nep-exp New Economics Papers
on Experimental Economics
Issue of 2016‒12‒11
29 papers chosen by

  1. Dynamic Incentive Effects of Team Formation: Experimental Evidence By Gall, Thomas; Hu, Xiaocheng; Vlassopoulos, Michael
  2. Regular Information and Health: Evidence from a Field Experiment with Undergraduate Students. By Marianne Bernatzky; José María Cabrera; Alejandro Cid
  3. Funding conservation locally: Insights from behavioral experiments in Indonesia By Nelson, Katherine M.; Schlüter, Achim; Vance, Colin
  4. That's my turf: An experimental analysis of territorial use rights for fisheries in Indonesia By Gallier, Carlo; Langbein, Jörg; Vance, Colin
  5. The Effect of Early Education on Social Preferences By Alexander W. Cappelen; John A. List; Anya Samek; Bertil Tungodden
  6. Race and Gender Affinities in Voting: Experimental Evidence By Jeffrey Penney; Erin Tolley; Elizabeth Goodyear-Grant
  7. The Effects of Computers on Children's Social Development and School Participation: Evidence from a Randomized Control Experiment By Fairlie, Robert W.; Kalil, Ariel
  8. Physician performance pay: Evidence from a laboratory experiment By Brosig-Koch, Jeannette; Hennig-Schmidt, Heike; Kairies-Schwarz, Nadja; Wiesen, Daniel
  9. Naïve advice in financial decision making: Hidden costs of a free offer By Sprenger, Julia
  10. Using Experiments to Compare the Predictive Power of Models of Multilateral Negotiations By Cary Deck; Charles J. Thomas
  11. The Behavioralist as Policy Designer: The Need to Test Multiple Treatments to Meet Multiple Targets By Robert Hahn; Robert D. Metcalfe; David Novgorodsky; Michael K. Price
  12. The Spillover Effects of Affirmative Action on Competitiveness and Unethical Behavior By Ritwik Banerjee; Nabanita Datta Gupta; Marie Claire Villeval
  13. Foodservice Composting Crowds out Consumer Food Waste Reduction Behavior in a Dining Experiment By Qi, Danyi; Roe, Brian E.
  14. Framing, Expectations and Reference Points By Oliver März
  15. Older Peoples’ Willingness to Delay Social Security Claiming By Raimond Maurer; Olivia S. Mitchell
  16. Disability Discrimination in the Rental Housing Market – A Field Experiment on Blind Tenants By Fumarco, Luca
  17. Loss Aversion and lying behavior: Theory, estimation and empirical evidence By Ellen Garbarino; Robert Slonim; Marie Villeval
  18. Can Cash Transfers Help Households Escape an Inter-Generational Poverty Trap? By Maria Caridad Araujo; Mariano Bosch; Norbert Schady
  19. Gain and loss of money in a choice experiment. The impact of financial loss aversion and risk preferences on willingness to pay to avoid renewable energy extarnalities. By Anna Bartczak; Susan Chilton; Mikołaj Czajkowski; Jürgen Meyerhoff
  20. Stereotypes of physical appearance and labor market chances By Arai, Mahmood; Gartell, Marie; Rödin, Magnus; Özcan, Gülay
  21. Behavior Change for Early Childhood Nutrition: Effectiveness of Health Worker Training Depends on Maternal Information in a Randomized Control Trial By Singh, Prakarsh; Masters, William A.
  22. (Non)Randomization: A Theory of Quasi-Experimental Evaluation of School Quality By Yusuki Narita
  23. Can Artificial Intelligence Heal Human Hearts? A randomized controlled trial on the effects of internet cognitive behavioral therapy with artificial intelligence on depression (Japanese) By SO Mirai; SEKIZAWA Yoichi; TAKEBAYASHI Yoshitake
  24. Studying science: the impact of school curriculum on degree choice By Marta De Philippis
  25. On a way to overcome strategic overbidding in open-ended stated preference surveys: A recoding approach By Ewa Zawojska; Pierre-Alexandre Mahieu; Romain Crastes; Jordan Louviere
  26. Guilt in Voting and Public Good Games By Dominik Rothenhaüsler; Nikolaus Schweizer; Nora Szech
  27. The value of vulnerability The transformative capacity of risky trust By Luigino Bruni; Fabio Tufano
  28. Equity versus Equality By Konow, James; Saijo, Tatsuyoshi; Akai, Kenju
  29. The Demand for Season of Birth By Damian Clarke; Sonia Oreffice; Climent Quintana-Domeque

  1. By: Gall, Thomas (University of Southampton); Hu, Xiaocheng (University of Southampton); Vlassopoulos, Michael (University of Southampton)
    Abstract: Optimal team composition has been the focus of exhaustive analysis, academic and otherwise. Yet, much of this analysis has ignored possible dynamic effects: e.g., anticipating that team formation is based on prior performance will affect prior performance. We test this hypothesis in a lab experiment with two stages of a real effort task. Participants first work individually without monetary incentives and are then assigned to teams of two where compensation is based on team performance. Our results are consistent with a simple investment-cum-matching model: pairing the worst performing individuals with the best yields 20% lower first stage effort than random matching. Pairing the best with the best, however, yields 5% higher first stage effort than random matching. In line with the theory the latter result is more pronounced when the task has less scope for learning-by-doing. Moreover, pairing the best with the best achieves the same effort response as having explicit monetary incentives in the first stage.
    Keywords: matching, team formation, performance, dynamic incentives
    JEL: C78 C91 M54
    Date: 2016–11
  2. By: Marianne Bernatzky; José María Cabrera; Alejandro Cid
    Abstract: We run a randomized controlled trial with the aim of evaluating the effects of a health seminar complemented with weekly reminders on health outcomes. Our research design exploits the excess of applicants over the intervention capacity. In this 4-month intervention with undergraduate students, we provide information on preventive behaviors and healthy habits and on how to modify personal behaviors that could derive in chronical illnesses. We find that all students who were subject to the treatment improved their knowledge relative to the control group. But they were not able to translate it into healthier behaviors, neither self-reported nor objectively measured by a physician. We hypothesize that high discount rates, overconfidence and the lack of complementary inputs may explain our findings.
    Keywords: randomized trial; exercise; healthy habits; text message
  3. By: Nelson, Katherine M.; Schlüter, Achim; Vance, Colin
    Abstract: Proximate stressors such as destructive fishing are key drivers of coral reef degradation. Conservation strategies that marshal local action and are tailored to the preferences of the target group are thus needed to sustain coral resources. We experimentally analyze the behavior of marine resource users in a coastal village in Indonesia to gain insight into whether people prefer to donate time or money to environmental or other charitable causes. Each person is subject to one of four treatments: monetary donation, monetary donation match, volunteer time donation, and volunteer time donation match. Contrasting with the existing literature, we find that participants give significantly more when donating money compared to time. We also find that matching donations increases the percent of people giving but does not increase the amount donated. This research furthers our understanding of what motivates resource users in a developing country to contribute to the provision of public goods.
    Abstract: Schädliche Fischerei und Zerstörung von natürlichen Ressourcen im Meeresraum sind entscheidende Faktoren für den Verfall von Korallenriffen. Es werden daher Umweltschutzmaßnahmen benötigt, die auf die Präferenzen von Ortsansässigen abgestimmt sind und darauf abzielen sie zum Handeln zu bewegen. Dafür implementieren wir ein Experiment in einem Dorf an der Küste in Indonesien, welches das Verhalten von Fischern analysiert. Wir untersuchen, ob Leute es bei Umweltschutz oder anderen gemeinnützigen Projekten eher bevorzugen, Zeit oder Geld zu spenden. Jeder Teilnehmer wird dabei einer von vier Treatment-Gruppen zugeteilt: Geldspende, Geldspende, die von uns verdoppelt wird, ehrenamtliche Tätigkeit, bzw. ehrenamtliche Tätigkeit, die verdoppelt wird. Im Unterschied zu existierender Literatur finden wir, dass Teilnehmer signifikant mehr spenden, wenn es um Geld geht, als wenn es um ihre eigene Zeit geht. Wir finden außerdem, dass, wenn wir die Spenden verdoppeln, dies zwar den Anteil der Personen erhöht, die überhaupt etwas spenden, aber nicht die gespendete Gesamtsumme. Diese Studie gibt wichtig Hinweise darauf, wie Ressourcennutzer in Entwicklungsländern motiviert werden können einen Beitrag zur Bereitstellung von öffentlichen Gütern zu leisten.
    Keywords: Behavioral economics,conservation,donation,field experiment,funding,volunteer
    JEL: Q22 Z1
    Date: 2016
  4. By: Gallier, Carlo; Langbein, Jörg; Vance, Colin
    Abstract: We conduct a framed field experiment in Indonesian fishing communities, with an eye towards evaluating the potential of Territorial Use Rights for Fisheries (TURFs) to preserve coral reef fisheries. Conducted in three culturally distinctive sites, the study assembles groups of five fishers who participate in a common-pool resource game. We implement the game with randomly assigned treatments in all sites to explore whether the extraction decision varies according to three recommended non-binding extraction levels originating from (1) a democratic process, (2) a group leader or (3) an external source that recommends a socially optimal extraction level. In one of the sites - that having the highest levels of ethnic and religious diversity - we find that democratic decision-making as well as information originating from outside the community promotes the cooperative behavior that underpins TURFs, a result that is robust to regressions controlling for individual and community attributes.
    Keywords: Framed field experiment,commons dilemmas,coral reefs,self-governance
    JEL: C93 H43 L31 Q32
    Date: 2016
  5. By: Alexander W. Cappelen; John A. List; Anya Samek; Bertil Tungodden
    Abstract: We present results from the first study to examine the causal impact of early childhood education on social preferences of children. We compare children who, at 3-4 years old, were randomized into either a full-time preschool, a parenting program with incentives, or to a control group. We returned to the same children when they reached 7-8 years old and conducted a series of incentivized experiments to elicit their social preferences. We find that early childhood education has a strong causal impact on social preferences several years after the intervention: attending preschool makes children more egalitarian in their fairness view and the parenting program enhances the importance children place on efficiency relative to fairness. Our findings highlight the importance of taking a broad perspective when designing and evaluating early childhood educational programs, and provide evidence of how differences in institutional exposure may contribute to explaining heterogeneity in social preferences in society.
    JEL: C9 C93 D01
    Date: 2016–12
  6. By: Jeffrey Penney (Pontificia Universidad Javeriana); Erin Tolley (University of Toronto); Elizabeth Goodyear-Grant (Queen's University)
    Abstract: We analyze the results of a large-scale experiment wherein subjects participate in a hypothetical primary election and must choose between two fictional candidates who vary by sex and race. We find evidence of affinities along these dimensions in voting behaviour. A number of phenomena regarding these affinities and their interactions are detailed and explored. We find that they compete with each other on the basis of race and gender. Neuroeconomic metrics suggest that people who vote for own race candidates tend to rely more on heuristics than those who do not.
    Keywords: Gender, Prejudice, Race, Voting
    JEL: D72 C90 J15 J16
    Date: 2016–10
  7. By: Fairlie, Robert W. (University of California, Santa Cruz); Kalil, Ariel (University of Chicago)
    Abstract: Concerns over the perceived negative impacts of computers on social development among children are prevalent but largely uninformed by plausibly causal evidence. We provide the first test of this hypothesis using a large-scale randomized control experiment in which more than one thousand children attending grades 6-10 across 15 different schools and 5 school districts in California were randomly given computers to use at home. Children in the treatment group are more likely to report having a social networking site, but also report spending more time communicating with their friends and interacting with their friends in person. There is no evidence that computer ownership displaces participation in after-school activities such as sports teams or clubs or reduces school participation and engagement.
    Keywords: computers, ICT, education, social development, school participation, experiment
    JEL: I20
    Date: 2016–11
  8. By: Brosig-Koch, Jeannette; Hennig-Schmidt, Heike; Kairies-Schwarz, Nadja; Wiesen, Daniel
    Abstract: We present causal evidence from a controlled experiment on the effect of pay for performance on physicians' behavior and patients' health benefits. At a within-subject level, we introduce performance pay to complement either fee-for-service or capitation. Performance pay is granted if a health care quality threshold is reached, and varies with the patients' severity of illness. We find that performance pay significantly reduces overprovision of medical services due to fee-for-service incentives, and underprovision due to capitation; on average, it increases the patients' health benefit. The magnitude of these effects depends, however, on the patients' characteristics. We also find evidence for a crowding-out of patient-regarding behavior due to performance pay. Health policy implications are discussed.
    Abstract: Mit Hilfe eines kontrollierten Experiments präsentieren wir kausale Evidenz zur Wirkung einer leistungsbasierten Vergütung (Pay-for-Performance) auf das Arztverhalten und den Patientennutzen. Auf individueller Ebene führen wir Pay-for-Performance entweder basierend auf einer Einzelleistungsvergütung oder einer Kopfpauschale ein. Die leistungsbasierte Vergütung, die an den Schweregrad der Erkrankung angepasst ist, wird ausgezahlt, sobald die Behandlungsqualität einen bestimmten Schwellenwert erreicht. Wir beobachten, dass Pay-for-Performance die mit der Einzelleistungsvergütung verbundene Überversorgung und die mit der Kopfpauschale verbundene Unterversorgung signifikant reduziert sowie die Patientennutzen im Durchschnitt erhöht. Die Stärke dieser Effekte variiert jedoch mit den Patientencharakteristika. Darüber hinaus finden wir Hinweise darauf, dass Pay-for-Performance Patienten-orientiertes Verhalten verdrängen kann. Implikationen für die Gesundheitspolitik werden diskutiert.
    Keywords: Fee-for-service,capitation,pay for performance,laboratory experiment,crowding-out
    JEL: C91 I11
    Date: 2016
  9. By: Sprenger, Julia
    Abstract: The current study examines individual decision making in the field of personal finance. A laboratory experiment investigates the way näive advice influences the decisionmaking process. When advice is offered on demand, participants prefer expert over näive advice. Although näive advice is only half the price of expert advice, demand for näive advice is negligible. When näive advice is given unsolicited, however, it has nevertheless a strong impact on the decision process by lowering engagement in information acquisition and promoting a passive adoption of the recommended option. While high levels of financial literacy buffer this effect, issuing a warning does not. In case compliance with näive advice leads to a low decision quality and the saving in information acquisition costs does not make up for this effect, the free offer of näive advice produces financial losses. This can be interpreted as hidden costs of free näive advice resulting from a switch in information strategy. People with low financial literacy are most vulnerable to this effect.
    Abstract: Dieses Papier untersucht individuelles Entscheidungsverhalten im Bereich Finanzen. Ein Experiment beleuchtet auf welche Art naiver Rat den Entscheidungsprozess beeinflusst. Wird Rat nur auf Nachfrage erteilt, so bevorzugen die Teilnehmer den Expertenrat gegenüber dem naiven Rat. Obwohl der näive Rat nur halb so teuer ist wie der Expertenrat, ist die Nachfrage nach naivem Rat verschwindend gering. Wird naiver Rat jedoch ungefragt erteilt, hat er dennoch einen starken Einfluss auf den Entscheidungsprozess, denn er senkt das Engagement in der Informationsbeschaffung versträkt die passive Ausrichtung an der empfohlenen Option. Ein hohes Niveau an financial literacy reduziert diesen Effekt, eine Warnung vermag dies dagegen nicht. Falls die Befolgung des naiven Rats zu einer geringen Entscheidungsqalität führt und die Einsparung bei den Kosten der Informationbeschaffung diesen Effekt nicht ausgleichen, führt das Gratisangebot des naiven Rats zu finanziellen Verlusten. Dies kann als versteckte Kosten des frei verfügbaren naiven Rats interpretiert werden, die aus einem Wechsel in der Informationsstrategie resultieren. Menschen mit geringer financial literacy sind besonders anfällig für diesen Effekt.
    Keywords: Financial literacy,financial decision making,experiment,nä,ive advice
    JEL: C91 G02 D83
    Date: 2016
  10. By: Cary Deck (University of Arkansas and Economic Science Institute, Chapman University and University of Alaska-Anchorage); Charles J. Thomas (Chapman University and Clemson University)
    Abstract: We conduct unstructured negotiations in a laboratory experiment designed to empirically assess the predictive power of three approaches to modeling the multilateral negotiations observed in diverse strategic settings. For concreteness we consider two sellers negotiating with a buyer who wants to make only one trade, with the modeling approaches distinguished by whether the buyer negotiates with the sellers sequentially, simultaneously, or in a “take-it-or-leave-it” fashion. Our experiment features two scenarios within which the three approaches have observationally distinct predictions: a differentiated scenario with one highsurplus and one low-surplus seller, and a homogeneous scenario with identical high-surplus sellers. In both scenarios the buyer tends to trade with a high-surplus seller at terms indistinguishable from those in bilateral negotiations with a high-surplus seller, meaning that introducing a competing seller does not affect the observed terms of trade. Our findings match the predictions from the sequential approach, supporting its use in modeling multilateral negotiations.
    Keywords: Negotiations & Bargaining, Laboratory Experiments, Procurement, Mergers & Acquisitions, Personnel Economics, Investment
    JEL: C7 C9 D4 L1
    Date: 2016
  11. By: Robert Hahn; Robert D. Metcalfe; David Novgorodsky; Michael K. Price
    Abstract: We explore Tinbergen’s fundamental insight that policymakers need at least as many policy instruments as targets. We extend this idea using a large natural field experiment in water resource management. We use social comparisons and loss-framed messages to help achieve two goals of our partner utility: getting consumers to purchase drought-resistant plants and reducing water use. Our results show that seemingly related behavioral instruments can affect different household decisions. By themselves, social comparisons and loss framing have no significant impact on the number of rebate requests; when combined, however, they lead to a 36% increase in requests. Only loss framing leads to a significant increase in the purchase of drought-resistant plants, and only the social comparison reduces water consumption. These results highlight the importance of testing different combinations of instruments, particularly when policymakers have multiple goals and the relationship between instruments and goals is uncertain.
    JEL: C93 D12 H41 Q25
    Date: 2016–12
  12. By: Ritwik Banerjee (Indian Institute of Management Bangalore, Bannerghatta Main Road, Bilekahalli, Bengaluru, Karnataka 560076 India); Nabanita Datta Gupta (Department of Economics and Business Economics, Aarhus University and IZA, Bonn. Fuglesangs Allé 4, 8210 Aarhus V, Denmark); Marie Claire Villeval (Univ Lyon, Université Lyon 2, GATE L-SE UMR 5824, F-69342 Lyon, France)
    Abstract: We conduct an artefactual field experiment to examine various spillover effects of Affirmative Action policies in the context of castes in India. We test a) if individuals who compete in the presence of Affirmative Action policies remain competitive in the same proportion after the policy has been removed, and b) whether having been exposed to the policy generates unethical behavior and spite against subjects from the category who has benefited from the policy. We find that these policies increase substantially the confidence of the lower caste members and motivate them to choose significantly more frequently a tournament payment scheme. However, we find no spillover effect on confidence and competitiveness once Affirmative Action is withdrawn: any lower caste’s gain in competitiveness due to the policy is then entirely wiped out. Furthermore, the strong existing bias of the dominant caste against the lower caste is not significantly aggravated by Affirmative Action.
    Keywords: Affirmative Action, castes, competitiveness, unethical behavior, field experiment
    JEL: C70 C91 J16 J24 J31 M52
    Date: 2016
  13. By: Qi, Danyi; Roe, Brian E.
    Abstract: Pressure mounts to address food waste, which deprives hungry people of needed nutrition, depletes resources used to produce food, and accounts for substantial greenhouse gas emissions during production, distribution and disposal. Composting, and other food waste recycling technologies that divert food waste from landfills, mitigate the environmental damages of food waste disposal and grow in popularity. We explore whether consumer knowledge that the environmental damage created by their food waste will be mitigated undermines personal food waste reduction behavior. Subjects in a dining situation are randomly assigned whether or not they receive information about the negative effects of landfilling food waste and whether they are told that uneaten food from the study will be composted or landfilled. We find that providing information about the negative effects of food waste in landfills significantly reduces both the propensity to create any food waste and the total amount of solid food waste created when compared to control subjects. However, if subjects are also informed that food waste from the study will be composted, the propensity to create food waste and the amount of solid food waste generated is similar to control situation which features neither a reduction nor a recycling policy. This suggests a crowding out effect or informational rebound effect in which promoting policies that mitigate the environmental damages of food waste may unintentionally undermine policies meant to encourage individual consumer food waste reduction. We discuss key policy implications as well as several limitations of our experimental setting and analysis.
    Keywords: Food waste, composting, rebound effects, supply chain, policy, economic experiments, crowd-out effect, single-action bias, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, C90, Q18, Q53,
    Date: 2016–11
  14. By: Oliver März
    Abstract: Recent theories of expectation-based reference-dependent preferences offer a structured approach of the formation of reference points, yet do not incorporate important context-specific characteristics. One implicit assumption is that individuals form their reference point as expectations by correctly predicting the probabilistic environment they are facing. In an experimental setup, we demonstrate that a simple change in the framing of a decision problem alters the reference point formation by evoking a different moment of first focus. Apart from providing evidence on the limitations of current theories of expectation-based reference dependence, this paper further offers a theoretical extension that overcomes these limitations and allows reference points to be contingent on contextual effects.
    Keywords: framing; expectations; stochastic reference points; salience effects
    JEL: C91 D81 D84
    Date: 2016–11
  15. By: Raimond Maurer (Goethe University of Frankfurt); Olivia S. Mitchell (The Wharton School of the University of Pennsylvania)
    Abstract: We designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons’ willingness to voluntarily defer claiming of Social Security benefits. In addition we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources, which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46 percent, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or about 10 percent of older households’ income.
    Date: 2016–09
  16. By: Fumarco, Luca
    Abstract: In this study, I show that with the appropriate experimental strategy, a correspondence test can be adapted to investigate disability discrimination in the rental housing market. I focus on discrimination against blind tenants assisted by guide dogs in Italy and obtain very robust results. The utilization of three fictitious household tenants (that is, a married couple, a married couple with a blind wife who owns a guide dog, and a married couple where the wife is normal sighted and owns a pet dog) allows me to investigate whether discrimination is due to the blindness or to the guide dog. I find that apartment owners discriminate blind tenants because of the presence of the guide dog alone. According to the Italian law, this is indirect discrimination, which in the US corresponds to the refusal to provide reasonable accommodation.
    Keywords: Disability; Discrimination; Housing Market; Field Experiment
    JEL: C93 I12 J14 R21
    Date: 2015
  17. By: Ellen Garbarino (The University of Sydney [Sydney]); Robert Slonim (The University of Sydney [Sydney]); Marie Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon)
    Abstract: We theoretically show that agents with loss-averse preferences are more likely to lie to avoid receiving a financially bad outcome the lower the probability of this bad outcome. The increased dishonesty occurs due to the expected payoff increasing as the bad outcome becomes less likely, and hence the greater the loss that can be avoided by lying. We demonstrate robust support for this role of loss aversion on lying by reanalyzing the results from the extant literature covering 74 studies and 363 treatments, and from two new experiments that vary the outcome probabilities and examine lying for personal gain and for gains to causes one supports or opposes. To measure and compare lying behavior across treatments and studies, we develop an empirical method that estimates the full distribution of dishonesty when agents privately observe the outcome of a random process and can misreport what they observed. Abstract: We theoretically show that agents with loss-averse preferences are more likely to lie to avoid receiving a financially bad outcome the lower the probability of this bad outcome. The increased dishonesty occurs due to the expected payoff increasing as the bad outcome becomes less likely, and hence the greater the loss that can be avoided by lying. We demonstrate robust support for this role of loss aversion on lying by reanalyzing the results from the extant literature covering 74 studies and 363 treatments, and from two new experiments that vary the outcome probabilities and examine lying for personal gain and for gains to causes one supports or opposes. To measure and compare lying behavior across treatments and studies, we develop an empirical method that estimates the full distribution of dishonesty when agents privately observe the outcome of a random process and can misreport what they observed.
    Keywords: loss aversion, dishonesty, econometric estimation, experimental economics, lying
    Date: 2016
  18. By: Maria Caridad Araujo; Mariano Bosch (Inter American Development Bank); Norbert Schady (Inter-American Development Bank)
    Abstract: Many poor households in developing countries are liquidity-constrained. As a result, they may under-invest in the human capital of their children. We provide new evidence on the long-term (10-year) effects of cash transfers using data from Ecuador. Our analysis is based on two separate sources of data and two identification strategies. First, we extend the results from an experiment that randomly assigned children under the age of 6 years to “early” or “late” treatment groups. Although the early treatment group received twice as much in total transfers, we find no difference between children in the two groups on performance on a large number of tests. Second, we use a regression discontinuity design exploiting the fact that a “poverty index” was used to determine eligibility for transfers. We focus on children who were just-eligible and just-ineligible for transfers when they were in late childhood, and compare their school attainment and work status 10 years later. Transfers increased secondary school completion, but the effects are small, between 1 and 2 percentage points from a counterfactual school completion rate of 75 percent. We conclude that any effect of cash transfers on the inter-generational transmission of poverty in Ecuador is likely to be modest.
    Keywords: poverty, human capital, liquidity constraints, educational attainment
    JEL: I30 J24 J13 I00
    Date: 2016–11
  19. By: Anna Bartczak (Faculty of Economic Sciences, University of Warsaw; Warsaw Ecological Economics Center); Susan Chilton (Newcastle University Business School); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Jürgen Meyerhoff (Institute for Landscape and Environmental Planning, Technische Universität Berlin)
    Abstract: We examine how the direction of price changes affects the value people place on avoiding renewable energy externalities in Poland. Additionally, we investigate the influence of individuals’ financial loss aversion and financial risk preferences on this valuation. In our study we conduct a choice experiment survey in which respondents’ choices indicate the value they place on avoiding wind, solar, and biomass externalities. We combine this survey with a financial lottery choice task that elicits the respondents’ risk preferences and degree of loss aversion. In the choice experiment we use both increases and decreases in electricity bills to depict the uncertain effect of new sources of energy generation on the current price level. This design allows us to investigate if obtained values are independent of the payment mechanism. In the analyzed context, our results indicate that marginal utility of money seems to be lower with a rebate on the energy bill than with a surcharge. Moreover, financial risk preferences affect people’s choices in a case of a surcharge, while loss aversion for money affects them in the case of a rebate. We find that the more loss averse people are with regard to money, the more they require compensation before they accept externalities from renewable electricity production. In contrast, the more risk seeking people are in a financial domain, the less cost sensitive they are and the more willing they are to pay for proposed changes in renewable electricity generation.
    Keywords: choice experiment, externalities of renewable energy, loss aversion, lottery experiment, marginal utility of money, risk preferences
    JEL: D81 Q20 Q42 Q49 Q51
    Date: 2016
  20. By: Arai, Mahmood (Stockholm University); Gartell, Marie (Swedish public employment services (Arbetsförmedlingen)); Rödin, Magnus (Swedish public employment services (Arbetsförmedlingen)); Özcan, Gülay (Swedish public employment services (Arbetsförmedlingen))
    Abstract: Using an experimental setup involving 436 case workers at the Swedish Public Employment Service (SPES) as subjects and the profile photographs and recorded voices of 75 jobseekers as treatments, we report results indicating that male case workers tend to favor jobseekers perceived as having a stereotypical Swedish appearance when they select candidates to be recommended for labor market programs (LMP). This bias represents a roughly 50-percent greater chance of being selected if you compare the candidate with the highest score with regard to stereotypical Swedish looks (8/10) with the candidate with the lowest score (3/10) in our sample.
    Keywords: discrimination; ethnic discrimination; racial discrimination; stereotypes; noncognitive attributes
    JEL: J15 J70
    Date: 2016–11–22
  21. By: Singh, Prakarsh (Amherst College); Masters, William A. (Tufts University)
    Abstract: We carry out a randomized control trial to test for interaction effects between training state-employed caregivers and providing mothers information to improve nutrition of preschool children aged 2-6 in rural India. Salaried caregivers are supposed to provide a mid-day meal and also advise mothers on health and nutrition for their child. Our one-day caregiver training covered basic health and nutrition facts with advice on how to communicate with mothers for behavior change at home. We find that this training was effective only when we provided the mothers with an independent source of nutrition information, and that the combined treatment was effective only among younger caregivers. Results are consistent with behavior change as a costly investment that is more attractive when done earlier in life, and greater response to information that is confirmed and reinforced from multiple sources.
    Keywords: child underweight, child malnutrition, child health, ICDS, Punjab, South Asia
    JEL: M53 I12 I38 J38
    Date: 2016–11
  22. By: Yusuki Narita (Cowles Foundation, Yale University)
    Abstract: In centralized school admissions systems, rationing at oversubscribed schools often uses lotteries in addition to preferences. This partly random assignment is used by empirical researchers to identify the effect of entering a school on outcomes like test scores. This paper formally studies if the two most popular empirical research designs successfully extract a random assignment. For a class of data-generating mechanisms containing those used in practice, I show: One research design extracts a random assignment under a mechanism if and almost only if the mechanism is strategy-proof for schools. In contrast, the other research design does not necessarily extract a random assignment under any mechanism.
    Keywords: Matching Market Design, Natural Experiment, Program Evaluation, Random Assignment, Quasi-Experimental Research Design, School Eectiveness
    Date: 2016–12
  23. By: SO Mirai; SEKIZAWA Yoichi; TAKEBAYASHI Yoshitake
    Abstract: Background: In spite of recent high expectations of internet-based cognitive behavioral therapy (iCBT), iCBT still holds limitations including effect sustainability, function improvement, and dropout. Therefore, we focused on iCBT-AI in which automatic feedback by text or animation expressing empathy or indicating instruction is given to users with respect to their input after analysis conducted by a natural language processing (NLP) system, which is one area of artificial intelligence (AI). Since there is no evidence of iCBT using AI technology so far, we evaluated its effectiveness. Methods: 1,187 participants recruited from the website were randomly assigned into three groups; iCBT-AI, conventional iCBT without AI, and waitlist as control. Those allocated to interventional arms were encouraged to perform each exercise at least once a week for seven weeks. The primary outcome was moderate-to-severe depression defined as a PHQ-9 score of 10 or higher. Intention-to-treat analyses were performed. Results: The dropout rate was significantly lower in iCBT-AI than iCBT (p Conclusion: Although iCBT-AI has no significant short-term antidepressant effect, iCBT-AI seems to have an exclusive potential to reduce moderate-to-severe depression in the future. Further research is required.
    Date: 2016–11
  24. By: Marta De Philippis
    Abstract: An educational reform in England in 2004 that entitled higher ability school students to take the so-called 'triple science'course contributed a third of the increased share of STEM graduates in England 2005-10. That is the central finding of research by Marta De Philippis, which explores whether greater exposure to science at secondary school can encourage more young people to study for degrees in STEM subjects. She finds that taking more science courses at school does indeed encourage students to enrol in STEM degrees. But the effect of stronger school science preparation on STEM degrees is concentrated among boys.
    Keywords: university education, high school curriculum, stem
    JEL: J16 J24 I28 I21
    Date: 2016–12
  25. By: Ewa Zawojska (Faculty of Economic Sciences, University of Warsaw); Pierre-Alexandre Mahieu (University of Nantes, LEMNA); Romain Crastes (University of Leeds, Centre of Choice Modelling); Jordan Louviere
    Abstract: Stated preference (SP) surveys often use open-ended questions to elicit individuals’ willingness-to-pay values for goods, services, or policy projects. However, an open-ended format may encourage strategic overbidding, and so lead to biased value estimates. We propose a new approach, based on economic theory, to limit strategic overbidding in open-ended SP surveys: prior to the valuation question, respondents are told that their insincere responses will be (unfavourably) recoded as zeros. We develop a theoretical model and verify its predictions in a field SP study. We find that the approach works: respondents aware of subsequent unfavourable recoding of their insincere answers state significantly lower willingness-to-pay values.
    Keywords: stated preferences, contingent valuation, open-ended survey, strategic overbidding, recoding approach
    JEL: C80 D01 D11 D12 D61
    Date: 2016
  26. By: Dominik Rothenhaüsler (Seminar for Statistics, ETH Zurich); Nikolaus Schweizer (Department of Econometrics and OR, Tilburg University); Nora Szech (Karlsruher Institut für Technologie)
    Abstract: This paper analyzes how moral costs affect individual support of morally difficult group decisions. We study a threshold public good game with moral costs. Motivated by recent empirical findings, we assume that these costs are heterogeneous and consist of three parts. The first one is a standard cost term. The second, shared guilt, decreases in the number of supporters. The third hinges on the notion of being pivotal. We analyze equilibrium predictions, isolate the causal effects of guilt sharing, and compare results to standard utilitarian and nonconsequentialist approaches. As interventions, we study information release, feedback, and fostering individual moral standards.
    Keywords: moral decision making, committee decisions, diffusion of responsibility, Shared guilt, being pivotal, division of labor, institutions and morals
    JEL: D02 D03 D23 D63 D82
    Date: 2016–11
  27. By: Luigino Bruni (Department of Economics, Politics and Modern Languages, LUMSA); Fabio Tufano (Department of Economics, University of Nottingham)
    Abstract: The ‘grammar of trust’ is one of the most explored loci in behavioural and experimental economics. This experimental study aims at contributing to the understanding of new dimensions of trust by exploring how risky trust may foster a trustee’s behavioural change. It investigates trustee’s behaviour when the intentional trustor’s risk is both manifestly salient and dependent upon the trustee’s revealed type, namely trustworthy or untrustworthy. The results support the transformative nature of risky trust, which generates more trustworthy and reciprocal behaviour in untrustworthy people.
    Keywords: experiment; gift-exchange game; organization; trust; vulnerability
    Date: 2016
  28. By: Konow, James; Saijo, Tatsuyoshi; Akai, Kenju
    Abstract: How should economic output be distributed among those who created it? An expansive theoretical and empirical literature seeks to answer this fundamental, and controversial, question, which has implications, inter alia, for the structure of wages, redistributive policies and international agreements. Among the possible fairness rules that have been proposed, the primary rivals are equality and equity, whereby the latter refers to allocating in proportion to some measure of individual contributions. This paper reports the results of an experiment conducted in the United States and Japan. It investigates a large variety of factors that might affect preferences for equity and equality, including multiple approaches to examining concepts of culture. We find impersonal third parties, or spectators, exclusively favour equity. Distributive preferences move incrementally toward equality, however, when subjects share personal stakes (i.e., are stakeholders), and even further toward equality, when stakeholder anonymity is lifted. Although the degree of self-interest sometimes differs across countries, these findings about fairness preferences are robust with respect to a wide range of non-ethics variables that seldom matter, including race, income, gender, nationality and culture. We interpret the findings as suggesting that equity is an impersonal (or impartial) rule of fairness, whereas fairness preferences move progressively toward equality with greater proximity, i.e., as relationships become more personal through belonging to a group and being non-anonymous.
    Keywords: fairness, equity, equality, experiments
    JEL: C91 D31 D63
    Date: 2016–12–01
  29. By: Damian Clarke (Universidad de Santiago de Chile); Sonia Oreffice (University of Surrey); Climent Quintana-Domeque (University of Oxford and St Edmund Hall)
    Abstract: We study the determinants of season of birth, for white married women aged 20-45 in the US, using birth certificate and Census data. We also elicit the willingness to pay for season of birth through discrete choice experiments implemented on the Amazon Mechanical Turk platform. We document that the probability of a spring first birth is significantly related to mother's age, education, smoking status during pregnancy, and the mother working in "education, training, and library" occupations, whereas a summer first birth does not depend on socio-demographic characteristics. We find consistent but stronger correlates when focusing on second births, while all our findings are muted among unmarried women. We estimate the average willingness to pay for a spring birth to be 600 USD, which is about 18% of the most valued birth in our Amazon Mechanical Turk experimental sample or 15% of the mean charges for a normal birth in 2013 according to the Agency for Healthcare Research and Quality.
    Keywords: quarter of birth, willingness to pay, NVSS, ACS-IPUMS, Amazon Mechanical Turk, discrete choice experiments, fertility timing
    JEL: I10 J01 J13
    Date: 2016–12

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.