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on Experimental Economics |
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Issue of 2016‒07‒02
24 papers chosen by |
| By: | Michael Callen; Saad Gulzar; Syed Ali Hasanain; Yasir Khan |
| Abstract: | This paper presents evidence that one cause of absenteeism in the public sector is that government jobs are handed out as patronage. First, politicians routinely interfere when bureaucrats sanction absent doctors, and doctors are more absent in uncompetitive constituencies and when connected to politicians. Next, we find that the effects of two experimental interventions to address absence are attenuated in uncompetitive constituencies and for connected doctors. The first is a smartphone monitoring technology that nearly doubles inspection rates, and the second, representing the first experiment on the effects of providing data to policymakers, channels real time information on doctor absence. |
| JEL: | D02 D72 D73 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22340&r=exp |
| By: | Sandro Casal; Nives Della Valle; Luigi Mittone; Ivan Soraperra |
| Abstract: | Field studies suggest that feedback is an effective tool for promoting efficient consumption. Feedback enhances consumers’ awareness of the consequences associated with consumption of those goods, such as energy, that are usually consumed indirectly and unconsciously. Yet, variations in methodologies and weaknesses of internal control in the literature studying the effect of feedback on efficient consumption make it difficult to draw general conclusions. Our study aims to isolate the mechanisms underlying the effect of feedback on consumption in a controlled environment with a neutral language. We design a laboratory experiment in which individuals are not aware of the consequences of their consumption decisions and, thus, cannot easily identify the optimal ones. We introduce feedback as a mechanism to enhance awareness of consumption consequences. We assess the efficacy of different types of feedback that include descriptive norms and framing effects to enhance search of optimal consumption. We find that feedback is most effective when we introduce a negative frame. On the contrary, feedback reduces efficiency when we introduce information about peers’ inefficient behavior. Our study quantifies the effect of different types of feedback and suggests useful insights for policy makers. |
| Keywords: | Feedback, Consumption, Laboratory Experiment |
| JEL: | C91 D12 Q41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:1608&r=exp |
| By: | Ancev, Tiho; Taylor, Eloise; Merrett, Danielle |
| Keywords: | Risk and Uncertainty, |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare16:235237&r=exp |
| By: | G. Calzolari; M. Casari; R. Ghidoni |
| Abstract: | Greenhouse gases generate impacts that can last longer than human civilization itself. Such persistence may affect the behavioral ability to cooperate. Here we study mitigation efforts within a framework that reflects key features of climate change and then contrasts a dynamic versus a static setting. In a treatment with persistence, the pollution cumulates and generates damages over time while in another treatment it has only immediate effects and then disappears. We find that cooperation is not hampered, on average, by pollution persistence. Mitigation efforts, though, should not be delayed, because cooperation levels appear to deteriorate for high stocks of pollution. |
| JEL: | C70 C90 D03 Q54 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1065&r=exp |
| By: | Greer K. Gosnell; John A. List; Robert Metcalfe |
| Abstract: | Understanding motivations in the workplace remains of utmost import as economies around the world rely on increases in labor productivity to foster sustainable economic growth. This study makes use of a unique opportunity to “look under the hood” of an organization that critically relies on worker effort and performance. By partnering with Virgin Atlantic Airways on a field experiment that includes over 40,000 unique flights covering an eight-month period, we explore how information and incentives affect captains’ performance. Making use of more than 110,000 captain-level observations, we find that our set of treatments—which include performance information, personal targets, and prosocial incentives—induces captains to improve efficiency in all three key flight areas: pre-flight, in-flight, and post-flight. We estimate that our treatments saved between 266,000-704,000 kg of fuel for the airline over the eight-month experimental period. These savings led to between 838,000-2.22 million kg of CO2 abated at a marginal abatement cost of negative $250 per ton of CO2 (i.e. a $250 savings per ton abated) over the eight-month experimental period. Methodologically, our approach highlights the potential usefulness of moving beyond an experimental design that focuses on short-run substitution effects, and it also suggests a new way to combat firm-level externalities: target workers rather than the firm as a whole. |
| JEL: | D01 J3 Q5 R4 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22316&r=exp |
| By: | Hiroki Ozono (Kagoshima University); Yoshio Kamijo (School of Economics and Management, Kochi University of Technology); Kazumi Shimizu (Waseda University) |
| Abstract: | Cooperation is fundamental to human societies, and one of the important paths for its emergence and maintenance is reciprocity. In prisoner's dilemma (PD) experiments, reciprocal strategies are often effective at attaining and maintaining high cooperation. In many public goods (PG) games or n-person PD experiments, however, reciprocal strategies are not successful at engendering cooperation. In the present paper, we attribute this difficulty to a coordination problem against free riding among reciprocators: Because it is difficult for the reciprocators to coordinate their behaviors against free riders, this may lead to inequality among players, which will demotivate them from cooperating in future rounds. We propose a new mechanism, institutionalized reciprocity (IR), which refers to embedding the reciprocal strategy as an institution (i.e., institutionalizing the reciprocal strategy). We experimentally demonstrate that IR can prevent groups of reciprocators from falling into coordination failure and achieve high cooperation in PG games. In conclusion, we argue that a natural extension of the present study will be to investigate the possibility of IR to serve as a collective punishment system. |
| Keywords: | cooperation, public goods game, laboratory experiment, institutionalized reciprocity, raise the stakes strategy |
| JEL: | C72 C91 C92 M54 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2015-19&r=exp |
| By: | Subha Mani; Prakarsh Singh; Utteeyo Dasgupta |
| Abstract: | This paper examines whether, in India, discriminatory practices by government-employed child caregivers along religious lines, lead to differential health outcomes among the care receiving children. Child caregivers participate in a novel allocation game where we incorporate treatments to disentangle statistical and taste-based discrimination.Our findings find no evidence of taste-based discrimination or statistical discrimination among the child caregivers. We also weigh-in on the usefulness of non-incentivized experiments in discrimination experiments. |
| Keywords: | Discrimination in employment, Field experiments, Health, Religion |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-069&r=exp |
| By: | Ferdinand Vieider (Department of Economics, University of Reading) |
| Abstract: | I revisit recent evidence uncovering a preference for certainty in violation of dominant normative and descriptive theories of decision making under risk. I explore two alternative explanations of the preference patterns found: i) systematic noise; and ii) reference dependence activated by salient outcomes. I develop choice lists that allow to disentangle these different explanations, and test them on rural subjects in southern India. The results reject explanations based on a preference for certainty in favor of explanations based on random choice. The estimates are further distorted by response mode effects, with loss aversion leading to an over-estimation of risk aversion. |
| Keywords: | risk preferences, certainty effect, random choice, loss aversion |
| JEL: | C91 D12 D81 O12 |
| Date: | 2016–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2016-06&r=exp |
| By: | Leonardo Becchetti (University of Rome Tor Vergata); Vittorio Pelligra (University of Cagliari, CRENoS); Francesco Salustri (DEDI, University of Rome "Tor Vergata") |
| Abstract: | We use experimental data from the “vote with the wallet” multiplayer prisoner’s dilemma to investigate with a finite mixture approach the effect of a responsible purchase on players’ satisfaction. We find clear-cut evidence of heterogeneity of preferences with two groups of players that differ significantly in terms of effects of the responsible choice on satisfaction. |
| Keywords: | randomized experiment, multiplayer prisoners’ dilemma, mixture models, satisfaction |
| JEL: | C92 D03 D12 D60 D71 |
| Date: | 2016–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:383&r=exp |
| By: | Bauer, Michal; Blattman, Christopher; Chytilova, Julie; Henrich, Joseph; Miguel, Edward; Mitts, Tamar |
| Abstract: | In the past decade, nearly 20 studies have found a strong, persistent pattern in surveys and behavioral experiments from over 40 countries: individual exposure to war violence tends to increase social cooperation at the local level, including community participation and prosocial behavior. Thus while war has many negative legacies for individuals and societies, it appears to leave a positive legacy in terms of local cooperation and civic engagement. We discuss, synthesize and reanalyze the emerging body of evidence, and weigh alternative explanations. There is some indication that war violence especially enhances in-group or "parochial" norms and preferences, a finding that, if true, suggests that the rising social cohesion we document need not promote broader peace. |
| Keywords: | Cooperation; post-conflict development; social preferences; war |
| JEL: | C80 D74 H56 O10 O12 O40 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11327&r=exp |
| By: | Di Falco, Salvatore; Feri, Francesco; Pin, Paolo; Vollenweider, Xavier |
| Abstract: | In this paper, we identify the economic implications of the pressure to share resources within a social network. Through a set of field experiments in rural Tanzania we randomly increased the expected harvest of a treatment group by the assignment of an improved and much more productive variety of maize. We find that individuals in this group reduced their interaction with their own network. We also find that treated individuals reduced labor input by asking fewer network members to work on their farm during the growing season and, as a result, obtained fewer harvest gains. |
| Keywords: | Ego-network, Field Experiment, Redistributive pressure, Harvest, Tanzania, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, Labor and Human Capital, O12, O13, C93, H26, Z13, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:236345&r=exp |
| By: | Gerhards, Leonie (Department of Economics, University of Hamburg); Gravert, Christina (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Various empirical papers have shown that peers affect productivity and behavior in the workplace. However, the mechanisms through which peers influence each other are still largely unknown. In this laboratory experiment we study a situation in which individuals might look at their peers' behavior to motivate themselves to endure in a task that requires perseverance. We test the impact of unidirectional peer effects under individual monetary incentives, controlling for ability and tactics. We find that peers significantly increase their observers' perseverance, while knowing about being observed does not significantly affect behavior. In a second experiment we investigate the motives to self-select into the role of an observing or an observant subject and what kind of peers individuals deliberately choose. Our findings provide first insights on the perception of peer situations by individuals and new empirical evidence on how peer groups emerge. |
| Keywords: | grit; perseverance; laboratory experiment; peer effects; real effort |
| JEL: | C91 D03 J24 M50 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0659&r=exp |
| By: | Benndorf, Volker; Martinez-Martinez, Ismael; Normann, Hans-Theo |
| Abstract: | Standard one- and two-population models for evolutionary games are the limit cases of a uniparametric family combining intra- and intergroup interactions. Our setup interpolates between both extremes with a coupling parameter k. For the example of the hawk-dove game, we analyze the replicator dynamics of the coupled model. We confirm the existence of a bifurcation in the dynamics of the system and identify three regions for equilibrium selection, one of which does not appear in common one- and two-population models. We also design a continuous-time experiment, exploring the dynamics and the equilibrium selection. The data largely confirm the theory. |
| Keywords: | evolutionary game theory,experiment in continuous time,hawk-dove game,replicator dynamics |
| JEL: | C62 C73 C91 C92 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:222&r=exp |
| By: | Kenta Tanaka (Faculty of Economics, Musashi University); Keisaku Higashida (School of Economics, Kwansei Gakuin University); Arvin Vista (Department of Agricultural Economics, University of the Philippines Los Baños); Anton Setyo Nugroho (Ministry of Maritime Affairs, Republic of Indonesia); Budi Muhamad Ruslan (Ministry of Marine Affairs and Fisheries, Republic of Indonesia) |
| Abstract: | This paper examines the effect of fishery resource depletion experiences on the social cooperative preferences of fishermen. We adopt (i) the value orientation test to measure cooperativeness and (ii) experiences that are subjectively perceived. Additionally, we focus on the perceived causes of resource depletion experienced by fishermen. Similar to previous studies, we find clear correlations between experiences and preferences. Moreover, we find that the impact of resource depletion experiences depends on whether fishermen perceive artificial factors or changes in the natural environment to be its causes. Particularly, resource depletion experiences caused by artificial factors are likely to make fishermen more cooperative, while those caused by changes in the natural environment are likely to make fishermen less cooperative. |
| Keywords: | Cooperativeness, Experiences, Fishery resource depletion, Value orientation test |
| JEL: | C93 Q22 Q56 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:143&r=exp |
| By: | Sawada, Yasuyuki; Aida, Takeshi; Griffen, Andrew; Kazianga, Harounan; Kozuka, Eiji; Nogushi, Haruko; Todo, Yasuyuki |
| Abstract: | We estimate the short-term impacts of a school-based management program in Burkina Faso in a range of outcomes that include education, voluntary contribution to public goods, participation in informal saving groups, and health. Evaluated at the control average, COGES increases the voluntary contributions to public goods by 15.90%. Participation in informal saving groups increases by 0.016 percent for the lowest income group, and enrollment in school increases by 7.1%. Overall the findings are consistent with the observation that social capital, strengthened by SBM, plays a critical complementary role in correcting financial market failures in low income economies. The results also demonstrate that impact evaluation of SBM that focus only on education are likely to undervalue the overall effects of SBMS. |
| Keywords: | School Based Management, Public Goods, Education, Informal Saving Groups, Health, Developing Countries, Burkina Faso, Institutional and Behavioral Economics, International Development, Public Economics, O12, D14, H41, I1, I2, |
| Date: | 2016–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:236323&r=exp |
| By: | Scharf, Kimberley; Smith, Sarah |
| Abstract: | Much fundraising is done by individuals within existing social groups. Exploiting a unique dataset, we demonstrate (i) a positive relationship between social group size and the number of donations; (ii) a negative relationship between group size and the size of individual donations; (iii) no clear relationship between group size and the total amount raised. Free riding with respect to the activity being funded cannot explain the relationship between group size and donation size, since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by "relational altruism" . |
| Keywords: | Online giving; Fundraising; Social groups; Donations; Charity; Altruism |
| JEL: | D64 H31 Z1 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11333&r=exp |
| By: | Philip Oreopoulos; Reuben Ford |
| Abstract: | Recent research suggests that the college application process itself prevents access. This paper reports results from a large school-based experiment in which application assistance is incorporated into the high school curriculum for all graduating seniors at low-transition schools. Over three workshops, students were guided to pick programs of interest that they were eligible for, apply for real, and complete the financial aid application. The goal was to create a college option for exiting students to make the transition easier and more salient. On average, the program increased application rates from 64 to 78 per cent. College enrolment increased the following school year by 5.2 percentage points with virtually all of this increase in two-year community college programs. The greatest impact was for students who were not taking any university-track courses in high school: the application rate for these students increased by 24 percentage points with a nine per cent increase in two-year college enrolment. A second experiment was conducted two years later to explore several variations of the program. Offering personal assistance without waiving application fees had a negligible or even negative impact on applications and enrollment. Using laptops in homeroom classrooms instead of sending students to computer labs while combining the initial 2 workshops into one full-morning session increased application rates. However, subsequent enrollment effects were negligible. We provide some evidence consistent with the possibility that decreased guidance in choosing eligible programs was responsible for the second-experiment's decline in enrollment impacts. |
| JEL: | I20 I23 I28 J20 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22320&r=exp |
| By: | Christian, Basteck; Marco, Mantovani |
| Abstract: | We take school admission mechanisms to the lab to test whether the manipulable Boston mechanism disadvantages students of lower cognitive ability and whether this leads to ability segregation across schools. Results show this is the case: lower ability participants receive a lower average payoff and are over-represented at the worst school. Under the strategy-proof Deferred Acceptance mechanism, payoff differences between high and low ability participants are reduced, and distributions by ability across schools are harmonized. Hence, we find support for the argument that a move to strategy-proof mechanisms would “level the playing field†. However, we document a trade-off between equality and efficiency in the choice of school admission mechanisms since average payoffs are larger under Boston than under Deferred Acceptance. |
| Keywords: | laboratory experiment, school choice, strategy-proofness, cognitive ability, mechanism design |
| JEL: | C78 C91 D82 I24 |
| Date: | 2016–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:343&r=exp |
| By: | William A. Masters; Prakarsh Singh |
| Abstract: | This paper provides evidence for the effectiveness of performance pay among government caregivers to improve child health in India. In a controlled study of 160 daycare centers serving over 4000 children, we randomly assign workers to receive performance pay or fixed bonuses of roughly similar expected value, and test for differences in malnutrition among the children in their care. We find that performance pay reduces the prevalence of weight-for-age malnutrition by about 5 percentage points in 3 months. This effect is sustained in the medium term with a renewal of incentives but the differential growth rate fades away once the scheme is discontinued. Fixed bonuses lead to smaller-sized effects and only in the medium-term. Both treatments appear to improve worker effort and communication with mothers, who in turn feed a more calorific diet to their children at home. |
| Keywords: | Performance Pay, Public Health Information, Child Malnutrition |
| JEL: | O1 I1 M5 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0818&r=exp |
| By: | Marco Battaglini (Department of Economics, Cornell University and EIEF); Ernest K. Lair (Department of Economics, Lehigh University); Wooyoung Lim (Department of Economics, The Hong Kong University of Science and Technology); Joseph Tao-yi Wang (Department of Economics, National Taiwan University) |
| Abstract: | We experimentally investigate the informational theory of legislative committees first proposed by Gilligan and Krehbiel [1987, 1989]. Two committees provide policy-relevant information to a legislature under two different procedural rules. Under the open rule, the legislature is free to make any decision; under the closed rule, the legislature is constrained to choose between a committee¡¦s proposal and an exogenous status quo. Our experiment shows that even in the presence of conflicts of interests, legislative committees help improve the legislature¡¦s decision by providing useful information. We further obtain evidence in support of three theoretical predictions: the Outlier Principle, according to which more extreme preferences of the committees reduce the extent of information transmission; the Distributional Principle, according to which the open rule is more distributionally efficient than the closed rule; and the Restrictive-rule Principle, according to which the closed rule better facilitates the informational role of legislative committees. We, however, obtain mixed evidence for the Heterogeneity Principle, according to which more information can be extracted in the presence of multiple committees with heterogeneous preferences. Our experimental findings provide overall support for the equilibrium predictions of Gilligan and Krehbiel [1989], some of which have been controversial in the literature. |
| Keywords: | Legislative Committees; Strategic Information Transmission; Laboratory Experiment |
| JEL: | C72 D82 D83 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ntw:wpaper:1601&r=exp |
| By: | Christian, Basteck; Marco, Mantovani; |
| Abstract: | Unsophisticated applicants can be at a disadvantage under manipulable and hence strategically demanding school choice mechanisms. Disclosing information on applications in previous admission periods makes it easier to asses the chances of being admitted at a particular school, and hence may level the playing field between applicants who differ in their cognitive ability. We test this conjecture experimentally for the widely used Boston mechanism. Results show that, absent this information, there exist a substantial gap between subjects of higher and lower cognitive ability, resulting in significant differences in payoffs, and ability segregation across schools. The treatment is effective in improving applicants’ strategic performance. However, because both lower and higher ability subjects improve when they have information about past demands, the gap between the two groups shrinks only marginally, and the instrument fails at levelling the playing field. |
| Keywords: | laboratory experiment, school choice, strategy-proofness, cognitive ability, mechanism design |
| JEL: | C78 C91 D82 I24 |
| Date: | 2016–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:342&r=exp |
| By: | Solomon Hsiang; Nitin Sekar |
| Abstract: | Black markets are estimated to represent a fifth of global economic activity, but their response to policy is poorly understood because participants systematically hide their actions. It is widely hypothesized that relaxing trade bans in illegal goods allows legal supplies to competitively displace illegal supplies, but a richer economic theory provides more ambiguous predictions. Here we evaluate the first major global legalization experiment in an internationally banned market, where a monitoring system established before the experiment enables us to observe the behavior of illegal suppliers before and after. International trade of ivory was banned in 1989, with global elephant poaching data collected by field researchers since 2003. A one-time legal sale of ivory stocks in 2008 was designed as an experiment, but its global impact has not been evaluated. We find that international announcement of the legal ivory sale corresponds with an abrupt ~66% increase in illegal ivory production across two continents, and a possible ten-fold increase in its trend. An estimated ~71% increase in ivory smuggling out of Africa corroborates this finding, while corresponding patterns are absent from natural mortality and alternative explanatory variables. These data suggest the widely documented recent increase in elephant poaching likely originated with the legal sale. More generally, these results suggest that changes to producer costs and/or consumer demand induced by legal sales can have larger effects than displacement of illegal production in some global black markets, implying that partial legalization of banned goods does not necessarily reduce black market activity. |
| JEL: | F18 F55 K42 O13 O17 Q2 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22314&r=exp |
| By: | Eric Floyd; John List |
| Abstract: | The gold standard in the sciences is uncovering causal relationships. A growing literature in economics utilizes field experiments as a methodology to establish causality between variables. Taking lessons from the economics literature, this study provides an "A-to-Z" description of how to conduct field experiments in accounting and finance. We begin by providing a user's guide into what a field experiment is, what behavioral parameters field experiments identify, and how to efficiently generate and analyze experimental data. We then provide a discussion of extant field experiments that touch on important issues in accounting and finance, and we also review areas that have ample opportunities for future field experimental explorations. We conclude that the time is ripe for field experimentation to deepen our understanding of important issues in accounting and finance. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00410&r=exp |
| By: | Fudenberg, Drew |
| Abstract: | Jean Tirole was awarded the 2014 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his analysis of market power and regulation. This paper provides an overview of some of that work, and of his related contributions to game theory. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:faseco:27303657&r=exp |