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on Experimental Economics |
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Issue of 2016‒10‒30
seventeen papers chosen by |
| By: | Yoshio Kamijo (School of Economics and Management, Kochi University of Technology); Teruyuki Tamura (School of Economics and Management, Kochi University of Technology) |
| Abstract: | This study examines whether attitudes toward risk and altruism are affected by being in a group or being alone. Subjects in our experiment were requested only to show their faces to other members without any further communication, differing from previous studies. In experiments of both anonymous investments and donations, we found that subjects who made decisions in a group offered significantly lower amounts than individuals who made decisions alone, even controlling for individuals' risk and altruistic preferences. Our results indicate that people are more risk averse and self-interested when they are in a group. |
| Keywords: | Group decision, Altruism, Decision under risk |
| JEL: | C91 C92 D81 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2016-12&r=exp |
| By: | Marie Boltz (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Karine Marazyan (IEDES); Paola Villar (INED - Institut national d'études démographiques, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics) |
| Abstract: | Informal redistribution play a preponderant role in individual risk management in developing economies. However, strategies to reduce the pressure to redistribute are rather widespread and often costly, while under-explored in the economic literature. In this paper, we identify the potentially distortionary effects of informal redistribution on individual resource allocation choices, through exogenous variations on one hand of the share of unobservable income and on the other hand, of the pool of observers. For this, we conducted an original experiment combining both a lab-in-the-field and a randomized controlled trial in poor urban communities in Senegal on a randomly selected sample. A first contribution of the paper is to elicit in the lab the willingness-to-pay to hide one’s lab lottery gains from kin and neighbors. Second, we estimate the impact of the non-observability of this windfall income on resource allocation decisions of participants out of the lab. We find a high willingness-to-pay for hiding: 65% of subjects prefer to receive their gains in private rather than in public and among them, they are ready to forgo on average 14.3% of their unobserved income for the privacy option. Also, we find that the determinants of the willingness-to-pay to hide income while correlated with redistributive pressure differ across gender. Moreover, while lottery public winners are found to spend 22% of their windfall income on transfers to kin, lottery private winners showing preferences for hidden income transfer 24% less and reallocate this extra money in health and private expenditures. |
| Keywords: | informal redistribution,income observability,intra-family resource allocations,lab experiment in the field,Sub-Saharan Africa |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01157710&r=exp |
| By: | Hisaki Kono (Faculty of Economics, Kyoto University); Yasuyuki Sawada (Faculty of Economics, The University of Tokyo); Abu S. Shonchoy (New York University and Institute of Developing Economies) |
| Abstract: | In contrast to the remarkable improvement in basic education globally, access to higher education remains limited in many developing countries, particularly in rural areas where the quantity and quality of supply is inadequate. In this study, we evaluate a unique DVD-based distance-learning program, targeting students who aim to take university entrance exams in rural Bangladesh, by conducting two experiments: one to evaluate the impact of the program and the second to examine its price sensitivity. Our findings demonstrated that the DVD program had a considerable positive effect on the probability of students passing entrance exams. This effect does not depend on students’ cognitive scores, but does depend on non-cognitive attributes―particularly self-control abilities―indicating the importance of a commitment mechanism in applying the DVD program. In the second experiment, we offered a randomized subsidy to interested participants; however, price sensitivity was not correlated with students' socio-economic status, suggesting that imposing a cost for such a program may not disproportionately exclude poor students. We also found evidence that a higher price induced a greater attendance rate due to the sunk cost effect. |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2016cf1027&r=exp |
| By: | Seeun Jung (ESSEC Business School - Essec Business School, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Radu Vranceanu (Economics Department - Essec Business School) |
| Abstract: | This paper reports results from a real-e ort experiment in which men and women are paired to form a two-member team and asked to execute a real-eff ort task. Each participant receives an equal share of the team's output. Workers who perform better than their partner can punish him/her by imposing a fi ne. We manipulate the teams' gender composition (man-man, man-woman, and woman-woman) to analyze whether an individual's performance and sanctioning behavior depends on his/her gender and the gender interaction within the team. The data show that, on average, men perform slightly better than women. A man's performance will deteriorate when paired with a woman, while a woman's performance will improve when paired with a woman. When underperforming, women are sanctioned more often and more heavily than men; if sanctioned, men tend to improve their performance, while women's performance does not change. |
| Keywords: | Gender studies,Real-e ort task,Team production,Performance,Punishment,Discrimination |
| Date: | 2015–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01171161&r=exp |
| By: | Elise Huillery (ECON - Département d'économie - Sciences Po); Juliette Seban (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Performance-based financing becomes a common strategy to improve health sector quality. The findings of this paper imply that performance-based financing should take motivational effects and levels of provider capacity into account. Using a field experiment in the Democratic Republic of Congo, we find that financial incentives led to more effort from health workers on rewarded activities, without deterring effort on non-rewarded activities. We also find a shift from intrinsic to extrinsic motivation. Finally, the increased effort by health workers proved unsuccessful and led to a reduction in revenue, suggesting that health workers lacked the capacity to develop appropriate strategies to perform. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01071880&r=exp |
| By: | Morone, Andrea; Temerario, Tiziana |
| Abstract: | We analysed dyads strategies in one-shot public goods game. By means of a laboratory experiment, using a variant of the strategy-method, we found that more than one third of the dyads are conditional cooperators, whereas 18% can be categorised as free riders. |
| Keywords: | Voluntary contributions; Conditional cooperation; Free riding; Strategy-method; Experiments; |
| JEL: | C91 C92 H41 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74732&r=exp |
| By: | Bjerk, David J. (Claremont McKenna College) |
| Abstract: | This paper uses a laboratory experiment to explore individuals' motivations for redistribution. The laboratory results show that as income uncertainty diminishes, participants become more extreme in their preferences for redistribution. The findings suggest that for most people, the motivation for redistribution is financial self-interest – namely as insurance against future bad luck – rather than furthering equity. However, a non-negligible group of participants propose redistribution levels inconsistent with financial self-interest, where this group is primarily made up of those with the least to lose financially from making such a proposal, and the size of this group increases when participants can communicate prior to proposing. Survey data from the National Longitudinal Survey of Youth and General Social Survey show that these experimental findings may help shed light on the way preferences for redistribution evolve with age in the real world. |
| Keywords: | redistribution, laboratory experiment, veil of ignorance, progressive taxation |
| JEL: | H2 D3 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10259&r=exp |
| By: | Wälde, Klaus (University of Mainz); Moors, Agnes (KU Leuven) |
| Abstract: | Positive and negative feelings were central to the development of economics, especially in utility theory in classical economics. While neoclassical utility theory ignored feelings, behavioral economics more recently reintroduced feelings in utility theory. Beyond feelings, economic theorists use full-fledged specific emotions to explain behavior that otherwise could not be understood or they study emotions out of interest for the emotion itself. While some analyses display a strong overlap between psychological thinking and economic modelling, in most cases there is still a large gap between economic and psychological approaches to emotion research. Ways how to reduce this gap are discussed. |
| Keywords: | emotions, decision making, theory |
| JEL: | A12 B0 D03 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10261&r=exp |
| By: | Simon Burgess; Robert Metcalfe; Sally Sadoff |
| Abstract: | We analyze the impact of incentivizing students’ effort during the school year on performance on high-stakes assessments in a field experiment with 63 low-income high schools and over 10,000 students. We contribute to the literature on education incentives by incentivising inputs rather than output, by focusing on high stakes outcomes, and by comparing financial and non-financial rewards. We take advantage of our large sample and rich data to explore heterogeneity in the effects of incentives, and identify a “right tail” of underperforming students who experience a significant impact on high stakes assessments. Among students in the upper half of the distribution of incentive effectiveness, exam scores improve by 10% to 20% of a standard deviation, equal to about half the attainment gap between poor and non-poor students. |
| Date: | 2016–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:16/678&r=exp |
| By: | Glenn Dutcher; Daniela Glätzle-Rützler; Dmitry Ryvkin |
| Abstract: | Contests are meant to attract the best performers and incentivize high effort, however, they may also attract cheaters who try to win via illicit means which crowds out the best performers. We use a laboratory experiment to explore the role of self-selection in contests with a possibility of lying in a real effort task. Contrary to common wisdom, we do not find evidence that contests disproportionately attract intrinsic cheaters. However, we find that contests fail at selecting the best performers, as no difference is observed in the actual or perceived ability of those who selected into the contest versus those who selected into a comparable noncompetitive pay scheme. Classification-JEL: D02, K42, M52, C90 |
| Keywords: | contest, cheating, entry, experiment |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2016-29&r=exp |
| By: | Armin Falk; Fabian Kosse; Ingo Menrath; Pablo E. Verde; Johannes Siegrist |
| Abstract: | This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative panel data. In a simple principal-agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents' heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control, and which has been shown to predict coronary heart disease in the long-run. Our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using observational data from a large representative panel data set. Complementary to our experimental findings we show a strong and significant negative association between unfair pay and health outcomes, in particular cardiovascular health. |
| Keywords: | Fairness, social preferences, inequality, heart rate variability, health, experiments, SOEP |
| JEL: | C91 D03 D63 I14 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp870&r=exp |
| By: | Adrien Bouguen (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Deon Filmer (Banque Mondiale - Centre de recherche de la Banque Mondiale - Banque Mondiale); Karen Macours (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Sophie Naudeau (Banque Mondiale - Centre de recherche de la Banque Mondiale - Banque Mondiale) |
| Abstract: | Interventions targeting early childhood development hold promise for increasing human capital and reducing the intergenerational transmission of poverty. This paper presents results from a randomized evaluation of a preschool construction program in Cambodia, and suggests caution. The overall impact of the program on early childhood outcomes was small and statistically insignificant. For the cohort with highest program exposure, the impact on cognitive indicators was negative; with the largest negative effects among children of poorer and less educated parents. The results are consistent with frequent underage enrollment in primary school in the absence of preschools, stricter enforcement of the minimum age for primary school entry after the intervention, substitution between primary and preschool following intervention, and difference in demand responses to the new preschools between more and less educated parents. The results show that contextual and program specifics, and behavioral responses, can potentially lead to perverse effects of programs. |
| Keywords: | Poverty and inequality,Parental involvement,Preschool and kindergarten,cognitive development |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01090361&r=exp |
| By: | Rommel, Jens; Hermann, Daniel; Müller, Malte; Mußhoff, Oliver |
| Abstract: | Farmers face many risks in economic decision-making. Therefore, understanding farmers’ risk attitudes is important to support decision-making and policy. Economic experiments have become popular to elicit farmers’ risk preferences. However, previous research is inconclusive about the power of simple lotteries or survey questions to predict actual behavior of farmers. In this paper, we experimentally compare the predictive power of four different lottery tasks. In a 2 x 2 full factorial experimental design, we compare the effect of framing the task in an agricultural context vs. an abstract task, as well as the effect of incentivizing the lottery vs. not using monetary incentives. We also introduce three survey items that ask respondents to rank their risk attitude in different domains. We compare these measures against a benchmark of actual risk management instruments farmers are using. An incentivized lottery without contextual framing triggers most risk-seeking behavior among farmers. However, all four lotteries and three survey-based measures correlate only poorly with the use of actual risk management instruments such as hail insurance. Our findings cast doubt on the predictive power of commonly used risk elicitation instruments. Additional methods are necessary to establish greater external validity in the elicitation of farmers’ risk attitudes. |
| Keywords: | Experimental economics, external validity, farmers, risk attitudes., Farm Management, Risk and Uncertainty, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi16:244759&r=exp |
| By: | Nobuyuki Hanaki (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Nicolas Jacquemet (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)); Stéphane Luchini (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Adam Zylbersztejn (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | How is one's cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple 2 × 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive abilities are more sensitive to strategic uncertainty than those with lower cognitive abilities. |
| Keywords: | strategic uncertainty,robot,bounded rationality,experiment |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01095897&r=exp |
| By: | Damien Bol (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); André Blais (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Antonin Macé (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales) |
| Abstract: | We know that electoral systems have an effect on the number of competing candidates. However, a mystery remains concerning the impact of majority runoff. According to theory, the number of competing candidates should be equal (or only marginally larger) under majority runoff than under plurality. However, in real-life elections, this number is much higher under majority runoff. To provide new insights on this puzzle, we report the results of a laboratory experiment where subjects play the role of candidates in plurality and majority runoff elections. We use a candidate-only and sincere-voting model to isolate the effect of the electoral system on the decision of candidates to enter the election. We find very little difference between the two electoral systems. We thus re-affirm the mystery of the number of competing candidates under majority runoff. |
| Keywords: | Electoral System |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01168722&r=exp |
| By: | Eggert, Håkan (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Department of Economics, School of Business, Economics and Law, Göteborg University); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper investigates trust among stakeholders in fisheries management. We asked the general public, environmental bureaucrats, and recreational and commercial fishers whether they believed various stakeholders have sufficient knowledge to take a stance regarding fisheries management issues in a choice experiment they themselves had just been exposed to. We found that the general public and recreational fishers tend to trust bureaucrats to have sufficient knowledge, while bureaucrats distrust the general public. The commercial fishers in our sample deviate from the other respondents with high self-trust and low trust in both the general public and bureaucrats. In addition, bureaucrats tend to think that their colleagues are more knowledgeable than them. When looking at observable characteristics, we find that, regardless of comparison group, males show higher trust in their own knowledge than do females, and those with higher education believe they are more knowledgeable than people in general. |
| Keywords: | Trust; Fisheries Management; Overconfidence; Choice experiment |
| JEL: | Q22 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0675&r=exp |
| By: | David Freeman (Simon Fraser University) |
| Abstract: | This paper proposes a novel way of distinguishing whether a person is naïve or sophisticated about their own dynamic inconsistency using only their task completion behaviour. I show that adding an extra opportunity to complete the task that goes unused can lead a naïve (but not a sophisticated) person to complete it even later, and can lead a sophisticated (but not a naïve) person to complete the task even earlier. These results provide the framework for revealing the preference and sophistication types studied in O’Donoghue and Rabin (1999) from behaviour in a generalization of their environment. |
| Keywords: | sophistication, naïveté, procrastination, preproperation, task completion, present bias, time inconsistency |
| JEL: | D03 D84 D90 |
| Date: | 2016–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp16-11&r=exp |