nep-exp New Economics Papers
on Experimental Economics
Issue of 2016‒06‒04
twenty-one papers chosen by
Daniel Houser
George Mason University

  1. Can Transparency of Information Reduce Embezzlement? Experimental Evidence from Tanzania By Di Falco, Salvatore; Magdalou, Brice; Masclet, David; Villeval, Marie Claire; Willinger, Marc
  2. Does Exposure to Unawareness Affect Risk Preferences? A Preliminary Result By Wenjun Ma; Burkhard Schipper
  3. Risk Attitudes in Medical Decisions for Others: An Experimental Approach By Alejandro Arrieta; Ariadna García-Prado; Paula González; Jose Luis Pinto-Prades
  4. Natural Groups and Economic Characteristics as Driving Forces of Wage Discrimination By Thorsten Chmura; Sebastian J. Goerg; Pia Weiss
  5. Are gender differences in performance innate or socially mediated ? By Benyishay,Ariel; Jones,Maria Ruth; Kondylis,Florence; Mobarak,Ahmed Mushfiq
  6. Do Open Comment Processes Increase Regulatory Compliance? Evidence from a Public Goods Experiment By Morgan, Stephen N.; Mason, Nicole M.; Shupp, Robert S.
  8. Auctions with external incentives: Experimental evidence By Miguel A. Fonseca; Francesco Giovannoni; Miltiadis Makris
  9. Impact of Sensory Quality and Labels on Consumer Preference of Fresh Strawberries By He, Chenyi; Gao, Zhifeng; House, Lisa; Guan, Zhengfei
  10. Experimental Evidence on the Demand for and Costs of Rural Electrification By Kenneth Lee; Edward Miguel; Catherine Wolfram
  11. On the Use of the BDM Mechanism in Non-Hypothetical Choice Experiments By Bazzani, Claudia; Nayga, Rodolfo M. Jr.; Caputo, Vincenzina; Canavari, Maurizio; Danforth, Diana M.
  12. Preference Elicitation Methods and Valuation Implications: Experimental Evidence from Valuation and Purchase of Water Quality Credits By Liu, Pengfei; Swallow, Stephen
  13. Intrahousehold valuation, preference heterogeneity, and demand of an agricultural technology in Bihar, India By Gulati, Kajal; Ward, Patrick; Lybbert, Travis; Spielman, David
  14. Determinants of Risk Aversion over Time: Experimental Evidence from Rural Thailand By Lukas Menkhoff; Sahra Sakha
  15. Learning about Integrated Soil Fertility Practices: Evidence from a RCT in Malawi By Maertens, Annemie; Michelson, Hope
  16. That’s the ticket: Explicit lottery randomisation and learning in Tullock contests By Subhasish M. Chowdhury; Anwesha Mukherjee; Theodore L. Turocy
  17. Anti-Western conspiracy thinking and expectations of collusion: Evidence from Russia and China By Libman, Alexander; Vollan, Björn
  18. Application of Regression Discontinuity Approach in Experimental Auctions: A Case Study of Gaining Participants’ Trust and Their Willingness to Pay By Li, Hao; Elbakidze, Levan
  19. Voters' preferences and electoral systems: The EuroVotePlus experiment in Italy By Luca, Bettarelli; Giovanna, Iannantuoni; Elena, Manzoni; Francesca, Rossi
  20. Do I care if others lie? Current and future effects of delegation of lying By Serhiy Kandul; Oliver Kirchkamp
  21. Online fundraising, self-deception, and the long-term impact of ask avoidance By Adena, Maja; Huck, Steffen

  1. By: Di Falco, Salvatore (University of Geneva); Magdalou, Brice (University of Montpellier 1); Masclet, David (University of Rennes); Villeval, Marie Claire (CNRS, GATE); Willinger, Marc (University of Montpellier 1)
    Abstract: Embezzlement is a major concern in various settings. By means of a sequential modified dictator game, we investigate theoretically and experimentally whether making information more transparent and reducing the number of intermediaries in transfer chains can reduce embezzlement and improve the recipients' welfare. Consistent with reference-dependent preferences in terms of moral ideal, we show that the impact of transparency is conditional on the length of the transfer chain and on the position of the intermediaries in the chain. Its direct effect on image encourages honesty. Its indirect effect via expectations plays in the opposite direction, motivating individuals to embezzle more when they expect that the following intermediary will embezzle less. Senders react positively to a reduction of the length of the chain but negatively to transparency.
    Keywords: embezzlement, corruption, dishonesty, transparency, experiment
    JEL: C91 D83
    Date: 2016–05
  2. By: Wenjun Ma; Burkhard Schipper (Department of Economics, University of California Davis)
    Abstract: One fundamental assumption often made in the literature on unawareness is that risk preferences are invariant to changes of awareness. We study how exposure to unawareness a ects choices under risk. Participants in our experiment choose repeatedly between varying sure outcomes and a lottery in 3 phases. All treatments are exactly identical in phase 1 and phase 3, but di er in phase 2. There are ve di erent treatments pertaining to the lottery faced in phase 2: The control treatment (i.e., a standard lottery), the treatment with awareness of unawareness of lottery outcomes but known number of outcomes, the treatment with awareness of unawareness of outcomes but with unknown number of outcomes, the treatment with unawareness of unawareness of some outcomes, and the treatment with an ambiguous lottery. We study both whether behavior di ers in phase 3 across treatments (between subjects e ect) and whether di erences of subjects' behavior between phases 1 and phase 3 di ers across treatments (within subject e ects). We observe no signi cant treatment e ects.
    Keywords: Unawareness, Awareness of unawareness, Risk aversion, Experiments.
    JEL: C91 C92 D81 D87
    Date: 2016–05–25
  3. By: Alejandro Arrieta (Florida International University); Ariadna García-Prado (Universidad Pública de Navarra); Paula González (Universidad Pablo de Olavide); Jose Luis Pinto-Prades (Universidad de Navarra)
    Abstract: The aim of this paper is to investigate how risk attitudes in medical decisions for others vary across health contexts. A lab experiment was designed to elicit the risk attitudes of 257 students by assigning them the role of a physician who must decide between treatments for patients. An interval regression model was used to estimate individual coefficients of relative risk aversion, and an estimation model was used to test for the effect of type of medical decision and experiment design characteristics on elicited risk aversion. We find that: (i) risk preferences for decisions involving life expectancy are different from those involving quality of life, but risk aversion prevails in all types of medical decisions; (ii) students enrolled in health-related degrees show a higher degree of risk aversion; and (iii) real rewards for third parties (patients) make subjects less risk-averse. The results underline the importance of accounting for doctors’ attitudes towards risk in medical decision-making.
    Keywords: physicians, risk aversion, health contexts, laboratory experiment, multiple price list format.
    JEL: I1 C91 D81
    Date: 2016–05
  4. By: Thorsten Chmura (Nottingham University, Business School); Sebastian J. Goerg (Department of Economics, Florida State University); Pia Weiss (Nottingham University, Business School)
    Abstract: We investigate whether the origin of an employee provides different motives for wage discrimination in gift-exchange experiments with students and migrant workers in China. In a lab and an internet experiment, subjects in the role of employers can condition their wages on the employees? home provinces. The resulting systematic differences in wages can be linked to natural groups and economic characteristics of the provinces. In-group favoritism increases wages for employees who share the same origin as the employer, while an increased probability of being matched with an employee with a different ethnicity reduces wages. Furthermore, wages in the laboratory increase with the actual wage level in the employees? home province. Nevertheless, employees? effort is not influenced by these variables; only the wage paid in the experiment influences effort.
    Keywords: wages, discrimination, social identity, natural groups, lab experiment, gift-exchange, migrant-workers, China
    JEL: C91 J31 J71 M52
    Date: 2016–04
  5. By: Benyishay,Ariel; Jones,Maria Ruth; Kondylis,Florence; Mobarak,Ahmed Mushfiq
    Abstract: To explain persistent gender gaps in market outcomes, a lab experimental literature explores whether women and men have innate differences in ability (or attitudes or preferences), and a separate field-based literature studies discrimination against women in market settings. This paper posits that even if women have comparable innate ability, their relative performance may suffer in the market if the task requires them to interact with others in society, and they are subject to discrimination in those interactions. The paper tests these ideas using a large-scale field experiment in 142 Malawian villages where men or women were randomly assigned the task of learning about a new agricultural technology, and then communicating it to others to convince them to adopt it. Although female communicators learn and retain the new information just as well, and those taught by women experience higher farm yields, the women are not as successful at teaching or convincing others to adopt the new technology. Micro-data on individual interactions from 4,000 farmers in these villages suggest that other farmers perceive female communicators to be less able, and are less receptive to the women's messages. Relatively small incentives for rewards undo the disparity in performance by encouraging added interactions, improving farmers'accuracy about female communicators'relative skill.
    Keywords: Agricultural Knowledge and Information Systems,Gender and Health,Rural Development Knowledge&Information Systems,Gender and Law,Housing&Human Habitats
    Date: 2016–05–31
  6. By: Morgan, Stephen N.; Mason, Nicole M.; Shupp, Robert S.
    Abstract: Agri-environmental programs often incorporate stakeholder participation elements in an effort to increase community ownership of policies designed to protect environmental resources (Hajer 1995; Fischer 2000). Participation – acting through increased levels of ownership – is then expected to increase individual rates of compliance with regulatory policies. Utilizing a novel lab experiment, this research leverages a public goods contribution game to test the effects of a specific type of stakeholder participation scheme on individual compliance outcomes. We find significant evidence that the implemented type of non-voting participation mechanism reduces the probability that an individual will engage in noncompliant behavior and reduces the level of noncompliance. At the same time, exposure to the open comment treatment also increases individual contributions to a public good. Additionally, we find evidence that exposure to participation schemes results in a faster decay in individual compliance over time suggesting that the impacts of this type of participation mechanism may be transitory.
    Keywords: Public Goods, Experiment, Regulation, Participation, Compliance, Agricultural and Food Policy, Environmental Economics and Policy, Institutional and Behavioral Economics, Political Economy,
    Date: 2016
  7. By: Santiago I. Sautua
    Abstract: Previous research has shown that often there is clear inertia in individual decision making? that is, a tendency for decision makers to choose a status quo option. I conduct a laboratory experiment to investigate two potential determinants of inertia in uncertain environments: (i) regret aversion and (ii) ambiguity-driven indecisiveness. I use a between-subjects design with varying conditions to identify the e¤ects of these two mechanisms on choice behavior. In each condition, participants choose between two simple real gambles, one of which is the status quo option. I ?nd that inertia is quite large and that both mechanisms are equally important.
    Keywords: status quo, inertia, reference-dependent preferences, regretaversion, ambiguity, indecisiveness
    JEL: C91 D01 D03 D81
    Date: 2016–03–07
  8. By: Miguel A. Fonseca (Department of Economics, University of Exeter); Francesco Giovannoni (Department of Economics, CSE and CMPO, University of Bristol); Miltiadis Makris (Department of Economics, University of Southampton)
    Abstract: We consider auctions where bidders have external incentives and focus on the case where their valuations in the auction are positively correlated with their productivity which matters in a second stage job market. We study how this affects bidding behavior and wages in the job market and proceed to test the model’s implication in an experiment where treatments differ according to which bids are disclosed. Our results broadly confirm the theoretical prediction that bidders tend to overbid, and their bidding behavior and wages are influenced by the disclosure rule. The data also suggests that the dispersion in worker wages is affected by the disclosure rule, suggesting the importance of reputational bidding.
    Keywords: Auctions, signaling, disclosure, experiments.
    JEL: C92 D44 D82
    Date: 2016
  9. By: He, Chenyi; Gao, Zhifeng; House, Lisa; Guan, Zhengfei
    Abstract: Growth in imports of strawberries, particularly from Mexico, threaten the Florida strawberry industry. To better compete with strawberries from Mexico, the Florida strawberry industry has focused on product differentiation with an emphasis on quality. In this study, we conducted one sensory test combined with experimental auctions to examine the impact of fruit quality and labeling strategies on consumer purchase. Two strawberry varieties, Sweet Sensation and Festival are used in the experiment. Ten samples with different labels under different strawberry varieties were randomly presented to participants. In total 103 panelists participated in sensory test and experimental auction. Results show that without labeling, consumers cannot distinguish different varieties of strawberry. In most cases, labeling varieties does not directly affect consumer preference. This indicates that actions need to be taken to improve consumers’ awareness and recognition of variety labels such as Sweet Sensation.
    Keywords: Sensory Quality, Labels, Fresh Strawberries, Experiment Auction, Agribusiness, Consumer/Household Economics, Institutional and Behavioral Economics, Marketing,
    Date: 2016–01
  10. By: Kenneth Lee; Edward Miguel; Catherine Wolfram
    Abstract: We present results from an experiment that randomized the expansion of electric grid infrastructure in rural Kenya. Electricity distribution is the canonical example of a natural monopoly. Randomized price offers show that demand for electricity connections falls sharply with price. Experimental variation in the number of connections combined with administrative cost data reveals considerable scale economies, as hypothesized. However, consumer surplus is far less than total costs at all price levels, suggesting that residential electrification may reduce social welfare. We discuss how leakage, reduced demand (due to red tape, low reliability, and credit constraints), and spillovers may impact this conclusion.
    JEL: L12 L94 O13 Q41
    Date: 2016–05
  11. By: Bazzani, Claudia; Nayga, Rodolfo M. Jr.; Caputo, Vincenzina; Canavari, Maurizio; Danforth, Diana M.
    Abstract: To potentially reduce bias in hypothetical choice experiments, many studies have incentivized respondents to reveal more truthful choices by randomly choosing a binding choice set and then asking them to pay the price indicated for the chosen product alternative in this binding choice set. This approach, however, does not separate what the price the respondent indicated he/she is willing to pay for the chosen product alternative from the price that he/she will end up paying. Would the use of the BDM mechanism make non-hypothetical choice experiments more incentive compatible? Our results using a conventional homegrown choice experiment and an induced value choice experiment suggest that it does not. Choice behavior is associated with the degree of understanding about the experimental procedures and the amount of time devoted to each choice set
    Keywords: Real Choice Experiment, BDM mechanism, Induced Value Experiment, Homegrown Value Experiment, Incentive Compatibility, Institutional and Behavioral Economics, Marketing, Research Methods/ Statistical Methods,
    Date: 2016–05–25
  12. By: Liu, Pengfei; Swallow, Stephen
    Abstract: This paper compares different preference elicitation methods used in choice ex- periments. We implemented four different methods to elicit individuals’ preference for a non-market good. Our four treatments include (1) a hypothetical referen- dum, (2) a real referendum lacking incentive compatibility, (3) a real choice with incentive compatibility and (4) a hybrid approach that combines (2) and (3). We develop a method to estimate the percentage of strategic choices in each treatment. We find that in the hypothetical referendum, about 75% to 92% individuals truth- fully reveal their preference and choose the option that gives the highest utility in a choice question. Adding policy consequentiality (e.g., the real referendum) and payment consequentiality (e.g., the hybrid approach) could increase the percentage of individuals truthfully reveal their preference.
    Keywords: Stated Preference, Policy Consequences, Incentive Compatibility, Wel- fare, Water Quality Trading, Environmental Economics and Policy, Institutional and Behavioral Economics, Land Economics/Use, Public Economics, Resource /Energy Economics and Policy, Q56, Q57, C72,
    Date: 2016–05–25
  13. By: Gulati, Kajal; Ward, Patrick; Lybbert, Travis; Spielman, David
    Abstract: Measuring intrahousehold preferences for the production activities of the household is challenging as the decisions are made jointly and it is often not possible to switch spheres of influence within a household. An example of a situation where divergent preferences may exist amongst household members even though household constraints masks the household decision is that of rice transplanting in India. In many parts of India, manual rice transplanting in puddled conditions tends to be a task primarily reserved for women, and is highly labor-intensive and arduous. Quite recently, mechanical rice transplanters (MRT), which are a labor-saving production technology, are being promoted in rice-producing areas in the country. We elicit intrahousehold heterogeneity in preferences for mechanical rice transplanting by combining hypothetical and experimental elicitation mechanisms. After informing randomly selected agricultural households about mechanical rice transplanting, we elicited attribute-based non-monetary preferences and monetary hypothetical willingness to pay measures for mechanical and traditional transplanting for women and men in the same household from a sample of 965 households in Bihar, India. Soon after, we conducted village-level, incentive-compatible auctions for providing actual mechanical rice transplanting services, which allowed us to elicit experimental measures of household heads’ willingness to pay. Our study finds evidence of deviations from hypothetical to experimental valuations. However, most individuals did not change their pure preferences for the technology and instead refined their willingness to pay. Knowing the technology service provider during the auctions reduced the difference between hypothetical and individual valuations. Bargaining power of female household members did not play any role in shifting the willingness to pay measures. Women in households where only family labor is used for transplanting value MRTs higher than men by Rs. 162.69, which is driven by their preferences instead of a difference in their individual characteristics.
    Keywords: Demand and Price Analysis, International Development, Production Economics,
    Date: 2016–05–25
  14. By: Lukas Menkhoff; Sahra Sakha
    Abstract: We use a repeated incentivized risk experiment in rural Thailand to test determinants of changes in the level of individual risk aversion over time. We find that risk aversion significantly changes between 2008 and 2013 as a result of macro- andmicro-level shocks. Strong macroeconomic recovery following the 2007/08 financial crisis makes people more risk-seeking, whereas macroeconomic normalization thereafter increases risk aversion parameters. On the micro-level, we observe that negative economic and agricultural shocks increase risk aversion. Subjective perceptions of well-being and expectations also play a role but do not drive the macro-micro determinants of changes in individual risk aversion.
    Keywords: risk aversion, lab-in-the-field experiment, shocks, socio-economic determinants
    JEL: D01 D81 O12
    Date: 2016
  15. By: Maertens, Annemie; Michelson, Hope
    Abstract: We combine panel survey data with a randomized controlled trial conducted among 250 villages in Malawi to test the effectiveness of a standard agricultural extension service. The two main tools of the service are a mid-season farmer field day and farmer club managed demonstration plots. We find that farmers in villages who were invited to attend the farmer field days display an increased knowledge of Integrated Soil Fertility Management Practices and a higher probability of adoption (plans), with the majority of the effects concentrated among non-attendees. However, when combined with in-village demonstration plots, farmers who participate in the demonstration plots display a higher knowledge of what we refer to as “detailed” production knowledge, such as types of inputs, quantity of inputs, and increased likelihood of planning to adopt these.
    Keywords: Agricultural technology adoption, ISFM, learning, demonstration plots, farmer field days, Farm Management, Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession,
    Date: 2016
  16. By: Subhasish M. Chowdhury (University of East Anglia); Anwesha Mukherjee (University of East Anglia); Theodore L. Turocy (University of East Anglia)
    Abstract: We experimentally contrast mathematical versus operational explanations of Tullock lottery contests. We contrast a protocol explaining the contest in terms of probability of winning, with an operational approach that carries out the random component of the contest as an explicit lottery each period. Initial expenditure levels are significantly lower when using the operational approach. In addition, using the operational approach, groups far from equilibrium in a given period move more rapidly towards approximate mutual best response. We find these results in sessions conducted in the UK and in the US. The implications that can be drawn from experiments on contest games therefore depend on the approach used to present the game to the players.
    Keywords: lottery contest, learning, framing, experiment
    JEL: C72 C91 D72 D83
    Date: 2016–05–21
  17. By: Libman, Alexander; Vollan, Björn
    Abstract: Anti-Western conspiracies are frequently used by Governments to strengthen their power. We investigate the impact of conspiracy thinking on expectations of collusion among individuals in Russia and China. For this purpose, we conduct a novel laboratory experiment to measure expectations of collusion and several survey items related to conspiracy thinking. Our survey results indicate that anti-Western conspiracy thinking is widespread in both countries and correlates with distrust. We find a significant effect of anti-Western conspiracy thinking in China: Anti-Western conspiracy thinking correlates with lower expectations of collusion. We explain this result by stronger ingroup feeling emanating from the anti-Western sentiment. Our paper provides a first step in analyzing the economic implications of conspiracy thinking for society.
    Keywords: conspiracy thinking, Russia, China, trust, collusion experiments
    JEL: C91 D83 O17
    Date: 2015–04–29
  18. By: Li, Hao; Elbakidze, Levan
    Abstract: Presentation #10058 Session # 1648, “Methodological Advancements in Experimental Economics”
    Keywords: Experimental Auction, Regression Discontinuity, Animal Welfare, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Livestock Production/Industries, Research Methods/ Statistical Methods,
    Date: 2016
  19. By: Luca, Bettarelli; Giovanna, Iannantuoni; Elena, Manzoni; Francesca, Rossi
    Abstract: Motivated by the need of understanding voting behavior under different electoral rules, Laslier et al. (2015) have conducted an online experiment in several European countries during the three weeks before the 2014 elections for the European Parliament, the EuroVotePlus experiment. This paper focuses on the Italian data . We first show that the behavior of Italian respondents is consistent with the empirical findings at the European level. Then, we exploit the change from open list to closed list elections implemented in Italy in 1993 to investigate whether and how preferences over institutions are affected by experience. We find that respondents who voted using the open list system in Italy are more likely to prefer closed list systems, and that the effect is stronger the higher the number of open list elections that the respondents have faced.
    Keywords: European Parliament Election, Open list, Closed list, Voting rules
    JEL: D7 C9
    Date: 2016–05–19
  20. By: Serhiy Kandul (Friedrich-Schiller-University Jena); Oliver Kirchkamp (Friedrich-Schiller-University Jena)
    Abstract: The aim of this study is to find out why people are telling the truth: is it a desire to respect trust, to avoid losses for others, or a mere distaste for lying per se? To answer this question we study a sender-receiver game where it is possible to delegate the act of lying and where it is possible to take pro-social actions in a subsequent dictator game. We examine how delegation affects the outcomes of people's current and future ethical decisions. We find that a non-trivial fraction of participants delegate their decision. However, delegation is associated with higher transfers in the subsequent dictator game
    Keywords: Sender-Receiver games, moral balancing, guilt aversion
    JEL: C72 D82
    Date: 2016–05–18
  21. By: Adena, Maja; Huck, Steffen
    Abstract: We study an online fundraising campaign run on an opera ticket booking plat-form. After establishing a baseline, a first change doubled the donation grid. A second change altered the navigation of the website rendering the act of declining to donate more salient. The contribution of our paper is fourfold. First, we add to the literature on defaults by showing how donation grids can have dramatic im-pacts on giving. Second, we demonstrate that small, apparently superficial chang-es in the design of a campaign can have unexpectedly large consequences (offset-ting the effects of changes in the choice architecture). Third, we provide the first field evidence for the role of self-image in charitable giving. Finally, we provide stark evidence on adverse long-run effects of fundraising campaigns for ticket selling entities. "Avoiding the ask," non-frequent customers buy fewer tickets in the following opera season. Ticket sales per person fall by €16-32, while average charitable income from the same group during the campaign is just €0.26.
    Keywords: online fundraising,quasi-experiment,self-image
    JEL: D64 D03 D12 C93 L31
    Date: 2016

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