nep-exp New Economics Papers
on Experimental Economics
Issue of 2016‒09‒25
eleven papers chosen by
Daniel Houser
George Mason University

  1. Social Identity and Role Models By Vecci, Joseph; Zelinsky, Tomas
  2. An Experimental Approach to Comparing Similarity- and Guilt-Based Charitable Appeals By van Rijn, Jordan; Barham, Bradford; Sundaram-Stukel, Reka
  3. Concentration and Unpredictability of Forecasts in Artificial Investment Games By Xiu Chen; Fuhai Hong; Xiaojian Zhao
  4. Impulsive Behavior in Competition: Testing Theories of Overbidding in Rent-Seeking Contests By Roman M. Sheremeta
  5. Complicity without Connection or Communication By Abigail Barr; Georgia Michailidou
  6. Discrimination against Female Migrants Wearing Headscarves By Weichselbaumer, Doris
  7. How You Pay Affects How You Do: Financial Aid Type and Student Performance in College By Peter Cappelli; Shinjae Won
  8. Investigating gender differences under time pressure in financial risk taking By Zhixin Xie; Lionel Page; Ben Hardy
  9. The Impact of Conditional Cash Transfers on the Matriculation of Junior High School Students into Rural China’s High Schools By Fan Li; Yingquan Song; Hongmei Yi; Jianguo Wei; Linxiu Zhang; Yaojiang Shi; James Chu; Natalie Johnson; Prashant Loyalka; Scott Rozelle
  10. The effect of sequentiality and heterogeneity in network formation games By Liza Charroin
  11. Identity, Perceptions and Institutions: Caste Differences in Earnings from Self-Employment in India By Goel, Deepti; Deshpande, Ashwini

  1. By: Vecci, Joseph (Department of Economics, School of Business, Economics and Law, Göteborg University); Zelinsky, Tomas (Faculty of Economics, Technical University of Kosice, Kosice, Slovakia)
    Abstract: We present a lab-in-the-field experiment and surveys of marginalised Roma children in Slovakia to examine whether reminding Roma of their ethnicity reduces their performance in a cognitive task. Research on social identity and stereotypes has documented that when individuals feel their social group is negatively stereo- typed in a domain their performance declines, which can reinforce discrimination. In an effort to break the cycle of negative stereotypes we remind Roma of either Roma or non-Roma role models. We find that the activation of a Roma's ethnicity reduces cognitive performance. In contrast Roma exposed to Roma role models outperform those reminded of their ethnicity and also non-Roma role models. We then attempt to understand the channels through which social identity and role models effect performance. We show that priming a Roma's identity has a direct effect on confidence, decreasing performance.
    Keywords: Social Identity; artefactual field experiments; discrimination; role models; Roma
    JEL: C93 J15
    Date: 2016–09
  2. By: van Rijn, Jordan (University of Wisconsin); Barham, Bradford (University of Wisconsin); Sundaram-Stukel, Reka (University of Wisconsin)
    Abstract: Non-profit organizations face the challenge of eliciting pro-social behavior (e.g.: donations) amidst an increasingly competitive landscape. One traditional approach involves "guilt appeals", where the organization attempts to create negative emotions through story-telling, defining an explicit need, and emphasizing differences between potential donors and aid recipients. Recently, some non-profit organizations have used the opposite strategy and designed charitable appeals that focus on positive emotions and similarities between donors and recipients. This study uses a dictator game experiment with undergraduate students to test how a positive charitable appeal video that highlights similarities between donors and recipients affects donor behavior relative to a traditional guilt appeal video that highlights differences. We find that both feelings of guilt and similarity are positively associated with donation behavior; however, only the guilt-appeal treatment has a statistically significant positive effect on donations relative to the control. Yet, we cannot reject the null hypothesis of equal donations between similarity- and guilt-based treatments. We also find major gender differences in pro-social behavior: average male donations in the control were 40% higher than female donations; whereas, this outcome is almost completely reversed in the guilt appeal treatment, where females donated over twice as much as males. In other words, guilt appeals appear to work on women but have the opposite effect on men. This difference may be partially explained by males' aversion to feelings of manipulation, a feeling that seemed to discourage their donations but had no impact on female donations.
    Date: 2016–08
  3. By: Xiu Chen (Department of Economics, Hong Kong University of Science and Technology, Hong Kong); Fuhai Hong (Division of Economics, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332.); Xiaojian Zhao (Department of Economics, Hong Kong University of Science and Technology, Hong Kong)
    Abstract: This paper investigates how people’s forecasts about financial market are shaped by the environment, in which people interact before making investment decisions. By recruiting 1385 subjects on WeChat, one of the largest social media, we conduct an online experiment of artificial investment games. Our treatments manipulate whether subjects can observe others’ forecasts and whether subjects engage in public or private investment decisions. We find that subjects’ forecasts significantly converge when shared, though in different directions across groups. We also observe a strong positive correlation between forecasts and investments, suggesting that an individual’s reported forecast is associated with his belief.
    Keywords: forecast, investment, online experiment
    JEL: C90 D83 D84 G11
    Date: 2016–08
  4. By: Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University)
    Abstract: Researchers have proposed various theories to explain overbidding in rent-seeking contents, including mistakes, systematic biases, the utility of winning, and relative payoff maximization. Through an eight-part experiment, we test and find significant support for the existing theories. Also, we discover some new explanations based on cognitive ability and impulsive behavior. Out of all explanations examined, we find that impulsivity is the most important factor explaining overbidding in contests.
    Keywords: rent-seeking, contest, competition, impulsive behavior, experiments
    JEL: C72 C91 D01 D72
    Date: 2016
  5. By: Abigail Barr (School of Economics, University of Nottingham); Georgia Michailidou (University of Nottingham, School of Economics)
    Abstract: We use a novel experiment to investigate whether people aim to coordinate when, to do so, they have to lie; and are more willing to lie when, in doing so, they are aiming to coordinate with a potential accomplice, i.e., another with whom coordination would be beneficial and who is facing the same individual and mutual incentives and the same moral dilemma. We find that people often aim to coordinate when they have to lie to do so and that having a potential accomplice increases willingness to lie even when that potential accomplice is a stranger and communication is not possible.
    Keywords: complicity, lying, coordination, die rolling task
    Date: 2016
  6. By: Weichselbaumer, Doris (University of Linz)
    Abstract: Germany is currently experiencing a high influx of Muslim migrants. From a policy perspective, integration of migrants into the labor market is crucial. Hence, a field experiment was conducted that examined the employment chances of females with backgrounds of migration from Muslim countries, and especially of those wearing headscarves. It focused on Turkish migrants, who have constituted a large demographic group in Germany since the 1970s. In the field experiment presented here, job applications for three fictitious female characters with identical qualifications were sent out in response to job advertisements: one applicant had a German name, one a Turkish name, and one had a Turkish name and was wearing a headscarf in the photograph included in the application material. Germany was the ideal location for the experiment as job seekers typically attach their picture to their résumé. High levels of discrimination were found particularly against the migrant wearing a headscarf.
    Keywords: discrimination, Muslim religion, headscarf, hiring, experiment
    JEL: C93 J15 J71
    Date: 2016–09
  7. By: Peter Cappelli; Shinjae Won
    Abstract: Students receiving financial aid pay different amounts for equivalent education and do so in different ways: Grants, which do not have to be repaid, loans, which are paid back in the future, and work-study, pay-as-you-go. We examine the effects of need-based aid independent of study ability on student outcomes – grade point average in particular - controlling for student background and attributes they had prior to college. We also analyze grades within colleges. The results suggest that students receiving need-based grants do significantly better in college than those not receiving financial aid while those paying for college with loans perform significantly worse than students receiving other forms of aid.
    JEL: D03 I21 I23 J38
    Date: 2016–09
  8. By: Zhixin Xie; Lionel Page; Ben Hardy
    Abstract: We investigate the nature of gender differences in financial risk taking under time pressure. Motivated by the large gender imbalance on financial trading floor we investigate gender differences under pressure and whether testosterone plays a role in gender differences in risk attitude under pressure. We find that testosterone exposure affects both outcome and probability sensitivity in men. We also find that testosterone exposure makes men relatively more risk seeking and optimistic when having to make risky decision under time pressure.
    Date: 2016–09–23
  9. By: Fan Li; Yingquan Song; Hongmei Yi; Jianguo Wei; Linxiu Zhang; Yaojiang Shi; James Chu; Natalie Johnson; Prashant Loyalka; Scott Rozelle
    Abstract: The goal of this study is to examine whether promising a Conditional Cash Transfer (conditional on matriculation) at the start of junior high increases the rate at which disadvantaged students matriculate in to high school. Based on a randomized controlled trial involving 1,418 disadvantaged (economically poor) students in rural China, we find that the promise of a CCT has no effect on increasing high school matriculation for the average disadvantaged student. We do find, however, that providing the CCT increases high school matriculation among the subset of disadvantaged students who overestimate the direct costs of attending high school.
    Keywords: Conditional Cash Transfer, Voucher, Rural Education, Dropout, High School, Randomized Controlled Trial, China
    Date: 2015
  10. By: Liza Charroin (Univ Lyon, ENS de Lyon, GATE L-SE UMR 5824, F-69342 Lyon, France)
    Abstract: In the benchmark model of Bala and Goyal (2000) on network formation, the equilibrium network is asymmetric and unfair as agents have different payoffs. While they are prominent in reality, asymmetric networks do not emerge in the lab mainly because of fairness concerns. We extend this model with a sequential linking decision process to ease coordination and with heterogeneous agents. Heterogeneity is introduced with the presence of a special agent who has either a higher monetary value or a different status. The equilibrium is asymmetric and unfair. Our experimental results show that thanks to sequentiality and fairness concerns, individuals coordinate on fair and efficient networks in homogeneous settings. Heterogeneity impacts the network formation process by increasing the asymmetry of networks but does not decrease the level of fairness nor efficiency
    Keywords: Network formation, sequentiality, heterogeneity, fairness, asymmetry
    JEL: C72 C92 D85 Z13
    Date: 2016
  11. By: Goel, Deepti (Delhi School of Economics); Deshpande, Ashwini (Delhi School of Economics)
    Abstract: Using data from two rounds of the Employment-Unemployment Survey of the National Sample Survey for 2004-5 and 2009-10, we investigate the relationship between social identity, specifically caste identity in India, and perceptions of self-worth as measured by the amounts that individuals consider as remunerative earnings from self-employment. We also investigate if institutional change (e.g. a policy intervention such as an employment guarantee program, or change in the ruling party in power) mitigates this relationship. Finally, we examine the relationship between caste identity and actual earnings, and how institutional change can influence it. Our main finding is that caste identity in contemporary India does shape perceptions of self-worth. Among the fully self-employed, we find that controlling for other characteristics, lower-ranked groups earn lower amounts and perceive lower amounts as being remunerative. Further, institutional factors alter self-perceptions differentially for different caste groups, but in more nuanced ways than our ex-ante beliefs.
    Keywords: caste discrimination, remunerative earnings, political economy
    JEL: J15 O15 P16
    Date: 2016–09

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