|
on Experimental Economics |
Issue of 2016‒05‒08
23 papers chosen by |
By: | Dmitry Ryvkin (Department of Economics, Florida State University); Danila Serra (Department of Economics, Southern Methodist University) |
Abstract: | We test the effectiveness of an anti-corruption policy that is often discussed among practitioners: an increase in competition among officials providing the same good or service. In particular, we investigate whether an increase in overlapping jurisdictions reduces extortionary corruption, i.e., bribe demands for the provision of services that clients are entitled to receive. We overcome measurement and identification problems by addressing our research question in the laboratory. We conduct an extortionary bribery experiment where clients apply for a license from one of many available offices and officials can demand a bribe on top of the license fee. By manipulating the number of available offices and the size of search costs we are able to assess whether increasing competition reduces extortionary corruption. We find that, if search costs are unaffected, increasing the number of providers may actually increase corruption. In particular, our results show that increasing competition has either no eeffect (if search costs are high) or a positive effect (if search costs are low) on bribe demands. We compare our findings to those obtained in a standard market environment and find evidence of different search behaviors in the two settings. |
Keywords: | competition, extortionary corruption, experiment |
JEL: | D73 D49 C91 |
Date: | 2015–10 |
URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2015_10_01&r=exp |
By: | Galasso, Vincenzo; Nannicini, Tommaso |
Abstract: | This paper investigates the differential response of male and female voters to compet-itive persuasion in political campaigns. We implemented a survey experiment during the (mixed gender) electoral race for mayor in Milan (2011), and a field experiment during the (same gender) electoral race for mayor in Cava de' Tirreni (2015). In both cases, a sample of eligible voters was randomly divided into three groups. Two were exposed to either a positive or a negative campaign by one of the opponents. The third-control-group received no electoral information. In Milan, the campaigns were administered online and consisted of a bundle of advertising tools (videos, texts, slogans). In Cava de' Tirreni, we implemented a large scale door-to-door campaign in collaboration with one of the candidates, randomizing positive vs. negative messages. In both experiments, stark gender differences emerge. Females vote more for the opponent and less for the incumbent when they are exposed to the opponent's positive campaign. Exactly the opposite occurs for males. These gender differences cannot be accounted for by gender identification with the candidate, ideology, or other observable attributes of the voters. |
Keywords: | competitive persuasion.; gender di erences; political campaigns; randomized controlled trials |
JEL: | D72 J16 M37 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11238&r=exp |
By: | Meriggi, Niccolo; Leuvelf, Koen |
Abstract: | Trust plays a key role in promoting cooperation, exchanges, and interactions among individuals and therefore it is believed to foster economic and societal development. Sender's behaviour in the popular "investment game" (Berg et al. 1995) is widely employed to measure trust among individuals, but recent economic literature has cast doubts on the accuracy of this measure of trust. These studies, however, were mostly conducted in controlled environmentsm having university students as subject polls. We played the "investment game" with 3320 rural households from 200 villages in the Adamawa region of Cameroon, recording for each participant his expectations of return on the edowment shared as first mover. In addition, participants played two additional games obtained by separating the "investment game" into two sub-games, "Triple dictator game" and "reverse triple dictator game"/ The latter two games were used to measure participants' altruism and distributional preferences. All participants were randomly assigned to two treatments with different secrecy levels to create exogenous variation in social pressure, and measure the effect of social norms on behaviour in investment game. We use behaviour observed in the sub games to test whether senders behaviour in the investment game only measures trust (and therefore a belief in someone else's trustworthiness), and whether trustworthiness in turn is a reciprocation of kindness with kindness, or unkindness with unkindness. We control for risk preferences and other demographics, and find that senders behaviour in the investment game measures mostly trust, but it is not an accurate measure of trust. |
Keywords: | Consumer/Household Economics, Financial Economics, |
Date: | 2015 |
URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212455&r=exp |
By: | Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; Meléndez-Jiménez, Miguel A. |
Abstract: | This paper reports on experiments testing the viability of markets for cheap talk information. We find that these markets are fragile. The reasons are surprising given the previous experimental results on cheap-talk games. Our subjects provide low-quality information even when doing so does not increase their monetary payoff. We show that this is not because subjects play a different (babbling) equilibrium. By analyzing subjects' behavior in another game, we find that those adopting deceptive strategies tend to have envious or non-pro-social traits. The poor quality of the information transmitted leads to a collapse of information markets. |
Keywords: | Auction; cheap talk; Experiment; Information Acquisition; Information Sale |
JEL: | C72 D83 G14 |
Date: | 2016–03 |
URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11206&r=exp |
By: | Stefano DellaVigna; Devin Pope |
Abstract: | How much do different monetary and non-monetary motivators induce costly effort? Does the effectiveness line up with the expectations of researchers? We present the results of a large-scale real-effort experiment with 18 treatment arms. We compare the effect of three motivators: (i) standard incentives; (ii) behavioral factors like present-bias, reference dependence, and social preferences; and (iii) non-monetary inducements from psychology. In addition, we elicit forecasts by behavioral experts regarding the effectiveness of the treatments, allowing us to compare results to expectations. We find that (i) monetary incentives work largely as expected, including a very low piece rate treatment which does not crowd out incentives; (ii) the evidence is partly consistent with standard behavioral models, including warm glow, though we do not find evidence of probability weighting; (iii) the psychological motivators are effective, but less so than incentives. We then compare the results to forecasts by 208 experts. On average, the experts anticipate several key features, like the effectiveness of psychological motivators. A sizeable share of experts, however, expects crowd-out, probability weighting, and pure altruism, counterfactually. This heterogeneity does not reflect field of training, as behavioral economists, standard economists, and psychologists make similar forecasts. Using a simple model, we back out key parameters for social preferences, time preferences, and reference dependence, comparing expert beliefs and experimental results. |
JEL: | C9 C93 D03 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22193&r=exp |
By: | Luigi Mittone; Andrew Musau |
Abstract: | One shot two-player sequential game experiments are characterized by an asymmetry in the observed payoffs of participants. In the ultimatum game, for example, the distribution favors first-movers, whereas in the in- vestment game, it favors second movers. A comparison to sequential move games are symmetric simultaneous move games, which entail symmetry in actions and payoffs. We experimentally examine the role of first-mover anticipated communication on the inter-player strategic power dynamics that exist in a symmetric simultaneous move prisoners’ dilemma, and a sequential move investment game, and show that such communication has a significant effect in inducing payoff asymmetries in symmetric games. |
Keywords: | strategic power, communication, prisoners’ dilemma, investment game, experiment |
JEL: | C72 C91 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:1603&r=exp |
By: | Eugen Dimant (Philosophy, Politics and Economics, University of Pennsylvania) |
Abstract: | Social interactions and the resulting peer effects loom large in both economic and social contexts. This is particularly true for the spillover of pro- and anti-social behavior in explaining how such behavior and norms spread across individual people, neighborhoods, or even cultures. Although we 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 pro- and anti-sociality of behavior one is exposed to. We use a variant of a power-to-take dictator game to shed light on these aspects in a controlled 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 behavior under varied levels of social identity. Second, we study whether pro- and anti-social behavior are equally contagious. Our results suggest that anti-social behavior is more contagious than pro-social behavior and that the extent of social identification to one’s peers particularly drives the contagion of anti-social behavior. Our findings yield strong policy implications with regards to designing effective nudges and interventions to facilitate (reduce) pro- (anti-) social behavior. |
Keywords: | anti-social behavior, behavioral contagion, charitable giving, peer effects, social identity |
JEL: | C91 D03 D73 D81 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:ppc:wpaper:0006&r=exp |
By: | Artavia-Mora, Luis (ISS, Erasmus University Rotterdam); Bedi, Arjun S. (ISS, Erasmus University Rotterdam); Rieger, Matthias (ISS, Erasmus University Rotterdam) |
Abstract: | We test whether humans are intuitively inclined to cooperate with or punish strangers using a natural field experiment. We exogenously vary the time available to help a stranger in an everyday situation. Our findings suggest that subjects intuitively tend to help but behave more selfishly as thinking time increases. We also present suggestive evidence that time pressure can increase rates of punishment. We discuss our results with respect to findings in the lab on cognitive models of dual-processing and the origins of human cooperation. |
Keywords: | cooperation, punishment, response time, dual-process of cognition, natural field experiment |
JEL: | D03 D63 D64 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9871&r=exp |
By: | Matteo M. Galizzi; Marisa Miraldo; Charitini Stavropoulou |
Abstract: | We present results from a hypothetical framed field experiment assessing whether risk preferences significantly differ across the health and financial domains when they are elicited through the same multiple price list paired-lottery method. We consider a sample of 300 patients attending outpatient clinics in a university hospital in Athens, during the Greek financial crisis. Risk preferences in finance are elicited using paired-lottery questions with hypothetical payments. The questions are adapted to the health domain by framing the lotteries as risky treatments in hypothetical healthcare scenarios. Using Maximum Likelihood methods, we estimate the degree of risk aversion, allowing for the estimates to be dependent on domain and individual characteristics. The subjects in our sample, who were exposed to both health and financial distress, tend to be less risk averse in the financial than in the health domain. |
Keywords: | Behavioral experiments in health; Field experiments; Risk aversion |
JEL: | G32 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64764&r=exp |
By: | İriş, Doruk; Lee, Jungmin; Tavoni, Alessandro |
Abstract: | The provision of global public goods, such as climate change mitigation and managing fisheries to avoid overharvesting, requires the coordination of national contributions. The contributions are managed by elected governments who, in turn, are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and ask them to elect a delegate by a secret vote. The elected delegates repeatedly play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among the team members, including the delegate. We find that delegation causes a small reduction in the group contributions. Public pressure, in the form of teammates’ messages to their delegate, has a significant negative effect on contributions, even though the messages are designed to be payoff-inconsequential (i.e., cheap talk). The reason for the latter finding is that delegates tend to focus on the least ambitious suggestion. In other words, they focus on the lower of the two public good contributions preferred by their teammates. This finding is consistent with the prediction of our model, a modified version of regret theory. |
Keywords: | Delegation, Cooperation, Threshold Public Goods Game, Climate Experiment, Regret Theory, Research Methods/ Statistical Methods, C72, C92, D81, H4, Q54, |
Date: | 2016–04–15 |
URL: | http://d.repec.org/n?u=RePEc:ags:feemet:234307&r=exp |
By: | Görlitz, Katja; Tamm, Marcus |
Abstract: | To increase employee participation in training activities, the German government introduced a large-scale training voucher program in 2008 that reduces training fees by half. Based on a randomized field experiment, this paper analyzes whether providing information about the existence and the conditions of the training voucher had an effect on actual training activities of employees. Because the voucher was newly introduced, only one-fourth of the eligible employees knew the voucher exists at the time of the experiment. The information intervention informed a random sample of eligible employees by telephone about the program details and conditions. The results indicate that the information significantly increased treated individuals´ knowledge of the program but had no effect on voucher take-up or participation in training activities. Additional descriptive analyses suggest that the reasons for these zero effects are that the demand for self-financed training is low and that liquidity constraints do not discourage many employees from training participation. |
Keywords: | training participation,voucher,financial aid,randomized field experiment,information treatment |
JEL: | I22 D83 H52 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:20166&r=exp |
By: | Hopfensitz, Astrid; Mantilla, Cesar; Miquel-Florensa, Josepa |
Abstract: | We design and conduct a lab-in-the-field experiment to test the effect of a conditional contract on the sustainability of an open access fishery, where unit prices are conditional on aggregate catch. The contract provides collective incentives to decrease extraction but maintain the individual incentives of extraction maximization. We conduct the experiment with two communities of artisanal fishermen differing in their market and technological restrictions. We find that the conditional contract, compared to a fixed price scheme, increases efficiency, the duration of the resource and the total yield. The contract has a greater effect upon groups from the less restricted community. |
Keywords: | artifactual field experiment, dynamic resource, artisanal fishery, stochastic production function |
JEL: | C92 Q22 |
Date: | 2016–03 |
URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:30371&r=exp |
By: | Julian Conrads; Rainer Rilke; Tommaso Reggiani |
Abstract: | Ambiguity about the chances of winning represents a key aspect in lotteries. By means of a controlled field experiment, we exogenously vary the degree of ambiguity about the winning chances of lotteries organized to incentivize the contribution for a public good. In one treatment, people have been simply informed about the maximum number of potential participants (i.e. the number of lottery tickets released). In a second treatment, this information has been omitted as in all traditional lotteries. Our general finding shows that simply reducing the degree of ambiguity of the lottery leads to a sizable and significant increase (67%) in the participation rate. This result is robust to alternative prize configurations. |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:feb:framed:00407&r=exp |
By: | Vranceanu, Radu (Essec Business School, Economics Department); Sutan, Angela (University of Bourgogne Franche-Comté, ESC Dijon); Dubart, Delphine (Essec Business School) |
Abstract: | This paper reports results from a linear sanction cost variant of the power-to-take game, with implications for tax policies. We compare a pay-as-you-earn (PAYE) system with an ex-post taxation system in which payroll taxes are collected at the end of the fiscal year. Dissatisfaction with taxation, as proxied by the sanction in the power-to-take game, is significantly higher in an ex-post taxation system compared with the PAYE system. However, in anticipation of the higher sanction, the "tax authority" will not apply lower taxes in the former system. Communication does not decrease dissatisfaction in a significant manner, and it is not used extensively by participants. |
Keywords: | Power-to-take game; Experiments; Tax systems; Dissatisfaction with taxes |
JEL: | C91 D01 H26 |
Date: | 2016–03–01 |
URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-16002&r=exp |
By: | Kosfeld, Michael; Neckermann, Susanne; Yang, Xiaolan |
Abstract: | We manipulate workers' perceived meaning of a job in a field experiment and interact meaning of work with both financial and recognition incentives. Results show that workers exert more effort when meaning is high. Money has a positive effect on performance that is independent of meaning. In contrast, meaning and recognition interact negatively. Our results provide new insights into the stability of incentive effects across important work contexts. They also suggest that meaning and worker recognition may operate via the same motivational channel. |
Keywords: | context factors; field experiment; interactions; meaning; monetary incentives; worker recognition |
JEL: | C93 J33 M12 M52 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11221&r=exp |
By: | Moser, Stefan; Mubhoff, Oliver |
Abstract: | Palm oil production creates negative externalities, e.g., through intensive fertiliser application. Policies to limit externalities need an effective, sustainable and efficient measure We use a business simulation game in a framed field experiment in Indonesia to test ex ante different incentives for reducing such negative externalities. This setting allows inclusion of adequate contextual features, required for reasonable ex ante evaluation of policy measures. The different designs of the test incentives (either a reward or punishment) varied in their magnitude and probability of occurrence but with constant effects on expected income. Results show that participants react differently to these incentives, indicating that the design can contribute significantly to effectiveness, sustainability or efficiency. A high reward with a low probability was found to be the most effective and sustainable incentive. Moreover, for the most efficient design, a low and certain reward is indicated. |
Keywords: | Ex ante policy impact analysis, reward, punishment, framed field experiment, business simulation game, palm oil production, Indonesia, fertiliser use, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, C91, Q18, Q52, |
Date: | 2015 |
URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212475&r=exp |
By: | Görlitz, Katja; Tamm, Marcus |
Abstract: | To increase employee participation in training activities, the German government introduced a large-scale training voucher program in 2008 that reduces training fees by half. Based on a randomized field experiment, this paper analyzes whether providing information about the existence and the conditions of the training voucher had an effect on actual training activities of employees. Because the voucher was newly introduced, only one-fourth of the eligible employees knew the voucher exists at the time of the experiment. The information intervention informed a random sample of eligible employees by telephone about the program details and conditions. The results indicate that the information significantly increased treated individuals' knowledge of the program but had no effect on voucher take-up or participation in training activities. Additional descriptive analyses suggest that the reasons for these zero effects are that the demand for self-financed training is low and that liquidity constraints do not discourage many employees from training participation. |
Abstract: | Im Jahr 2008 wurde in Deutschland das Programm Bildungsprämie eingeführt. Mit diesem Weiterbildungsgutschein, der eine 50-prozentige Erstattung der Weiterbildungskosten umfasst, sollen Erwerbstätige zu Weiterbildung angeregt werden. Anhand eines randomisierten Feldexperiments untersucht die Studie, ob ein verstärktes Bekanntmachen des Gutscheins mittels einer 'Informationsintervention' zu Änderungen im Weiterbildungsverhalten von Erwerbstätigen führt. Da der Gutschein erst kürzlich eingeführt wurde, war die Bekanntheit zum Zeitpunkt des Feldexperiments vergleichsweise gering. Die Ergebnisse zeigen, dass die Informationsintervention die Bekanntheit der Bildungsprämie signifikant erhöht hat, die Teilnahme an Weiterbildung hierdurch jedoch nicht verändert wurde. Ergänzende Analysen legen nahe, dass der fehlende Einfluss auf die Weiterbildungsteilnahme auf eine insgesamt geringe Nachfrage nach eigenfinanzierter Weiterbildung zurückzuführen ist sowie auf den Umstand, dass finanzielle Beschränkungen nur wenige Erwerbstätige von Weiterbildung abhalten und die Behebung dieser finanziellen Beschränkungen daher kaum Wirkung entfaltet. |
Keywords: | training participation,voucher,financial aid,randomized field experiment,information treatment |
JEL: | I22 D83 H52 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:615&r=exp |
By: | David Smerdon (University of Amsterdam, the Netherlands); Theo Offerman (University of Amsterdam, the Netherlands); Uri Gneezy (UC San Diego, United States) |
Abstract: | Social norms permeate society across a wide range of issues and are important to understanding how societies function. In this paper we concentrate on 'bad' social norms - those that are inefficient or even damaging to a group. This paper explains how bad social norms evolve and persist; our theory proposes a testable model of bad norms based on anecdotal evidence from real-world examples. We then experimentally test the model and find empirical support to its main predictions. Central to the model is the role of a person's social identity in encouraging compliance to a norm. The strength of this identity is found to have a positive effect on bad norm persistence. Additionally, while the size of the social group does not have a long run effect, smaller groups are more likely to break a bad norm in the short term. Furthermore, the results suggest that both anonymous communication and increasing information about others' payoffs are promising intervention policies to counter bad norms. |
Keywords: | Social norms; Experiment; Identity; Behavioral Economics |
JEL: | D03 Z13 C92 |
Date: | 2016–04–05 |
URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20160023&r=exp |
By: | Abhijit Banerjee; Sylvain Chassang; Erik Snowberg |
Abstract: | A modern, decision-theoretic framework can help clarify important practical questions of experimental design. Building on our recent work, this chapter begins by summarizing our framework for understanding the goals of experimenters, and applying this to re-randomization. We then use this framework to shed light on questions related to experimental registries, pre-analysis plans, and most importantly, external validity. Our framework implies that even when large samples can be collected, external decision-making remains inherently subjective. We embrace this conclusion, and argue that in order to improve external validity, experimental research needs to create a space for structured speculation. |
JEL: | B23 C9 O1 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22167&r=exp |
By: | Dan Acland; Matthew R. Levy |
Abstract: | We implement a gym-attendance incentive intervention and elicit subjects' predictions of their postintervention attendance. We find that subjects greatly overpredict future attendance, which we interpret as evidence of partial naiveté with respect to present bias. We find a significant postintervention attendance increase, which we interpret as habit formation, and which subjects appear not to predict ex ante. These results are consistent with a model of projection bias with respect to habit formation. Neither the intervention incentives, nor the small posttreatment incentives involved in our elicitation mechanism, appear to crowd out existing intrinsic motivation. The combination of naiveté and projection bias in gym attendance can help to explain limited take-up of commitment devices by dynamically inconsistent agents, and points to new forms of contracts. Alternative explanations of our results are discussed. |
Keywords: | behavioral economics; experimental economics; habit formation; present bias; projection bias |
JEL: | J1 |
Date: | 2015–01 |
URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66147&r=exp |
By: | Roland G. Fryer, Jr |
Abstract: | Starting in the 2013-2014 school year, I conducted a randomized field experiment in fifty traditional public elementary schools in Houston, Texas designed to test the potential productivity benefits of teacher specialization in schools. Treatment schools altered their schedules to have teachers specialize in a subset of subjects in which they have demonstrated relative strength (based on value-add measures and principal observations). The average impact of teacher specialization on student achievement is -0.042 standard deviations in math and -0.034 standard deviations in reading, per year. Students enrolled in special education and those with younger teachers demonstrated marked negative results. I argue that the results are consistent with a model in which the benefits of specialization driven by sorting teachers into a subset of subjects based on comparative advantage is outweighed by inefficient pedagogy due to having fewer interactions with each student. Consistent with this, specialized teachers report providing less attention to individual students (relative to non-specialized teachers), though other mechanisms are possible. |
JEL: | D24 I20 J0 |
Date: | 2016–04 |
URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22205&r=exp |
By: | Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University); Neslihan Uler (Institute for Social Research, the University of Michigan) |
Abstract: | We examine the impact of taxes and wasteful government spending on charitable giving. In our model, the government collects a flat-rate tax on income net of donations and wastes part of the tax revenue before redistribution. The model provides theoretical predictions which we test in a framed field experiment. The results of the experiment show that the tax rate has a weak and insignificant effect on giving. The degree of waste, however, has a large, negative and significant effect on giving, with the relationship moderated by the curvature in the utility function. |
Keywords: | giving, charity donations, tax, waste, redistribution, experiments |
JEL: | C90 D64 H41 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-07&r=exp |
By: | Shen, Meng; Gao, Zhifeng |
Abstract: | The capacity to perform complex cognitive tasks depends on the ability to retain task-relevant information in an accessible state (working memory) and to selectively process information in the environment (selective attention). Due to working memory capacity limits, people usually filter out irrelevant information and instead focus on important information. Will consumer’s working memory capacity affect their attention and further their choice? Our study uses choice experiments (CE) to investigate the effect of working memory capacity on attention and choice. Evidence suggests that consumer’s working memory capacity will indeed affect their attention and choice. |
Keywords: | Working Memory, Selective Attention, Choice Experiment, Consumer/Household Economics, Institutional and Behavioral Economics, |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:ags:saea16:230036&r=exp |