Zurichbergstrasse 18, 8032 Zürich); Marie Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France) |
| Abstract: | Achieving an ambitious goal frequently requires succeeding in a sequence of intermediary tasks, some being critical for the final outcome, and others not. Individuals are not always able to provide a level of effort sufficient to guarantee success in all the intermediary tasks. The ability to manage effort throughout the sequence of tasks is therefore critical. In this paper we propose a criterion that defines the importance of a task and that identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals’ performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability to achieve the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures. |
| Keywords: | Critical ability, choking under pressure, Morris-importance, Skin Conductance Responses, experiment |
| JEL: | C72 C92 D81 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1609&r=exp |
| By: | Klajdi Bregu (University of Arkansas); Cary Deck (University of Arkansas, Chapman University, University of Alaska-Anchorage); Lindsay Ham (University of Arkansas); Salar Jahedi (RAND Corporation) |
| Abstract: | It is notoriously hard to study the effect of alcohol on decision making, given the selection that takes place in who drinks alcohol and when they choose to do so. In a controlled laboratory experiment, we study the causal effect of alcohol on economic decision making. We examine the impact of alcohol on the following types of tasks: math and logic, uncertainty, overcon dence, strategic games, food choices, anchoring, and altruism. Our results indicate that alcohol consumption, as measured by the blood alcohol concentration (BAC), increases cooperation in strategic settings and altruism in Dictator games. We do not find any effects of alcohol on individual decision making tasks with the exception of anchoring. People with higher BAC did better in the anchoring task. The results suggest that the effects of alcohol are domain specifc. |
| Keywords: | Alcohol, Risk Taking, Overconfidence, Altruism, Behavioral Economics |
| JEL: | C91 D03 D81 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-03&r=exp |
| By: | Pietro Battiston; Simona Gamba |
| Abstract: | We study the effect of social pressure on tax compliance, focusing on the compliance of shop sellers to the legal obligation of releasing tax receipts for each sale. We carry out a field experiment on bakeries in Italy, where a strong gap exists between the legal obligation and the actual behavior of sellers. Social pressure is manipulated by means of an explicit request for a receipt when not released. We employ an innovative approach to the identification of the treatment effect. We find that a single request for a receipt causes a 17 per cent rise in the probability of a receipt being released for a sale occurring shortly thereafter, causing on average more than two receipts to be released. We also find strong evidence of persistence in compliance decisions. |
| Keywords: | Tax evasion, field experiment, peer pressure, social pressure |
| JEL: | C93 H32 K34 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:fbk:wpaper:2016-04&r=exp |
| By: | Chaikal Nuryakin (Faculty of Economics, Universitas Indonesia); Alistair Munro (National Graduate Institute for Policy Studies) |
| Abstract: | Fukubukuro (or lucky bag) is a familiar institution in Japan and many other countries used by retailers for disposing of unwanted stock during the New Year sales. Two features of the institution are important: First, in fukubukuro, stores bundle goods of related items into sealed bags rather than selling items separately. Secondly, while general information about the contents is provided, details of brands and specifications are concealed creating a lottery for the purchaser. Motivated by the fukubukuro example and the lack of evidence on risk attitudes in lotteries involving goods, we conduct a laboratory experiment and follow-up survey to investigate preferences for lotteries in which the outcomes are bundled or unbundled goods. In general, we find that risk has a negative effect on subjects’ WTP for a product lottery. Nevertheless, a minority of subjects are risk-seeking and value the lottery more highly than the highest valued individual product. Conversely, we do not find much evidence of an uncertainty effect. Although subjects’ WTP responses to bundled product lotteries are less heterogeneous than their responses to single product lotteries, there is no significant advantage of selling bundled product lotteries over single product lotteries in relation to subjects’ risk preferences. We follow up the experiment with a hypothetical choice questionnaire in which we confront subjects with three options for a variety of goods: a certain product, its substitute, and a product lottery. We find that subjects who are riskseeking or have less product knowledge and familiarity are more likely to choose a product lottery. Furthermore, subjects are more likely to choose a product lottery when the choice task consists of complex products rather than simple products. We speculate that risk seeking and less-informed subjects may find a lottery between products to be a direct and simple way to solve their buying decision tasks. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:15-24&r=exp |
| By: | Nicolas Houy (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Jean-Philippe Nicolaï (Eidgenössische Technische Hochschule Zürich - ETHZ (SWITZERLAND)); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Achieving an ambitious goal frequently requires succeeding in a sequence of intermediary tasks, some being critical for the final outcome, and others not. Individuals are not always able to provide a level of effort sufficient to guarantee success in all the intermediary tasks. The ability to manage effort throughout the sequence of tasks is therefore critical. In this paper we propose a criterion that defines the importance of a task and that identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals' performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability to achieve the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures. |
| Keywords: | C ritical ability, choking under pressure, Morr is - importance, Skin Conductance Responses, experiment |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01277982&r=exp |
| By: | Brandts J.; Riedl A.M. (GSBE) |
| Abstract: | We use laboratory experiments to study the causal effects of favorable and unfavorable competitive market experience on cooperation in a subsequent social dilemma game. The issues we study are part of the broader topic of whether there are behavioral spillovers between different spheres of social interactions. Market interaction takes place in a continuous double auction market in which one side of the market obtains the larger part of the surplus. We examine the efficiency of subsequent cooperation for pairs of market-winners, market-losers and mixed pairs and study both the cases where interaction in the social dilemma is with others from the same market, market-partners, and where it is with others from another market, market-strangers, and compare it with benchmark behavior in a stand-alone social dilemma game. We find that in market-partners, market experience has adverse effects on the efficiency of cooperation on both market-winner and market-loser pairs. In market-strangers, pairs of market-winners manage to cooperate more efficiently. These results indicate that it is not market experience per se that lowers the ability to cooperate. Rather, having competed for scarce resources on the same side of the market makes it difficult to overcome the social dilemma and positive market experience fosters cooperation only for those who did not have to compete with each other. We also show that differences in cooperation cannot be explainedby ex-ante income differences and find that market experience also affects subjective well-being and social value orientation. |
| Keywords: | Relation of Economics to Social Values; Design of Experiments: Laboratory, Group Behavior; Distribution: General; Labor-Management Relations, Trade Unions, and Collective Bargaining: General; Personnel Economics: General; |
| JEL: | A13 C92 D30 J50 M50 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2016006&r=exp |
| By: | Heinz, Matthias; Normann, Hans-Theo; Rau, Holger A. |
| Abstract: | We show that choices in competitive behavior may entail a gender wage gap. In our experi ments, employees first choose a remuneration scheme (competitive tournament vs. piece rate) and then conduct a real-effort task. Employers know the pie size the employee has generated, the remuneration scheme chosen, and the employee's gender. Employers then decide how the pie will be split, as in a dictator game. Whereas employers do not discriminate by gender when tournaments are chosen, they take substantially and significantly more from female employees who choose piece-rate remuneration. A discriminatory wage gap occurs which cannot be attributed to employees' performance. |
| Keywords: | dictator game,discrimination,gender wage gap,laboratory experiment,real-effort task |
| JEL: | C91 J16 M52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:213&r=exp |
| By: | Romaniuc, Rustam; Farrow, Katherine; Ibanez, Lisette; Marciano Alain |
| Abstract: | An important part of the debate about self vs state-governance involves a discussion about enforcement mechanisms. While some scholars argue that private enforcement mechanisms work sufficiently well in supporting cooperation, others cite the downfalls of private mechanisms so as to legitimize government enforcement. This paper focuses on the interplay between government and private enforcement mechanisms. Using an experimental approach, we demonstrate two results. First, we show that government enforcement, in the form of a centralized monetary punishment in our experiment, can be useful if aligned with and implemented after a private form of enforcement, namely peer disapproval. However, our second result suggests that the removal of government enforcement leads to a substantial decrease in overall cooperation levels – cooperation levels are higher under private enforcement when subjects had never experienced government enforcement compared to when they had been exposed to government enforcement. Specifically, the removal of government enforcement undermines the power of the remaining private enforcement mechanism to affect the behavior of free-riders. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucaiel:21&r=exp |
| By: | Mengel F.; Peeters R.J.A.P. (GSBE) |
| Abstract: | Excessive risk taking in markets can have devastating consequences as recent financial crises have high-lighted. In this paper we ask whether markets as an institution encourage such excessive risk taking. To establish causality, we isolate the effects of market interaction in a laboratory experiment keeping otherpossibly confounding factors constant. We find that the opposite is true. Markets decrease participants willingness to take risks. This finding can be explained by social comparison utility in the presence of negatively correlated risks and we provide evidence for such a mechanism. |
| Keywords: | Institutions: Design, Formation, and Operations; Behavioral Economics: Underlying Principles; |
| JEL: | D02 D03 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2015042&r=exp |
| By: | Armin Falk (Universität Bonn); Anke Becker (Bonn Graduate School of Economics); Thomas Dohmen (Universität Bonn); David Huffman (University of Pittsburgh); Uwe Sunde (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: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-003&r=exp |