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on Experimental Economics |
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Issue of 2016‒10‒16
27 papers chosen by |
| By: | Morone, Andrea; Nemore, Francesco; Nuzzo, Simone |
| Abstract: | While a basic theoretical principle in public economics assumes that individuals’ behaviour is fully-optimizer with respect to the introduction of a tax, an increasing body of research is presenting evidence that agents decision making is often affected by non-negligible cognitive biases, which could be responsible for lower market performance as well as for deviations from standard theoretical predictions. This paper extends the latter strand of research focusing on two trend topics in public economics: tax salience and tax incidence. While the former refers to the prominence of the tax, the latter places emphasis on the statutory vs. factual division of tax payments. Is market performance affected by the salience of the tax? Is the incidence of a tax independent of which side of the market it is levied on (Liability Side Equivalence Principle, LES)? We address these questions through a laboratory experiment in which one unit of a fictitious good is traded through a double-auction market institution. Based on a panel data analysis, our contribution shows that a non-salient tax reduces both the allocational and informational efficiency of the market with respect to the instance in which the tax is salient. Moreover, we show that the Liability Side Equivalence Principle does not hold in practice. |
| Keywords: | Tax incidence, Tax salience, Liability Side Equivalence, choice behaviour, laboratory. |
| JEL: | C91 H2 H21 H30 |
| Date: | 2016–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74319&r=exp |
| By: | Ginger Zhe Jin; Guodong Gao; Tianshu Sun |
| Abstract: | While much research has examined the role of technology in moderating online user connections, how IT motivates offline interactions among users is much less understood. Using a randomized field experiment involving 80,000 participants, we study how mobile messaging can leverage recipients' social ties to encourage blood donation. There are three main findings: first, both behavior intervention (in the form of reminder message) and economic reward (in the form of individual or group reward) increase donations, but only the messages with group reward are effective in motivating more donors to donate with their friend(s); second, group reward tends to attract different types of donors, especially those who are traditionally less active in online social setting; and third, across all treatments, message recipients donate a greater amount of blood if their friends are present. Structural estimation further suggests that rewarding group donors is four times more cost-effective than rewarding individual donors. Based on the structural estimates, we perform policy simulations on the optimal design of mobile messaging. The method of combining structural model and randomized field experiment opens new frontiers for research on leveraging IT to mobilize a user's social network for social good. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00571&r=exp |
| By: | Erik Verhoef; Jasper Knockaert; Stefanie Peer |
| Abstract: | If left unidentified and uncorrected, self-selection biases may greatly compromise the external validity of the outcomes of field experiments. We show that self-selection biases in terms of observed und unobserved characteristics can be well identified and corrected by means of a complementary stated preference (SP) experiment conducted among the participants and non-participants of a field experiment. In the SP experiment, respondents are confronted with hypothetical choice situations that closely resemble the choice situations present in the field experiment. The SP experiment does not only allow us to compare participants and non-participants with respect to their behavior and implied preferences in the hypothetical choice situations, but also renders it possible to infer how non-participants would have behaved if they had decided to participate, using an innovative modeling approach to elicit the corresponding preference structures. We apply this approach in the context of a large-scale field experiment in which train commuters received monetary rewards for traveling outside peak hours. We find strong self-selection biases, especially with respect to the marginal utility of income, which is significantly higher among participants of the field experiment. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00568&r=exp |
| By: | Christina Gravert; Mette Trier Damgaard |
| Abstract: | We document the hidden costs of one of the most policy-relevant nudges, reminders. Sending reminders, while proven effective in facilitating behavior change, may come at a cost for both senders and receivers. Using a large scale field experiment with a charity, we find that reminders increase donations, but they also substantially increase unsubscriptions from the mailing list. To understand this novel finding, we develop a dynamic model of donation and unsubscription behavior with limited attention which is tested in reduced-form using a second field experiment. We also estimate our model structurally to perform a welfare analysis. We show that when not accounting for the hidden costs of reminders the average welfare effects for donors are overstated by a factor of ten and depending on the discount factor the welfare effects of the charity may be negative. Our results show the need to evaluate nudges on their intended as well as unintended consequences. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00549&r=exp |
| By: | Avi Weiss (Bar-Ilan University); Gabriele Camera; Dror Goldberg |
| Abstract: | The theory of money typically ignores the fact that the mode of market interaction arises endogenously, and simply assumes a decentralized, bilateral exchange process. However, endogenizing the organization of trade is critical for understanding the conditions that lend themselves to the development of money as a mode of exchange. To study this, we develop a “travelling game” to study the spontaneous emergence of different systems of exchange theoretically and experimentally. Players located on separate “islands” can either stay and trade on their island, or pay a cost to trade elsewhere. Earnings rise with the frequency of trade but fall with the frequency of travel. Decentralized and centralized markets can both emerge in equilibrium. The latter maximize consumption frequencies and are socially efficient; the former minimize travel cost and require the use of a medium of exchange. In the laboratory, a centralized market more frequently emerges when subjects perform diversified economic tasks, and when they interact in large groups and cannot be sure whether they will meet the same counterpart in later periods. The experiment shows that to understand the emergence of monetary systems it is important to amend the theory of money such that the market structure is endogenized. |
| Keywords: | endogenous institutions, macroeconomic experiments, matching, coordination, markets, money. |
| JEL: | E4 E5 C9 C92 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:biu:wpaper:2016-04&r=exp |
| By: | Mark Schneider (Economic Science Institute, Chapman University); David Porter (Economic Science Institute, Chapman University) |
| Abstract: | Cognitive reflection has been shown to be an important trait which is correlated with the propensity to: take risks, delay gratification, and form accurate beliefs about others’ behavior. However, previous research has not cleanly identified whether reflective thinkers make ‘better’ decisions than intuitive thinkers, since inferences of decision quality are confounded by inferences regarding risk preferences, time preferences, and beliefs. We directly test for differences in decision quality between reflective thinkers and intuitive thinkers in both individual and strategic decisions using a design which makes it possible to objectively rank risky and strategic choices, independent of one’s attitudes toward risk or one’s beliefs about the strategic sophistication or altruism of other decision makers. Employing a lottery choice task involving a dominant and a dominated alternative, and implementing multiple rounds of a second price auction, we find that the tendency to cognitively reflect has strong predictive power across domains (reasoning tasks, choices between lotteries, bidding behavior in auctions), and across time (as the tasks were administered on separate dates). In particular, the same subjects who engaged in reflective thinking on simple reasoning problems were also more likely to choose optimally in the lottery choice task and to bid closer to the dominant strategy equilibrium in second price auctions. We also find that experience helps to narrow the gap in performance between reflective and intuitive thinkers. |
| Keywords: | Cognitive Reflection, Stochastic Dominance, Second Price Auction |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-24&r=exp |
| By: | Gautam Rao; John List; Stefano DellaVigna; Ulrike Malmendier |
| Abstract: | Why do people vote? We design a field experiment to estimate a model of voting 'because others will ask'. The expectation of being asked motivates turnout if individuals derive pride from telling others that they voted, or feel shame from admitting that they did not vote, provided that lying is costly. In a door-to-door survey about election turnout, we experimentally vary (i) the informational content and use of a flyer pre-announcing the survey, (ii) the duration and payment for the survey, and (iii) the incentives to lie about past voting. The experimental results indicate significant social image concerns. For the 2010 Congressional election, we estimate a value of voting 'to tell others' of about $15, contributing 2 percentage points to turnout. Lastly, we evaluate a get-out-the-vote intervention in which we tell potential voters that we will ask if they voted. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00575&r=exp |
| By: | Charles Loeffler; Holger Sieg; John MacDonald; Michael Chirico; Robert Inman |
| Abstract: | Property taxes play a central role in the financing of municipal government services. Yet, municipal governments commonly confront problems with property tax collection even when the tax base is known. There is surprisingly little evidence on what authorities can do to increase property tax compliance. This paper analyzes seven different property tax notification strategies through a randomized controlled experiment conducted with the City of Philadelphia. All seven notification strategies increase property tax compliance over the usual approach of simply sending a bill. The most effective notifications are the those that threaten to take out a lien on the property or to foreclose by sheriff's sale for continued failure to pay taxes. The results suggest that economic motives to pay property taxes are more effective than those that appeal to social norms. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00543&r=exp |
| By: | Dennis Zhang; Gad Allon; Jan Van Mieghem |
| Abstract: | This paper studies how service providers can design social interaction among participants and quantify the causal impact of that interaction on service quality. We focus on education and analyze whether encouraging social interaction among students improves learning outcomes in Massive Open Online Courses (MOOCs), which are a new service delivery channel with universal access at reduced, if not zero, cost. We analyze three randomized experiments in a MOOC with more than 30; 317 students from 183 countries. Two experiments study large-group interaction by encouraging a random subset of students to visit the course discussion board. The majority of students treated in these experiments had higher social engagement, higher quiz completion rates, and higher course grades. Using these treatments as instrumental variables, we estimate that one additional board visit causally increases the probability that a student finishes the quiz in the subsequent week by up to 4:3%. The third experiment studies small-group interaction by encouraging a random subset of students to conduct one-on-one synchronous discussions. Students who followed through and actually conducted pairwise discussions increased their quiz completion rates and quiz scores by 10% in the subsequent week. Combining results from these three experiments, we provide recommendations for designing social interaction mechanisms to improve service quality. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00574&r=exp |
| By: | March, Christoph; Sahm, Marco |
| Abstract: | We provide new experimental evidence which suggests an asymmetric discouragement effect in lottery contests with heterogeneous abilities. Compared to a symmetric contest, subjects invest less effort when facing a stronger opponent, but they invest the same when facing a weaker opponent. Our results can be explained by a simple model of disappointment aversion. |
| Keywords: | Asymmetric Contest,Discouragement Effect,Disappointment Aversion,Laboratory Experiment |
| JEL: | C72 C92 D72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bamber:117&r=exp |
| By: | Brit Grosskopf; Graeme Pearce |
| Abstract: | We present a natural field experiment designed to measure other{regarding preferences in the market for taxis. We employed testers of varying ethnicity to take a number of predetermined taxi journeys. In each case we endowed them with only 80% of the expected fare. Testers revealed the amount they could afford to pay to the driver mid-journey and asked for a portion of the journey for free. In a 2x2 between{subjects design we vary the length of the journey and whether drivers havereputational concerns or not. We find that the majority of drivers give at least part of the journey for free and over 25% complete the journey. Giving is found to be proportional to the length of the journey, and the drivers' reputational concerns do not explain their behaviour. Evidence of strong out{group negativity against black testers by both white and South Asian drivers is also reported. In order to link our empirical analysis to behavioural theory we estimate the parameters of a number of utility functions. The data and the structural analysis lend support to the quantitative predictions of experiments that measure other{regarding preferences, and shed further light on how discrimination can manifest itself within our preferences. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00556&r=exp |
| By: | Laura Razzolini; Marco Mariani; Patrizia Lattarulo |
| Abstract: | This paper reports results from a field experiment conducted to study the effect of incentives offered to high school teens to motivate them to visit art museums. A vast literature exists on the design of incentives to modify the behavior of firms and consumers, but not much is known about incentives offered to adolescents and young adults to affect their cultural consumption behavior. Students in the first treatment receive a flier with basic information and opening hours of a main museum in Florence, Italy-Palazzo Vecchio. Students in the second treatment receive the flier and a short presentation conducted by an art expert about the exhibit; students in the third treatment, in addition to the flier and the presentation, receive also a non-financial reward in the form of extra-credit points toward their school grade. The analysis yields two main findings. First, non-financial reward is more effective at inducing the students to undertake the encouraged visit than either the simple presentation or the basic information with the flier. Second, over a longer time horizon the non-financial reward does not induce a significant change in behavior with respect to the simple presentation. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00576&r=exp |
| By: | Michael Razen; Matthias Stefan |
| Abstract: | The term greed has become very popular in the public debate. It is regularly argued, for instance, that greed is one of the deep rooted reasons for the financial crisis, numerous incidents of fraud and growing inequalities in wealth. Despite its prominent role in the current debates, however, empirical research on greed is rather sparse. We argue that the major impediment for empirical studies is the difficulty to distinguish greed from selfishness. To overcome this methodological problem, we propose a modified version of the classic dictator game which allows us to unambiguously distinguish greed from other forms of self-centered behavior in an experimental environment. Building on the notion of greed as a selfish and excessive desire for more than is needed, we introduce an artificial point of material satiation. We find that greed is indeed observable under laboratory conditions and that it is even one of the predominant behavioral motives. We also find that feelings of entitlement significantly increase the frequency of greedy behavior. Further, our results indicate that feelings of social obligation have no impact on the proportion of greedy behavior. |
| Keywords: | Experimental economics, greed, entitlement |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2016-27&r=exp |
| By: | Bruno Crepon; Julie Pernaudet |
| Abstract: | Disadvantaged youth are particularly at risk of under-investing in their health. Costs of healthcare and bias in health needs perceptions are likely to be key factors of underinvestment. Relying on a randomized experiment, we find that providing them with personalized information both on public health insurance and on their health status based on a medical diagnosis raises their curative and preventive investments. More specifically, they are more likely to consult a psychologist and to use contraception, while depression and risky sexual behaviors are key issues in this population. In order to distinguish between the two barriers, financial constraints and underestimation of health needs, we also test a program providing information on public health insurance only. This limited program improves their medical coverage in the same way as the combined program, but it does not translate into higher health investments. These findings highlight the importance of taking into account the role of subjective perceptions of health needs when considering health decisions among disadvantaged youth. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00558&r=exp |
| By: | Travis J. Lybbert; Bruce Wydick |
| Abstract: | Work in positive psychology decomposes hope into aspirations, agency, and pathways. Operating in the context of an economic model developed with this framework, we review the literature on hope from philosophy, theology, psychology, and its relationship to emerging work on aspirations in development economics. We then present one-month follow-up results from an experimental study based on a hope intervention in Oaxaca, Mexico among 601 indigenous women with access to microfinance loans. Our early experimental results suggest that the intervention raised aspirations approximately a quarter of a standard deviation, significantly raised a hope index among the treated subjects, and had positive but statistically insignificant results on enterprise revenues and profits. |
| JEL: | O12 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22661&r=exp |
| By: | Jie Bai |
| Abstract: | There is often a lack of reliable high quality provision in many markets in developing countries. I designed an experiment to understand this phenomenon in a setting that features typical market conditions in a developing country: the retail watermelon market in a major Chinese city. I begin by demonstrating empirically that there is substantial asymmetric information between sellers and buyers on sweetness, the key indicator of quality for watermelons, yet sellers do not sort and price watermelons by quality. I then randomly introduce one of two branding technologies into 40 out of 60 markets-one sticker label that is widely used and often counterfeited and one novel laser-cut label. I track sellers' quality, pricing and sales over an entire season and collect household panel purchasing data to examine the demand side's response. I find that laser branding induced sellers to provide higher quality and led to higher sales profits, establishing that reputational incentives are present and can be made to pay. However, after the intervention was withdrawn, all markets reverted back to baseline. To rationalize the experimental findings, I build an empirical model of consumer learning and seller reputation. The structural estimates suggest that consumers are hesitant to upgrade their perception about quality under the existing branding technology, which makes reputation building a low return investment. While the new technology enhances consumer learning, the resulting increase in profits is not sufficient to cover the fixed cost of the technology for small individual sellers. Counterfactual analysis shows that information frictions and fragmented markets lead to significant under-provision of quality. Third-party interventions that subsidize initial reputation building for sellers could improve welfare. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00540&r=exp |
| By: | Heimbach, Irina |
| Abstract: | This dissertation studies the effects of sharing mechanisms and content characteristics on social sharing processes. Social sharing describes any exchange of resources available in a social system (news, products, ideas, behaviors, etc.). The dissertation consists of four empirical studies, each addressing a different research question. The first empirical project focuses on the effects of user control over the sharing process, preservation of user’s privacy, and symbolic expressions of self-focus. The results from a laboratory experiment and two field studies reveal that content sharing is negatively affected by sharing mechanisms that allow greater control over the sharing process, aim to preserve the user’s privacy and express a self-focus. The second research project investigates how the sharing mechanisms which allow the non-disclosure of the users’ identity impact social sharing. The results show that content related to controversial topics are less likely to be shared on Facebook, whereas they are actively discussed on discussion boards. The third research project analyzes how the payment of incentives influences the social sharing. The results of three field experiments show that the payment of incentives increases the number of consumer reviews. Moreover, paid customers write less positive reviews and are less willing to make recommendations to their peers. The last study explores whether positive or negative content is shared with peers. The results show that the relationship between content’s positivity and its virality follows an inverted U-shape. |
| Date: | 2016–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:83318&r=exp |
| By: | Andris Saulitis |
| Abstract: | This paper examines the extent to which a noncompliant debtor can be induced to pay back the debt by sending a randomly assigned message via mobile phone and e-mail, ranging from a simple reminder to personalized messages and a social norm. In cooperation with a debt-collector enterprise in Latvia, the field experiment was carried out on 24,781 unique cases of consumer debts with unpaid liabilities, ranging from one to 40,060.26 euros. Overall, sending a message to a debtor increases compliance in comparison of not sending a message at all. However, messages, which include debtor's name, agent's name or social norm, do not increase compliance in comparison to a simple reminder message. I also looked at the interaction effect between the content of the message and the debt amount, which has been hardly examined in previous experiments on compliance. Messages with a debtor's name significantly increase compliance in comparison to a simple reminder among the debts smaller than 170 euros. However, such a message is counter-effective for debts larger than 1,340 euros, the same trend is true for a message with the social norm. Hence, a different policy needs to be applied to the debtors who are extensively overindebted in comparison to those with comparatively small debt amounts. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00567&r=exp |
| By: | Baghestanian, Sascha; Massenot, Baptiste |
| Abstract: | This paper reports that credit cycles emerged in laboratory economies that were not hit by aggregate shocks and in which information about fundamentals was perfect. This main result is in our view puzzling because standard theories predict that no cycles should have occurred in such a basic environment. Subjects could borrow funds in the credit market to invest in the risky project. The equilibrium interest rate equalized credit demand and supply. Among other behavioral biases, we observe that subjects increased their credit demand when they made larger losses in the previous period, consistent with a break-even motive. We find that a simple model of investment enriched with this motive can predict a credit cycle. We also show that the market environment plays a crucial role for the emergence of the cycle, which suggests that markets amplify rather than eliminate irrationality. Overall, our work implies that not only fundamental but also psychological factors can play a role in the emergence of fluctuations in financial markets. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:104r&r=exp |
| By: | Eizo Akiyama (Faculty of Engineering, Information and Systems, University of Tsukuba - University of Tsukuba); Nobuyuki Hanaki (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Ryuichiro Ishikawa (Faculty of Engineering, Information and Systems, University of Tsukuba - University of Tsukuba) |
| Abstract: | To what extent is the observed mispricing in experimental asset markets caused by strategic uncertainty and by confusion? We address this question by comparing subjects' initial price forecasts in two market environments: one with six human traders, and the other with one human and five computer traders. We find that both strategic uncertainty and confusion contribute equally to the median initial forecast deviation from the fundamental value. The effect of strategic uncertainty is greater for subjects with a perfect score in the Cognitive Reflection Test, and it is not significant for those with low scores. |
| Keywords: | Asset markets, Computer traders, Cognitive Reflection Test,Bounded rationality, Strategic uncertainty, Experiment |
| Date: | 2016–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01294917&r=exp |
| By: | Morone, Andrea; Nuzzo, Simone |
| Abstract: | We investigate, by mean of a lab experiment, a market inspired by two strands of literature on one hand we have herd behaviour in non-market situations, and on the other hand aggregation of private information in markets. The former suggests that socially undesirable herd behaviour may result when information is private; the latter suggests that socially undesirable behaviour may be eliminated through the market. As the trading mechanism might be a compounding factor, we investigate two kinds of market mechanism: the double auction, where bids, asks and trades take place in continuous time throughout a trading period; and the clearing house, where bids and asks are placed once in a trading period, and which are then cleared by an aggregating device. As a main result, this paper shows that double auction markets are, in several instances, superior to clearing house markets in terms of informational efficiency. Moreover, the employed trading institutions do not exhibit significant differences in both market volume and price volatility. |
| Keywords: | Experimental Markets; Market Efficiency; Double Auction; Clearing House |
| JEL: | C91 D02 G14 |
| Date: | 2016–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74322&r=exp |
| By: | Morone, Andrea; Nuzzo, Simone |
| Abstract: | We investigate, by mean of a lab experiment, a market inspired by two strands of literature on one hand we have herd behaviour in non-market situations, and on the other hand aggregation of private information in markets. The former suggests that socially undesirable herd behaviour may result when information is private; the latter suggests that socially undesirable behaviour may be eliminated through the market. As the trading mechanism might be a compounding factor, we investigate two kinds of market mechanism: the double auction, where bids, asks and trades take place in continuous time throughout a trading period; and the clearing house, where bids and asks are placed once in a trading period, and which are then cleared by an aggregating device. As a main result, this paper shows that double auction markets are, in several instances, superior to clearing house markets in terms of informational efficiency. Moreover, the employed trading institutions do not exhibit significant differences in both market volume and price volatility. |
| Keywords: | Experimental Markets,Market Efficiency,Double Auction,Clearing House |
| JEL: | C91 D02 G14 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:146917&r=exp |
| By: | Santosh Anagol; Tarun Ramadorai; Vimal Balasubramaniam |
| Abstract: | Winners of randomly assigned initial public offering (IPO) lottery shares are significantly more likely to hold these shares than lottery losers 1, 6, and even 24 months after the random allocation. This effect persists in samples of wealthy and highly active investors, suggesting along with additional evidence that this type of "endowment effect" is not solely driven by portfolio inertia or wealth effects. The effect decreases as experience in the IPO market increases, but persists even for the most experienced investors. These results suggest that agents' preferences and/or beliefs about an asset are not independent of ownership, providing field evidence derived from the behavior of 1.5 million Indian stock investors which is in line with the large laboratory literature documenting endowment effects. We evaluate the extent to which prominent models of endowment effects and/or investor behavior can explain our results. A combination of inattention and non-standard preferences (realization utility) or non-standard beliefs (salience based probability distortions) appears most consistent with our findings. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00551&r=exp |
| By: | Christel Vermeersch; Pablo Celhay; Paul Gertler; Paula Giavagnoli |
| Abstract: | We show that fixed costs of adjustment as opposed to low returns likely explain why better quality care practices diffuse slowly in the medical industry. Using a randomized field experiment conducted in Argentina, we find that temporary financial incentives paid to health clinics for the early initiation of prenatal care 'nudged' providers to test and develop new data driven strategies to locate and encourage likely pregnant women to seek care in the first trimester of pregnancy. These innovations raised the rate of early initiation of prenatal care by 34% while the incentives were being paid in the treatment period. We follow health clinics over time and find that this increase persisted for at least 24 months after the incentives ended. In the absence of incentives, even though it is in the clinics' interest to stimulate early initiation of care, the presence of hard to change habits and cost of experimentation made it too expensive to develop and implement new methods to increase early initiation of care. Despite the large increases in early initiation of prenatal care, we find no effects on health outcomes. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00537&r=exp |
| By: | Rosemarie Nagel; Christoph Bühren; Björn Frank |
| Abstract: | We draw an unusually detailed picture of a discovery, the beauty contest game - with Hervé Moulin as the center of the initial inspiration. Since its inception, the beauty contest game and the descriptive level k model has widely contributed to the growth of experimental and behavioral economics and expanded also to other areas within and outside of economics. We illustrate, in particular, the recent interaction between macro theorists and experimenters, who independently had worked on the puzzles and consequences due to beauty contest features. Furthermore, we introduce a new variety of the two-person beauty contest game with two different payoff structures that leads to different game-theoretic properties unperceived by naïve subjects and game theory experts alike. |
| Keywords: | Keynes, Beauty Contest Games, History, Level k, Micro-, Macro-, Neuro-Economic Experiments. |
| JEL: | C9 D84 D87 E12 N1 N80 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1539&r=exp |
| By: | Elizabeth Lyons |
| Abstract: | Remote and short-term work arrangements are increasingly common despite the limited incentives they provide for acquiring firm-specific knowledge. This paper examines the importance and cost-effectiveness of firm-specific training for remote contract workers using evidence from a field experiment conducted in an East African insurance firm that offers two-month employment contracts for its salespeople. Findings show that firm-specific training significantly increases firm revenue, but that this effect is concentrated among higher ability workers. Training has no impact on worker retention, and offering workers financial or competitive input-based incentives has no impact on these findings, or on observed worker investment in firm-specific training. These results demonstrate that high ability temporary workers may be willing to invest in firm-specific human capital without additional incentives, and that firm performance is significantly improved as a result. Implications for temporary work contracts are discussed. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00572&r=exp |
| By: | Hackethal, Andreas; Jakusch, Sven Thorsten; Meyer, Steffen |
| Abstract: | Microeconomic modeling of investors behavior in financial markets and its results crucially depends on assumptions about the mathematical shape of the underlying preference functions as well as their parameterizations. With the purpose to shed some light on the question, which preferences towards risky financial outcomes prevail in stock markets, we adopted and applied a maximum likelihood approach from the field of experimental economics on a randomly selected dataset of 656 private investors of a large German discount brokerage firm. According to our analysis we find evidence that the majority of these clients follow trading pattern in accordance with Prospect Theory (Kahneman and Tversky (1979)). We also find that observable sociodemographic and personal characteristics such as gender or age don't seem to correlate with specific preference types. With respect to the overall impact of preferences on trading behavior, we find a moderate impact of preferences on trading decisions of individual investors. A classification of investors according to various utility types reveals that the strength of the impact of preferences on an investors' rading behavior is not connected to most personal characteristics, but seems to be related to round-trip length. |
| Keywords: | Utility Theory,Maximum Likelihood,Individual Investors |
| JEL: | C35 C51 C52 G02 G11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:147&r=exp |